author: JAMES E. DOYLE, District Judge.

text:
    CITIZENS STATE BANK OF WITTENBERG, Valders State Bank, Bank of Spring Green, The Farmers State Bank of Waupaca, Cedarhurg State Bank, Bank of Mauston, Waukesha State Bank, and The Northwestern Bank (Chippewa Falls), Wisconsin banking corporations, and The First National Bank of Eagle River, The Union National Bank of Ashland, and The First National Bank of Rhinelander, national banking associations, and The WBA Pension Plans of the Above-Named Banks, Allen M. Voelz, an individual, The M. & I. Marshall & Ilsley Bank, a Wisconsin banking corporation, The First Wisconsin Trust Company, a Wisconsin banking corporation, and The Marine Trust Company, N.A., a national banking association, Plaintiffs, v. CONTINENTAL ASSURANCE COMPANY, a.k.a. CNA Insurance Companies, Defendant.
    No. 84-C-362-D.
    United States District Court, W.D. Wisconsin.
    Dec. 14, 1984.

      Michael P. May of Boardman, Suhr, Curry & Field, Madison, Wis., for plaintiffs.
    Linda M. Clifford of La Follette, Sinykin, Anderson & Munson, Madison, Wis., for defendant.
   OPINION AND ORDER

JAMES E. DOYLE, District Judge.

The second cause of action in the complaint alleges: Plaintiff employers established pension plans for the benefit of their employees. The plans were established through agreements among plaintiff employers, plaintiff trustees, and defendant insurance company. Under the plans and agreements, the future pension plans were to be funded in part by the establishment of an investment fund. In this respect, the agreement offered by defendant was a “security,” within the meaning of the Securities Act of 1933 (“the Act”). Defendant made representations and omissions of fact which were false, fraudulent, deceptive and misleading, in violation of § 17(a) of the Act, 15 U.S.C. § 77q (hereinafter, “17(a)”).

Defendant has moved to dismiss the second cause of action under Fed.R.Civ.P. 12(b)(1) or (6), on the ground that § 17(a) does not provide a private right of action for damages. Unless subject matter jurisdiction is present, I cannot reach the question whether the second cause of action states a claim upon which relief can be granted. Accordingly, I turn to defendant’s 12(b)(1) motion. Only if it is denied can I address its 12(b)(6) motion. However, for either purpose, I look to only the allegations of the complaint.

To this date the United States Supreme Court has reserved ruling whether § 17(a) implies a private right of action. Herman & Maclean v. Huddleston, 459 U.S. 375, 103 S.Ct. 683, 685 n. 2, 74 L.Ed.2d 548 (1983); International Brotherhood of Teamsters v. Daniel, 439 U.S. 551, 557 n. 9, 99 S.Ct. 790, 795 n. 9, 58 L.Ed.2d 808 (1979). The circuit courts of appeals are divided. See Kimmel v. Peterson, 565 F.Supp. 476, 482 n. 6 (E.D.Pa.1983) and cases cited therein.

The Seventh Circuit Court of Appeals has recently commented: “Whether Section 17(a) can be enforced by private damage suits is an open question in this circuit ____” Peoria Union Stock Yards Co. v. Penn Mut. Life Ins., 698 F.2d 320, 323 (7th Cir.1983). In Peoria, the court deemed this “not a terribly important” question, noting that Rule 10b-5 can be enforced by a private damage action, and that “10b-5 tracks § 17(a) closely.” Id. The court reversed a district court decision which had held that the pension plan at issue was not a security, that plaintiffs were barred by a statute of limitations, and that plaintiffs’ complaint was not pleaded with sufficient particularity. Id. at 324-328.

Prior to Peoria the court had held in Daniel v. Inter. Broth, of Tmstrs, Chauf., Etc., 561 F.2d 1223, 1244-46 (7th Cir.1977), rev’d on other grounds sub nom., Inter. Broth, of Teamsters v. Daniel, 439 U.S. 551, 99 S.Ct. 790, 58 L.Ed.2d 808 (1979), that § 17(a) did create a private right of action. In Daniel, however, the court had “proceeded] on the assumption that the operative provisions of the antifraud sections of the 1933 and 1934 Acts are identical ____” 561 F.2d at 1245. Defendants in Daniel did not contest the § 17(a) issue.

Subsequent to the Seventh Circuit’s decision in Daniel, and prior to its decision in Peoria, the United States Supreme Court had distinguished the kind of proof necessary to establish a violation of § 17(a) of the 1933 Act from that required under § 10(b) of the 1934 Act and Rule 10b-5. In Aaron v. Securities and Exchange Commission, 446 U.S. 680, 695-97, 100 S.Ct. 1945, 1954-56, 64 L.Ed.2d 611 (1980), the Court held “that the language of § 17(a) requires scienter under § 17(a)(1), but not under § 17(a)(2) or § 17(a)(3).” Id. at 697, 100 S.Ct. at 1956. The Court had previously limited the reach of § 10(b) and Rule 10b-5 by requiring that a plaintiff prove scienter. Ernst & Ernst v. Hochfelder, 425 U.S. 185, 201, 96 S.Ct. 1375, 1384, 47 L.Ed.2d 668 (1976).

I inquire first whether I should address and decide the question whether § 17(a) does or does not imply a private right of action for damages. Defendant argues that Peoria renders the question open in this circuit and that I should address it fully and decide it. Plaintiffs argue that Peoria renders the question open only in a case in which a § 17(a) claim is pleaded singly, uncoupled to a Rule 10b-5 claim. I understand plaintiffs to argue that in cases like Peoria itself, Daniel before it, and now this present case, in which a § 17(a) claim and a Rule 10b-5 claim are coupled, the question is not open. Rather, it is closed in this circuit, closed in favor of the existence of an implied private right of action under § 17(a). Thus, while plaintiffs agree I should address the question and decide it in their favor, they mean address it not freshly and fully but in the course of recognizing the controlling force of appellate precedent in this circuit.

I am disposed to read “open question in this circuit,” as the words appear in Peoria, as more liberating than plaintiff suggests. In part, I am so disposed because in the earlier cases like Daniel, the court of appeals had itself addressed the issue only provisionally. First, it had accepted the premise that § 17(a) afforded would-be plaintiffs an opportunity for success no broader than that afforded by Rule 10b-5 and, second, it had been aware that § 10(b) and Rule 10b-5 do give rise to private rights of action. Therefore, it had considered it unnecessary to address seriously the availability or nonavailability of a private right of action under § 17(a). While ambiguity has its charms, it may never have been the wiser course to leave uncertain whether a judgment for a successful private plaintiff rested only on § 10(b) and Rule 10b-5, only on § 17(a), or on both. Nevertheless, there is some merit to a suggestion that a trial court should emulate the manner in which the appellate court behaves as well as obey its direct and substantive holdings.

Even if I were otherwise disposed to continue in the paths of ambiguity, however, the effect of the 1980 decision of the Supreme Court in Aaron must be measured. Aaron undercut the earlier assumption of the court of appeals for the seventh circuit that the opportunity for success for a private party on a § 17(a) claim, if a private right of action should exist, would be no broader than the established opportunity on a § 10(b) and Rule 10b-5 claim. Some § 17(a) claims may no longer be considered “slender enough to remain in the shadow of ... § 10(b) claims.” Roskos v. Shearson/American Express, Inc., 589 F.Supp. 627 at p. 629 (E.D.Wis.1984). We know now that practical consequences may flow from the presentation of a § 17(a) claim even when coupled with a § 10b-5 claim.

I understand plaintiff to argue that in the wake of Aaron, the issue may yet be avoided when the § 17(a) claim presented in a particular lawsuit in tandem with a § 10(b) and Rule 10b-5 claim is strictly a § 17(a)(1) claim, as contrasted with a § 17(a)(2)-or (3) claim, because Aaron expands the opportunity for success on § 17(a) claims beyond the opportunity on § 10(b) and Rule 10b-5 claims only when the § 17(a) claims rest in subsections (2) and (3) of § 17(a). Plaintiff does not appear to suggest, and such a suggestion would surely fail in any event, that § 17(a) may be dissected as among its three subsections for the purpose of determining whether Congress implied the existence of a private right of action under one or two but not three of the subsections. Rather, the argument seems to be that it continues to be unnecessary to confront fully the question whether an implied private right of action exists under § 17(a), when the case at hand combines a claim strictly confined to § 17(a)(1), coupled with a claim under § 10(b) and Rule 10b-5.

I would not be persuaded by such exquisite refinement even if it were true that the present case combines a strictly § 17(a)(1) claim with a § 10(b) and Rule 10b-5 claim. But the second cause of action presently under consideration is not so confined. It cites § 17(a) generally and its language, including the language it incorporates by reference, does not track the language of § 17(a)(1) alone, as distinct from the language of § 17(a)(2) or (3). If plaintiff is allowed to proceed to trial on its second cause of action and the evidence proves arguably sufficient to support a verdict for plaintiff under § 17(a)(2) or (3) but not under § 17(a)(1), much time and effort will have been expended for the sake of avoiding careful inquiry now into the presence or absence of subject matter jurisdiction under § 17(a). Rather than risk such costs of continued ambiguity and equivocation, I will decide whether § 17(a) implies a private right of action.

In Cort v. Ash, 422 U.S. 66, 78, 95 S.Ct. 2080, 2087, 45 L.Ed.2d 26 (1975), the Court stated the factors to consider when deciding questions of statutorily implied private rights of action. Those criteria were summarized in Bassler v. Central Nat. Bank of Chicago, 715 F.2d 308, 310 (7th Cir.1983):

(1) whether the plaintiff is a member of the class for whose “especial benefit” the statute was passed; (2) whether there is any indication of legislative intent, explicit or implicit, either to create a private right of action or to deny one; (3) whether a private right is consistent with underlying purposes of the legislative scheme; and (4) whether the claim is one traditionally assigned to state law so that it would be inappropriate to infer a claim based on federal law.

In Allison v. Liberty Savings, 695 F.2d 1086, 1088 (7th Cir.1982), the court observed that legislative intent is key:

The Court has since explained and clarified the test’s application. All four factors are not equally weighted; the central inquiry is whether Congress intended to create a private right of action. Transamerica Mortgage Advisors, Inc. v. Lewis, 444 U.S. 11, 15-16, 100 S.Ct. 242, 245, 62 L.Ed.2d 146 (1979); Touche Ross & Co. v. Redington, 442 U.S. 560, 575, 99 S.Ct. 2479, 2488, 61 L.Ed.2d 82 (1979). If Congress has indicated its intent, either expressly or by implication, the court’s inquiry ends without consideration of the remaining Cort factors.

Similarly, in Bossier, the court observed “that the Cort mode is but one of several permissible approaches to ascertainment of that intent.” 715 F.2d at 310.

When the House Committee report listed those sections of the Securities Act of 1933 that create and define civil liability, it identified only sections 11 and 12, adding that “[t]o impose a greater responsibility ... would unnecessarily restrain the conscientious administration of honest business with no compensating advantage to the public.” H.R.Rep. No. 85, 73rd Cong., 1st Sess. 9-10 (1933). This piece of legislative history has been frequently cited by courts which have considered the § 17(a) private remedy question. See Landry v. All American Assurance Co., 688 F.2d 381, 389 and n. 34 (5th Cir.1982); SEC v. Texas Gulf Sulphur Co., 401 F.2d 833, 867 (2nd Cir.1968) (Friendly, J., concurring), cert. denied, 394 U.S. 976, 89 S.Ct. 1454, 22 L.Ed.2d 756 (1969); Kimmel v. Peterson, 565 F.Supp. at 486; Basile v. Merrill Lynch, Pierce, Fenner, & Smith, 551 F.Supp. 580, 586 (S.D.Ohio 1982); Reid v. Mann, 381 F.Supp. 525, 526 (N.D.Ill.1974). These courts have concluded uniformly that Congress did not intend a private right of action under § 17(a).

Further evidence of Congress’ intention in enacting § 17(a) appears in a memorandum explaining an amendment offered by Senator Fletcher to Title II of the Securities and Exchange Act of 1934, which was an amendment to the Securities Act of 1933. Senator Fletcher proposed that § 17(a) be amended to require compliance with certain registration provisions by groups purporting to act on behalf of stockholders. The explanatory memorandum ends with the following statement: “It is to be noted that enforcement of the provisions of the new subsection is left to injunction, stop order, and criminal prosecution. No civil liability attaches for any violation thereof.” 78 Cong.Rec. 8711-12 (1934). The Fletcher amendment was not included in the bill which emerged from the Senate-House Conference. However, the portion of the explanatory memorandum I have quoted is cited in Ruder, Civil Liability under Rule 10b-5: Judicial Revision of Legislative Intent? 57 Nw.U.L.Rev. 627, 656-57 (1963), where it is noted that Fletcher was well acquainted with the regulatory provisions of the 1934 Act and the 1933 Act. Other scholars and participants have concluded that Congress intended that only the SEC enforce § 17(a), using it as a basis for injunctive or criminal liability, and that § 17(a) not supplement the actions for damages provided by §§ 11 and 12 of the 1933 Act. See L. Loss, Fundamentals of Securities Regulation 1148 (1983); Landis, Liability Sections of the Securities Act, 18 Am.Acct. 330, 331 (1933); Douglas and Bates, Federal Securities Act of 1933, 43 Yale L.J. 171, 181-82 (1933).

The context of the entire securities law scheme reinforces such a view. I have referred, for example, to the securities regulatory framework when discussing the practical significance of the § 17(a) private remedy issue given the differences in proof required to substantiate § 17(a)(2) and (3) claims versus a § 10(b) claim. Also, certain procedural safeguards attend lawsuits filed under §§ 11 and 12 but not those filed under § 17(a). “To permit a private right of action under § 17(a) would cause the statutory and judicially-crafted restrictions on § 10(b) of the 1934 Act and §§11 and 12 of the 1933 Act to atrophy and fall away as securities fraud cases hustled in the back door of § 17.” Roskos, at p. 631. See Landry, 688 F.2d at 390, and Kimmel, 565 F.Supp. at 487.

I conclude there is no indication of legislative intent, explicit or implicit, to create a private right of action under § 17(a). Every indication points to the conclusion that there is no implied private remedy. In the absence of the existence of such a remedy, subject matter jurisdiction of this action is lacking.

ORDER

Defendants’ motion to dismiss plaintiffs’ second cause of action, pursuant to Fed.R. Civ.P. § 12(b)(1), is granted. I refrain from directing entry of judgment, presently, dismissing the second cause of action. Fed.R. Civ.P. 54(b).

      . Section 17(a) provides:
      (a) It shall be unlawful for any person in the offer or sale of any securities by the use of any means or instruments of transportation or communication in interstate commerce or by the use of the mails, directly or indirectly—
      (1) to employ any device, scheme, or artifice to defraud, or
      (2) to obtain money or property by means of any untrue statement of a material fact or any omission to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading, or
      (3) to engage in any transaction, practice, or course of business which operates or would operate as a fraud or deceit upon the purchaser.

      . SEC Rule 10-b5, 17 C.F.R. § 240.10b-5, was promulgated under the Securities Exchange Act of 1934, see 15 U.S.C. § 78j(b).

      . In Peoria and in Daniel, the complaints included a claim based on § 17(a), and also a claim based on Rule 10b-5.

      . Although Aaron involved a civil enforcement action by the SEC, there is no basis in the Court’s analysis of the statutory language for distinguishing, in terms of proofs required of plaintiffs, between SEC actions and private actions. See Hudson v. Capital Management Intern., Inc., 565 F.Supp. 615, 626 (N.D.Cal.1983).


source: Caselaw Access Project

author: CARRIGAN, District Judge.

license: Public Domain

text:
    Diane HOOT, Plaintiff, v. UNITED STATES of America, Defendant.
    Civ. A. No. 84-C-664.
    United States District Court, D. Colorado.
    Dec. 17, 1984.
    Ronald G. Crowder, Barton & Crowder, Colorado Springs, Colo., for plaintiff.
    James W. Winchester, Asst. U.S. Atty., Denver, Colo., for defendant.
   ORDER

CARRIGAN, District Judge.

Diane Hoot filed this action under the Federal Tort Claims Act, 28 U.S.C. 2671 et seq. seeking damages for personal injuries. The United States has moved to dismiss, asserting that the case is excluded from the Act’s coverage by § 2680(h), the provision that excludes assault and battery cases. The parties have briefed the issues thoroughly, and oral argument would not assist the decision process.

I. Background.

Well pleaded allegations in a plaintiff’s complaint must be taken as true in deciding a motion to dismiss. The facts as stated in this order are those alleged in the complaint; they are taken as true only for purposes of this motion.

On October 25, 1980, one Firth, a soldier in the United States Army stationed at Fort Carson, Colorado, entered Hoot’s Colorado Springs apartment while she was out. When Hoot returned, Firth beat her, threatened her with a deadly weapon, held her captive, and strangled her into unconsciousness.

Prior to this incident, Firth repeatedly had sought mental health treatment. Initially, he had asked for such treatment at a civilian institution, the Pike’s Peak Mental Health Center, but was denied treatment there because of his military status. Employees of that center encouraged Firth to seek help through the Army.

Firth next requested and received an appointment with Army Community Services, the organization through which soldiers receive psychiatric care. An unknown private screened Firth and denied him access to a doctor. Thereafter his mental condition apparently grew worse, and at one point he irrationally fired a shot through the floor of a friend’s car. On another occasion, while he was on duty, Firth threatened a fellow soldier with an automatic rifle. His superiors learned of the latter incident and were sufficiently concerned that they limited his access to weapons.

In September or early October, 1980, Firth asked his squad leader’s permission to seek psychiatric help at Army Communi: ty Services. The squad leader refused to allow time off duty for that purpose. Firth’s platoon sergeant and his commander also refused his requests for treatment.

Plaintiff Hoot claims that the Army’s negligence in refusing to provide Firth mental health treatment proximately caused her injuries. She sues the United States under the Federal Tort Claims Act, 28 U.S.C. § 2671 et seq. In its motion to dismiss, the United States argues that Hoot’s claim arises from an intentional tort and therefore is not covered by the Tort Claims Act. See 28 U.S.C. § 2680(h). Jurisdiction is based on 28 U.S.C. § 1346(b).

II. Discussion.

The United States contends that the Tenth Circuit opinion in Naisbitt v. United States, 611 F.2d 1350 (1980) controls. In Naisbitt two off-duty airmen committed multiple batteries, rapes and murders against the plaintiffs and their decedents. Plaintiffs there claimed that the United States was negligent in failing to supervise the two airmen. After reviewing the cases that had interpreted 28 U.S.C. § 2680(h), the provision excepting traditional intentional torts from the Tort Claims Act immunity waiver, the court concluded that a “strong thread running through most of these cases is that which recognizes the immunity of the government where the assailant is an employee of the government.” Id. at 1356. The court reasoned that where the principal basis for asserting liability against the government is the fact that the intentional tortfeasor is a government employee, the government is immune from suit. Thus, sovereign immunity bars an action against the United States if the plaintiff is merely attempting to impute the intentional acts of government employees to the government.

The result in Naisbitt might have been different had there been any specific negligence alleged against supervisory air force personnel. ■ Rather Naisbitt involved only generalized allegations of negligent failure to supervise airmen. There was no allegation there that the supervisors knew or should have known that the specific two airmen were more dangerous than other airmen. A close reading of Naisbitt makes clear that if there had been such specific negligence related to particular airmen and creating a forseeable risk of the kind of harm that occurred, the result would probably have been different. Rather Naisbitt reads as an effort by the plaintiffs to bootstrap past § 2680(h) by broadly alleging supervisory negligence in an unfocused form without indicating any direct causal relation — or forseeability — of which airmen might cause harm, or what kind of harm they might cause. Judge Doyle’s opinion in Naisbitt noted that the airmen’s attack “was, as a matter of law, an intervening force of such great magnitude that it rendered the negligence of the government in failing to control the assailants insignificant in comparison.” Id. at 1356.

Thus the actual holding of the case was narrow: the intentional tort exception was extended to negligence of supervisory employees only where their alleged negligence was but a slight or minimal factor in bringing about the plaintiff’s injury and the assaultive behavior was an intervening cause. In holding the airmen’s crimes were intervening forces, Naisbitt necessarily held by implication that those crimes were unforseeable: a forseeable consequence cannot be an intervening or superceding force where the negligent defendant has created or increased the forseeable risk of harm through intervention of that force. Restatement, Torts (2d) § 442(A); Prosser Torts 272 (4th ed. 1971).

Thus, Hoot’s claim against the United States is easily distinguishable from the plaintiffs’ claims in Naisbitt. There, even though the plaintiffs phrased their claims in negligence terms, they were actually attempting to impute the airmen’s intentional acts to their supervisors who had almost no causal role in the injuries. Hoot, however, asserts a plausible, independent negligence claim against the supervisors themselves, claiming it was their negligence which really caused the injury. Here the specific allegations of repeated negligent refusals to provide treatment to a demonstrably violent, potentially dangerous, emotionally ill serviceman, whose army status rendered civilian mental health care unavailable, go well beyond the mere generalized claim of failure to supervise airmen on leave asserted in Naisbitt.

Thus the actual tort on which Hoot’s claim is based is not the ultimate assault, but the negligence of the supervising personnel in denying needed mental health care. She does not merely seek to hold military supervisory personnel vicariously liable for an assault by their underling; rather the negligence of the supervisors themselves is the tort for which she seeks damages. Nor is there here any intervening cause, as in Naisbitt, for here the kind of harm brought about by the negligence was clearly forseeable.

Moreover, the act giving rise to this suit occurred while Firth was off duty, and thus the rationale behind governmental immunity should have less force. Had Firth been a cannonball negligently loosed to roll willy-nilly down the street and ultimately explode injuring whatever bystander was near, the government would be liable for its employee’s negligence in loosing it. The negligence is not that of the cannonball in exploding, but of the Army employee in not restraining it.

If the instant complaint be true, Firth was loosed on an unsuspecting community by the negligence of government employees who had repeated warnings that he might explode and injure someone. It is clear causal negligence, not Firth’s assault, for which a remedy is here sought. Firth’s act but furnished the injury element to an otherwise complete tort.

The United States also relies on two cases from other circuits. In Hughes v. United States, 662 F.2d 219 (4th Cir.1981), a mailman sexually assaulted the plaintiff. The mailman had been arrested and treated five years earlier for a similar offense. The plaintiff sued the United States for its failure to discharge the mailman. The Fourth Circuit upheld the district court’s decision holding the United States immune under § 2680(h) from suits arising from intentional torts. Hughes is a brief and conclusory opinion of little precedential value here.

In United States v. Shively, 345 F.2d 294 (5th Cir.1965), an army sergeant killed his wife with a pistol he had received from the local army base without proper authorization. The court held that the sergeant’s intentional tort was a supervening cause of his wife’s death and relieved the Army of liability. Shively is not helpful here because the court there relied on Georgia’s state law governing intervening cause. As above explained, there was no intervening cause in the instant case.

In opposition to the defendant’s motion to dismiss, Hoot relies on three cases holding the government liable to third parties for negligent supervision of soldiers undergoing psychiatric care. Underwood v. United States, 356 F.2d 92 (5th Cir.1966); Merchant’s National Bank v. United States, 272 F.Supp. 409 (D.N.D.1967); Lipari v. Sears Roebuck & Co., 497 F.Supp. 185 (D.Neb.1980). Unlike the present case, these cases involved patients already receiving psychiatric treatment. Nonetheless, taking the allegations in Hoot’s complaint as true, I conclude that Hoot has asserted sufficient claims of negligence against the United States to avoid the government’s sovereign immunity defense against intentional torts.

Accordingly,

IT IS ORDERED that the defendant’s motion to dismiss is denied.


author: WARREN, District Judge.

text:
    Joyce DOMKE, Personal representative of the Estate of William Simons, Deceased, and William Simons II and Laura Simons, by Robert P. Rudolph, their Guardian ad Litem, Plaintiffs, v. The SIEMPELKAMP COMPANY, Colonia Insurance Company, Nercon Engineering & Manufacturing, and Employers Insurance of Wausau, Defendants.
    No. 83-C-945.
    United States District Court, E.D. Wisconsin.
    Dec. 19, 1984.
    George W. Curtis, Curtis-Wilde Law Office, Oshkosh, Wis., for plaintiffs.
    Patrick B. Howell, Frisch, Dudek & Slattery, Milwaukee, Wis., for Siempelkamp Corp. and Colonia Ins. Co.
    Daniel R. Riordan, Riordan, Crivello, Carlson, Mentkowski & Henderson, Milwaukee, Wis., for Nercon Engineering and Employers Ins. of Wausau.
    Ned J. Czajkowski, Kluwin, Dunphy & Hankin, Milwaukee, Wis., for Lauderdale Machine Shop and U.S. Fidelity and Guaranty Co.
   DECISION AND ORDER

WARREN, District Judge.

Presently before the Court in this matter is the motion of defendant Nercon Engineering and Manufacturing (“Nercon”) to remand this case, pursuant to 28 U.S.C. § 1447(c), to the state circuit court from which it was removed. The Court has determined, for the reasons stated below, that the procedural and substantive developments in this action to date do not justify remand and that the present motion must therefore be denied.

BACKGROUND

This action was initiated on July 1, 1983, when the plaintiffs filed their complaint in the Wisconsin Circuit Court for Winnebago County, seeking damages for the death of one William Simons. Named as principal defendants in the action were The Siempelkamp Company (“Siempelkamp”) and Lauderdale Hamilton Company (“Lauderdale”), two parties allegedly responsible for the improper design and defective manufacture of certain press machinery which the deceased was operating during the course of his employment when he was killed.

On July 28,1983, the action was removed from state court upon the petition of defendant Siempelkamp, filed pursuant to 28 U.S.C. §§ 1441(a) & 1446(a). Significantly, Siempelkamp noted in its removal petition that 28 U.S.C. § 1332(a) confers original jurisdiction upon this Court over the subject matter and parties to this action, since the amount in controversy exceeds the sum of $10,000.00 and all plaintiffs are diverse from all defendants. With respect to this second consideration, defendant Siempelkamp observed that while the plaintiffs are all residents of the State of Wisconsin, Siempelkamp itself is incorporated in the State of Tennessee with its principal place of business in the State of Georgia, and defendant Lauderdale is both incorporated and maintains its principal place of business in the State of Mississippi. Finally, Siempelkamp stated that its insurance company, designated as an unknown party in the original complaint, is a foreign corporation, authorized and operating pursuant to the laws of the Federal Republic of Germany, and that the insurer for defendant Lauderdale, likewise designated in the complaint as an unknown party, is incorporated and maintains its principal place of business in the State of Maryland.

Apparently, on July 27, 1983, one day before this action was removed to federal court, the plaintiffs filed an amended summons and complaint in the Wisconsin Circuit Court for Winnebago County, incorporating those principal allegations and prayers for relief stated in the original complaint. On August 11, 1983, defendant Siempelkamp, having previously interposed an answer to the original complaint, filed its answer to the supplemental petition, denying all material allegations against it, raising five affirmative defenses, and stating a cross-claim for contribution against co-defendant Lauderdale. On August 24, 1983, Colonia Insurance Company (“Colonia”), the previously unidentified insurer of defendant Siempelkamp, likewise filed its answer to the amended complaint, incorporating by reference all admissions, affirmative allegations, denials, and qualifications set forth in the answer interposed by Siempelkamp on August 11, 1983.

On October 25, 1983, defendants Lauder-dale and its previously unidentified insurer, United States Fidelity and Guaranty Company, filed its answer to the amended complaint, similarly denying all principal claims against it, stating some five affirmative defenses, and raising a cross-claim for contribution from defendants Siempelkamp and Colonia. Eight days later, on November 3, 1983, Siempelkamp and Colonia answered the cross-claim interposed by Lauderdale and Fidelity and re-articulated their own cross-claim for contribution from these two co-defendants. Lauderdale and Fidelity answered the cross-claim against them on November 10, 1983.

On March 15, 1984, the Court conducted an initial status conference in this case, during which it established various deadlines for the designation of witnesses and the completion of discovery. Significantly, it was at that hearing that the Court granted the plaintiffs leave to join the present defendant and movant, Nercon Engineering and Manufacturing (“Nercon”), as a party to this action. See Court’s Letter at 1 (March 15,1984). Upon the stipulation of all parties, the Court, on March 26, 1984, dismissed without prejudice and without costs all claims and cross-claims made against defendants Lauderdale and Fidelity.

On April 10, 1984, the plaintiffs filed a second amended complaint, incorporating the dismissal of defendants Lauderdale and Fidelity and stating, for the first time, their claims against defendants Nercon and its insurer, Employers Insurance of Wausau (“Employers”). On May 1, 1984, defendants Siempelkamp and Colonia answered the second amended complaint, this time incorporating a cross-claim for contribution or indemnity against defendants Nercon and Employers. Eight days later, on May 9, 1984, Nercon and Employers likewise answered the second amended complaint and cross-claimed against defendants Siempelkamp and Colonia for contribution or indemnity. Finally, on May 17, 1984, defendants Siempelkamp and Colonia answered the recent cross-claim of defendants Nercon and Employers.

The present motion, seeking an order remanding this action, to the state court pursuant to 28 U.S.C. § 1447(c), was interposed by Nercon on July 16, 1984. In support of its request, the movant notes that the original petition for removal of this case, filed by defendant Siempelkamp on July 28, 1983, was premised principally on the existence of complete diversity between the plaintiffs, all Wisconsin residents, and the defendants, all residents of foreign jurisdictions. It is the movant’s principal contention that since it, like all plaintiffs, is a resident of the State of Wisconsin, its joinder in this action as a party defendant effectively destroys the complete diversity required under 28 U.S.C. § 1332(a). Arguing that 28 U.S.C. § 1447(c) does not preclude this Court from examining any post-removal developments to determine whether its jurisdiction has been compromised, movant Nercon seeks remand of this action back to the Wisconsin Circuit Court for Winnebago County, based on the lack of federal subject matter jurisdiction.

In its answering brief of July 27, 1984, defendants Siempelkamp and Colonia recite briefly the procedural developments of this action to date and argue, among other things, that post-removal developments in the prosecution and defense of this action fail to establish a reasonable basis upon which remand might be justified. While acknowledging that some federal courts have, on occasion, reviewed post-removal circumstances in deciding the propriety of remand, these defendants also contend that, once obtained, the jurisdiction of the federal courts over properly-removed actions such as this should not be defeated.

More specifically, defendants Siempelkamp and Colonia maintain that the peculiar procedural posturing of the parties to date and their reasonable expectations for the prosecution and defense of the several claims in this case justify the Court’s retention of jurisdiction, as follows:

The Court, presumably on the basis of F.R.C.P. 15, permitted the plaintiff to amend its pleading to add Nercon without questioning the “citizenship” of Nercon. The Court did not permit this amendment so as to defeat federal court jurisdiction, rather, once jurisdiction was obtained, the Court merely allowed the plaintiff to add a necessary, although not indispensable, party; ...
Since the plaintiffs alleged that Siempelkamp and Nercon are joint tort-feasors, with joint and several liability, Nercon is not an indispensable party to this litigation. Plaintiffs could obtain complete relief against Siempelkamp only. Moreover, the plaintiffs merely added as an additional defendant a party that Siempelkamp was prepared to name as a third-party defendant pursuant to F.R. C.P. 14. Parties impleaded under Rule 14 fall under the ancillary jurisdiction of the court and do not affect the Court’s original determination of whether diversity is present [citations omitted]. Had plaintiffs not identified Nercon as a defendant, Siempelkamp would have instituted a third-party complaint and, as long as the plaintiffs maintain their claim against Siempelkamp, this Court would have obtained jurisdiction [citations omitted]. Principals of judicial economy mandate that the mere alignment of the parties not dictate whether the Court has subject matter jurisdiction of this action____

Defendants’ Brief in Opposition to Motion to Remand at 5-6 (July 27, 1984). This central claim that the present alignment of the parties is irrelevant for jurisdictional purposes, coupled with the threshold argument that this case was not improvidently removed under 28 U.S.C. § 1447(c), warrant denial of defendant Nercon’s motion to remand, or so defendants Siempelkamp and Colonia conclude.

28 U.S.C. §§ 1332(a), 1441(a), & 1447(c) AND DEFENDANT NERCON’S MOTION TO REMAND

As the parties recognize in their opposing briefs, this action was removed to federal court pursuant to 28 U.S.C. § 1441(a), which provides for the removal of “any civil action brought in a State court of which the district courts of the United States have original jurisdiction____” In a case such as this, the Court’s original jurisdiction is established by 28 U.S.C. § 1332(a)(3), since the matter in controversy exceeds the sum of $10,000.00, and is between “citizens of different States and in which [a] citizen[ ] ... of a foreign state [is] an additional part[y].”

It is well established that the diversity of parties, as prescribed by 28 U.S.C. § 1332(a), must be complete — that is, that all indispensable parties with claims on one side of the controversy must be citizens of different states from all indispensable parties with claims on the other. See Krupnick v. Union National Bank, 470 F.Supp. 1037, 1038 (W.D.Pa.1979); Schetter v. Heim, 300 F.Supp. 1070, 1072 (E.D.Wis.1969). Indeed, if the citizenship of any plaintiff is identical to that of any defendant in an action premised on the jurisdictional prescription of 28 U.S.C. § 1332(a), diversity is completely destroyed. See Owen Equipment & Erection Company v. Kroger, 437 U.S. 365, 373, 98 S.Ct. 2396, 2402, 57 L.Ed.2d 274 (1978); Strawbridge v. Curtiss, 7 U.S. (3 Cranch) 267, 2 L.Ed. 435 (1806).

This Court has itself recently invoked these well-established principles regarding federal diversity jurisdiction in finding that the amendment of a complaint to join a nondiverse, yet necessary, party as an additional defendant necessitated remand to the state court from which the action was removed. See Wimes v. Eaton Corporation, 573 F.Supp. 331 (E.D.Wis.1983). In that case, the Court found that the joinder of another indispensable Wisconsin defendant whose interests were clearly adverse to those of the Wisconsin plaintiff destroyed the diversity jurisdiction invoked by the Ohio defendant in its removal petition, filed pursuant to 28 U.S.C. § 1332(a).

While thus recognizing the validity and force of the general propositions upon which defendant Nercon seeks remand, the Court nonetheless concludes that the circumstances of the present case are sufficiently distinguishable from those eases cited by the movant Nercon to justify denial of its present motion. In reaching this conclusion, the Court notes, as have defendants Siempelkamp and Colonia, that when a case has been properly removed, jurisdiction over it will generally not be defeated by later changes or developments in the action, such as changes in citizenship or in parties. Southern Pacific Company v. Haight, 126 F.2d 900, 903 (9th Cir.1942), cert. denied, 317 U.S. 676, 63 S.Ct. 154, 87 L.Ed. 542 (1942). In fact, under circumstances similar to those of the present case, federal tribunals have explicitly found that actions of plaintiffs in adding nondiverse parties following discovery need not destroy their original diversity jurisdiction and compel remand to the state court, unless the added parties were indispensable. See Kaib v. Pennzoil Company, 545 F.Supp. 1267, 1269-1270 (W.D.Pa.1982); Barrett v. McDonald’s of Oklahoma City, 419 F.Supp. 792, 793 (W.D.Okla.1976). Indeed, as Professors Wright, Miller, and Cooper observe:

The addition of indispensable parties should be contrasted with the addition of litigants who are merely necessary or proper. If the addition of a necessary or proper party-whose presence destroyed diversity required a remand, the federal courts could be deprived of subject matter jurisdiction by the simple expedient of plaintiff adding a nonessential nondiverse party. Accordingly, in this situation the federal courts usually will not permit the nondiverse party to be added, or it simply will invoke the doctrine of ancilliary jurisdiction and deny remand.

14 Wright, Miller, & Cooper, Federal Practice And Procedure § 3739 at 762 (1976).

Examining the merits of the present motion under these general guidelines, it is clear, as defendants Siempelkamp and Colonia contend, that co-defendant Nercon was joined in this action as a joint tortfeasor. Since joint and several liability thus exists between Siempelkamp and Nercon, the plaintiffs could obtain complete relief, if they so desire, from Siempelkamp alone. In short, movant and co-defendant Nercon is not an indispensable party to this litigation. Accordingly, the Court finds that the strict requirement of complete diversity, necessary in cases involving indispensable parties, is not applicable here.

Furthermore, the Court is convinced that judicial, prosecutorial, and defensive economies would be promoted if the parties, as presently aligned, were permitted to proceed with the litigation of their various claims against one another. In the Court’s view, no substantive or procedural advantage would be gained by requiring defendants Siempelkamp and Colonia to assert a discrete third-party claim against Nercon and Employers when the merits of the allegations between these co-defendants will presumably be litigated in the context of the cross-claims they have already initiated.

At the time of the status conference of March 15, 1984, the Court granted the plaintiffs leave to join Nercon and its insurer not for the purpose of defeating that jurisdiction upon which the case had been removed but, rather, to facilitate the complete exposition and disposition of all claims arising from the death of William Simons. Nothing in defendant Nercon’s motion papers convinces the Court that the presence of nondiverse parties on opposing sides of this action mandates remand to the Wisconsin Circuit Court for Winnebago County.

Finally, the Court notes, if only in response to the peripheral arguments articulated by the parties in their briefs, that the case was not, in the language of 28 U.S.C. § 1447(c), “removed improvidently and without jurisdiction____” As defendants Siempelkamp and Colonia observe in their memorandum and as the Court has recited above, all procedural and substantive prerequisites to removal to this tribunal were met on July 28, 1983, when the removal petition was filed. The upshot of today’s decision is that the subsequent joinder of additional, nondiverse, dispensable defendants need not defeat the Court’s jurisdiction, pursuant to 28 U.S.C. § 1332(a), and thus compel an order for remand.

CONCLUSION

For the reasons articulated above, the Court hereby DENIES the motion of defendant Nercon for an order remanding this case to the Wisconsin Circuit Court for Winnebago County, pursuant to 28 U.S.C. § 1447(c).


author: ELFVIN, District Judge.

text:
    Barbara KULSAR, Diane Yackle, Michelle Munro, Walter Schewtschuk, Stasia Schewtschuk, Betty Keeton, Vera Muerle, and Beverly Stalker, Plaintiffs, v. Gordon M. AMBACH, Commissioner of Education of the State of New York; New York State Board of Regents; State Board for Professional Medical Conduct; Jerome Ditkoff, D.O.; Lawrence Ames, M.D.; William Heyden, M.D.; David Sherman, M.D.; Robert Briber, and Marshall Grauer, Esq.; individually and as members of the State Board for Professional Medical Conduct; David Axelrod, M.D.; Commissioner of Health of the State of New York; Robert B. Abrams, Attorney General of the State of New York; and Douglas K. McGivney, Esq., Designee of the Attorney General, Defendants.
    No. CIV-84-932E.
    United States District Court, W.D. New York.
    Dec. 21, 1984.
    Jeffrey A. Lazroe, Buffalo, N.Y., for plaintiffs.
    Peter B. Sullivan, Asst. Atty. Gen., Buffalo, N.Y., for defendants.
   MEMORANDUM and ORDER

ELFVIN, District Judge.

In this action under 42 U.S.C. § 1983 seeking injunctive relief as well as a declaration that certain laws of the State of New York unconstitutionally prohibit plaintiffs’ physician from administering to them a “nutritional-hormonal” treatment for hypoglycemia, plaintiffs have moved for a preliminary injunction and defendants Ambach, Axelrod, Abrams and the New York State Board of Regents (“the Board”) have moved to dismiss the Complaint or, alternatively, for summary judgment.

Plaintiffs have alleged that they are residents of Erie County, N.Y., “who wish to avail themselves of medical treatment for hypoglycemic disorders from Dr. Raymond L. Moreland.” Complaint, at page 2. It is further alleged that defendants’ acts and policies have made it impossible for certain plaintiffs suffering from various afflictions to receive “professional services of a preventive-nutritional oriented doctor specializing in vitaminal, nutritional and adrenal-cortical hormonal therapy.” Ibid.

Although the Complaint is somewhat ambiguous, it appears that it contains two distinct claims — namely, (1) that plaintiffs’ constitutional privacy rights have been infringed due to the allegedly improper removal by defendants of Moreland’s license to practice medicine; and (2) that their right to choose medical treatment of their choice has been violated by defendants’ ban upon the treatment of hypoglycemia by utilization of a “nutritional, vitamin, adrenal-cortical and hormonal approach to treatment.” (Complaint, at page 4).

Defendants have asserted that there is currently pending before New York’s Appellate Division, Third Department, a review of the Board’s determination that had revoked Moreland’s license, that More-land’s motion for a stay of the revocation order had been denied by the Appellate Division July 23, 1984 and that plaintiffs lack standing to assert any claim based upon any alleged violation of the rights of Moreland. Defendants have correctly stated that Moreland’s license had not been revoked by the Board primarily due to his treatment of patients with substances such as raw adrenal cortex extract (“a.c.e.”) and laetrile, but due to his failure to have examined and diagnosed patients properly, to have evaluated tests properly, his ordering of unnecessary tests and his demonstrated poor judgment and incompetence in the practice of medicine. See Report of Hearing Committee, annexed as exhibit C to the September 12, 1984 affidavit of Peter B. Sullivan.

This Court agrees with defendants’ position that, in view of the pending stateside appeal of the revocation of Moreland’s license, it would be inappropriate for this Court to consider plaintiffs’ claim that Moreland’s license had been arbitrarily and capriciously removed due to his rendering to them of an unorthodox medical treatment. Moreland’s entitlement vel non to practice medicine in the State of New York has been and is being addressed by proper stateside proceedings. This Court would not and properly could not permit Moreland presently to challenge herein the correctness of the stateside administrative or judicial proceedings and plaintiffs lack standing to assert before this Court that the removal of Moreland’s license is improper. Plaintiffs’ request for a preliminary injunction permitting Moreland to administer to them the adrenal-cortex treatment during the pendency of the stateside appeal must be denied due to the absence of a valid claim before this Court.

In addition, it is clear that plaintiffs’ claim of a constitutional right to receive the a.c.e. treatment must be dismissed. Plaintiffs’ counsel’s September 21, 1984 affidavit indicates that Moreland’s treatment of plaintiffs, including the use of a.c.e., has relieved their symptoms and that, since the revocation of Moreland’s license and the absence of treatments, their conditions have deteriorated. However, it is further averred in such affidavit that in January 1978 the federal Food and Drug Administration (“the FDA”) had ordered a.c.e. removed from the marketplace, having found that it was obsolete, and had reclassified it as a new drug requiring testing prior to readmission to the market. Counsel’s affidavit also states that no other physician known to plaintiffs now provides a.c.e. treatments and that a California entity has applied to the FDA for permission to test the effectiveness of a.c.e., thereby changing the status of a.c.e. from “new drug” to “investigative new drug.” Assuming that these assertions are accurate, plaintiffs’ claim of a constitutional right to a.c.e. treatment must still be dismissed.

Although it has been held that the decision by a patient “whether to have a treatment or not is a protected right,” her or his “selection of a particular treatment, or at least a medication, is within the area of governmental interest in protecting public health.” Rutherford v. United States, 616 F.2d 455, 457 (10th Cir.), cert. denied, 449 U.S. 937, 101 S.Ct. 336, 66 L.Ed.2d 160 (1980) (a laetrile case). The constitutional right of privacy does not give individuals the right to obtain a particular medical treatment “free of the lawful exercise of government police power.” Carnohan v. United States, 616 F.2d 1120, 1122 (9th Cir.1980).

In the ease at bar, plaintiffs have not named the FDA as a defendant, have not alleged that the FDA’s removal of a.c.e. from the market had been in any way improper, or that there has been any inordinate delay or impropriety with respect to the FDA’s processing of the California entity’s application to test a.c.e.’s effectiveness. Moreover, plaintiffs have not alleged that they, Moreland or anyone else has made an application to New York’s Commissioner of Education or its Commissioner of Health pursuant to section 6817 of New York’s Education Law in order to be permitted to utilize or sell a.c.e. as a drug within this state. Plaintiffs’ conclusory allegations that defendants’ application of New York’s Education Law and Public Health Law has infringed their right to a.c.e. treatment fail to state a claim upon which relief may properly be granted by this Court in the absence of allegations that plaintiffs have exhausted their administrative remedies by availing themselves of the procedures which those laws afford. See Carnohan v. United States, supra, at 1122.

For these reasons, plaintiffs’ motion for a preliminary injunction will be denied and the motion of defendants Ambach, Axelrod, Abrams and the Board for summary judgment will be granted.

Accordingly, it is hereby

ORDERED that plaintiffs’ motion for a preliminary injunction is denied; and it hereby further

ORDERED that the motion of defendants Ambach, Axelrod, Abrams and New York State Board of Regents for summary judgment of dismissal is granted, without prejudice.

      . Although defendants’ motion papers refer to Fed.R.Civ.P. rule 54 rather than rule 56, it is clear that they are moving for summary judgment under the latter provision and plaintiffs have recognized such in their opposition papers.


author: RESTANI, Judge:

text:
    MILLER AND COMPANY, Plaintiff, v. The UNITED STATES, Defendant.
    Court No. 84-4-00576.
    United States Court of International Trade.
    Nov. 21, 1984.

      Plaia, Schaumberg & deKieffer, Chartered, Washington, D.C. (Herbert C. Shelley and George W. Thompson), Washington, D.C., for plaintiff.
    Richard K. Willard, Acting Asst. Atty. Gen., David M. Cohen, Director, Commercial Litigation Branch; Francis J. Sailer; Civil Division, U.S. Dept, of Justice, Washington, D.C., for defendant.
   Opinion and Order

RESTANI, Judge:

Plaintiff filed an action challenging the final determination made by the International Trade Administration (“ITA”) of the United States Department of Commerce at the conclusion of its periodic review, conducted pursuant to section 751 of the Tariff Act of 1930, as amended, 19 U.S.C. § 1675 (1982), of the outstanding countervailing duty order on pig iron imported from Brazil. Plaintiff, an importer, seeks an injunction directing the ITA not to order liquidation of plaintiff’s Brazilian pig iron entries for 1981 in the manner set forth in the ITA’s section 751 determination.

The countervailing duty order in this action was published in the Federal Register on April 4, 1980 (45 Fed.Reg. 23045). The preliminary results of the ITA’s administrative review for 1981 of this countervailing duty order were published in the Federal Register on November 30, 1983 (48 Fed. Reg. 54091), and the final results were published on March 16, 1984 (49 Fed.Reg. 9923). The ITA instructed the Customs Service to assess countervailing duties in excess of the cash deposits paid on account of duties on 1981 imports of Brazilian pig iron.

This case is before the court on plaintiff’s motion to amend its summons and on defendant’s alternative motions for dismissal or summary judgment. Plaintiff seeks amendment of its summons to include an assertion of jurisdiction under 28 U.S.C. § 1581(c) (1982). Plaintiffs original complaint alleged jurisdiction under 28 U.S.C. § 1581(i) (1982). Defendant opposes the motion to amend and moves for dismissal on the grounds that (1) plaintiff lacks standing to prosecute this action and (2) the court lacks subject matter jurisdiction over this action.

The first issue is whether plaintiff’s motion to amend should be permitted. Resolution of this issue will depend on whether or not plaintiff's suit lies under 19 U.S.C. § 1516a(a)(2) (1982), which is referenced in 28 U.S.C. § 1581(c). Plaintiff challenges the scope of a final countervailing duty-order. The question of the period for which the ITA may assess excess duties pursuant to its countervailing duty order involves a legal conclusion. “[FJactual findings or legal conclusions upon which” countervailing duty orders are based are specifically reviewable under § 1516a(a)(2)(A). Plaintiff’s suit, therefore, would appear to lie under § 1581(c).

A suit may be brought under § 1581(c), however, only by “an interested party who is a party to the proceeding in connection with which the matter arises.” 19 U.S.C. § 1516a(a)(2)(A). Plaintiff may be “an interested party,” but plaintiff was not a party to the administrative proceeding out of which this action arises. Unlike the plaintiff in First Miss., Inc. v. United States, CIT, Slip Op. 84-14 (March 6, 1984) (cited by plaintiff), plaintiff here does not point to a particular employee or agent who represented it in the agency proceedings, nor can it point to any reason why the ITA should have realized that it was participating in those particular proceedings. Absent these factors, it is irrelevant whether or not plaintiff’s failure to participate prejudiced defendant or whether plaintiff’s participation would have been futile. It is not enough that some of the participants have the same general interest as plaintiff. Under the statutory scheme plaintiff itself must participate. Thus, it appears that if this action must be brought under § 1581(c), it may not be maintained by plaintiff, because plaintiff did not participate in the relevant administrative proceedings. Cf. Matsushita Electric Industrial Co. v. United States, 2 CIT 254, 257-58, 529 F.Supp. 664, 668-69 (1981). Accordingly, plaintiffs motion to amend the summons in this action is denied.

The second issue is whether jurisdiction over this action exists under 28 U.S.C. § 1581(i). Although it did not deal specifically with § 1581(c) as it relates to § 1581(i), the case of United States v. Uniroyal, Inc., 69 CCPA 179, 687 F.2d 467 (1982), makes it quite clear that 28 U.S.C. § 1581(i) may not be used to circumvent the specific requirements of jurisdiction under § 1581(a)-(h). If § 1581(c) provides an adequate avenue of relief, plaintiff may not proceed under § 1581(i). It appears to the court that at one point in time plaintiff could have taken steps to qualify its action for jurisdiction under § 1581(c), but it is not clear that plaintiff must have done so in order to obtain relief now, as the court will discuss. If plaintiff is not required in this instance to proceed under § 1581(c) exclusively, § 1581(i) will provide an avenue of relief.

Analysis of this matter begins with the proposition that one who has been injured by agency action is presumptively entitled to judicial review. City of Rochester v. Bond, 603 F.2d 927, 931 (D.C.Cir.1979); Administrative Procedure Act § 10(a), 5 U.S.C. § 702 (1982). See Abbott Laboratories v. Gardner, 387 U.S. 136, 140-41, 87 S.Ct. 1507, 1510-12, 18 L.Ed.2d 681 (1967); see also K. Davis, Administrative Law Treatise § 28.08 (Supp.1970); L. Jaffe, Judicial Control of Administrative Action 336 (1965). When Congress provides a specific statutory procedure for judicial review of administrative action, “it is ordinarily supposed that Congress intended that procedure to be the exclusive means of obtaining judicial review in those cases to which it applies.” City of Rochester, 603 F.2d at 931 (footnote omitted) (emphasis added). Generally, this means that a plaintiff must exhaust its administrative remedies before it can seek such review. Lowa, Ltd. v. United States, — CIT —, 561 F.Supp. 441, 448, aff'd, 724 F.2d 121 (1984). On the other hand, when there is substantial doubt as to whether Congress intended to require strict exhaustion of administrative remedies in a particular case, the court must lean towards permitting judicial review even absent complete exhaustion. Block v. Community Nutrition Institute, — U.S. —, 104 S.Ct. 2450, 2457, 81 L.Ed.2d 270 (1984).

The question here is whether Congress intended § 1581(i) to serve as an avenue of relief in certain instances of failure to comply with the exhaustion prerequisites to § 1581(c) relief. The court must assume that Congress was aware of the judicial precedents in this area and that it intended them to be applicable to this court’s interpretation of its jurisdictional mandate. See Johnson v. First National Bank of Montevideo, Minnesota, 719 F.2d 270, 277 (8th Cir.), cert. denied, — U.S. —, 104 S.Ct. 1015, 79 L.Ed.2d 245 (1984). Although statutory exhaustion requirements, such as that made applicable under § 1581(c), are generally prerequisites to obtaining judicial review, in rare instances courts have recognized exceptions to these requirements. See generally American Trucking Associations, Inc. v. I.C.C., 673 F.2d 82, 85 n. 4 (5th Cir.1982), cert. denied, 460 U.S. 1022, 103 S.Ct. 1272, 75 L.Ed.2d 493 (1983) (judicial review available when non-party to agency proceeding attacks agency authority or constitutionality of agency’s enabling statute). In the international trade area see Luggage and Leather Goods Manufacturers of America v. United States, — CIT —, —-—, 588 F.Supp. 1413, 1420-1421 (1984) (plaintiffs not required to pursue “manifestly inadequate” or “inappropriate administrative remedy” prior to seeking judicial review); United States Cane Sugar Refiners’ Association, etc. v. Block, 69 CCPA 172, 175 n. 5, 683 F.2d 399, 402 n. 5 (1982) (because of potential for immediate injury and irreparable harm to an industry and a substantial impact on the national economy, plaintiff not required to exhaust administrative remedy). This case presents a situation in which a general exception to the exhaustion rule may be applicable here. If such an exception exists it would provide the extraordinary reason for allowing plaintiff to proceed under 28 U.S.C. § 1581(i) in a case where plaintiff could have taken steps to qualify for § 1581(c) jurisdiction.

Courts have original jurisdiction to review administrative actions when a plaintiff alleges that an agency has exceeded its statutory powers. Skinner & Eddy Corp. v. United States, 249 U.S. 557, 562, 39 5. Ct. 375, 377, 63 L.Ed. 772 (1919). This exception to the rule of exhaustion has been repeatedly observed by the Supreme Court and lower courts. Leedom v. Kyne, 358 U.S. 184, 188, 79 S.Ct. 180, 183, 3 L.Ed.2d 210 (1958); Hines v. United States, 263 U.S. 143, 147; 44 S.Ct. 72, 73, 68 L.Ed. 216 (1923); American Trucking, 673 F.2d at 85 n. 4; City of Rochester, 603 F.2d at 934 n. 32; Schwartz v. Allegheny Corp., 282 F.Supp. 161, 163 (S.D.N.Y.1968) (three-judge dist. ct.). In the instant case, plaintiff argues that it is challenging the administrative agency’s exercise of its power. Plaintiff asserts that Commerce did not act in the timely manner allegedly mandated by 19 U.S.C. § 1675 and was therefore without power to review and retroactively assess countervailing duties on 1981 entries. Plaintiff further asserts that Commerce’s retroactive assessment of countervailing duties is contrary to law and is in direct opposition to this court’s ruling in Ambassador Division of Florsheim Shoe Co. v. United States, — CIT —, 577 F.Supp. 1016 (1983), appeal docketed, No. 84-814 (Fed.Cir. Jan. 27, 1984).

Mere challenge to the validity of an administrative ruling as beyond the power of the agency is not enough to excuse the exhaustion of administrative remedies. Plaintiff must allege a patent violation of agency authority. Leedom v. Kyne, 358 U.S. 184, 189, 79 S.Ct. 180, 184, 3 L.Ed.2d 210 (1958). “[WJhen Congress has specified a procedure for judicial review of administrative action, that procedure is the exclusive means of review unless, because of some extraordinary circumstances, the procedure fails to provide an adequate remedy ____ Those extraordinary circumstances ... ‘were instances of agency action which is ultra vires ...'" Independent Cosmetic Manufacturers and Distributors, Inc. v. H.E.W., 574 F.2d 553, 554 (D.C.Cir.), cert. denied, 439 U.S. 893, 99 S.Ct. 250, 58 L.Ed.2d 238 (1978). United Parcel Service, Inc. v. U.S. Postal Service, 524 F.Supp. 1235, 1247 (D.Del.1981). Clearly, if the ITA’s actions were patently ultra vires it would be inappropriate to require plaintiff to appear before it as a prerequisite to judicial review.

The court finds, however, that it cannot determine at this time whether plaintiff has alleged a “patent violation” of agency authority. This question is so intertwined with the merits of this matter that a decision on jurisdiction must be reserved. Therefore, the parties are directed to proceed pursuant to the rules of this court to bring the issues raised by plaintiff before the court for decision. The court will then determine whether jurisdiction to hear this action exists under 28 U.S.C. § 1581(i).

Accordingly, decision on defendant’s motion to dismiss and its alternative motion for summary judgment is reserved.

      . Plaintiffs motion for summary judgment is based on the jurisdictional and standing issues raised in its motion to dismiss.

      . 28 U.S.C. § 1581(c) reads as follows:
      The Court of International Trade shall have exclusive jurisdiction of any civil action commenced under section 516A of the Tariff Act of 1930.

      Section 516A of the Tariff Act of 1930, 19 U.S.C. § 1516a (1982) reads in relevant part:
      (a) Review of determination
      ... (2) Review of determinations on record. (A) In general. — Within thirty days after the date of publication in the Federal Register of—
      (i) notice of any determination described in clause (ii) (iii), (iv), or (v) of subparagraph (B), or
      (ii) an antidumping or countervailing duty order based upon any determination described in clause (i) of subparagraph (B), an interested party who is a party to the proceeding in connection with which the matter arises may commence an action in the United States Court of International Trade by filing a summons, and within thirty days thereafter a complaint, each with the content and in the form, manner, and style prescribed by the rules of that court, contesting any factual findings or legal conclusions upon which the determination is based.
      (B) Reviewable determinations. — The determinations which may be contested under subparagraph (A) are as follows:
      ... (iii) A determination, other than a determination reviewable under paragraph (1), by the Secretary, the administering authority, or the Commission under section 1675 of this title.

      . 28 U.S.C. § 1581(i) provides:
      (i) In addition to the jurisdiction conferred upon the Court of International Trade by subsections (a)-(h) of this section and subject to the exception set forth in subsection (j) of this section, the Court of International Trade shall have exclusive jurisdiction of any civil action commenced against the United States, its agencies, or its officers, that arises out of any la\t of the United States providing for—
      (1) revenue from imports or tonnage;
      (2) tariffs, duties, fees, or other taxes on the importation of merchandise for reasons other than the raising of revenue;
      (3) embargoes or other quantitative restrictions on the importation of merchandise for reasons other than the protection of the public health or safety; or
      (4) administration and enforcement with respect to matters referred to in paragraphs (l)-(3) of this subsection and subsections (a)(h) of this section.

      . When there is no specific statutory scheme for administrative and judicial review, § 1581(i) provides this court with jurisdiction over most international trade disputes. The broad grant of jurisdiction found in § 1581(i) is not easily defeated:
      Unless these preceding jurisdictional subsections [1581(a)-(h) ] express or contain in their manifest legislative history, a limitation on jurisdiction of other related actions, they do not operate to diminish the broad grant of jurisdiction contained in section 1581(i).

        Sacilor, Aciertes et Laminoirs de Lorraine v. United States, 3 CIT 191, 193, 542 F.Supp. 1020, 1023 (1982).

      . Participation in the relevant administrative proceedings as specified in 19 U.S.C. § 1516a(a)(2) is a form of exhaustion of administrative remedies.

      . 19 U.S.C. § 1675 provides in relevant part:
      § 1675. Administrative review of determinations
      (a) Periodic review of amount of duty.
      (1) In general. — At least once during each 12-month period beginning on the anniversary of the date of publication of a countervailing duty order under this subtitle or under section 1303 of this title, an antidumping duty order under this subtitle or a finding under the Antidumping Act, 1921, or a notice of the suspension of an investigation, the administering authority, after publication of notice of such review in the Federal Register, shall—
      (A) review and determine the amount of any net subsidy, ...
      (emphasis added).

      . The Federal Register notice of the final countervailing duty order contested here states:

        Comment 1: The Government of Brazil argues that, in accordance with the Court of International Trade’s decision in The Ambassador Division of Florsheim Shoes Co. v. United States, No. 83-125 (C.I.T., December 1, 1983), the Department has no authority to collect countervailing duties on entries subject to the review greater than the cash deposits on those entries. The Brazilian government further argues that the results of a section 751 review should only apply to future entries.

        Department’s Position: We disagree. The Department has appealed the Florsheim decision. The Department believes that its practice of retroactive collection is correct and will continue to operate on that belief pending the outcome of the appeal.
      49 Fed.Reg. 9924 (March 16, 1984).


author: HUNGATE, District Judge.

text:
    GENERAL INSURANCE COMPANY OF AMERICA, Plaintiff, v. The ACADEMY OF the VISITATION AT ST. LOUIS, et al., Defendants.
    No. 82-1846C(D).
    United States District Court E.D. Missouri.
    Nov. 16, 1984.
    Sam P. Rynearson, St. Louis, Mo., for plaintiff.
    James F. Koester, Joseph Mueller, St. Louis, Mo., for defendants.
   MEMORANDUM

HUNGATE, District Judge.

Plaintiff, a corporation authorized to conduct the business of insurance in the State of Missouri, initiated this complaint for declaratory judgment on November 10, 1982. Plaintiff alleges that defendant Gina Kujawa was injured on May 12, 1982, while upon the premises of defendant Academy of the Visitation at St. Louis (hereafter Visitation), while practicing for or partieipating in a contest or exhibition of an athletic or sports • nature sponsored by Visitation. Plaintiff further alleges that Kujawa’s injury was excluded under the terms of a policy issued by plaintiff to Visitation, and therefore seeks a judgment of no obligation of coverage.

A nonjury trial was held on October 31, 1984.

Findings of Fact

1. Plaintiff, General Insurance Company of America (hereafter General Insurance), is a corporation in good standing, authorized to conduct the business of insurance in the State of Missouri. General Insurance is incorporated in the State of Washington and has there its principal place of business.

2. The individual defendants are citizens and residents of the State of Missouri, and Visitation is a Missouri corporation with its principal place of business in Missouri.

3. Gina Kujawa has filed suit for $350,-000 against Visitation for injuries allegedly sustained while on Visitation’s premises on May 12, 1982, and that action is currently pending in the Circuit Court of St. Louis County. In said action, the petition charges that “plaintiff was engaged in athletic activities at ... Visitation ... at which time she was caused to fall from a balance beam which ... caused her to sustain serious and permanent injuries____”

4. Each year, Visitation stages an event known as “Play Day,” on the second Wednesday in May. In 1982, the event was held on May 12, and Visitation’s athletic director, Judy Stahl, was the moderator. “Play Day” is traditionally held on a school day • and attendance is mandatory. Students wear their physical education uniforms, and they are required to participate in seven of twelve scheduled athletic and recreational events.

5. The Visitation Athletic Association, the Spirit Club, Physical Education Department, and parents of students work together in planning each “Play Day.” The events scheduled in 1982 included a balloon toss, tricycle race, three-legged race, long jump, softball throw, low hurdles, and gymnastic events including performance on a balance beam. Some of the events were judged by students, and ribbons were-awarded at the end of the day. Only Visitation students participate in the athletic and recreational events.

6. Three levels of competition existed as to the balance beam: A, B, and C. Students were scored on participation and quality of performance. On May 12, 1982, while performing a routine for which she was being scored, Gina Kujawa fell from the balance beam and sustained injury to her leg.

7. At that time, General Insurance had issued to Visitation an insurance policy which excluded coverage for “Athletic Participants Hazards.” This type of hazard was defined as “bodily injury to any person while practicing for or participating in any contest or exhibition of an athletic or sports nature sponsored by the named insured.” Plaintiff’s Ex. 2. Medical payments for injuries are further excluded for “any person practicing, instructing, or participating in any physical training, sport, athletic activity or contest ____” Plaintiff’s Ex. 2.

8. General Insurance denies coverage under the terms of its policy.

Conclusions of Law

1. The Court has jurisdiction of this action under 28 U.S.C. § 1332, due to diversity of citizenship and an amount in controversy in excess of $10,000.

2. “Under Missouri law plain and unambiguous language must be given its plain meaning.” Missouri Terrazzo Co. v. Iowa National Mutual Insurance Co., 566 F.Supp. 546, 552 (E.D.Mo.1983) (citation omitted), aff'd, 740 F.2d 647 (8th Cir.1984). While an insurance contract reasonably susceptible of an interpretation favorable to the insured will be construed in the insured’s favor, an insurance contract which is clear and unambiguous must be construed as written. Bellamy v. Pacific Mutual Life Insurance Co., 651 S.W.2d 490, 495 (Mo.1983). The fact that the insured asserts a contrary position does not make the language ambiguous. See Crim v. National Life and Accident Insurance Co., 605 S.W.2d 73, 76 (Mo.1980).

3. The facts at hand are virtually on point with those in Morrison Assurance Co. v. School Board of Suwanee County, 414 So.2d 581 (Fla.Dist.Ct.App.1982). In Morrison, the applicable general liability insurance policy contained an exclusion clause providing that “this insurance does not apply to bodily injury to any and all persons practicing, instructing, or participating in any physical training, sport, athletic activity or contest.” When a student sued the Board for injuries sustained while running the fifty-yard dash in a physical education class, the insurance company contested coverage. The court ruled in favor of the insurance company:

The exclusionary clause is plain and unambiguous on its face, leaving no room for construction. Application of the plain-meaning rule and common sense leads to the reasonable conclusion that running the 50-yard dash in a physical education class is an activity that falls within the exclusion.

Id. at 581. See also Madison County Sheriff's Posse, Inc. v. Horseman’s United Association, Inc., 434 So.2d 1387 (Ala.1983) (where injured party had participated in one rodeo event and was responding to gate call when injury occurred, injury was within exclusion for anyone practicing or participating in a contest or exhibition of an athletic or sports nature).

4. The injury sustained by Gina Kujawa was clearly of a type excluded, from coverage under the terms of the policy. Regardless of whether “Play Day” is characterized as a recreational event, an athletic event, or a combination thereof, Kujawa was involved in athletic competition at the time of her injury and the event was sponsored by Visitation. She was being scored on her efforts, and the fact that the competition was limited to Visitation students does not change the plain meaning of the contract. The policy at issue does not provide coverage for Kujawa’s injuries.

5. “The duty of an insurer to defend ah action depends upon whether the allegations of petitioner state a claim within the policy coverage.” Estrin Construction Co. v. Aetna Casualty and Surety Co., 612 S.W.2d 413, 416 (Mo.App.1981), citing Zipkin v. Freeman, 436 S.W.2d 753, 754 (Mo.1969) (en banc). Kujawa’s petition, which claims injury sustained while engaging in “athletic activities,” plainly does not state a claim within the policy coverage. Thus, Visitation is not entitled to have General Insurance defend the claim under the terms of the policy.


author: GLASSER, District Judge:

text:
    Florence KOSTER, John Koster, Donna Koster, John Koster, Jr., Helen Koster, Janet Koster, Edward Koster, Patricia Weatherly, La Shonta Weatherly, Morris Weatherly, Christopher Weatherly and Terrel Weatherly, on their own behalves and on behalf of all others similarly situated, Plaintiffs, v. Arthur Y. WEBB, as Acting Commissioner of the New York State Department of Social Services, Francis T. Purcell, as Executive of the County of Nassau, and Joseph A. D’Elia, as Commissioner of the Nassau County Department of Social Services, Defendants.
    No. 82 Civ. 2892.
    United States District Court, E.D. New York.
    Nov. 9, 1983.

      Vicki Lens, Nassau Suffolk Law Services, Hempstead, N.Y., Robert M. Hayes, Coalition for the Homeless, New York City, for plaintiffs.
    Howard Zwickel, Asst. Atty. Gen., New York City, for Webb.
    Bruce J. Adams, Deputy County Atty., Mineóla, N.Y., for D’Elia and Purcell.
   MEMORANDUM AND ORDER

GLASSER, District Judge:

This is an action under 42 U.S.C. § 1983 alleging that defendants .have unlawfully denied plaintiffs emergency shelter in violation of federal law. Plaintiffs also allege violations of New York State law, invoking the Court’s pendent jurisdiction. See United Mine Workers of America v. Gibbs, 383 U.S. 715, 86 S.Ct. 1130, 16 L.Ed.2d 218 (1966). Defendants Purcell and D’Elia move pursuant to Fed.R.Civ.P. 12(b)(6) to dismiss the complaint for failure to state a claim upon which relief can be granted, and Fed.R.Civ.P. 56 for summary judgment. Because matters outside of the pleadings have not been presented to and accepted by the Court, this case is not ripe for summary judgment. Furthermore, because I find that plaintiffs’ complaint states both a federal claim under 42 U.S.C. § 1983 as well as a valid pendent state law claim, the Rule 12(b)(6) motion is denied in its entirety.

Facts

Plaintiffs named in the complaint comprise two needy homeless families living in Nassau County. They allege that defendants have arbitrarily denied them emergency shelter in violation of both federal and state law. Specifically, the members of the Koster family allege that on September 2, 1982 they were evicted from their home because their landlord wished to use the premises for his own family. Complaint, 1131. The Kosters, who had been receiving public assistance since 1979, Complaint, II30, repeatedly asked the defendants for emergency shelter. Complaint, II32. Except for a three day period in early September, these requests were denied. Complaint, 11 33. The denials were not in writing. Complaint, ¶ 57.

The Weatherly family, also recipients of public assistance, Complaint, II44, were rendered homeless on May 20, 1982 when their apartment was completely destroyed by fire. Complaint, ¶ 45. The Weatherlys requested emergency shelter from defendants and were placed in a single room with one bed and one cot without bathroom or cooking facilities. Complaint, 1148. A subsequent request by a social worker on behalf of the Weatherlys for other shelter was denied by defendants. Complaint, II48. The Weatherlys, five in number, lived in this room for 12 days before Mrs. Weatherly obtained permanent housing. Complaint, ¶ 49.

In addition to their allegations that they have individually been denied emergency shelter, both the Kosters and the Weatherlys, on behalf of a proposed class of needy homeless families in Nassau County, allege that defendants have neither implemented a plan to provide shelter for such families, Complaint, ¶ 39, nor maintain any shelters for needy homeless families in Nassau County. Complaint, II40. Plaintiffs allege further that defendants either refused to provide needy homeless families with emergency shelter, Complaint, II42, or referred needy homeless families to grossly substandard shelters which are a hazard to health and safety. Complaint, II41.

Plaintiffs allege, both individually and on behalf of the proposed class, as causes of action against moving defendants, federal violations of the Social Security Act and state violations of the New York Social Services Law and the New York State Constitution. Specifically, they allege that defendants Purcell and D’Elia, acting under color of state law, denied plaintiffs emergency shelter, thereby violating the Social Security Act and the equal protection and due process clauses of the United States Constitution. As pendent state claims plaintiffs allege that moving defendants have violated the New York Social Service Law, the New York Code of Rules and Regulations, as well as provisions of the New York State Constitution safeguarding care for the needy, equal protection under the State’s laws and due process of law.

Plaintiffs seek declaratory and injunctive relief as well as damages, costs and attorneys’ fees.

Discussion

Moving defendants’ motion to dismiss cannot be granted unless, taking plaintiffs’ allegations as true, the complaint fails to state a cause of action. In other words, plaintiffs’ “complaint [will] not be dismissed for failure to state a claim unless it appears beyond doubt that plaintiff[s] can prove no set of facts in support of [their] claim which would entitle [them] to relief.” Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 101-102, 2 L.Ed.2d 80 (1957).

In a far reaching affidavit in support of the motion, moving defendants' attorney makes a variety of legal arguments, only some of which are relevant to a motion to dismiss for failure to state a claim. Moving defendants apparently also seek to challenge the court’s jurisdiction and to respond affirmatively to the complaint by way of denial and affirmative defense.

Considering first the court’s jurisdiction to entertain this suit, the law is clear that individual citizens may seek to enforce federal statutory rights in federal court against state defendants pursuant to 28 U.S.C. § 1331 and 42 U.S.C. § 1983. 28 U.S.C. § 1331 gives this court jurisdiction over all cases arising under the Constitution or laws of the United States regardless of the amount in controversy. This includes lawsuits brought pursuant to 42 U.S.C. § 1983.

It is also clear that 42 U.S.C. § 1983 may be used by plaintiffs to enforce their purported right to emergency shelter under the Social Security Act. In Maine v. Thiboutot, 448 U.S. 1, 100 S.Ct. 2502, 65 L.Ed.2d 555 (1980), the Supreme Court unequivocally held that 42 U.S.C. § 1983 “encompasses claims based on purely statutory violations of Federal law.” Id. at 2, 3, 100 S.Ct. at 2503, 2504. Similarly, the Supreme Court has held that “suits in Federal court under § 1983 are proper to secure compliance with the provisions of the Social Security Act on the part of participatory states.” Edelman v. Jordan, 415 U.S. 651, 675, 94 S.Ct. 1347, 1361, 39 L.Ed.2d 662 (1974) citing, Rosado v. Wyman, 397 U.S. 397, 90 S.Ct. 1207, 25 L.Ed.2d 442 (1970).

More difficult, however, is whether under the Social Security Act plaintiffs are entitled to the emergency shelter they seek. Apparently no other court has passed on this question.

The federal Social Security Act provides for grants to states for aid and services to needy families with children. See 42 U.S.C. §§ 301, et seq. The grants are embodied in the federal aid to families with dependent children (“AFDC”) program, 42 U.S.C. §§ 601-610, and provides for emergency assistance to families, 42 U.S.C. § 606(e). These social services are administered by voluntarily participating states and provide assistance to needy children and needy families. States which choose to participate in the program must submit and have approved by the Secretary of Health and Human Services a plan for administering the programs. 42 U.S.C. § 601. Federal regulations implementing the Social Security Act establish the minimum standards that the state plans must meet. 45 C.F.R. § 233.120(a). Financing for the programs is provided in part by the federal government on a matching fund basis. New York State participates in both programs, N.Y. Soc.Serv.Law §§ 343 et seq., and the State’s plan, which has been approved by the Secretary of Health and Human Services, is set forth in its regulations. Appendix A to plaintiffs’ Brief in Opposition; See 18 N.Y.C.R.R. § 372 et seq.

States which participate in the AFDC program have broad discretion in determining how to disburse AFDC resources. An individual state may determine “its own standard of need [as well as] the level of benefits by the amount of funds it devotes to the program.” King v. Smith, 392 U.S. 309, 318-19, 88 S.Ct. 2128, 2133-34, 20 L.Ed.2d 1118 (1968). A voluntarily participating state, however, must comply with the applicable federal legislation and implementing regulations. Carleson v. Remillard, 406 U.S. 598, 92 S.Ct. 1932, 32 L.Ed.2d 352 (1972); Townsend v. Swank, 404 U.S. 282, 92 S.Ct. 504, 30 L.Ed.2d 448 (1971), cited in Barrera v. Dep’t of Institutions, 374 A.2d 1219, 1221, 150 N.J.Super. 41 (App.Div.1977).

Section 606(e) of Title 42 provides that “emergency assistance to needy families with children” shall include payments, care or services “to avoid destitution of [a needy] child or to provide living arrangements in a home for such child.” Although the federal statute and its implementing regulations do not explicitly require participating states to supply emergency shelter to homeless families with needy children eligible for emergency assistance, the participating states are required to specify in its AFDC plan whether securing family shelter is one of the services to be provided. See 45 C.F.R. § 233.120(a)(4). New York’s plan states that “securing family shelter” is one of the kinds of services New York State will provide to meet emergency needs or crisis situations of needy families with children. New York State’s administrative regulations implementing the plan further state that “securing family shelter” is one of the services necessary to cope with emergency situations which “shall be provided” by the state. 18 N.Y.C.R.R. § 372.4(d). Also, the legislative history of the Social Security Act indicates that emergency shelter was the type of assistance contemplated by the Act. See H.R.Rep. No. 544, pp. 17-18, 90th Cong., 1st Sess. (1967); U.S.Code Congressional and Administrative News 2834, 3003, Sen. Rep. No. 744, 90th Cong. 1st Sess. (1967).

Numerous cases have held that a state’s AFDC policies and regulations may be challenged in federal court as inconsistent with the requirements of the Social Security Act. See Maine v. Thiboutot, supra, 448 U.S. at 6, 100 S.Ct. at 2505, citing Miller v. Youakim, 440 U.S. 125, 132 and n. 13, 99 S.Ct. 957, 962 and n. 13, 59 L.Ed.2d 194 (1979); Quern v. Mandley, 436 U.S. 725, 729 and n. 3, 98 S.Ct. 2068, 2072, and n. 3, 56 L.Ed.2d 658 (1978); Van Lare v. Hurley, 421 U.S. 338, 95 S.Ct. 1741, 44 L.Ed.2d 208 (1975); Townsend v. Swank, 404 U.S. 282, 92 S.Ct. 502, 30 L.Ed.2d 448 (1971); King v. Smith, supra, 392 U.S. at 311, 88 S.Ct. at 2130.

Similarly, in the instant case plaintiffs claim that New York State has promulgated policies and regulations implementing the AFDC program which are contrary to the Social Security Act. In essence, they argue that by specifying emergency shelter as a service which “shall be provided” to qualifying families and then denying eligible families the aid promised the State of New York has violated the Social Security Act.

I agree. It is clear that New York State voluntarily has committed itself to provide emergency family shelter to needy families with dependent children as part of its participation in the AFDC program. The State, having assumed the responsibility for providing emergency shelter pursuant to the Social Security Act, is bound to fulfill its promise.

Plaintiffs also seek to invoke the court’s pendent jurisdiction pursuant to United Mine Workers of America v. Gibbs, supra, and assert a state claim alleging that by denying plaintiffs emergency shelter, defendants have violated New York State’s Social Services Law, as well as Article XVII, § 1 of the New York State Constitution.

Article XVII, § 1 of the New York State Constitution provides:

“The aid, care and support of the needy are public concerns and shall be provided by the state and by such of its subdivisions, and in such a manner and by such means, as the legislative may from time to time determine.”

The Court of Appeals of the State of New York has held that Section 1 of Article XVII places upon the state an “affirmative duty to aid the needy.” Tucker v. Toia, 43 N.Y.2d 1, 8, 400 N.Y.S.2d 728, 731, 371 N.E.2d 449, 452 (1977). The Court found that although the state legislature had broad discretion in satisfying the constitutional mandate to aid the needy, the legislature could not “simply refuse to aid those whom it classified as needy.” Id.

New York Social Services Law, Sections 62(1), 131(1) and 131(3) provides for the assistance and care of the needy as required by the New York State Constitution. Within the group of those people defined as needy are destitute or homeless children. See N.Y.Soc.Serv.Law §§ 371(3), 397(1). Thus, under state law, assistance and care of destitute children must be provided by the state. Because plaintiffs’ complaint alleges that defendants have failed to provide the aid, care and support of destitute and homeless children required by the Social Services Law, it has stated a claim upon which relief can be granted.

Finally, plaintiffs allege that under both the Social Security Act and state law they are entitled to a reasoned determination of their eligibility for emergency shelter assistance and written notice of any adverse termination. The Social Security Act provides for such a reasoned determination, see 42 U.S.C. § 602(a)(10); 45 C.F.R. §§ 205.10(a)(12), 206.10(a)(8); see also Davis v. Smith, 607 F.2d 535, 540 (2d Cir.1978), petition for rehearing granted on other grounds, 607 F.2d 540 (1979), as does New York’s Social Services Law. See N.Y. Soc.Serv.Law § 132; see also Jones v. Berman, 37 N.Y.2d 42, 52-53, 371 N.Y.S.2d 422, 429, 332 N.E.2d 303, 310 (1975). Similarly, both federal and state statutes provide for written notice of any adverse determination of a request for emergency assistance. 45 C.F.R. § 206.10(a)(4); N.Y. Soc.Serv.Law § 353(b). Since plaintiffs allege that defendants have failed to provide them with both a reasoned determination of their request for assistance and written notification of an adverse determination they state a claim upon which relief can be granted.

In conclusion, plaintiffs have sufficiently alleged violations of federal and state statutory law to withstand defendants’ motion to dismiss, which is denied in all respects.

SO ORDERED.

      . Having found that plaintiffs state a claim upon which relief can be granted pursuant to 42 U.S.C. § 1983, it is unnecessary for the Court to consider whether plaintiffs have stated a claim under the equal protection clause of the United States Constitution. Hagans v. Lavine, 415 U.S. 528, 94 S.Ct. 1372, 39 L.Ed.2d 577 (1974).

      . N.Y.Soc.Serv.Law § 131(1) requires that defendant Webb as Acting Commissioner of the New York State Department of Social Services "provide adequately for those unable to maintain themselves.” Each public welfare district, one of which is Nassau County, see N.Y.Soc. Serv.Law § 62, is also responsible "for the assistance and care of any person who resides or is found in its territory and who is in need of public assistance."
      Because plaintiffs have stated a claim by alleging the denial of rights created explicitly by the Social Services Law to aid, care and support destitute children, it is unnecessary for me to decide whether emergency shelter is the guaranteed remedy.
      I do not express a view, however, as to whether shelter is the appropriate remedy for the violations alleged by plaintiffs. Such a determination must await a development of the facts at trial.

      . Emergency shelter is guaranteed explicitly in neither the New York State Constitution nor the New York State Social Services Law. One New York court, however, has held that these provisions did require that emergency shelter be provided for the homeless needy men of the Bowery in New York City. See Callahan v. Carey, New York Law Journal, Dec. 11, 1979, at 10, col. 4B (Sup.Ct.N.Y.Co.1979).

      . Since I have found that plaintiffs’ allegations of defendants’ failure to provide a reasoned determination of plaintiffs’ requests as well as a written notification of adverse determination state a claim of violation of both federal and state statutory law, it is unnecessary to consider plaintiffs’ arguments that such actions also violate their federal and state constitutional rights. See Califano v. Yamasaki, 442 U.S. 682, 692-93, 99 S.Ct. 2545, 2553-54, 61 L.Ed.2d 176 (1979).