author: JULIAN ABELE COOK, Jr., District Judge.

text:
    Wanda CARTER for Lakesha and Felicia CARTER, Plaintiff, v. SECRETARY OF HEALTH AND HUMAN SERVICES, Defendant.
    Civ. A. No. 84-4649.
    United States District Court, E.D. Michigan, S.D.
    Nov. 25, 1985.

      Diane M. Kwitoski, Detroit, Mich., for plaintiff.
    Ross I. MacKenzie, Asst. U.S. Atty., Detroit, Mich., for defendant.
   ORDER

JULIAN ABELE COOK, Jr., District Judge.

The Court has reviewed the file, the Magistrate’s Report and Recommendation and the Plaintiff’s agreement with that Report. The Magistrate made several recommendations. This Court accepts the following. Under a statutory rather than a constitutional analysis of 42 U.S.C. § 416(h)(2)(A), this Court concludes that the applicable law, which was in effect at the time of the application, governs. In applying that law to the instant case, this Court concludes that there is substantial evidence on the record to support the Administrative Law Judge’s decision that Lakesha and Felicia Carter had inheritance rights under Michigan law requiring “a mutually acknowledged relationship of parent and child.” Thus, Plaintiff’s Motion for Summary Judgment is granted and the action is remanded to the Secretary of Health and Human Services for a computation and payment of benefits.

IT IS SO ORDERED.

JUDGMENT

The Court has reviewed the file, the Magistrate’s Report and Recommendation and Plaintiff’s agreement with the Report. The Defendant has not timely filed any objections. The Report and Recommendation of the Magistrate is hereby accepted and adopted as the findings and conclusions of the Court.

IT IS ORDERED that the Motion for Summary Judgment of Plaintiff is granted and the case returned to the Secretary for a computation and payment of the benefits to which Plaintiff is entitled.

IT IS FURTHER ORDERED that the Clerk serve a copy of this Judgment by United States mail on the counsel for Plaintiff and on the'United States Attorney for the Eastern District of Michigan.

REPORT AND RECOMMENDATION

October 31, 1985

STEVEN D. PEPE, United States Magistrate.

This is a review under 42 U.S.C. § 405(g) of a denial of child’s insurance benefits.

The worker, Leonard Nabors, died on May 7, 1977. Plaintiff applicants applied for benefits on June 15, 1982, claiming that Leonard Nabors was their father. Lakesha Carter was born out of wedlock on October . 8, 1976, and Felicia Carter was born out of wedlock on January 7, 1975. A decision by an Administrative Law Judge (AU) granting plaintiffs benefits was overturned by the Appeals Council, which claimed that the AU made an error of law. Before considering the specific facts of this case, some background on the law would be appropriate.

THE APPLICABLE LAW FOR CHILD’S SURVIVOR BENEFITS

An individual can receive child’s survivor benefits under 42 U.S.C. § 402(d) if five conditions are met:

I. An application is filed.
II. The applicant is unmarried.
III. The applicant is under age 18, a full-time student under age 22, or under a disability before age 22.
IV. The applicant is a child of the insured worker under 42 U.S.C. § 416(d).
V. The applicant is dependent on the insured worker at the time of death.

In this case, there is no dispute regarding the first three conditions. The dispute centers on issues IV and V.

a. Eligibility Issue IV — Being a “child” under the Act:

There are four ways in which an applicant can be a “child” within the meaning of the Act. These can be labeled and defined as follows:

A. “The Inheritance Child” (42 U.S.C. § 416(h)(2)(A)).
If one would be a child under the state laws of the insured worker’s domicile at the time of his death which determine the devolution of intestate personal property, one would be a child under the Act (or deemed a child if treated equivalently of a child under the appropriate state laws). (Most biological and adopted children would fall under this section.)

B. “The Flawed Marriage Child” (42 U.S.C. § 416(h)(2)(B)).

If one would be a son or daughter of an insured who undertook a purported marriage ceremony made defective by a procedural flaw or a prior undissolved marriage one would be deemed a child under the Act.

C. “The Written Acknowledgment or Court Decree Child” (42 U.S.C. § 416(h)(3)(C)(i)).

If one is a son or daughter, but not a child (or deemed to be a child) under A or B above, one can be deemed to be a child of a deceased worker if a written acknowledgment, court decree of parenthood or support made prior to death established the applicant as a son or daughter.

D. “The Other Evidence of Parentage Child” (42 U.S.C. § 416(h)(3)(C)(ii)).

Other evidence satisfactory to the Secretary shows the insured worker to be the mother or father of the applicant and the insured was either living with or contributing to the support of the applicant at the time the insured died.

b. Eligibility Issue V — Being “Dependent” Under the Act:

A “child” is deemed “dependent” under the Act if he is a legitimate or adopted child [42 U.S.C. § 402(d)(3)]. A child is deemed “legitimate” for the 402(d)(3) dependency test if he is a flawed marriage child under 416(h)(2)(B) or a written acknowledgment/court decree child or an other evidence of parentage child under § 416(h)(3)(C).

Type B, C and D children are all deemed dependent. Type D other evidence of parentage children are also deemed to fulfill eligibility condition V on “dependency” since proofs of living with the insured or supporting the insured were necessary to establish eligibility condition IV on being a child. Again, the Type D other evidence of parentage child is an illegitimate child of the insured who cannot inherit from the insured and for whom there is no written acknowledgment of paternity, filiation or support decree.

Under the Act, if an applicant meets the definition of “child”, it is likely that the child applicant will be “deemed” dependent on the- insured notwithstanding who supports the child or where the child lives. One small group of insured children who are not “deemed” dependent on the insured are illegitimate Type A inheritance children with whom the insured does not live and to whom the insured does not contribute funds, goods or services for support. This small group of illegitimate Type A inheritance children must prove their actual dependency on the insured to be eligible for survivors benefits.

Plaintiffs’ counsel asserts that each of the plaintiffs is either a Type A inheritance child, or Type C court decree child. For reasons stated below, it appears that each is either a Type A inheritance child or a Type D other evidence of parentage child. While the Michigan Probate Court did enter a decree establishing that the plaintiffs were the children of the deceased worker, this decree was entered after the worker’s death, and 42 U.S.C. § 416(h)(3) (C)(i)(III) requires that any such court decree be made before the death of the insured.

MICHIGAN INHERITANCE LAW

At the time of the wage earner’s death in 1977, Michigan Compiled Laws, § 702.83, provided for the legitimation of a child born out of wedlock either by intermarriage of the parents or by written acknowledgment of paternity which is executed and acknowledged in the same manner as real estate deeds and recorded in the Probate Court where the parents reside. An Amendment to the Probate Code, § 700.-lll(4)(c), effective July 1,1979, provided an additional means to establish a parent/child relationship for purposes of intestate inheritance. Under the new provision, if it could be established that the father and child bore a “mutually acknowledged relationship of parent and child” which began before the child became 18 years of age and continued until the death of either, such a child could inherit.

BACKGROUND FACTS

Following the death of Leonard Nabors on May 7, 1977, his mother, on July 27, 1977, filed an application for lump sum death benefits. She indicated that plaintiff was not married or survived by any children. On February 19, 1982, Wanda Carter filed for child’s benefits on behalf of Lakesha and Felicia Carter. In the application, she noted that the children were not living with the insured at the time of his death and that Nabors had made no non-cash contributions to the children and that the sole source of support for the children at the time of his death was AFDC payments.

In an Order of September 24, 1981, as amended October 1, 1981, the Wayne County Circuit Court (Tr. 75) determined that Lakesha T. Carter and Felicia J. Carter were children and heirs of the deceased and, thus, capable of taking under a wrongful death action brought on behalf of the estate. They each took approximately 31.5% of the estate, and the deceased’s mother received 34.6%. These divisions were certified by the Circuit Court Judge to the Wayne County Probate Court. The Wayne County Probate Court, on November 19, 1981, determined that Lakesha Carter and Felicia Carter were heirs of the deceased (Tr. 69). The court records also note that during the deceased worker’s lifetime, he and each child had a mutually acknowledged relationship as parent and child, which relation continued until his death, and the children thereafter bore a relationship to his mother as between grandparent and grandchild. The record further indicates that the court record shows that the deceased worker and Wanda Jean Carter, the applicants’ mother, were scheduled to be married on May 14, 1977, which marriage did not occur due to Leonard Nabors’ death on May 7, 1977 (Tr. 76).

The reconsideration decision considered plaintiff’s application under the standards of the Type A inheritance child, § 416(h)(2)(A), and the Type D other evidence of parentage child, § 416(h)(3)(C)(ii). With regard to the new legitimation standard in the Michigan Probate Code effective July 1, 1979 — of the “mutually acknowledged relationship” test — the reconsideration decision noted that this test applied to individuals who died on or after July 1, 1979 (Tr. 60). It noted that it was not bound by the Michigan Probate Court’s decision of November 19, 1981, that determined that both of the applicants are heirs. The reconsideration opinion suggested that the Probate Court erroneously applied the post-July 1, 1979, “mutually acknowledged relationship” test to determine the heirs of a person who died prior to that time (Tr. 59-60). It noted, however, that the Probate Court determination would be relevant to the “other evidence of parentage” test under 416(h)(3)(C)(ii).

Throughout this case, there seems to be no dispute that Leonard Nabors is the biological father of the two applicants. However, the Secretary’s decision at the reconsideration level found that under the other evidence of parentage test the applicants failed since they could not show that they lived with or received support from the worker prior to his death (Tr. 60-61).

The AU concurred that the applicants have not shown that the deceased worker contributed to their support. He found, however, that the July 19, 1979, change in the Probate Code did not substantially change the test for legitimation of children born out of wedlock. He found that the applicants were inheritance children since the father and each child bore a mutually acknowledged relationship of parent and child (Tr. 15-16).

On this issue, the Appeals Council disagreed with the AU and found that the July 1, 1979, amendment to the Probate Code added a new and different means of legitimation under the mutually acknowledged relationship test. Referring to a newly adopted regulation, 20 C.F.R. § 404.354, which was merely pending for consideration at the time of the AU’s decision, the Appeals Council stated that the Secretary interpreted 42 U.S.C. § 402(d) to require the child to be dependent on the insured worker at the time of death and that for purposes of considering whether a person is an inheritance child, the applicable state law is the law in effect at the time of the worker’s death and not at the time of the child’s application. (See April 1, 1985 Edition of Code of Federal Regulations.) Thus, the Appeals Council found that neither applicant qualified either as an inheritance child who would be deemed to be dependent, or as an other evidence of parentage child since each had failed to demonstrate her dependence.

THE INHERITANCE CHILD STANDARD

The first issue to be determined is whether for purposes of determining Social Security eligibility — and not determining how an individual’s estate should be distributed — the applicable law should be the law in effect at the time of the worker’s death or the law in effect at the time of the child’s application.

a. The Constitutional Challenge

Plaintiffs’ counsel asserts that the earlier Michigan law was unconstitutional, and thus the appropriate standard should be the newly enacted Michigan standard. In Allen v. Califano, 456 F.Supp. 168 (D.Md.1978), the state intestate law was found to be unconstitutional. Plaintiffs’ counsel cites several cases, including Trimble v. Gordon, 430 U.S. 762, 97 S.Ct. 1459, 52 L.Ed.2d 31 (1977), and attempts to distinguish In re Dempster’s Estate, 247 Mich. 459, 226 N.W. 243 (1929), and In re Adolphson’s Estate, 403 Mich. 590, 271 N.W.2d 511 (1978). In light of In re Blan co Estate, 117 Mich.App. 281, 323 N.W.2d 671 (1982), upholding the pre-1979 statute, and Lalli v. Lalli, 439 U.S. 259, 99 S.Ct. 518, 58 L.Ed.2d 503 (1978), it is recommended that this Court not declare the Michigan statute to be unconstitutional. For the reasons set out below, this Court can avoid the constitutional issues and resolve this matter on statutory grounds.

b. The Applicable Law for the Inheritance Child Test

For obvious reasons, Michigan applies its liberalized 1979 inheritance law only prospectively. This avoids the confusion and bitterness of relitigation over and redivision of portions of a decedent’s estate which is of fixed size and which may have already been distributed and vested. See In re Adolphson’s Estate, supra, 403 Mich, at 593, 271 N.W.2d 511. Similar efficiency and policy reasons do not exist to induce the Secretary not to apply the new standard to pending applications. Unlike the Probate Court, the Secretary would never have to make efforts to recall funds from others to whom the decedent’s estate had been distributed prior to July of 1979. The Probate Court uses existing inheritance law to determine the number of beneficiaries and the quantity of each beneficiary’s portion of the estate. The Secretary, on the other hand, adopts state inheritance law merely to measure the quality of the parent child relationship. The policy considerations for Social Security purposes are substantially different in light of the different purposes for which the Secretary adopts state inheritance laws. The remedial purposes of Social Security legislation, and not finality of judgments and efficiency, should be paramount.

The Secretary’s new regulation, 20 C.F.R. 404.354, interprets the Social Security Act to mean that state law at the time of the wage earner’s death is controlling for purposes of determining an inheritance child. If the Social Security Act intends this, it is all but clear. What is clear in 42 U.S.C. § 416(h)(2)(A) is that the law to be applied should be drawn from the state where the deceased worker was domiciled at the time of his death. But what is ambiguous and has been the subject of dispute and litigation is whether the law of the appropriate state is to be looked at at the time the Secretary makes her decision or must be looked at and rigidly adopted at the time of the deceased’s death.

The general rule is that:

The Court is to apply the law in effect at the time it renders its decision, unless doing so would result in manifest injustice or there is statutory direction or legislative history to the contrary.

Bradley v. School Board of Richmond, 416 U.S. 696, at 711, 94 S.Ct. 2006, at 2016, 40 L.Ed.2d 476 (1974).

A Maryland district court reviewing the application for survivor’s benefits for a child born out of wedlock with a father domiciled in Michigan at the time of his death had to decide the same issue that is before this Court. Tyler v. Schweiker, 530 F.Supp. 1028, (D.Md.1981). At the time of the father’s death in 1977, and the initial Social Security determinations, the child could not have inherited under Michigan law. By the time the Maryland AU decided the matter in 1979, the Michigan Law had changed to include the “mutually acknowledged relationship” test, and the child applicant coulCl inherit under Michigan law. The AU applied the law of Michigan at the time of death and denied benefits. The Maryland- federal district court held that if Michigan law was applicable, the AU should have applied the current law and the “mutually acknowledged” test. The Court noted that in reviewing a Social Security application of a surviving child applicant, it was not necessary to reopen and relitigate claims against a decedent’s closed estate.

There is a split of authority on whether to use the inheritance law in effect at the time of death or the time of decision, though the majority of courts have adopted the time of decision. As noted in the Appeals Council’s decision, Allen v. Califano, 452 F.Supp. 205 (D.Md.1978), and Ramon v. Califano, 493 F.Supp. 158 (W.D.Tex. 1980), used the inheritance law in effect at the time of death. Accord Cox v. Schweiker, 684 F.2d 310 (5th Cir.1982). Both Allen, in a subsequent opinion (456 F.Supp. 168 (D.Md.1978)), and Ramon then found the old inheritance law unconstitutional and awarded Social Security benefits. These opinions give little reasoned consideration to their “time of death” holding, possibly because they are awarding benefits under a different theory. Tyler, supra, Charles v. Schweiker, 569 F.Supp. 1341 (E.D.N.Y.1983), Cooper v. Harris, 499 F.Supp. 266 (N.D.Ill., 1980), and Owens v. Schweiker, 692 F.2d 80 (9th Cir.1982), used the inheritance law in effect at the time of decision. The Sixth Circuit has not decided a case on this issue.

In Jones v. Schweiker, 668 F.2d 755 (4th Cir.1981), the Fourth Circuit considered a Mississippi statute of intestate succession under 42 U.S.C. § 416(h)(2)(A) which did not permit illegitimate children to inherit from their father without certain legitimating action. Children whose claims for Social Security surviving children’s benefits had been denied challenged its constitutionality. The Fourth Circuit upheld a denial of benefits without having to decide whether the Mississippi statute was unconstitutional and held that even if it were, benefits would not be granted under 416(h)(2)(A) since actual dependency was not shown. The Supreme Court granted certiorari and then remanded for further consideration in light of an amendment to the intestate law (Miss.Code Ann. § 91-1-5), (Cum.Supp. 1982), 460 U.S. 1077, 103 S.Ct. 1763, 76 L.Ed.2d 339 (1983). Since the Jones children’s father, Odes Watson, died in 1975 (668 F.2d at 758), this clearly implies the Supreme Court anticipated that, under 416(h)(2)(A), the current Mississippi intestate law would apply, not the law in effect upon the worker’s death which was challenged as unconstitutional in the Fourth Circuit.

Ramon and Cox both seem to rely on the Maryland district court in Allen. In Tyler, however, the same Maryland district court limited Allen’s application to the specific Maryland statute that clearly stated it applied only to the estates of decedents who died on or after its effective date. (See footnote 4 of Tyler.) Absent such a specific “statutory direction”, Bradley, supra, the Maryland federal court in Tyler applied the general rule of using the law in effect at the time of decision. Thus, Allen, Ramon and Cox are weakened as precedents.

The reasoning and grammatical analysis of Judge Morgan in Copeland v. Califano, No. 78-1004 (C.D.Ill., June 20, 1979), as set out and adopted by the Ninth Circuit in Owens, seems persuasive. 42 U.S.C. § 416(h)(2) states, “the Secretary shall apply such law as would be applied in determining the devolution of intestate personal property ...” An analysis of the plain meaning of this phrase suggests the use of the state intestate law applicable at the time the Secretary is called upon to make an eligibility determination. Copeland and Owens note that had Congress intended the Secretary to apply the law at the time the applicant’s father died instead of the time of application, the Act should read:

... the Secretary shall apply such law as would have been applied in determining the devolution of intestate personal property ... by the courts of the State in which the insured was domiciled at the time of his death ...

As the law is written, the Secretary is directed at the time she determines whether the applicant is a “child” to look to the law of the state of the insured. In deciding which state to choose, the Act uses the following rules: For retired and disabled workers, use the state of the worker’s domicile at the time of the application (not at the time of retirement age or disability). For deceased workers, use the state of the deceased worker’s domicile at the time of death.

If this Court adopts the interpretation of 416(h)(2)(A) that the Secretary applies, this will result in illegitimate children of deceased workers receiving different treatment than such children of retired or disabled workers. Under the Secretary’s interpretation, illegitimate children of retired and disabled workers could assure their inheritance rights test would be decided under the most current or favorable law merely by delaying their applications, whereas illegitimate children of deceased workers could not do this. This unequal treatment has no principled justification. If, however, this Court adopts the interpretation of 416(h)(2)(A) that the Ninth Circuit suggests, the Court avoids such unequal treatment.

There is no reason to give illegitimate children of retired and disabled workers such a procedural advantage over illegitimate children of deceased workers. The triggering eligibility event — retirement, disability, or death — should not affect the opportunities of an illegitimate child to be eligible for benefits. Or if it did, illegitimate children of deceased workers should be given an advantage not a disadvantage. If an illegitimate child of a retired or disabled worker cannot separately qualify as a “child” and get Title II benefits, at least the retired or disabled father (possibly the mother also) will get some Title II benefits which he could voluntarily use to assist the non-qualifying child. Such indirect sharing of benefits would not be available to the illegitimate child of a deceased worker. Thus, if procedural advantages are to be given, it would be more reasonable for them to flow to illegitimate children of deceased workers rather than those of retired or disabled workers.

It seems unlikely Congress thought about such procedural advantages. It may not have fully considered all the substantive permutations of 416(h)(2)(A).

In considering the interpretation of a statute, the interpretation of the administrative agency applying the law ordinarily is given great deference. Udall v. Tailman, 380 U.S. 1, 16, 85 S.Ct. 792, 801, 13 L.Ed.2d 616 (1965). Unlike questions of fact, a reviewing court can determine questions of law de novo. First Nat’l. Bank v. Nat’l. Bank of So. Dakota, 667 F.2d 708 at 711 (8th Cir.1981). Courts may reject an agency’s interpretation of its statute when its regulations do not “honor the clear meaning of the statute, as revealed by its language, purpose and history”. Int’l. Brotherhood of Teamsters Warehousemen & Helpers of America v. Daniel, 439 U.S. 551, 99 S.Ct. 790, 800 n. 20, 58 L.Ed.2d 808 (1979), or when the regulations are clearly wrong or unreasonable, Fredricks v. Kreps, 578 F.2d 555, 561 (5th Cir.1978).

We do not imply that deference to an agency’s interpretation of the law equates with blind faith. A court is obliged to accept the administrative construction of a statute only so far as it is reasonable ... and consistent with the intent of Congress in adopting the statute. Espinoza v. Farah Mfg. Co., 414 U.S. 86, 94-95, 94 S.Ct. 334, 339-40, 38 L.Ed.2d 287.

Committee for an Independent P.I. v. Hearst Corp., 704 F.2d, 467, 473, (9th Cir. 1982), cert. denied, 464 U.S. 892, 104 S.Ct. 236, 78 L.Ed.2d 228 (1983).

Thus, this court is not bound by the Secretary’s regulation interpreting the Act when it leads to bizzare results that do not seem in accordance with the overall remedial purposes of the Social Security Act. In interpreting the law, this Court should adopt an interpretation that avoids unnecessary, unreasonable and unequal procedural advantages for certain groups of similarly situated illegitimate children. Mathews v. Lucas, 427 U.S. 495, 96 S.Ct. 2755, 49 L.Ed.2d 651 (1976), upheld different treatment for different groups of illegitimate children when the government could articulate a legitimate reason for such distinctions. No legitimate reason, however, exists for why the advantage gained by being able to choose when to apply should be available to illegitimate children of retired and disabled workers, but not available to illegitimate children of deceased workers. One might argue that illegitimate child applicants of deceased workers are less likely to actually be dependent on the worker than illegitimate child applicants of retired and disabled workers. Yet, this unverified premise was unlikely to have been a concern to Congress in establishing the inheritance child test since it “deemed” all inheritance child applicants to be dependent on the parent-worker without further proof. If Congress was concerned about actual contribution to the support and dependence of inheritance children of deceased workers, it could have required actual proof of dependence for them as it did for the other evidence of parentage children in 42 U.S.C. 416(h)(3)(C)(ii). This raises the question of why Congress may not have required proof of dependency for a Type A inheritance child [416(h)(2)(A) ] but incorporated contribution standards into the qualifying test for a Type D other evidence of parentage child [416(h)(3)(C)(ii) ].

Illegitimate children of non-supporting retired or disabled workers can have paternity and support actions brought on their behalf without regard to tight statutes of limitations. Mills v. Habluetzel, 456 U.S. 91, 102 S.Ct. 1549, 71 L.Ed.2d 770 (1982); Pickett v. Brown, 462 U.S. 1, 103 S.Ct. 2199, 76 L.Ed.2d 372 (1983). Such an illegitimate child would then get Social Security benefits as a Type C court decree child [416(h)(3)(C)(i) ]. Since illegitimate children of deceased non-supporting fathers do not have paternity and support action opportunities to qualify under 416(h)(3)(C)(i) as do illegitimate children of living retired and disabled workers, they should at least have equal opportunities to qualify under the inheritance child provisions of 416(h)(2)(A).

One reason Congress may have deemed an inheritance child to be dependent is the reasonable Congressional policy that even if there was no support being paid by the father before his death, these children had inchoate rights to paternity and support actions that were terminated with the death of the father. Thus, their opportunities to qualify as an inheritance child acts as a protective surrogate for the lost right of action to have a paternity and support action brought on their behalf.

Lalli v. Lalli, supra, and Mills v. Habluetzel, supra, found classifications against illegitimates valid only if they bear an evident and substantial relation to a legitimate state interest; This Court should interpret the Act in a manner that avoids such discriminatory classifications among illegitimates. The Ninth Circuit interpretation of 416(h) in Owens avoids such unequal treatment. This interpretation also meets the remedial objectives of the Social Security Act and is in accord with its spirit and purpose. United Steelworkers of America v. Weber, 443 U.S. 193, 99 S.Ct. 2721, 61 L.Ed.2d 480 (1979).

Given the grammatical analysis of Copeland and the desire to avoid unequal treatment of illegitimate children of deceased workers when there are no reasons to do so, this Court should follow the Ninth Circuit and adopt the general rule stated ■ by the Supreme Court in Bradley. Accordingly, the Secretary’s regulation should be found inconsistent with the statute, and the Secretary should apply the inheritance law of Michigan that exists at the time she renders her final decision. Under that applicable law, there is substantial evidence to uphold the AU’s finding that Lakesha and Felicia Carter had inheritance rights under Michigan law requiring “a mutually acknowledged relationship of parent and child.” (Tr. 15).

ALTERNATE RECOMMENDATION-OTHER EVIDENCE OF PARENTAGE TEST

In addition to the above error, it is also apparent from the record that both the Appeals Council and the ALJ, as well as the Secretary at the reconsideration level, applied the wrong test for determining “regular and substantial contributions”, and considering whether there was other evidence of parentage under 42 U.S.C. § 416(h)(3)(C)(ii). Each of these decision makers suggested that plaintiff could not have made regular and substantial contributtons necessary to qualify under the Act, particularly in the period immediately preceding his death when his income was substantially reduced (Tr. 60-61, 15, 6). The record reflects that the wage earner had total wages of $5,331 in 1976, $918.62 in the first quarter of 1977, $313 in the second quarter of 1977, as well as sick pay in the amount of $123.75 from February through April of 1977. The Appeals Council noted that plaintiff could not have made necessary contributions given his limited income.

In several cases involving other evidence of parentage children seeking survivors benefits, it has been held that the “regular and substantial contributions” test was erroneously applied in cases where the insured worker was marginally employed or unemployed in the year of his death. McNeal v. Schweiker, 711 F.2d 18 (3rd Cir.1983), Childress v. Secretary of HHS, 679 F.2d 623 (6th Cir.1982), Parker v. Schweiker, 673 F.2d 160 (6th Cir.1982), Boyland v. Califano, 633 F.2d 430 (6th Cir.1980), Jones v. Harris, 629 F.2d 334 (4th Cir.1980), Santiago v. Mathews, 431 F.Supp. 1213 (E.D.N.Y.1977), Madison v. Richardson, 354 F.Supp. 383 (M.D.La. 1973).

In Jones, the initial 1975 application was denied, and thereafter the applicant supplied supplemental evidence to show the deceased father purchased clothes, diapers and milk for his child who lived with the mother. In Jones, no more than $30.00 per month was alleged to have been paid by the father. As does the Appeals Council in this case, the ALJ in Jones noted inconsistencies between the initial application and supplemental statements after the denial of benefits and denied the claim, concluding that “while the wage earner may have occasionally given some money and goods, he did not make regular and substantial contributions for the support of the claimant” at the time of his death. 629 F.2d at 335-336. The Jones court noted that while the “regular and substantial contributions” standard is not required by the statute, it has been upheld by other courts. Carey v. Social Security Board, 62 F.Supp. 458 (W.D.Ky.1945), Allen v. Califano, 452 F.Supp. 205 (D.Md.1978). The Circuit Court in Jones stated:

From the record, we cannot determine the exact significance attached by the ALJ to his requirement of regularity and substantiality of contributions. While we cannot believe that he understood and applied these in any absolute sense unrelated to the amount and flow of the wage earner’s income and to the child’s needs, we cannot be sure in the absence of any findings of fact upon these critical matters. Because the test applied to the claim is thus unclear, we cannot conduct a principled review, and must remand for reconsideration of the claim____
Upon remand, the test properly to be applied is whether contributions regular and substantial in relation to the wage earner’s income and the child’s needs were made.
The Act is intended to offset economic dislocation suffered by dependents on account of the death of the wage earner, see Mathews v. Lucas, 427 U.S. 495, 507, S.Ct. 2755, 2763, 49 L.Ed.2d 651 (1976). The purpose of the Act cannot be furthered by applying a test of substantiality of contribution in the abstract because the loss of small, regular contributions to a poor family would cause the economic dislocation the Act seeks to prevent. Whether the wage earner was contributing to the support of the child must be determined by comparing the amount and frequency of contribution with the wage earner’s income and with the income of the family in which the child resided.

659 F.2d at 336.

The Sixth Circuit in Parker v. Schweiker, supra, agreed with this interpretation:

The support requirement of 42 U.S.C. § 416(h)(3)(C)(ii) is not a fixed rule requiring regular or substantial support, but rather must be evaluated in light of the father and child’s actual circumstances.

The Parker court also considered the need for support of the child. Id. at 164. In Parker, there had been no contributions in the last year. Nonetheless, the Sixth Circuit reversed a finding of no support and found without a remand that the § 416(h)(3)(C)(ii)’s support test was met.

In Boyland v. Califano, supra, the Sixth Circuit questioned the Secretary’s practice of discounting “sporadic” payments as not counting as support. The Secretary had found that the deceased worker had not made continuous payments to his two illegitimate children and “probably had stopped altogether sometime before [his] death.” Id. at 434. The Sixth Circuit found both the “regular and substantial” support test and the “regular and continuous support test” were inappropriately applied under the circumstances of the case. It found even periodic payments could be sufficient under certain circumstances to meet the support test. In Boyland, the mother in her application admitted the insured “was not contributing to their support” and apparently had not done so for three years. Id. at 432, fn. 5. Boyland notes the earnings of the insured or lack thereof in the year of death must be considered.

Obviously, continuously regular and substantial contributions is a just standard when the wage earner’s income is regular and substantial. But where the income of a wage earner lacks continuity and substantiality and contributions are nevertheless given, a different criterion should be applied. Where a wage earner is poor and earns an irregular income, it is ludicrous to require regular and substantial payments to his children born out of wedlock or not. The wage earner is barely supporting himself. Instead, attention should be focused on whether the contributions that were made to the support of his children were important to them given their needs and the wage earner’s economic circumstances and ability to support____
The lack of economic well-being or regular income does not eliminate the statutory requirement of “contribution.” However, where the resources of the wage earner are scarce and the contributions to his children important to them, the statutory requirements can be satisfied. We emphasize that the periodic contributions were made to the wage earner’s own children albeit born out of wedlock. The children should not be denied benefits because the wage earner could only afford small irregular payments.

633 F.2d at 434.

The insured gave $5.00-$10.00 to the two applicant children, bought them clothing and presents, gave them lunch money and had them as house guests at times. He also had two other of his illegitimate children living with him. Without a remand, the Sixth Circuit reversed all decisions below and awarded benefits.

Childress v. Secretary of HHS, supra, reiterated that Boyland and Parker state the law of the Sixth Circuit. Without a remand, Childress reversed a denial of child’s survivor’s benefits. The father had made contributions of $15.00-$20.00 per month. The court held there was insufficient evidence for the ALJ not to find this amount sufficient to fulfill the support requirements of § 416(h)(3)(C)(ii).

In Santiago v. Mathews, 431 F.Supp. 1213 (E.D.N.Y.), the court found small and irregular payments of $10.00 — $50.00 every two, three or four months, and no more than $200.00-$300.00 a year, sufficient to be important to the support of the illegitimate child, reversed the Secretary and, without a remand, awarded benefits. In Adams v. Weinberger, 521 F.2d 656 (2nd Cir.1975), the illegitimate child was born after the death of the insured father. He had paid $200.00 — $300.00 to the mother before the child’s birth, $100.00 to register her in the hospital and promised to pay the hospital bill. This was found sufficient support to qualify the illegitimate child for survivor’s benefits without a remand to determine his actual earnings during this period.

These cases show that the standard applied below for determining the level of Leonard Nabors’ support for Lakesha and Felicia Carter was inappropriate under the facts of the case because of the limited employment and income of Leonard Nabors in the years before his death. Small and occasional support and sporadic payments are not necessarily disqualified as support.

Under certain circumstances of low earnings and periodic unemployment, small payments when employed and sporadic payments and in-kind contributions could qualify as support, even in the total absence of regular payments in the year of death, if the insured was out of work his final year. Thus, plaintiffs did not receive a full and fair hearing on the contributions and support issue since the needs of each child and the nature and extent of income of the insured were not taken into consideration as the courts have required.

The Secretary has now amended her regulations. While these amendments are in response to court rulings, they do not fully embrace the federal court precedents. The current regulation No. 4, Sub-part D, § 404.366(a)(2), drops the term “substantial” and requires only that the regular contribution meet an important part of ordinary living costs. Also, to avoid unfair discrimination against the involuntarily unemployed or temporarily ill workers, the new regulation in considering contributions disregards periods of temporary interruption caused by those two factors unless someone else takes over responsibility for supporting the child on a permanent basis.

This new standard that is referred to by the Appeals Council (Tr. 4) is more restricfive than the standard of Boyland, Parker and Childress. Thus, the ALJ and the Appeals Council appear, under Boyland, Parker and Childress, to have applied the wrong support test under Boyland, Parker and Childress. While the new regulation does disregard the temporary interruptions caused by circumstances beyond the insured person’s control, it still stresses regular payments large enough to meet an important part of the applicant child’s living costs and it specifically excludes certain gifts and donations. The Secretary has issued a ruling, SSR 81-lc (January, 1981), stating it does not acquiesce in Boyland since the contributions there were not regular or large enough to meet an important part of the children’s ordinary living costs nor were they made in the year of death. See 1 Unemp. Ins. Rep. (CCH), par. 12,335.-31, 12,358.81. Childress pointed out that the Appeals Council refused to hold AUs to Santiago v. Weinberger if they were not in the jurisdiction of that court. Childress reminded the Secretary that Boyland and Parker are the law of the Sixth Circuit. Thus, to the extent that 20 CFR § 404.-366(a)(2) is inconsistent with the case law of this Circuit, the Secretary’s regulation must yield. Though the Childress court was not applying this new regulation, by way of dicta it held that $15.00 — $20.00 per month was large enough to meet an important part of Patrick Childress’ ordinary living costs. 679 F.2d at 629, fn. 9, and at 630.

RECOMMENDATION

For the above-stated reasons, it is recommended that the inheritance law at the time of the application should apply. As noted in the ALJ’s opinion, under the mutually acknowledged relationship test, which had become the law by the time of plaintiffs’ application, plaintiffs would be allowed to inherit under the laws of the State of Michigan and thus each would be deemed to be both a “child” and “dependent” under the Social Security Act and therefore eligible for Social Security child’s benefits. It is thus recommended that the plaintiffs’ motion for summary judgment be granted and the case remanded for an institution of benefits.

In the alternative, it is recommended that the case be remanded for a proper determination of “contributing to the support of the applicant” under 42 U.S.C. § 416(h)(3)(C)(ii), and for such further findings and determinations as are necessary to accord with the law as stated in Childress, Boyland and Parker.

Objections may be filed to this Report and Recommendation within ten (10) days of its service. 28 U.S.C. § 636(b)(1). Failure to file objections may constitute a waiver of any further right of appeal. United States v. Walters, 638 F.2d 947 (6th Cir. 1981).

      . Conceptually, Congress would have been clearer if it had allowed a Type D applicant to fulfill eligibility requirement number IV of being a "child" under § 416(h)(3)(C)(ii) by merely showing other evidence satisfactory to the Secretary that the applicant is the biological child. Had Congress kept the “lived with/supported by” proofs under the "dependency" condition of eligibility V, instead of merging it with the biological parentage issue under the "child of the insured" condition of eligibility IV for the Type D child, the statutory/regulatory sections would cause less confusion.

      . It would be peculiar here to use "time of application” since decedents are generally not deemed to have a domicile after their time of death which fixes it, notwithstanding their state of burial.

      . This later provision must anticipate some other natural person, such as a stepfather, and not the Department of Social Services. If DSS payments under AFDC were considered to fulfill this final proviso clause, then the entire scheme for temporary disregards during unemployment would never apply, and this portion of the regulation would be meaningless. This would result because Title IV AFDC benefits are available to all children without other support whose fathers are not living with them. If the insured worker/father here were living with the child at the time of death, then actual contributions need not be shown to get Title II survivor’s benefits. Only deceased fathers not living with the child at time of death must be shown to have made regular contributions for the child to be eligible for survivor’s benefits. All of these children could receive AFDC if the absent father was not paying any support during periods of illness or unemployment. The limitations on unemployment/illness disregards also require the surrogate to take over support obligations on a "permanent basis.” AFDC payments are not permanent; they end when income eligibility ends. Also, nearly half of all welfare recipients do not stay on welfare for over one or two years. Duncan, Years of Poverty, Years of Plenty, (University of Michigan Institute for Social Research, 1984).


source: Caselaw Access Project

author: ASPEN, District Judge:

license: Public Domain

text:
    JOSEPH J. LEGAT ARCHITECTS, P.C., Plaintiff, v. UNITED STATES DEVELOPMENT CORPORATION, Esper A. Peterson, Seth Pines and Royal Oak Apartments Phase III, Defendants.
    No. 84 C 8803.
    United States District Court, N.D. Illinois, E.D.
    Nov. 25, 1985.

      Thomas A. Morris, Jr., Nicholas Anaclerio, Jr., Brydges, Riseborough, Morris, Franke & Miller, Waukegan, 111., for plaintiff.
    Thomas W. Gooch, Thomas R. Ruth & Assoc., Barrington, 111., for defendants.
   MEMORANDUM OPINION AND ORDER

ASPEN, District Judge:

This bitter suit between an architect and a developer has spawned many overlapping motions, which have unduly complicated the case. Joseph J. Legat Architects, P.C. (“Legat P.C.”) sued United States Development Corporation (“USCD”), its president Esper Peterson (“Peterson”) and one of its architects Seth Pines (“Pines”) in a fifteen count complaint alleging federal copyright and trademark claims, as well as pendent state claims of breach of contract and unfair competition. Early this year we held that we had subject matter jurisdiction over the case. See Legat v. United States Development Corp., 601 F.Supp. 673 (N.D.Ill.1985). Since then, we have referred Counts I and II, breach of contract claims, to arbitration before retired Illinois Supreme Court Justice Walter Schaefer, but retained jurisdiction over the rest of the case. Now before the Court are several motions, including motions by the defendants to dismiss Counts III-XV and for summary judgment as to Counts I and II and a motion by Legat P.C. for a preliminary injunction. For the reasons stated below, each of defendants’ motions is denied; Legat P.C.’s motion is granted in principle, but no formal order is entered with this opinion.

Facts

Although the parties have been fighting over what happened between them, much of their dispute centers over interpretation of the facts, not over the facts themselves. Unless indicated otherwise, the facts recited below are not in dispute.

Legat P.C. is an architectural firm headed by Joseph Legat, an architect for over twenty years. On October 1, 1981, Legat P.C. contracted with Peterson and USDC to draw up architectural plans for a federally subsidized housing project called the Royal Oak Apartments Phase III project (“Royal Oak project” or “the Project”). The contract was a standard form agreement of the American Institute of Architects (“AIA”). Article 5.1 of the Agreement governs ownership of the documents Legat was to create, and it states:

Drawings and Specifications as instruments of service are and shall remain the property of the Architect whether the project for which they are made is executed or not. The Owner [Peterson and USDC] shall be permitted to retain copies, including reproducible copies, of Drawings and Specifications for information and reference in connection with the Owner’s use and occupancy of the Project. The Drawings and Specifications shall not be used by the owner on other projects, for additions to this project, or for completion of this Project by others provided the Architect is not in default under this Agreement, except by agreement in writing and with appropriate compensation to the Architect.

The Agreement provided that USDC would pay Legat P.C. $50,000 for designing the Royal Oak project, in increments of $10,-000, $30,000 and $20,000.

Legat and his employees drew up plans and delivered them to USDC and Peterson in November 1981. The Plans then conformed with relevant regulations of the Federal Department of Housing and Urban Development (“HUD”) and the Lake County Department of Building and Zoning. However, between November 1981 and spring 1983, both the HUD and Lake County regulations changed, so that Legat’s original architectural plans no longer conformed. Legat claims that he acceded to and fulfilled USDC’s subsequent request to amend the Plans to bring them into conformity. Pines and Peterson claim in their affidavits that Legat never brought the Plans into conformity, and that Pines did so by revising them. Regardless of who revised the Plans, it is clear that Pines and Peterson filed the Plans with HUD and Lake County to secure approval to build the Project. Pines says he stamped and signed the following statement on the Plans he filed with HUD:

I hereby certify that I have reviewed the attached plans of Royal Oak Phase III, consisting of 21 pages. These plans comply with all applicable building codes, ordinances, rules and regulations of the County of Lake, State of Illinois and all rules and regulations of the Federal Housing Administration and Department of Housing and Urban Development. I assume full responsibility and liability for any defects in these plans, to the extent of the responsibility and liability of the design architect.

However, the cover sheet of the Plans on file with Lake County and HUD do not contain this statement, but identify Seth Pines as “Architect” and do not mention Legat at all as architect or otherwise.

USDC and Peterson began building, using the Plans on file with HUD and Lake County, having paid Legat only $20,000. They claim Legat breached the contract by submitting non-conforming plans and refusing to revise them. Legat asserts that he did revise the Plans, and that defendants thus have breached the contract. Moreover, he claims that the representations on the HUD and Lake County cover sheets that Pines was architect constituted copyright infringement, as well as a violation of Section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a), .and of various state law statutes. Legat’s preliminary injunction motion asks the Court to issue a writ of seizure under 17 U.S.C. §§ 501, 502 to impound the Plans and to enjoin the defendants from further copying and use of the Plans. Defendant’s opposition to this motion overlaps their motion to dismiss. In a nutshell, they assert that they had a right under the contract and copyright laws to use the Plans in the way they did; that their acts cannot create any “likelihood of confusion,” so that the various trademark and unfair competition claims must fail; and that Pines, as USDC’s agent, must be dismissed from the counts which name him. We turn first to defendants’ motion to dismiss, and then deal with Legat P.C.’s motion for preliminary injunctive relief.

B. The Motion to Dismiss

1. Standard of Review

We note at the outset that Legat’s “motion to dismiss” must be considered as a motion for summary judgment. Both sides have submitted affidavits and other supporting materials with their briefs. Because we must turn to matters outside the pleadings to resolve defendants’ motion, the standards of Fed.R.Civ.P. 56 apply. See Fed.R.Civ.P. 12(b). Defendants’ unsupported protests to the contrary cannot trump this clear command of Rule 12(b).

We can grant defendants’ summary judgment motion only if they can show that no genuine issue of material fact exists, and that they are entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c); Korf v. Ball State University, 726 F.2d 1222, 1226 (7th Cir.1984). We must view the evidence, as well as the reasonable inferences it creates, in the light most favorable to Legat P.C., the party opposing the motion. See, e.g., Big O Tire Dealers, Inc. v. Big O Warehouse, 741 F.2d 160, 163 (7th Cir. 1984). If defendants fail to carry their “strict burden,” their motion will be denied, even if Legat P.C. mounts no opposition. Id. But if defendants successfully carry their burden, Legat P.C. must bear the resulting burden of creating a genuine issue. It cannot rest on naked pleadings or assertions in meeting this burden. Fed.R. Civ.P. 56(e); Big O, 741 F.2d at 163. Mindful of these familiar standards, we consider defendants’ arguments in turn.

2. The Copyright Claims

Defendants argue that there can be no copyright infringement in this case because the parties’ contract gave them a right to copy and reproduce the architectural plans for use in building the Royal Oak project. They assert that they did no more than what the contract allows them to do: they essentially were to pay a $50,000 “royalty fee” for the one time right or license to copy and use the plans to build the project. These assertions are essentially correct, but miss the point.

It is true that Article 5.1 of the contract clearly grants defendants the right “to retain copies, including reproducible copies, of Drawings and Specifications for information and reference in connection with the Owner’s use and occupancy of the Project.” Obviously USDC, the general contractor, had the right to use and copy the Plans as reasonably necessary to build the Royal Oak project. Moreover, the contract also appears to give defendants the right to continue using the Plans even if Legat were in default. See above at 2 (quoting relevant contract provisions). But the contract is also unambiguous that the Plans remain the property of the architect Legat P.C. See Article 5.1. Legat P.C.’s grievance, as we understand it, is not that defendants were using and copying the Plans in order to build Royal Oak. Rather it complains that defendants exceeded its contractual rights by copying and filing these Plans in a way that suggested that Pines, not Legat, was the architect who created the Plans. No reasonable construction of the contract permits such a use of the Plans, argues Legat P.C. We agree. Assuming that Legat authored the Plans, we do not see how the contract authorized defendants to copy the Plans and suggest that Pines was their creator. This would be a plain infringement if proved. See below at 302.

Defendants take several tacks in justifying their actions, none of which support an award of summary judgment in their favor. Defendants, for example, argue that they own the Plans by virtue of Legat P.C.’s alleged contractual default. Yet they cite no authority for this proposition, and we perceive none. They fail to deal with the contract’s plain language that Legat owns the Plans. In any event, this question of title, if it is not frivolous, is now in arbitration before Justice Schaefer. Clearly, then, this issue does not warrant summary judgment for the defendants.

Defendants also argue that the Plans were a “work made for hire.” Two statutory provisions govern the “work for hire” doctrine. 17 U.S.C. § 101 defines a work made for hire as:

(1) a work prepared by an employee within the scope of his or her employment; or
(2) a work specially ordered or commissioned for use as a contribution to a collective work, as a part of a motion picture or other audiovisual work, as a translation, as a supplementary work, as a compilation, as an instructional text, as a test, as answer material for a test, or as an atlas, if the parties expressly agree in a written instrument signed by them that the work shall be considered a work made for hire____

The thrust of defendants’ argument is apparently that the Plans Legat P.C. prepared were a “work for hire,” which gave USDC and Peterson all copyright rights, including the right to copy and distribute them. We disagree that defendants are entitled to summary judgment on this count and, moreover, think that the facts clearly show that the Plans were not a “work for hire.”

Section 101 defines two types of situations, one where the work is “commissioned” and one for where it is done by an “employee within the scope of his employment.” Defendants do not seriously argue that the Plans constituted a “commissioned work” as defined in 17 U.S.C. § 101(2). Only the specific types of work listed in that section constitute works prepared “on special order or commission.” See 1 M. Nimmer, Nimmer on Copyright, 15.-03[B][2][a] at 5-18 to 5-19 (1985). Architectural work is not within one of those categories. See May v. Morganelli-Heumann & Associates, 618 F.2d 1363, 1368 n. 4 (9th Cir.1980) (dictum); Aitken, Hazen, et al. v. Empire Construction Co., 542 F.Supp. 252, 257 (D.Neb.1982); Meltzer v. Zoller, 520 F.Supp. 847, 855 (D.N.J.1981). Thus, defendants are left with the argument that Legat drew up the Plans as an “employee within the scope of his ... employment.” 17 U.S.C. § 101(1). We disagree.

Neither the Copyright Act nor the Committee Reports define the terms “employee” or “scope of employment.” However, a substantial body of law has shaped the meanings of these terms. See generally 1 Nimmer at 5-12 to 5-14. The pivotal question in determining if an employment relationship exists is whether the alleged employer has the right to direct and supervise the manner in which the work is performed. See e.g., Aitken, Hazen, 542 F.Supp. at 257; 1 Nimmer, § 5.03[B][l][a] at 5-12 to 5-12.1. Under this criterion, Legat P.C. was an independent contractor, not an employee. Legat P.C. is a well established architectural firm governed by professional standards and regulated by statute. See Ill.Rev.Stat. ch. Ill, 111201 et seq. (1983). As such, a presumption is warranted that Legat P.C. had the principal control over the development of the Plans. Cf. Aitken, Hazen, 542 F.Supp. at 258 (architect has professional obligation to use independent judgment in drawing plans). The record does not rebut this presumption, and, indeed, even absent a presumption, it appears correct that Legat P.C. was an independent contractor. Article 1 of the contract provides that Legat P.C. was to review with USDC alternative approaches to design and construction of the Project. Following such a review, Legat P.C. was to prepare relevant Drawings and Specifications. This preparation was subject to “approval by the Owner,” but nowhere does the contract empower the Owner, USDC, to direct and supervise Legat P.C.’s day-today preparation of the documents. Legat’s affidavit avers that he supervised the preparation of the documents, and that neither Pines nor anyone else controlled or supervised his work. Pines’ and Peterson’s affidavits do not contradict this allegation. They claim that Legat’s Plans were subject to Pines’ approval, but neither one claims that they directly supervised or controlled Legat’s work. Indeed, such an allegation would be incredible, since during the relevant time period, Pines was not even a registered architect, while Legat had been practicing for over twenty years. It is highly unlikely that in such circumstances Pines would “supervise” Legat’s work in the sense meant by the “work for hire” doctrine. In any event, the fact that Pines had the contractual power to approve or veto the final or interim products does not render him an “employer” within the “work for hire” doctrine. Architectural clients typically must approve the final product and even prescribe certain design features at the outset. But this does not mean they “supervise” or “control” the professional architect as he or she prepares the details of the plans.

This case is on all fours with the Aitken, Hazen case, where the Court held that the “work for hire” doctrine did not apply to services rendered by an architectural firm to a building contractor:

While [the builder] had the right to direct the result to be accomplished by [the architect’s] work — i.e., architectural plans for a multiplex apartment building with certain design features — it did not have the right to control and direct the detail and means by which that result was accomplished. Put simply, [the builder] had the right to direct what should be done, but not how it should be done. Rather it was the [architect’s] obligation, as a professional architectural and engineering firm, to use its independent professional knowledge and experience in designing the architectural plans in question.

542 F.Supp. at 258. The factual and logical bases of the Aitken, Hazen holding apply here. We accordingly deny defendants’ motion for summary judgment to the extent it is based on the “work for hire” doctrine, since the record appears clear that Legat P.C. operated as an independent contractor rather than as defendants’ employee.

3. The Confusion Issues

Legat P.C. has alternatively sought relief under the Lanham Act, 15 U.S.C. § 1125 and the Illinois Deceptive Business Practices Act, Ill.Rev.Stat. ch. 121V2, § 311 et seq. The parties agree that to obtain relief under the plain terms of either of these statutes, Legat P.C. must prove, among other things, that defendants falsely designated the origin of the Plans, creating a likelihood of public confusion. Recognizing the importance of the “confusion” issue, defendants seek dismissal of those counts for which confusion is relevant, arguing that confusion is highly unlikely in this case. Once again, we deny defendants’ attempt at dismissal.

The complete factual record reveals that defendants are incorrect. We begin with Legat’s version. As noted earlier, Legat’s drawings supposedly did not conform to HUD and Lake County regulations, and he refused to revise them. In order to prevent costly delay, Pines revised the Plans to bring them into conformance and then filed them with HUD and Lake County. Defendants assert that in signing and sealing the Plans, Pines was not overtly indicating that he and not Legat was the architect who created them. Rather, they claim, he “restrictively assumed liability” for the Plans. That is, he signed as the architect “responsible” for the Plans and was essentially certifying that the Plans conformed to relevant regulations. See above at 295. Relying on these facts, defendants argue that no confusion concerning authorship of the Plans is likely, since Pines did not purport to create them, and his name only appears on file with HUD and Lake County.

Legat P.C.’s affidavit and documentary evidence complete the picture. Legat claims that he did revise the Plans, that they did conform, and that the Plans on file with HUD and Lake County are completely created by him. Besides this assertion, the rest of Legat’s material assertions have not been contested. Legat P.C. has filed with the Court copies of the “cover sheet” for the Plans on file with HUD and Lake County. Those sheets contain a space next to the word “Architect,” and Pines’ name appears in that space. Nowhere on that form or on the Plans themselves does Legat’s name appear. Moreover, Legat claims that under industry custom only the author of architectural plans certifies the plans as conforming to relevant regulations. It thus appears quite possible, even likely, that someone viewing the Plans on file would conclude that Pines is the architect. Legat P.C. avers that the files are accessible to the public, so that someone wanting to know who designed the Phase III project could refer to the Plans and be misled. Further, Legat P.C. avers that the sub-contractors who have worked on the Project could have already been misled. Considering the above evidence, as we must, in the light most favorable to Legat P.C. at minimum a genuine issue of fact exists as to the likelihood of public confusion. Indeed, even the ««contested facts show that confusion is likely.

Defendants’ arguments to the contrary lack merit. They argue that HUD and Lake County officials knew of the dispute .between the parties and so would not be confused by Pines’ certification. Even if this is true, there is still the possibility that others, including sub-contractors and future readers of the file, have been and might be confused. The possible lack of official confusion does not imply that Pines’ certification will not mislead others. Defendants next argue Pines’ name appears “only” on the few Plans filed with HUD and “only” to restrictively assume liability for them. First, the clever phrase “restrictive assumption of liability,” is nothing but a euphemism for authorship if Legat is correct that industry insiders would conclude that Pines’ certification suggests that he created the Plans. Certainly the phrase, if it means anything, does not dispel the likelihood of confusion stemming from Pines’ name next to the word “architect” on the cover sheet. Second, the argument that Pines’ name appears “only” on a few Plans and nowhere else proves too much. It is undisputed that Legat’s name appears nowhere, and Pines’ name appears, if only in a few places, beside the word “architect.” That Pines did not trumpet this designation far and wide does not suggest that his few signatures are unlikely to confuse. Even one false designation of authorship can be enough to create confusion, so long as that designation is accessible to the public. Viewing the facts in the light most favorable to Legat P.C., the likelihood of confusion is manifest, and defendant’s arguments to the contrary must be rejected.

4. Pines as Individual Defendant

The defendants argue that even if we disagree with them on the above arguments, we should dismiss Pines as an individual defendant. They argue that Pines acted at all times within the scope of his employment, as agent of USDC and Peterson, and that only they, rather than he, can be held liable. This misstates the law. It is true that under the doctrine of respondeat superior, USDC and Peterson may be held liable for the wrongful acts of their “servant,” Pines. See, e.g., Bremen State Bank v. Hartford, Accident & Indemnity Co., 427 F.2d 425, 428 (7th Cir.1970). But neither this case nor either of the other cases cited by the defendants suggest that the agent himself if not also liable to a third party for the wrongful acts he commits within the scope of his agency. Rather, Pines plainly can be held liable for his allegedly wrongful acts. See, e.g., Jeanty v. McKey & Poague, Inc., 496 F.2d 1119, 1120-21 (7th Cir.1974); Adkins v. Chicago, Rock Island & Pacific R.R. Co., 2 Ill. App.3d 906, 913-15, 274 N.E.2d 507, 512 (1971), rev’d on other grounds, 54 Ill.2d 511, 301 N.E.2d 729 (1973), cert. denied, 424 U.S. 943, 96 S.Ct. 1411, 47 L.Ed.2d 349 (1976); Rest. (Second) of Agency, §§ 343, 348, 359C (1958). Accordingly, defendants’ motion to dismiss Seth Pines as a defendant is denied. ■

C. Legat P.C.’s Motion for a Preliminary Injunction

Legat P.C. has moved under 17 U.S.C. §§ 502, 503 for a preliminary injunction and writ of seizure, seeking impoundment of the allegedly infringing Plans. Legat argues that injunctive relief is alternatively warranted under the Lanham Act and the Illinois Deceptive Business Practices Act. We agree that Legat P.C. may be entitled to some form of injunctive relief in this case, but at this time we are not ready to enter a formal remedial order.

At the outset, we note our denial of defendants’ summary judgment motion does not automatically imply that Legat P.C. deserves preliminary injunctive relief. In seeking summary judgment, defendants carried the burden of showing that no genuine issue of material fact existed, and we were constrained to view the facts in the light most favorable to Legat P.C. In contrast, in seeking a preliminary injunction, Legat P.C. now carries the burden of proving a reasonable likelihood of prevailing on the merits, as well as irreparable harm and so on. In view of the procedural differences between the two motions, there would be no inherent inconsistency in simultaneously denying defendants’ motion for summary judgment and Legat P.C.’s motion for a preliminary injunction. See Communications Maintenance, Inc., 761 F.2d 1202, 1205 (7th Cir.1985); Technical Publishing Co. v. Lebhar-Friedman, Inc., 729 F.2d 1136, 1139 (7th Cir.1984). On the other hand, it could also obviously be consistent to deny defendants’ motion for summary judgment and grant plaintiff’s motion for preliminary injunctive relief, especially in light of our analysis above.

Before applying the usual four part test for injunctive relief, we think it proper to discuss the scope of the injunctive order that would be appropriate in this case. Even if Legat P.C. were correct as to all facts and could prevail on the four-part test, part of the remedy it seeks — seizure and impoundment of all copies of the Plans — is unnecessary and unjustified. The essence of its copyright, Lanham Act and unfair competition claims, as we see it, is that defendants for whatever reason have created the impression that Pines is sole author of the Plans. Below we agree that this false designation of authorship exceeds the rights granted by the contract and warrants some form of injunctive remedy. But this does not mean the Plans must be impounded. Defendants’ possession and use of unmarked plans creates no confusion. Moreover, defendants are right that their copying and use of the Plans in order to build the Project is authorized by Article 5.1 of the contract. Their failure to pay Legat P.C. for this use may entitle it to damages, but we do not see that as infringement warranting impoundment. In other words, we perceive two distinct harms to Legat P.C., only one of which cannot be repaired by damages. As we discuss below, the illusion that Pines drafted the Plans does harm Legat irreparably absent injunctive relief; but defendants’ copying and use of the Plans in connection with the Project harms Legat P.C. only in that he was not paid in full under the contract for this use. Money can redress this injury.

In short, equity would be served if the public record is corrected as to the source and creator(s) of the Plans. An order requiring that the cover sheets to the Plans (where Pines’ name appears) be amended would vindicate Legat’s equitable interest in preventing confusion. But impoundment of the Plans would serve no purpose. Thus, in discussing the propriety of injunctive relief below, we are discussing only whether an order which corrects the public record, not one which seizes all Plans, is proper under the four-part test.

To obtain preliminary injunctive relief, plaintiff must show:

(1) that it has no adequate remedy at law and will be irreparably harmed if the preliminary injunction is not granted;
(2) that the irreparable harm it would suffer outweighs the harm that a preliminary injunction may inflict on the plaintiffs;
(3) that it has some likelihood of succeeding on the merits; and
(4) that the granting of an injunction will not somehow disturb the “public interest.”

See, e.g., Palmer v. City of Chicago, 755 F.2d 560, 576 (7th Cir.1985); Roland Machinery Co. v. Dresser Industries, 749 F.2d 380, 386-87 (7th Cir.1984) (reh’g and reh’g en banc denied); United States v. Board of Education of City of Chicago, 610 F.Supp. 702, 704-05 (N.D.Ill.1985) (Aspen, J.). We will briefly discuss factors (1), (2) and (4) before focussing on factor (3).

If copyright infringement is shown, it is generally presumed that a plaintiff will be irreparably harmed absent a preliminary injunction, and that it will have no adequate remedy at law. Apple Computer, Inc. v. Formula International, Inc., 725 F.2d 521, 525 (7th Cir.1984); Atari, Inc. v. North American Philips Consumer Electronics Corp., 672 F.2d 607, 620 (7th Cir. 1982), cert. denied, 459 U.S. 880, 103 S.Ct. 176, 74 L.Ed.2d 145 (1982); Federal Practice & Procedure, § 2948 at 440-41 (1973). We do not think that defendants have successfully rebutted this presumption in favor of injunctive relief. So long as public records suggest that Pines drafted the Plans, Legat P.C.’s goodwill and future business is threatened. While damages might compensate Legat P.C. for defendants continued copying and use of the Plans in building the Royal Oak Project, such damages are not adequate to compensate Legat P.C. for the appearance, created by defendants, that Pines authored the Plans.

For similar reasons, we disagree with defendants that the “balance of harms” tips in their favor. They claim that a preliminary injunction would halt construction of the Project, thereby damaging their business and goodwill. They also claim that an injunction would deplete the housing stock and cause unemployment, thereby disserving the public interest as well. Legat P.C. disputes the factual basis of defendants’ assertions: Legat claims that construction is nearly done, and that four of the five buildings in the Project are already occupied. He also asserts that the Plans are not needed to finish the little work that remains to be done on the fifth building. We need not resolve this factual dispute at this time. We do not intend to halt construction even if defendants are right that more needs to be done and the Plans are needed to do it. The type of injunctive relief we discussed earlier is relatively minor and should harm defendants little, as no Plans would be impounded. If they are indeed needed for work, they would be available. Thus, no jobs or housing is at stake. And our order would actually serve the public interest in that it would “preserve the integrity of the copyright laws,” Atari, 672 F.2d at 620, and correct the public record. In light of the contours of the order we are envisioning, then, we think the “balance of harms” and “public interest” factors do not block Legat P.C.’s attempt for injunctive relief.

Finally, we turn to the third factor, the “likelihood of success on- the merits.” While this standard is by no means precise, “all courts agree that plaintiff must present a prima facie case but need not show that he is certain to win.” 11 Wright & Miller, § 2948 at 452. This factor is also fluid. It depends on the degree of harm Legat would suffer in the absence of an injunction. If the harm to Legat P.C. is great, it carries less of a burden of proving likelihood of success on the merits; conversely, if its harm is slight, it must show greater likelihood of success on the merits in order to secure preliminary injunctive relief. See Roland Machineries, 749 F.2d at 387; U.S. v. Board of Education, 610 F.Supp. at 704-05; 11 Wright & Miller, § 2948 at 453-55. Thus, where harm to a plaintiff was extremely severe, we have held that a party seeking injunctive relief need only show that its chances of succeeding are “more than negligible,” that is, that it raises “serious questions.” See Board of Education, 610 F.Supp. at 705. However, in this case, while the harm to plaintiff from Pines’ actions is irreparable, it is not particularly severe or compelling. The Plans are on file with government agencies, and, while accessible, they are probably not often seen by others. Moreover, if Legat is right that the Project is nearly done, then subcontractors have already viewed the Plans and whatever damage, if any, was done and is water under the bridge. Thus, we see no need to relax the “likelihood of success” standard in this case. To obtain preliminary injunctive relief, Legat P.C. must show it has a substantial likelihood of succeeding on the merits.

Nevertheless, we think that Legat is substantially likely to succeed in showing that Pines’ so-called “restrictive assumption of liability” constituted both copyright infringement and a violation of the Illinois Deceptive Business Practices Act. Although we have held no live evidentiary hearing, we think the uncontested evidence submitted by the parties warrants such a conclusion. The evidence shows that regardless of who breached the contract, Legat was the principal and perhaps only author of the Plans, yet Pines and USDC filed them with HUD and Lake County in a way which would suggest to any reasonable observer that Pines authored the Plans. These acts constitute copyright infringement. To establish a prima facie case of infringement, a plaintiff must show that it owns a valid copyright, and that defendant “copied” its work. See, e.g., Atari, Inc., 672 F.2d at 614. Defendants have not disputed that the Plans are copyrightable, that Legat was at least their principal author or that he possesses a copyright. Defendants also admit that they “copied” the Plans. While much of their copying may well have been authorized by the contract, the copying at issue here — filing the copies with HUD and Lake County in a way that creates the impression that Pines was their sole creator— plainly exceeds the scope of the contract and thus was unauthorized copying in violation of the copyright laws. See 17 U.S.C. § 106(1) (owner of copyright has exclusive right to do and to authorize copying of the copyrighted work).

Alternatively, Legat P.C. is reasonably likely to prove that defendants’ actions caused a “likelihood of confusion” and thus violated the Illinois Deceptive Business Practices Act. Under that Act, one commits a deceptive trade practice when, in the course of business, he or she “causes likelihood of confusion or of misunderstanding as to the source ... of goods or services.” Ill.Rev.Stat. ch. 121%, ¶ 312(2) (1983). The statute authorizes injunctive relief for “a person likely to be damaged by a deceptive trade practice.” Ill.Rev.Stat. ch. I21V2, ¶ 313 (1983). We think that it is quite likely that defendants’ actions, whether meant to do so or not, caused “likelihood of confusion or of misunderstanding as to the source” of those Plans. Actual confusion need not be shown; only a “likelihood of confusion” is necessary. See Ill.Rev.Stat. ch. 121V2, 11312 (1983); Filter Dynamics International, Inc. v. Astron Battery, Inc., 19 Ill.App.3d 299, 313, 311 N.E.2d 386, 397 (1974). While we are not certain that actual confusion has occurred or will occur, Legat’s uncontested assertions that the Plans are accessible to the public and could be viewed by various contractors or future architects shows that confusion is reasonably probable. Injunctive relief is appropriate under the statute to defuse this likely confusion.

However, we are not inclined now to issue a formal remedial order for either the copyright or unfair competition claims. First, as we noted earlier, we will be confining such an order to clearing up confusion as to the creator of the Plans. While Legat surely was their principal creator, there is a dispute of material fact about whether Pines revised those Plans. An amendment to the Plans would ideally reflect accurately who the true author(s) is(are). We desire the parties’ input on this point, since they have not really addressed the remedial terms we have proposed. Second, an order which merely amends the “cover sheets” and erases confusion as to authorship might not prove at all unpalatable to defendants. They may decide to consent to such an order, without waiving their other rights in this suit. Finally, much time has unfortunately passed since Legat, P.C.’s motion was filed. We think it prudent to hear from the parties whether any circumstances have changed in the interim before issuing an injunctive order.

To sum up, then, we agree in principle with Legat P.C. that it is entitled to some form of injunctive relief. The injunctive order should be limited to whatever is necessary to clear up any confusion as to the source and author of the Plans on file at HUD and Lake County. Impoundment of other Plans appears unnecessary at this time. The parties are ordered to meet within 14 days to discuss the form an injunctive order shall take and resolve concerns such as the ones raised in the previous paragraph. The proposed injunction order and a brief statement as to the parties’ respective positions on the matters discussed above shall be filed with the Court on or before December 12, 1985.

Other Matters

Defendants have also moved for summary judgment on the two contract counts, arguing that the contract was void for illegality. Legat P.C. has moved to strike this motion because that issue is currently in arbitration. We agree with Legat P.C. In an unpublished order last March, we granted defendants’ motion to refer Counts I and II to arbitration. See n. 1 above. Once in arbitration, defendants raised this new argument that the parties’ contract was illegal. Now defendants have jumped back into this forum and have pressed the contract issue on the Court. They cannot have it both ways. It was they who zealously argued for arbitration, and now it is they who zealously argue that we should short-circuit the arbitration. Although not saying so explicitly, defendants are essentially arguing that we should vacate our decision to refer the case to arbitration, but they have offered no good reason for doing so. The arbitrator, retired Justice Schaefer, is a nationally renowned jurist, and the defendants are lucky to have him. They have stated no reason why we should deprive them of what they wanted so badly earlier in this case, a chance to exercise their contractual right to let Justice Schaefer arbitrate the contract dispute. We are confident that he will render an intelligent and fair decision.

Contrary to defendants’ assertion, the outcome of the contract issue does not affect Legat P.C.’s right to injunctive relief on the other issues. We held earlier in our March 13 order that the contract counts are separate from and do not permeate the other counts. We stand by that holding. We do not agree with defendants that the alleged illegality of the contract bears on Legat P.C.’s request for injunctive relief. Even if defendants were correct that the contract is illegal, Legat P.C. would still deserve some form of injunctive relief. A void or voidable contract does not excuse defendants from passing off Legat’s Plans as their own. And even if the contract were illegal or if Legat in fact breached a legal contract, he would not have “unclean hands” with respect to the injunctive relief we discussed above. “ ‘Ordinarily, the clean hands doctrine only applies when there is a direct nexus between the bad conduct and the activities sought to be enjoined.’ ” Shondel v. McDermott, 775 F.2d 859, 869 (7th Cir.1985), quoting, International Union, Allied Industrial Workers v. Local Union No. 589, 693 F.2d 666, 672 (7th Cir.1982). In this case, there is no such “tight connection between the object of the injunction and the [alleged] misconduct of the plaintiff.” Shondel, at 869. Whether the contract is illegal or Legat P.C. breached it is separate from defendants’ creation of confusion as to the authorship of the Plans. An injunction does not excuse or condone Legat P.C.’s misconduct, if any there be. It merely clarifies the public record as to the author of the Plans. In contrast, denial of the injunction would merely shield defendants’ misconduct and leave intact a misleading public record. In sum, the resolution of the contract issues is largely separate from the other issues in this case. Thus, we grant Legat P.C.’s motion to strike defendants motion for summary judgment on Counts I and II.

Conclusion

Defendants’ motions to dismiss and for summary judgment are denied, the latter without prejudice. In so ruling, we express no opinion as to which party breached the contract or whether the contract is void for illegality. Legat P.C.’s request for injunctive relief is granted in principle, but a formal order will not be entered until after the parties have submitted their proposed form order and respective position papers as discussed herein. It is so ordered.

      . The parties’ contract provided for arbitration of disputes arising out of the contract. In an unpublished order dated March 13, 1985, we granted defendants’ motion to refer the two contract counts to arbitration. We denied defendants’ companion motion to stay the non-contract counts pending arbitration. We held that the contract issues were separate from those involved in Counts III-XV, so that a stay would not serve judicial economy. See March 13 Order at 2-3. Defendants try to revive this issue in connection with their summary judgment motion, and below at 19-20 we again lay their argument to rest.

      . Below in Section C we accept defendants’ argument in narrowing the scope of the injunctive order Legat P.C. is seeking. But as detailed in the text, defendants' arguments warrant neither dismissal of the case nor complete denial of Legat P.C.'s preliminary injunction motion.

      . Legat does of course complain that he was not paid for this use. But that is essentially a contract issue, see discussion below at 300, one that is distinct from defendants’ conduct in connection with filing the Plans with HUD and Lake County.

      . Defendants’ affidavits assert, and Legat denies, that Pines revised the Plans. If this dispute were material, we would have to resolve it in Legat’s favor for the purposes of this summary judgment motion. But this dispute really is not material to whether defendants' actions were proper. Defendants do not dispute that Legat initially drafted the Plans. They also do not directly contradict Legat’s assertion that, although defendants gave him drafts of the Phase II project as a guide, he did not model the Phase III project after Phase II. Thus, defendants’ version of the facts, when combined with the uncontested facts, reveals that Legat was principal author of the Plans, and Pines at most made some revisions to satisfy regulations. Even under this version of the facts, defendants’ actions were improper, since the public record suggests that Pines was sole creator of the Plans.

      . While a default by Legat P.C. would arguably preserve or expand defendants’ rights to use the Plans, see Article 5.1 (quoted above at 295), a default does not appear to shift title in the Plans. Article 5.1 plainly vests title in Legat P.C., and while defendants may have enjoyed the right to use the Plans to finish the Project, we fail to see how they had a contractual right to create a false impression as to who drafted the Plans.

      . Specifically, Peterson’s affidavit says, "I gave the plans and specifications for Royal Oak Phase II to plaintiff Legat to use in making the plans and specifications for Phase III together with instructions to report to both Mr. Seth Pines and me for approval of any changes made in the Phase II Project plans and specifications for Phase III.” This assertion does not contra-diet Legat’s claim, see n. 4 above, that he did not actually model Phase III on Phase II. Nor does Peterson assert that he and Pines directly controlled or supervised the details of Legat’s work.

      . We disagree with defendants that this case resembles Peregrine v. Lauren Corp., 601 F.Supp. 828 (D.Colo.1985). Under the facts of that case the defendant, an advertising agency, "at any point could have vetoed any of Mr. Peregrine’s [a photographer] ideas or otherwise radically changed the course, scope or fact or Mr. Peregrine’s photographic exertions on the project." 601 F.Supp. at 829. It is clear in this case that defendants did not have such a tight rein on Legat’s creations. They could veto a final product, but they were not present calling the shots as Legat was creating the Plans.

      . That section provides:
      (a) Any person who shall affix, apply, or annex, or use in connection with any goods or services, or any container or containers for goods, a false designation of origin, or any false description or representation, including words or other symbols tending falsely to describe or represent the same, and shall cause such goods or services to enter into commerce, and any person who shall with knowledge of the falsity of such designation of origin or description or representation cause or procure the same to be transported or used in commerce or deliver the same to any carrier to be transported or used, shall be liable to a civil action by any person doing business in the locality falsely indicated as that of origin or in the region in which said locality is situated, or by any person who believes that he is or is likely to be damaged by the use of any such false description or representation.

      . Defendants argue that the Contract does not give Legat the right to have his name appear on the Plans. This contention is frivolous. The question here is whether defendants’ actions are likely to cause confusion. Defendants’ contention is irrelevant, as the question is not whether Legat had a right to have his name on the Plans that he authored, but whether Pines had a right to have his name appear there.

      . Even without applying such a standard of review, the undisputed material facts favor Legat P.C. See n. 4 above. We think defendants’ actions, which create a false impression that Pines drafted the Plan, are manifestly likely to mislead a viewer of the Plans on file.

      . Defendants’ motion to strike portions of Legat P.C.’s Reply Brief in support of this motion lacks merit and is denied. It is so ordered.

      . Those sections provide in relevant part:
      (a) Any court having jurisdiction of a civil action arising under this title may, subject to the provisions of section 1498 of title 28, grant temporary and final injunctions on such terms as it may deem reasonable to prevent or restrain infringement of a copyright.
      17 U.S.C. § 502(a).
      (a) At any time while an action under this title is pending, the court may order the impounding, on such terms as it may deem reasonable, of all copies or phonorecords claimed to have been made or used in violation of the copyright owner’s exclusive rights, and of all plates, molds, matrices, masters, tapes, film negatives, or other articles by means of which such copies or phonorecords may be reproduced.
      17 U.S.C. § 503(a).

      . In cases where no conflict of material fact exists, a Court may issue an injunction, just as it may grant summary judgment in like circumstances. See Walsh v. Local Bd. No. 10, 305 F.Supp. 1274, 1279 (S.D.N.Y.1969), overruled on other grounds, United States v. Cook, 505 F.2d 1124 (7th Cir. 1974); Wright & Miller, § 2950 at 490. We observe that this practice has risks, as Professors Wright and Miller point out. Id. at 492. However, we perceive no problem in this case. The professors criticize the situation where a court summarily converts a preliminary injunction into a final order. We have not done so. We are only finding here that the facts material to preliminary injunctive relief do not appear to be in dispute. Below we enter no formal order, and such an order, when entered, will be a preliminary one, which can be amended if necessary.

      . We do not address whether relief is warranted under the Lanham Act, as that is not necessary to decide the issue before us While likelihood of confusion is one element of a § 1125(a) violation, see, e.g., Hooker v. Columbia Pictures Industries, Inc., 551 F.Supp. 1060, 1065 (N.D.Ill.1982), effect on interstate commerce is also required, see, e.g., Scotch Whisky Ass’n v. Burton Distilling Co., 489 F.2d 809, 811 (7th Cir.1973), and the parties have not discussed whether this element has been satisfied. Thus, we think it prudent not to rule on the basis of the Lanham Act. We express no opinion on the commerce issue.

      . Indeed, prudence might dictate that the parties consider resolving all remaining issues in their dispute quickly and promptly by submitting them to arbitration before Justice Schaefer.