author: ALLEN SHARP, Chief Judge.

text:
    Luella WINSTON, Plaintiff, v. Thomas E. SANDERS; City of Bloomington, a Municipal Corporation, Defendants.
    Civ. No. 84-3118.
    United States District Court, C.D. Illinois, Springfield Division.
    June 3, 1985.
    Michael A. Barford, Bloomington, Ill., for plaintiff.
    Frederick Velde, Heyl, Royster, Voelker & Allen, Springfield, Ill., for defendants.
   MEMORANDUM OPINION

ALLEN SHARP, Chief Judge.

This court is now called upon to decide whether the recent decision of the Supreme Court of the United States in Wilson v. Garcia, — U.S. -, 105 S.Ct. 1938, 85 L.Ed.2d 254 (1985), is to be applied retroactively in view of the decision in Beard v. Robinson, 563 F.2d 331 (7th Cir.1977), cert. denied, 438 U.S. 907, 98 S.Ct. 3125, 57 L.Ed.2d 1149 (1978).

A brief look at the factual and procedural record in this case is in order.

The occurrence complained of in the Plaintiff’s complaint here occurred on May 25 and 26, 1980. This complaint was filed purporting to allege a claim for constitutional violation under 42, U.S.C. § 1983, on March 2, 1984. A careful examination of the facial verbal fabric of Wilson v. Garcia and Beard v. Robinson leads solely to the conclusion that the latter is now inconsistent with the former. If the panel which decided Beard v. Robinson in 1977 (including this judge) had been given the benefit of Wilson v. Garcia, the result announced in Beard would have been contrary. This point was basically conceded by all counsel when this court heard argument on Defendants’ motion for judgment on the pleadings in Springfield, Illinois, on May 29, 1985. The question then becomes whether or not the recent decision in Wilson v. Garcia should be retroactively applied given the factual and procedural posture of this case.

The most superficial examination of Beard v. Robinson will disclose that it plowed new ground as far as the statute of limitations for section 1983 actions were concerned in the State of Illinois. It is also equally clear that the progeny of Beard v. Robinson indicates extensive, if not massive, reliance thereon by litigants and lawyers who file such 1983 actions. The cases collected in the footnote here are certainly indicative of that fact. It is beyond any dispute at all that Justice Stevens, speaking for the majority of the Court in Wilson v. Garcia, intended to bring some sense of national uniformity into the process of selecting the appropriate statute of limitations for section 1983 actions since the Reconstruction Congress that enacted the same did not specify a statute of limitations and no Congress subsequent to 1871 has chosen to do so. It is also beyond dispute that with reference to personal injury actions, the State of Illinois now has, and has had for a long period of time, a two-year statute of limitations as now found in Ill.Rev.Stat., ch. 110 § 13-202.

The question of the possible retroactive effect of Wilson v. Garcia is nowhere directly addressed in the Justice Stevens’ opinion for the Supreme Court in that case. In the Defendants’ brief filed May 24,1985, there is a brief quotation out of context from the most recent Supreme Court decision in Solem v. Stumes, 465 U.S. 638, 104 S.Ct. 1338, 79 L.Ed.2d 579 (1984), stating the general rule that as a general rule, judicial decisions apply retroactively, and there is some language and reference to a so-called “presumption” to that effect. However, the reasoning and the result in Solem is certainly not helpful to the Defendants in this case and, indeed, is not determinative of the issues here presented. Solem is in line with the earlier decision of Johnson v. New Jersey, 384 U.S. 719, 86 S.Ct. 1772, 16 L.Ed.2d 882 (1966), which in effect held that the earlier decision in Miranda v. Arizona, 384 U.S. 436, 86 S.Ct. 1602, 16 L.Ed.2d 694 (1966), was not to be given retroactive effect. In this same vein, the Supreme Court in Solem has now decided that the case of Edwards v. Arizona, 451 U.S. 477,101 S.Ct. 1880, 68 L.Ed.2d 378 (1981), is not to be given retroactive effect. The language chosen by Justice Stevens in Part II of his dissent in Solem 465 U.S. at -, 104 S.Ct. at 1351 is interesting and perhaps relevant to our discussion here. He there stated:

The “retroactivity” analysis of today’s majority merits separate scrutiny. The majority makes ho attempt to define a “new rule” that gives rise to a retroactivity question, but merely assumes that Edwards created one. Ante, [465 U.S.] at---[104 S.Ct. at 1341-1342]. Its reasoning for treating Edwards as having created a “new rule” is implicit, however, in its discussion of what it calls the “reliance factor” — the authorities’ reliance on the “prior rule.” The Court states that the police could not be faulted for failing to anticipate Edwards, since prior law could have been understood to permit a case-by-case evaluation of whether a suspect’s decision to speak with police despite an earlier invocation of the right to consult with counsel was a knowing, voluntary and intelligent waiver of that right. The majority concludes that Edwards can be considered as announcing a new rule because the law prior to Edwards was “unsettled,” and cites as evidence the fact that some lower courts had disagreed as to the correct interpretation of Miranda. Ante, at -[104 S.Ct. at 1344],
This approach to defining a “new rule” for retroactivity purposes is completely unprecedented. The majority concedes that Edwards was not a “clear break” with the past, ante, [465 U.S.] at-- — [104 S.Ct. at 1343-1344] yet that sort of change in the law has normally been required before a retroactivity question is even raised. For example, in Desist v. United States, 394 U.S. 244 [89 S.Ct. 1030, 22 L.Ed.2d 248] (1969), the Court wrote: “However clearly our holding in Katz [v. United States, 389 U.S. 347 [88 S.Ct. 507, 19 L.Ed.2d 576] (1967)] may have been foreshadowed, it was a clear break with the past, and we are thus compelled to decide whether its application should be limited to the future.” Id. at 248 [89 S.Ct. at 1033]. The fact that the position ultimately rejected by this Court had been previously accepted in some but not all lower courts has never been sufficient to demonstrate that a new rule has been created. United States v. Estate of Donnelly, 397 U.S. 286, 295 [90 S.Ct. 1033, 1038, 25 L.Ed.2d 312] (1970). Until today it had been clear that no retroactivity arises when a decision is based on principles previously announced by this Court, even though there is no precedent squarely on point. Henderson v. Morgan, 426 U.S. 637, 651-652 [96 S.Ct. 2253, 2260-2261, 49 L.Ed.2d 108] (1976) (White, J., concurring). That the principles governing the decision in Edwards were well recognized before that case was decided is amply demonstrated by the host of eases that had previously condemned the police practices at issue, (footnotes omitted).

The reasoning and the result of neither the majority nor the dissent in Solem are determinative of the retroactive application of Wilson v. Garcia in the context of this case.

The leading decision on the retroactivity of nonconstitutional, noncriminal decisions is Chevron Oil Company v. Huson, 404 U.S. 97, 92 S.Ct. 349, 30 L.Ed.2d 296 (1975). In Huson the issue presented involved the retroactivity of an earlier decision in Rodigue v. Aetna Casualty and Surety Company, 395 U.S. 352, 89 S.Ct. 1835, 23 L.Ed.2d 360 (1969). Rodigue had held that the Outer Continental Shelf Lands Act, 43 U.S.C. § 1331 et seq. was not governed by admiralty law. In Huson the Supreme Court held that the applicable state statute of limitations must be used under the aforesaid section 1331, but that it would be applied only prospectively. In arriving at this decision, the Supreme Court set out three factors to be considered in deciding whether a statute of limitations should be retroactive. Briefly and summarily stated, those three factors are as follows:

1. The decision to be applied nonretroactively must establish a new principle of law, either by overruling clear past precedent or by deciding an issue of first impression whose resolution was not clearly foreshadowed.
2. The merits and demerits in each case must be weighed and examined by looking at the prior history of the rule in question, its purpose and effect, and whether the retrospective operation will further or retard its operation.
3. An examination into the possible inequity imposed by retroactive application must be examined.

An excellent example of how a district judge should go about applying the Huson principles is found in Hambrick v. Royal Sonesta Hotel, 403 F.Supp. 943 (E.D.La.1975). The approach of Chief Judge Heebe in Hambrick is most helpful to the examination that this court must make and is consistent with the standards most recently announced by our court of appeals in Snyder v. Smith, 736 F.2d 409 (7th Cir.1984) at 414.

In examining the record in this case in light of the Huson standards, there can be no doubt whatsoever that Wilson v. Garcia is patently inconsistent with Beard v. Robinson, and that Wilson v. Garcia announces a new principle of law in a nonconstitutional, noncriminal context. It is equally clear that there is nothing in the prior decisions of the Supreme Court of the United States to forewarn lawyers and litigants in the State of Illinois that the basic decision in Beard v. Robinson would be undermined. This conclusion is added to, but not dependent upon, the fact that certiorari was denied by the Supreme Court of the United States in Beard v. Robinson.

There can be little doubt, as indicated by the cases collected in the footnote of this opinion, that lawyers and litigants relied heavily upon the 1977 announcement in Beard v. Robinson. Thus, the history from Beard v. Robinson in 1977 to Wilson v. Garcia in 1985 leans very heavily against the retroactive application of Wilson v. Garcia and toward its prospective application only. These same values are involved in the third prong of Huson in that it would be highly inequitable, given the purposes and values that inhere in section 1983 to retroactively apply this most recent pronouncement by the Supreme Court of the United States. It is correct that the Plaintiff has the basic burden of establishing that the Wilson decision was intended by the Court to be applied prospectively.

As indicated at oral argument, this court expressed some concerns with regard to the recent decision in Landahl v. PPG Industries, Inc., 746 F.2d 1312 (7th Cir.1984), wherein it was decided that DelCostello v. International Brotherhood of Teamsters, 462 U.S. 151, 103 S.Ct. 2281, 76 L.Ed.2d 476 (1983), should be applied retroactively. An extensive colliquy was held between both counsel and the court in an attempt to carefully analyze Judge Swygert’s analysis in Landahl. DelCostello involved the applicable statute of limitations in employment discharge cases under section 301 of 29 U.S.C. § 185, and held that the appropriate statute of limitation to be that in section 10(b) of the Act, namely, 29 U.S.C. § 160(b). In Landahl the court engaged in a careful Huson analysis. In that case there were two prior cases in which the issue decided by DelCostello had been reserved. DelCostello was found not to be a resolution of conflict between the circuits but conflicts in and among the circuits regarding the appropriate statute. In other words, DelCostello was not a break with the past but merely a clarification of existing statutory law. The court also noted that the Supreme Court of the United States had foreshadowed and warned of the DelCostello result in the recent decision of United Parcel Service, Inc. v. Mitchell, 451 U.S. 56, 101 S.Ct. 1559, 67 L.Ed.2d 732 (1981). The factual and procedure context of Landahl is distinguishable from that in this case, and Landahl does not compel a result contrary to that announced here. One of the critical factors announced in the Wilson v. Garcia opinion was the importance and the nature of the 1983 remedy itself. Given the Huson analysis, it is quite clear that to retroactively apply Wilson v. Garcia would retard rather than to support the values that inhere in that remedy.

As previously indicated, the equities very strongly lean in favor of this Plaintiff and against her removal from the courthouse by a retroactive application of Wilson v. Garcia. The reasoning and result of Wachovia Bank and Trust Company, N.A. v. National Student Marketing Corporation, 650 F.2d 342 (D.C.Cir.1980), supports this conclusion. The issue here presented has now been carefully briefed and orally argued, and this court reaches the conclusion that it would be most inappropriate to retroactively apply Wilson v. Garcia in this case to foreclose this Plaintiff from her day in court in regard to her complaint under § 1983.

Therefore, the Defendants’ motion for judgment on the pleadings filed May 1, 1985, is denied.

         Sitting by designation pursuant to 28 U.S.C. § 292.

      . Kolar v. County of Sangamon of State of Illinois, 756 F.2d 564 (7th Cir.1985); Sacks Brothers Loan Co., Inc. v. Cunningham, 578 F.2d 172 (7th Cir.1978); Teague v. Caterpillar Tractor Co., 566 F.2d 7 (7th Cir.1977); Williams v. Fulton County Jail, 575 F.Supp. 306 (N.D.Ill.1983); Gates v. Montalbano, 555 F.Supp. 708 (N.D.Ill. 1983); Killingham v. Board of Governors of State Colleges and Universities, 549 F.Supp. 525 (N.D.Ill.1982); Hampton v. Hanrahan, 522 F.Supp. 140 (N.D.Ill.1981); Hermes v. Hein, 479 F.Supp. 820 (N.D.Ill.1979); Hurst v. Hederman, 451 F.Supp. 1354, 1355 (N.D.Ill.1978); Canada v. United Parcel Service, Inc., 446 F.Supp. 1048 (N.D.Ill.1978); Lawson v. Metropolitan Sanitary District of Greater Chicago, 102 F.R.D. 783 (N.D.Ill.1983); Hernandez v. United Fire Insurance Co., 79 F.R.D. 419 (N.D.Ill.1978).


source: Caselaw Access Project

author: BERTELSMAN, District Judge.

license: Public Domain

text:
    Bruce MESSER and Timothy P’Simer, Plaintiffs, v. Fran CURCI, Kelly Newton, W. Gayle Foust and Thomas Lykins, Defendants.
    Civ. A. No. 84-157.
    United States District Court, E.D. Kentucky, Catlettsburg Division.
    June 4, 1985.

      Stephen Krumm and Deborah G. Roher of Northeast Ky. Legal Services, Ashland, Ky., for plaintiffs.
    J. Patrick Abell, Dept. of Parks, Paul C. Gaines, III, and Daniel F. Egbers, Cabinet for Human Resources, Frankfort, Ky., for defendants.
   OPINION AND ORDER

BERTELSMAN, District Judge.

“To the Victor Belong the Spoils of the Enemy.” — William L. Marcy, 1832

Defendants’ motion to dismiss in this action presents the court with a significant issue, namely, whether the rule of Elrod v. Burns, 427 U.S. 347, 96 S.Ct. 2673, 49 L.Ed.2d 547 (1976), prohibiting firings of non-policy making public employees for reasons of political patronage, applies to hirings of such employees. Considering the age of the Elrod decision and the long standing practice of making such personnel decisions on the basis of patronage, there is remarkably little authority on this issue. Perhaps this is due to the fact that frequently the issue is not clearly presented factually. That is not the situation with regard to the present case, however, where the motion to dismiss now before the court presents the precise issue for decision.

FACTS

In this 42 U.S.C. § 1983 action, plaintiffs Bruce Messer and Timothy P’Simer challenge the decision of the Kentucky Department of Parks not to rehire them as seasonal maintenance workers at the Carter Caves State Resort Park in Carter County, Kentucky. They base this action on the allegation that defendants acted in concert not to rehire the plaintiffs because of their political beliefs and because of their failure to work in the 1983 election campaign of Martha Layne Collins. Ms. Collins was elected Governor of the Commonwealth in that election.

There are four defendants in this action. First, Fran Curci is the Commissioner of the Department of Parks. His duties include the formulation and implementation of hiring policies and practices within his department. Second, W. Gayle Faust is the Department of Parks Director of Personnel. His duties include the employment and termination of employees within the Department. Third, Kelly Newton is the Superintendent of Carter Caves State Park. His duties include the determination of employment status at the Park. Last, Thomas Lykins is a member of the Carter County Democratic Party Committee who allegedly received and reviewed applications for seasonal employment at the Park during the 1984 season and was permitted to make actual hiring decisions during this period. Plaintiffs allege that the defendants held their respective positions at the time of the alleged deprivations.

On this motion, the following facts must be taken as true. Plaintiffs Messer and P’Simer were continuously employed as seasonal maintenance workers at the Park for the past eight and three years, respectively. Their positions commenced in mid-March and terminated in mid-November.

They filed their applications for seasonal maintenance positions at the park in January of 1984 for the 1984 summer season. Annual re-application for seasonal employment had been defendants’ hiring practice and had been utilized each of the preceding years plaintiffs had been employed at the park. These applications were delivered to Newton at the park.

Plaintiff Messer made a follow-up inquiry concerning the status of his application in March of 1984. He contacted Newton, who told Messer that he had recommended both plaintiffs be rehired and that he had taken the applications to defendant Lykins’ office. Newton claimed that the Committee of which Lykins was a member did not permit him to have any voice over who was ultimately hired.

Immediately thereafter, Messer went to Lykins’ home to inquire about his application’s status. He was told by Lykins that no one would be hired for seasonal employment at the park except through the Committee and that this Committee would not hire anyone who had not worked for the Martha Layne Collins election effort. Messer’s belief that he was not to be rehired was confirmed on or about April 7, 1984, when he went to the park and saw two new individuals performing the duties which had been performed by the plaintiffs in previous years.

Plaintiff P’Simer conversed with Messer, who notified him of the previous conversation he had with Newton and Lykins. P’Simer went to Lykins’ home on or about May 1, 1984 to ascertain why he had not been rehired for the 1984 season. Lykins indicated he had not been rehired because he had not worked in Martha Layne Collins’ campaign.

Messer is a registered Republican and P’Simer is not a registered voter. Neither Messer nor P’Simer worked in the 1983 campaign of Martha Layne Collins. Plaintiffs allege that they have been deprived of employment as seasonal maintenance workers at the park due to their political beliefs and associations in contravention of their rights under the First and Fourteenth Amendments to the Constitution of the United States.

ISSUES

1. Pursuant to Kentucky law with respect to state personnel management, is the situation described above in plaintiffs’ complaint one of a “failure to rehire” or “initial hiring”?

2. Is it a violation of the First and Fourteenth Amendments to refuse to hire a person for public employment in a non-policy making position for reasons of political patronage?

ANALYSIS

This is a Failure to Hire Case.

Under the relevant Kentucky statutes, the court concludes plaintiffs were initial applicants for the seasonal positions as maintenance workers at the park for the 1984 season. KRS 18A.005(20) provides:

“A ‘temporary position’ is one created for a defined period of time not to exceed six (6) months and not renewable; a ‘temporary employee’ is one (1) appointed to such a temporary position. A ‘seasonal position’ although temporary in duration in the foregoing sense coincides in duration with a particular season or seasons of the year, but may not exceed eleven (II) months duration, and may recur regularly from year to year; a ‘seasonal employee’ is one appointed to such a seasonal position from an existing eligible list or without reference to an eligible list.”

Pursuant to the express terms in the statute, plaintiffs’ old seasonal positions could not legally exceed eleven months in duration. At the end of the 1983 season, plaintiffs’ employment relationship with the state was terminated on criteria other than political affiliation. Plaintiffs stand in the same position as any other seasonal applicants with respect to any prospective seasonal employment in the 1984 hiring year. Notwithstanding plaintiffs’ past employment as seasonal maintenance employees and their expectation of continued employment prior to the beginning of the 1984 season, the court concludes that their status was as applicants for employment with the state and they stood in the same position as any other job applicant for seasonal employment.

Plaintiffs argue vigorously that the adverse personnel action should be characterized as a dismissal rather than a refusal to hire. This determination makes a critical difference as will be seen from the subsequent analysis in this opinion. In analyzing their status as employees, the court must defer to state law. Board of Regents v. Roth, 408 U.S. 564, 577, 92 S.Ct. 2701, 2709, 33 L.Ed.2d 548 (1972); Kendall v. Board of Education, 627 F.2d 1, 4 (6th Cir.1980); Yashon v. Gregory, 737 F.2d 547, 553 (6th Cir.1984).

The statute quoted above is clear on its face that after each period of temporary or seasonal employment the plaintiffs reverted to non-employment status. Their expectation of being re-employed could not rise to a property right in the face of the plain language of the statute.

Therefore, plaintiffs’ claim must be analyzed as a refusal to hire for political patronage reasons, rather than as a dismissal for such reasons.

Refusals to Hire for Reasons of Political Patronage.

Tradition has it that it was Andrew Jackson, upon his election as President of the United States, who cloaked the practice of political patronage in hirings of public employees with the mantle of respectability.

Ever since, “Old Hickory’s” approach has certainly been a time-honored albeit cynical practice of governments at all levels, but particularly in local government. As is well known, it has been ameliorated to some extent by the salutary development of the institution of civil service.

Until 1976, public employees who were not under civil service were more or less at the mercy of the politicians in both obtaining and retaining employment. However, in that year, the Supreme Court decided the landmark case of Elrod v. Burns, 427 U.S. 347, 96 S.Ct. 2673, 49 L.Ed.2d 547 (1976).

In Elrod it was held that the discharge of non-policymaking employees purely because they were not of the party or political philosophy of a newly elected administration was violative of their First Amendment rights. Elrod must be carefully read for a proper evaluation of its precedential effect, however.

The problem in interpreting Elrod arises from the fact that there was no opinion of the Court. The plurality opinion is wide-sweeping in its discussion of First Amendment rights. It contains sweeping denunciations of the entire patronage system, and its language is broad enough to condemn political patronage as a basis of personnel decisions whether they involve initial hirings or discharges. However, only three judges joined in this plurality opinion.

Justices Stewart and Blackmun concurred in a much narrower opinion. In the concurring opinion, to which the holding of the court is limited, it was specifically stated

“This case does not require us to consider the broad contours of the so-called patronage system, with all its variations and permutations. In particular, it does not require us to consider the constitutional validity of a system that confines the hiring of some governmental employees to those of a particular political party, and I would intimate no views whatever on that question.” 427 U.S. at 374, 96 S.Ct. at 2690.

The dissent is also enlightening in interpreting the sweep of Elrod. There, the dissenting Justices did not so much disagree with the importance placed on the First Amendment by the plurality, but emphasized the interference with state government that would be caused by the federal court’s acting to prohibit personnel decisions of state and local government based upon political patronage. Thus, in his dissent, Chief Justice Burger stated:

“In my view, the issue is not so much whether the patronage system is ‘good’ or ‘bad,’ as the plurality characterizes the problem, but whether the choice of its use in the management of the very government of each State was not, in the words of the Tenth Amendment, ‘reserved to the States ... or to the people.’ ” 427 U.S. at 376, 96 S.Ct. at 2691.

In a separate dissent, Justice Powell pointed out that some benefits were to be derived from the patronage system as far as encouraging political activity and strengthening political parties. 427 U.S. at 382, 96 S.Ct. at 2693. The epitome of Justice Powell’s dissent is found in the following language.

“I thus conclude that patronage hiring practices sufficiently serve important state interests, including some interests sought to be advanced by the First Amendment, to justify a tolerable intrusion on the First Amendment interests of employees or potential employees.” 427 U.S. at 387, 96 S.Ct. at 2696.

It is clear, then, that five Justices at the time of the decision in Elrod would not have extended the prohibition on political firings to political hirings.

All the Justices approached the issue as a problem of balancing between the First Amendment rights of the employees and the right of state and local governments to continue practices and institutions that had existed for at least 200 years without interference by the federal courts.

Nothing that has occurred since the Elrod decision indicates that the Supreme Court, or indeed the majority of other courts, would extend the First Amendment prohibition against political firings of nonpolicymaking employees to political hirings, such as that involved in the case at bar. Indeed, upon reflection, it appears that the balancing process indicated above would militate against such an extension.

Looking first at the First Amendment rights of the employees, it appears that a person who has already been hired and is holding a public post would indeed be intimidated in the exercise of his or her First Amendment rights if he stood to lose by reason of the expression or exercise of his political beliefs a post already obtained, which was now the basis of his livelihood. There would be a much less “chilling effect” on persons who merely had an expectation of public employment.

Turning to the factor of interference with state and local government, it may be seen that the interference would be much greater if the rule were extended to prospective employees as opposed to persons already employed. There can be only one incumbent of a job who is discharged and is in the position to bring suit against the state or local government. There might be a host of applicants for every job, who would sue upon its being filled by another and claim that they would have been hired but for their political beliefs. Such motives are not always easy to discern and are seldom as openly stated as they were in the case at bar. Thus, applying the Elrod decision to hiring would be likely to involve local government officials in numerous lengthy trials concerning the merits of disappointed job seekers. This would impose burdens on local government that were unacceptable to the majority of the Justices in Elrod.

One of the few decisions on this issue is that by my colleague and neighbor, Judge Rubin of the Southern District of Ohio at Cincinnati, in Avery v. Jennings, 604 F.Supp. 1356 (S.D.Ohio 1985). Judge Rubin in a two-pronged opinion held that an applicant for public employment had not established as a matter of fact that a refusal to hire her was based on political motives. But the opinion went further to hold that even if she had, she would not be entitled to redress under the Constitution of the United States. I agree entirely with Judge Rubin’s analysis of this latter issue. In concluding his analysis, Judge Rubin succinctly observes:

“To recognize the plaintiff’s claim that the defendants’ failure to hire her, allegedly on the basis of her political affiliation, was an encroachment on her first amendment rights under the line of cases discussed above would require, therefore, a broad and unwarranted extension of those cases beyond their facts and precedential effect____ Absent any persuasive arguments in favor of extending the applicability of Elrod and Branti to cases involving employment decisions other than discharges, this Court declines to do so.” 604 F.Supp. at 1362.

This court reaches the same conclusion. That the patronage system has its evils cannot be denied. The plaintiffs were perhaps better able to perform the jobs they sought than those who were allegedly hired for patronage reasons. Yet, to attempt to recognize and enforce their rights, and those of other applicants for public employment, would involve the federal courts in a myriad of personnel decisions at state and local level that would contravene the spirit of the Tenth Amendment. As stated above, a plethora of lawsuits by swarms of disappointed job seekers would be the inevitable result of recognition of the cause of action asserted by plaintiffs. Neither in Elrod nor in any subsequent decision has the Supreme Court indicated any disposition to go so far. In fact, its tendency has been to restrict the scope of First Amendment litigation of public employees. See, e.g., Connick v. Myers, 461 U.S. 138, 103 S.Ct. 1684, 75 L.Ed.2d 708 (1983), discussed in Landrum v. Eastern Kentucky University, 578 F.Supp. 241 (E.D.Ky.1984). In Landrum, this court observed:

“... the First Amendment in the employment context is now to be more narrowly interpreted to give greater scope to the legitimate rights of governmental entities as employers, and also to reduce the burdens on the courts caused by the burgeoning of litigation initiated by the decisions upon which plaintiff relies here.” 578 F.Supp. at 247.

In effect, the plaintiffs ask this court to mandate a merit system for all state and local public employees. Whatever the court’s personal views of patronage hiring, there exists no authority persuasive to this court for judicial activism of that sort.

Therefore, the motion to dismiss must be granted. A separate judgment is this day entered dismissing the complaint.

      . One Justice did not participate in the decision.

      . Thus, Justice Powell in concluding his dissent observed: "The judgment today unnecessarily constitutionalizes another element of American life — an element certainly not without its faults but one which generations have accepted on balance as having merit. We should have heeded, instead, the admonition of Mr. Justice Holmes that ‘[i]f a thing has been practiced for two hundred years by common consent, it' will need a strong case for the Fourteenth Amendment to affect it____’ ” 427 U.S. at 389, 96 S.Ct. at 2697.

      . Reference is made to Avery for an excellent discussion of the development of First Amendment law concerning public employment. 604 F.Supp. at 1360-61. See also, Note, First Amendment Limitations on Patronage Employment Practices, 49 U.Chi.L.Rev. 181 (1982).

      . Branti v. Finkel, 445 U.S. 507, 100 S.Ct. 1287, 63 L.Ed.2d 574 (1980).

      . Plaintiffs’ position does find support in Shakman v. Democratic Organization of Cook County, 435 F.2d 267 (7th Cir.1970), cert. denied 402 U.S. 909, 91 S.Ct. 1383, 28 L.Ed.2d 650 (1971), a pre-Elrod case, implemented in 569 F.Supp. 177 (N.D.Ill.1983), and Delong v. United States, 621 F.2d 618 (4th Cir.1980). But this court believes that these decisions are outweighed by the more recent cases discussed above, especially Connick v. Myers, supra. Other recent cases recognizing a more restrained approach to First Amendment restrictions on the employment practices of state and local government are: LaFalce v. Houston, 712 F.2d 292 (7th Cir.1983) (political consideration in awarding public contracts); Fox & Company v. Schoemehl, 519 F.Supp. 849 (E.D.Mo.1981) (independent contractor accountants).


author: BARTELS, District Judge.

text:
    William FRANSEN, Plaintiff, v. SECRETARY OF HEALTH AND HUMAN SERVICES, Defendant.
    No. 83 Civ. 0855.
    United States District Court, E.D. New York.
    June 4, 1985.

      William Fransen, plaintiff, pro se.
    Raymond J. Dearie, U.S. Atty., E.D.N.Y., Brooklyn, N.Y., for defendant; Thomas P. Battistoni, Asst. U.S. Atty., Brooklyn, N.Y., of counsel.
   BARTELS, District Judge.

Plaintiff, William Fransen, brings this action under § 205(g) of the Social Security Act, as amended (the “Act”), to review a final determination of the Secretary of Health and Human Services (the “Secretary”), which denied plaintiffs application for federal disability benefits. Defendant moves for judgment on the pleadings pursuant to Rule 12(c) of the Fed.R.Civ.P., affirming the Secretary’s decision as supported by substantial evidence on the record.

Facts

Plaintiff filed an application for disability benefits on September 5, 1980, claiming lower back injury, emphysema and arthritis as the basis for his claim. The application was denied November 16, 1980, as was Fransen’s application for reconsideration. Fransen was granted a de novo hearing before an Administrative Law Judge (“ALJ”), held on June 17, 1981, followed by three supplemental hearings, after which the ALJ issued a decision, on August 2, 1982, affirming the denial of benefits. The Appeals Council denied Fransen’s request for review on January 10, 1983, and the ALJ’s decision became the final decision of the Secretary, reviewable by this Court under 42 U.S.C. § 405(g).

On June 15, 1983, the parties stipulated to a remand of the case to the Secretary due to defendant’s inability to prepare a transcript of the January 1982 hearing. The Appeals Council subsequently ordered further proceedings before another AU. A supplemental hearing was held on November 17, 1983, at which Fransen appeared pro se. On December 13, 1983, the second AU issued a decision recommending a denial of benefits, which became the final decision of the Secretary when it was adopted by the Appeals Council on February 2, 1984.

In July 1984, defendant filed an answer to Fransen’s complaint in this court, and, in the Fall of 1984, moved for judgment on the pleadings. Fransen subsequently filed a response in which he requests the court to reverse the Secretary’s decision and award him benefits.

The ALJ’s decision

At the time of the second AU’s decision, Fransen was a 49 year old high school graduate who had worked, from 1961 to 1980, on the waterfront as a scaleman, lifting heavy bags of coffee onto and off scales. Although in 1975 Fransen suffered a myocardial infarction, he was able to return to the same work and continued such work until he threw out his back on May 12, 1980, while doing some lifting. Fransen tried to go back to work for a few days, but was unable to continue due to his injury, and he has been out of work since May 28, 1980.

At the first hearing, the AU considered the evidence of seven physicians, a psychologist and a vocational expert. Of the physicians, one, Dr. Romano, was Fransen’s treating physician; five had performed consultative exams and tests for the purpose of determining Fransen’s disability; and the remaining one, Dr. Lanier, reviewed the other doctors’ reports without examining Fransen himself. From the evidence of these experts and Fransen’s testimony, the first AU concluded that. Fransen, although unable to return to his past work, was capable of performing sedentary work such as cashier, clerk, parking attendant or assembly line worker.

The second AU, whose decision is presented for review here, incorporated by reference all the evidence before the first AU, and in addition considered an updated medical report from Dr. Romano, medical reports from two more doctors, the report of a vocational expert retained by Fransen, and documents from the International Longshoremen’s Association (“ILA”) indicating that Fransen was entitled to disability benefits from that organization.

Under examination by the AU, Fransen, appearing pro se, testified that he suffers a great deal of pain in his back, radiating down his left leg, at times excruciating, as a result of which he sleeps irregularly, must constantly shift position while standing or sitting, and takes several hot baths a day to relieve the pain. He further testified that he spends most of his time at home engaging in sedentary hobbies, climbing stairs twice a day, and caring for a diabetic, retarded son. He stated that when he does leave home, his wife drives him since he cannot take public transportation due to his pains. When his back is not bad, Fransen testified, he can stand and sit from IV2 to 2 hours, walk 4 to 5 blocks, but could not bend or squat.

Most of the medical reports concurred that Fransen probably has a herniated intervertebral disc, although the objective tests, including x-rays and a CAT scan, are not conclusive regarding this diagnosis. Neurological exams conducted by Dr. Strassberg in September 1980, Dr. Romano in December 1980, and Dr. Levy in September 1981, produced little or no abnormal findings and no significant motor loss. The medical reports did observe that Fran-sen was significantly restricted in his ability to flex and bend.

To relieve his back pain, Fransen has been taking regularly a variety of prescription pain relievers, as well as aspirin, which he testified made him “functional”. He wears a lumbrosacral corset, a hernia truss, uses a cane when walking outside, and wears a “TENS” unit, an electrical device connected to the spine by electrodes, to make the pain “tolerable” when he goes out. At least one doctor has recommended he undergo a myelogram and possible surgery, which Fransen has not done.

Fransen’s other ailments appear to be less significant impairments. Despite heart problems in 1975, he continued working until his back problem developed, and, since 1975, has never been hospitalized for any heart related problem. In his testimony, Fransen complained of chest pains on excitement or exertion and his doctor reported that as a result he takes 3 to 4 nitroglycerene tablets a day which rapidly clear the pain. The medical evidence, the bulk of which concerned the back problem, showed only that Fransen continued to suffer from the same heart condition he developed in 1975.

Fransen is also diagnosed as having emphysema, which the medical evidence does not reveal to be severe, causing him shortness of breath. He is doing nothing to treat it, and in fact continues to smoke a pack of cigarettes a day against his doctor’s recommendation. Fransen also complained of a “lousy” appetite, although the AU noted he had not changed weight between 1980 and 1983, and was described by an orthopedist examiner in November 1981 as a “well-developed, well-nourished adult male in no acute distress.”

Without seriously disagreeing with the clinical findings of the other physicians, Fransen’s treating physicians, Dr. Romano and Dr. Thorne, concluded that Fransen is totally disabled by the combination of ailments he suffers. Residual functional capacity evaluations done in September 1980 and in July 1981 concluded that Fransen could sit for 6 hours, stand about 2 hours, walk about 1 hour, lift light loads occasionally, and that he had no problems using his hands. A psychological evaluation in October 1981 found Fransen to be of average or better intelligence with no psychological problems.

From this evidence, the second AU concluded that Fransen’s back problem was a “severe impairment”, but that he nevertheless had the residual functional capacity to perform sedentary work. In reaching his conclusion, the AU took into account Fran-sen’s education, intelligence, and the fact that Administration regulations define the 49 year old claimant as a "younger person.” As to Fransen’s subjective complaints of disabling pain, the AU concluded that such were not credible in light of Fransen’s demeanor at the hearing and inconsistencies in his testimony regarding appetite and weight loss, as well as his ability to sit, stand, bend and walk despite the pain. The AU disregarded the ILA finding of disability as non-binding and unpersuasive due to differing standards of disability. The AU also rejected the conclusions of the vocational testing expert retained by Fransen on the ground that they were not valid medical testimony, nor did they show claimant’s inability to perform unskilled work after a normal period for vocational adjustment.

Discussion

The decision of the Secretary must be upheld unless the court finds it is not supported by substantial evidence, Bluvband v. Heckler, 730 F.2d 886, 891 (2d Cir.1984), which is defined as evidence “more than a mere scintilla” which “a reasonable mind might accept as adequate to support a conclusion.” Richardson v. Perales, 402 U.S. 389, 401, 91 S.Ct. 1420, 1427, 20 L.Ed.2d 842 (1971). A claimant will be found disabled

only if his physical or mental impairment or impairments are of such severity that he is not only unable to do his previous work but cannot, considering his age, education, and work experience, engage in any other kind of substantial gainful work which exists in the national economy, regardless of whether such work exists in the immediate area in which he lives, or whether a specific job vacancy exists for him, or whether he would be hired if he applied for work.

42 U.S.C. § 423(d)(2)(A). See Mimms v. Heckler, 750 F.2d 180, 185 (2d Cir.1984).

Once the claimant has established the existence of a disability, which the Secretary concedes here, the burden is on the Secretary to show there is alternative substantial gainful work existing in the national economy which the claimant could perform considering his physical capability, age, education, experience and training. Id.; Mongeur v. Heckler, 722 F.2d 1033, 1037 (2d Cir.1983).

The main objection raised by Fran-sen, now proceeding pro se, is that the Secretary failed to follow the decisions of the United States Department of Labor, under the Longshoremen’s and Harbor Workers’ Compensation Act (“LHWCA”), 33 U.S.C. § 901 et seq., and the ILA to the effect that he is entitled to disability benefits under programs administered by those agencies. The rule in this Circuit is that the determinations of other agencies that the claimant is disabled is “entitled to some weight and should be considered”, although it is not binding on the Secretary since different definitions of disability apply in other programs. Cutler v. Weinberger, 516 F.2d 1282, 1286 (2d Cir.1975); Hughes v. Heckler, 598 F.Supp. 765, 767 (W.D.N.Y.1984).

In the instant case the AU did consider the ILA finding but found it unpersuasive. The AU did not explicitly consider the Department of Labor finding that Fransen was totally disabled under the LHWCA. The standards for total disability under LHWCA, however, are significantly different, requiring the claimant to show only that he is unable to perform his regular work and placing the burden on the employer to show the availability of specific jobs the claimant could perform, American Stevedores, Inc. v. Salzano, 538 F.2d 933, 935-36 (2d Cir.1976); New Orleans (Gulfwide) Stevedores v. Turner, 661 F.2d 1031 (5th Cir.1981), something Fransen’s employer apparently did not attempt to do. Further, under LHWCA, a claimant may be considered totally disabled even though physically capable of performing certain light work. Diamond M. Drilling Co. v. Marshall, 577 F.2d 1003, 1006 (5th Cir. 1978). Thus, the Department of Labor finding of total disability under LHWCA does not significantly affect the AU’s decision, and, in view of the extent of medical evidence considered by the AU, his failure to explicitly consider the finding is at most harmless error. See Miles v. Harris, 645 F.2d 122, 124 (2d Cir.1981).

In all other respects, the AU’s decision is supported by substantial evidence and therefore must be affirmed. The AU based his decision on his observation of the claimant and his testimony from a total of five hearings, and upon consideration of all Fransen’s complaints, the facts of his relatively young age and high intelligence, the findings of vocational experts and the medical evidence, including the testimony of nine physicians and the conclusions of Fransen’s treating physicians. In addition, in view of the fact that Fransen appeared pro se at the hearing, the second AU properly made a diligent examination of the claimant, Echevarria v. Secretary, 685 F.2d 751, 755 (2d Cir.1982), particularly with regard to his subjective complaints of pain, Marcus v. Califano, 615 F.2d 23, 27 (2d Cir.1979), an inquiry made necessary by the somewhat limited clinical evidence of injury. See Gonzalez v. Schweiker, 540 F.Supp. 1256, 1260 (E.D.N.Y.1982).

Under the circumstances, the Secretary’s determination is affirmed and her motion for judgment dismissing the complaint is granted.

SO ORDERED.


author: HASTINGS, District Judge.

text:
    Norman HAWKINS, Plaintiff, v. HARIZ TANKERS CORPORATION, a foreign corporation doing business in Florida and Zim Israel Navigation Co., Ltd., a foreign corporation doing business in Florida, Defendants.
    No. 83-2918-Civ.-Hastings.
    United States District Court, S.D. Florida, Miami Division.
    June 4, 1985.
    Ralph P. Ezzo, Miami, Fla., for plaintiff.
    Allan R. Kelley, Miami, Fla., for defendants.
   FINAL SUMMARY JUDGMENT

HASTINGS, District Judge.

THIS CAUSE comes before the Court upon Defendants’ Motion for Summary Judgment and Defendants’ Motion for Leave to File Reply to Plaintiff’s Memorandum in Opposition to Defendants’ Motion for Summary Judgment. Leave to file a reply memorandum is GRANTED.

Plaintiff brought this action pursuant to the provisions of the Longshoremen’s and Harbor Workers’ Compensation Act, 33 U.S.C. §§ 904, 905(b) (hereinafter “the Act”) in the Circuit Court of the Eleventh Judicial Circuit, Dade County, Florida. The cause was removed by the Defendants to the United States District Court for the Southern District of Florida.

On December 10, 1980, the Plaintiff NORMAN HAWKINS, a longshoreman employed by the stevedoring company S.E.L. Maduro, was injured while unloading containers from the M/V “ZIM HOUSTON”, docked in Miami, Florida and owned by Defendant HARIZ TANKERS CORP. The vessel was operated by ZIM ISRAELI NAVEGATION CO., LTD.

Pursuant to § 5(b) of the Act, 33 U.S.C. § 905(b), Plaintiff filed a Workmen’s Compensation claim against his employer S.E.L. Maduro, which was insured by the Midland Insurance Co. The Act provides for compensation by the employer in a fixed amount regardless of fault.

On August 31, 1982, prior to the time that any formal award was entered by a Deputy Commissioner of the Office of Worker’s Compensation Programs of the United States Department of Labor or accepted by the claimant, Plaintiff filed a third party lawsuit against ZIM-AMERICAN ISRAELI SHIPPING CO., INC.

Pursuant to the provisions of § 8(i) of the Act, Plaintiff, his employer and its insurer reached an agreement settling the workman’s compensation claim. In September, 1982, an application of Approval of Settlement was signed by Plaintiff, his attorney, and a representative of the employer and insurance carrier.

In October, 1982, during the trial of the initial lawsuit filed in state court on August 81, 1982, Plaintiff took a voluntary dismissal as he had sued the wrong party.

On December 5, 1982, a compensation order was entered by a Deputy Commissioner approving the agreed settlement and awarding Plaintiff $20,000. Immediately thereafter Plaintiff accepted the compensation pursuant to the award in the compensation order.

On October 30, 1983, more than six months after acceptance of the compensation, Plaintiff commenced the present action. On April 25, 1985, the Plaintiff filed with this Court a document entitled “Assignment of Cause of Action” purporting to reassign to Plaintiff the insurer’s cause of action under the Act. The document is dated September 26, 1984.

For the following reasons the purported reassignment is ineffective and Plaintiff’s cause of action is non-existent. This action is governed by § 33(b) of the Act, 33 U.S.C. § 933(b) which provides:

Acceptance of such compensation under an award in a compensation order filed by the Deputy Commissioner ... shall operate as an assignment of all right of persons entitled to compensation to recover damages against such third person unless such person shall commence an action against such third person within six months after such award.

Plaintiff, having accepted such award was required to bring suit within six months. Failure to institute an action within this period caused the action to be irrevocably assigned to the employer. Pallas Shipping Agency, Ltd. v. Duris, 461 U.S. 529, 103 S.Ct. 1991, 76 L.Ed.2d 120 (1983).

While Plaintiff had filed an action against the wrong party within the required six month period, Plaintiff's voluntary dismissal of the August 1982 lawsuit did not toll the statute of limitations contained in § 33(b) of the Act. See 9 Wright & Miller, Federal Practice and Procedure § 2367. Plaintiff’s instant lawsuit was therefore not brought within the statute of limitations period.

Plaintiff relies on Caldwell v. Ogden Sea Transport, Inc. 618 F.2d 1037 (4th Cir. 1980) whereby the Fourth Circuit fashioned an additional remedy for the injured longshoreman. Under the Caldwell holding, where the employer’s insurer executed a reassignment of its cause of action to the longshoreman, he could then proceed with a cause of action against the third party in his own name. Plaintiff HAWKINS obtained such a reassignment in an apparent attempt to satisfy the requirements of Caldwell.

The Caldwell decision was sharply criticized by the United States Supreme Court in Rodriguez v. Compass Shipping Co., 451 U.S. 596,101 S.Ct. 1945, 68 L.Ed.2d 472 (1981). The Supreme Court found that the Act “precludes the fashioning of an entirely new set of remedies to deal with an aspect of a problem that Congress expressly addressed.” 101 S.Ct. at 1945.

While Rodriguez did not expressly address formal reassignments of the right to sue, the Fourth Circuit, being duly admonished by the Supreme Court, reversed itself and rejected the Caldwell re-assignment remedy in Simmons v. Sea-Land Services, Inc., 676 F.2d 106 (4th Cir.1982). See also Bandy v. Bank Line, Ltd. 518 F.Supp. 1229 (E.D.Va.1981). The Plaintiff seeks to have this Court follow Fourth Circuit precedent, which Circuit has now seen the error of its reasoning and has itself overruled such precedent. While the Court finds regrettable that Plaintiff’s cause of action must fail because of the statute of limitation, the Court declines to follow the overruled caselaw cited above.

The language of § 33(b) is both mandatory and unequivocal. After six months of the final award, assignment of the action to the employer occurs. Rodriguez, supra, 101 S.Ct. at 1950. This Court therefore concludes that Plaintiff cannot circumvent the mandatory language of the Act by procuring a reassignment of the right to sue unto himself and he does not retain any right to proceed with this action.

There being no genuine issue of fact in dispute, and the Court finding that as a matter of law Defendants are entitled to judgment in their favor, it is hereby

ORDERED AND ADJUDGED that FINAL SUMMARY JUDGMENT is hereby entered in favor of the Defendants. Each party shall bear its own costs and attorney’s fees.


author: LATCHUM, Senior District Judge.

text:
    George C. NOSE, Plaintiff, v. Anthony S. REMENTER, Steven R. Rementer and Mary Rementer, Defendants.
    Civ. A. No. 84-645-JLL.
    United States District Court, D. of Delaware.
    June 4, 1985.

      William S. Gee of Theisen, Lank, Mulford & Goldberg, P.A., Wilmington, Del., for plaintiff.
    Wayne N. Elliott and Michael P. Kelly of Prickett, Jones, Elliott, Kristol & Schnee, Wilmington, Del., for defendants.
   MEMORANDUM OPINION

LATCHUM, Senior District Judge.

The parties to this personal injury action have stipulated to the following facts. (See Docket Item [“D.I.”] 19 at 3; D.I. 20 at 3.) On May 30, 1981, a motor vehicle driven by the plaintiff collided with a motor vehicle driven by defendant Anthony S. Rementer approximately one mile north of Rehoboth, Delaware. The plaintiff claims to have suffered physical injuries as a direct result of that accident, and, to recover for his injuries, he filed suit on May 23, 1984, in the United States District Court for the District of Maryland, invoking the jurisdiction of the Federal court on the basis of diversity of citizenship. (D.I. 1A.) That court transferred the action to this Court by an order dated October 18, 1984. (D.I. 7.) The matter is now before this Court on the defendants’ motion for summary judgment under Fed.R.Civ.P. 56. (D.I. 17.) LAW

In transferring this case, the court in Maryland held that it lacked personal jurisdiction over the defendants. (D.I. 7 at 4.) Although the court was apparently in error in relying on 28 U.S.C. § 1631 as the basis for its authority to transfer the case, there is no doubt that court had authority to make the transfer under 28 U.S.C. § 1404(a). See United States v. Berkowitz, 328 F.2d 358, 361 (3d Cir.), cert. denied, 379 U.S. 821, 85 S.Ct. 42, 13 L.Ed.2d 32 (1964). It is also clear that when a transfer is made because a court lacks personal jurisdiction over the defendants that the law of the transferee forum becomes the law applicable to the case. As Circuit Judge Stapleton recently wrote for this Court,

A transfer necessitated by lack of personal jurisdiction is based not upon the inconvenience of the original forum but upon the impropriety of that forum. If the state law of the original forum is applied following a transfer based upon lack of personal jurisdiction, a plaintiff would gain by proceeding first in an improper forum.

Weber v. McDonald’s System of Europe, Inc., C.A. No. 84-442-WKS, slip op. at 7 (D.Del. May 15, 1985) (Stapleton, Circuit Judge, sitting by designation) (citations omitted); cf. Martin v. Stokes, 623 F.2d 469, 472 (6th Cir.1980). Therefore the law applicable to this diversity suit is the law of Delaware. Erie R.R. Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938). No choice of laws question is posed because the accident underlying the suit took place in Delaware.

The relevant statute of limitations is 10 Del.C. § 8119, which reads, in relevant part, “no action for the recovery of damages upon a claim for alleged personal injuries shall be brought after the expiration of 2 years from the date upon which it is claimed that such alleged injuries were sustained ____” The undisputed facts reveal that suit was not filed in connection with the May 1981 accident until May 23, 1984. The only argument the plaintiff has advanced to stave off summary judgment is that “[pjlaintiff s failure to file within two years was the result of his prior attorney’s unfamiliarity with this particular statute, and ... [pjlaintiff should not be penalized for a mistake not of his own making.” (D.I. 20 at 5.) But, as the defendants point out (D.I. 21 at 6), Delaware law has by long tradition given no weight to considerations of hardship or “fair play” in the application of statutes of limitations. See, e.g., Rash v. C. & M. Corp., 59 Del. 257, 218 A.2d 670, 672 (1966); Lewis v. Pawnee Bill’s Wild West Co., 6 Pennewill 316, 66 A. 471, 474 (1907); Bovay v. H.M. Byllesby & Co., 27 Del.Ch. 33, 29 A.2d 801, 804 (1943). The facts are undisputed, the law is simple, and the court’s obligation is clear. The defendants’ motion for summary judgment must be granted. An order to that effect will be entered.

      . Section 1631 reads:

        Transfer to cure want of jurisdiction. Whenever a civil action is filed in a court as defined in section 610 of this title or an appeal, including a petition for review of administrative action, is noticed for or filed with such a court and that court finds that there is a want of jurisdiction, the court shall, if it is in the interest of justice, transfer such action or appeal to any other such court in which the action or appeal could have been brought at the time it was filed or noticed, and the action or appeal shall proceed as if it had been filed in or noticed for the court to which it is transferred on the date upon which it was actually filed in or noticed for the court from which it is transferred. Although it is phrased in a manner which could be interpreted as meaning it is to apply to cases like this one, in which the transferor court lacks personal jurisdiction over the defendants, section 1631 appears from its legislative history to apply only to cases in which the transferor court lacks subject matter jurisdiction. See S.Rep. No. 97-275, 97th Cong., 2d sess. 11, reprinted in 1982 U.S.Code Cong. & Ad.News 11, 21.

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

      . The plaintiff did urge the Court to review the memorandum he submitted to the district court in Maryland (D.I. 20 at 5); however, that document deals with matters of personal jurisdiction. (D.I. 4.) It does not even address the dispositive statute of limitations.


text:
    CUMIS INSURANCE SOCIETY, INC., Plaintiff, v. SOUTH-COAST BANK, Westlands Bank, Paine, Webber, Jackson & Curtis, Inc., First Source Bank, Defendants.
    No. S 83-326.
    United States District Court, N.D. Indiana, South Bend Division.
    June 5, 1985.
    See also, 587 F.Supp. 339.

      R. Kent Rowe, South Bend, Ind., Peter D. Sullivan, Chicago, Ill., for plaintiff.
    William J. Reinke, Douglas K. Dieterly, South Bend, Ind., Jeffrey B. Lieberman, Michael B. Roche, Chicago, Ill., John C. Hamilton, Ronald J. Jaicomo, South Bend, Ind., for defendants.
   MEMORANDUM and ORDER

ALLEN SHARP, Chief Judge.

This cause is before the court on the motion to quash of R. Lawrence Steele, Jr., the United States Attorney for the Northern District of Indiana [U.S. Attorney] filed April 8, 1985. The U.S. Attorney moves the court to quash a subpoena duces tecum issued to him at the request of Paine, Webber, Jackson & Curtis [Paine Webber] on March 5, 1985 to obtain the following from the file of U.S.A. v. Larry L. Winsch, SCR 82-38-01:

All documents, including but not limited to notes, interviews, transcripts, records and the contents of any files which refer or relate to the investigation of the embezzlement of funds from AAA Federal Credit Union by Larry Winsch. [Deposition Subpoena, March 5, 1985.]

Between 1978 and June of 1982, Larry Winsch [Winsch] was the manager and chief operating officer of the AAA Federal Credit Union [AAA] in South Bend, Indiana. During 1980 and 1981, Winsch embezzled approximately $294,000 in funds from AAA. As part of his scheme, on May 18, 1981, Winsch opened an account in the name of AAA with AAA funds at Paine Webber. In August and September 1981, Winsch transferred approximately $205,000 in AAA funds held on account at West-lands Bank [Westlands] and South-Coast Bank [South-Coast] to the Paine Webber account. On November 19, 1981, Winsch wire transferred $200,000 of the funds in the Paine Webber account to his own personal account at Conti Commodities. Subsequently, Winsch pleaded guilty to a seven-count information and was sentenced by this court to three years in a federal penitentiary. He is now out of prison on parole.

The U.S. Attorney makes several claims as to why the subpoena should be quashed. First, he asserts that the documents requested by Paine Webber are not under his control. He states that although his file contains copies of investigative reports made by the Federal Bureau of Investigation [FBI] utilizing records obtained by means of grand jury subpoenas, the actual case file is maintained at its district office in Indianapolis, Indiana, under the control of its agent in charge, John C. McGinley. Second, assuming Paine Webber causes a subpoena to be issued to the correct party [i.e., the FBI], the subpoena should be quashed on the authority of Russ v. Ratliff, 68 F.R.D. 691 [E.D.Ark.1975]. In Russ, private litigants also wanted to obtain the benefits of a criminal investigation carried out by the FBI. The court there agreed with the government that [1] information in an FBI investigative file is privileged under Fed.R.Civ.P. 26[b]; [2] a request for an FBI investigative file is unreasonable where information contained in it is available from original sources; and [3] such a request is oppressive since it interferes with the FBI’s intended purpose. Third, the U.S. Attorney argues that the material sought raises Rule 6[e] issues since much of the FBI Agent’s reports flows from records obtained in response to grand jury subpoenas. Finally, the U.S. Attorney suggests that, notwithstanding Rule 6[e](3)[C][i] procedures, disclosure of financial records obtained by grand jury subpoena for purposes other than criminal prosecution may be proscribed by the Right to Financial Privacy Act, 12 U.S.C. § 3420.

The court turns first to the issue of the FBI investigative reports which are part of the government files sought in this case. The U.S. Attorney argues: 1] that he does not have “control” of such documents and, thus, cannot comply with the discovery request of Paine Webber, and 2] the materials sought are privileged within the meaning of Fed.R.Civ.P. 26[b][l].

In relevant part, Fed.R.Civ.P. 34 provides:

Any party may serve on any other party a request [1] to produce and permit the party making the request ... to inspect and copy, any designated documents ... or to inspect and copy, test or sample any tangible things which constitute or contain matters within the scope of Rule 26[b] and which are in the possession, custody or control of the party upon whom the request is served___ [Emphasis added.]

The investigative files which are sought by Paine Webber are “relevant to the subject matter ... in the pending matter.” Fed.R.Civ.P. 26[b][l]. Indeed, the information sought forms the basis of the complaint of plaintiff, Cumis Insurance Society, Inc. [CUMIS] against all the defendants and Paine Webber’s action against Winsch himself. Winsch is a third party defendant in the case being sued by Paine Webber to recover its costs, expenses and attorneys’ fees incurred in defending the action as well as for damages in the amount of any judgment obtained by Cumis against Paine Webber in the lawsuit.

The second prong of Fed.R.Civ.P. 34 is also satisfied here. The document sought must be in the “possession, custody or control” of the party upon whom the request is served. The phrase “possession, custody or control” is in the disjunctive and only one of the enumerated requirements need be met. Since it is undisputed that the U.S. Attorney has in his possession a copy of the FBI investigative report, the court finds the U.S. Attorney’s argument on “control” to be without merit.

A second argument relevant to the FBI investigative reports and set forth by the U.S. Attorney on support of his motion to quash is that the materials sought are “privileged” within the meaning of Fed.R.Civ.P. 26[b][1]. He relies on Russ v. Ratliff, supra, to support his allegation that such privilege exists in this case. Having reviewed that authority, the court finds no rationale for the conclusion arrived at by the Russ court. A qualified common law privilege does exist within the meaning of Fed.R.Civ.P. 26[b] for law enforcement investigatory files. Friedman v. Bache Halsey Stuart Shields, Inc., 738 F.2d 1336, 1341 [D.D.C.1984]. Generally, the applicable federal privilege for criminal investigative files provide for the protection of files relating to ongoing criminal investigations. Sirmans v. City of South Miami, 86 F.R.D. 492, 495 [S.D.Fla.1980] and cases cited therein. [Emphasis added.] When the existence of such a conditional privilege is established, there is a need to balance the public interest in nondisclosure against the need of the applicant for access to the privileged information. Friedman, 738 F.2d at 1341. The party claiming privilege has the burden to establish its existence. Id.

[Governmental privilege^] must be formally asserted and delineated in order to be raised properly____
The claiming official must “have seen and considered the contents of the documents and himself have formed the view that on grounds of public interest they ought not to be produced” and state with specificity the rationale of the claimed privilege____
Formally claiming a privilege should involve specifying which documents or class of documents are privileged and for what reasons, especially where the nature of requested documents does not reveal an obviously privileged matter. Id. at 1342 quoting Kerr v. United States District Court for Northern District of California, 511 F.2d 192, 198 [9th Cir.1975].

It is only when the claim of privilege has been presented to a district court with appropriate deliberation and precision that the duty of the demanding party to show his or her need for disclosure is triggered. Friedman, 738 F.2d at 1342.

The U.S. Attorney has made a generalized claim that the FBI investigative file is privileged, that a request for such file is unreasonable when the same information is available from original sources and that such a request is oppressive since it interferes with the FBI’s intended purpose. However, at no point in his brief does he give any specific reason as to why the documents are privileged. He never enumerated the kinds or classes of information contained in the files nor indicated specifically what is being jeopardized by disclosure. At oral argument, counsel representing the U.S. Attorney acknowledged that the only interest the government has in keeping the investigative file confidential is to eliminate any nuisance that might arise from similar requests in other cases.

As for such request being oppressive so as to interfere with the intended purpose of the FBI, it is of import to note that the FBI investigation of Larry Winsch is closed. Not only is the investigation complete, but Winsch has already plead guilty to an information, has served time in prison and has been paroled. In summary, the U.S. Attorney has not made an adequate presentation of the claim of privilege.

The U.S. Attorney also points out that the information sought by Paine Webber can be gleaned from the original sources. Although Paine Webber acknowledges that many of the original sources for the FBI investigation have been deposed, Paine Webber’s Memorandum In Opposition to the U.S. Attorney’s Motion to Quash, April 24, 1985, p. 5., it seeks the FBI files to determine if all of the original sources in the FBI investigation have been located and deposed. Further, the embezzlement took place in 1980 and 1981. Paine Webber argues that the information obtained by the FBI at or near the time of the embezzlement is likely to be more reliable and more complete than the information obtained during the course of discovery in the present action which began in earnest in 1984. This court concurs with Paine Webber’s position.

In addition to the argument made with respect to privilege, the U.S. Attorney contends that since much of the FBI agents’ reports flow from records obtained in response to grand jury subpoenas, a Rule 6[e] order is appropriate. Rule 6[e] is intended to protect against disclosure of what actually took place in grand jury proceedings. Therefore, the policy of secrecy and the required showing of particularized need for disclosure of grand jury materials applies only to “matters occurring before the grand jury.” Matter of Grand Jury Proceedings, Miller Brewing Company, 687 F.2d 1079, 1089 [7th Cir.1982].

In Matter of Grand Jury Proceedings, Miller Brewing Company, supra, the Seventh Circuit explains the distinction between documents subpoenaed and examined by a grand jury and “matters occurring before the grand jury”:

Unless information reveals something about the grand jury proceedings, secrecy is unnecessary____ Unlike testimony, documents are created for purposes other than the grand jury investigation; they are therefore more likely to be useful for purposes other than revealing what occurred before the grand jury. Persons may have a legitimate interest in documents so that disclosure of them does not constitute disclosure of matters occurring before the grand jury.
Id. at 1089 citing United States v. Stanford, 589 F.2d 285, 291 [7th Cir.1978].

Thus, when a particular document is sought only “for its own sake — for its intrinsic value in the furtherance of a lawful investigation,” it does not necessarily constitute a matter occurring before the grand jury. Id; Securities & Exchange Commission v. Dresser Industries, 628 F.2d 1368, 1382 [D.C.Cir.1980]. Moreover, a district court has wide discretion in determining whether documents reveal the inner workings of the grand jury.

Based on the records in this case, this court concludes that the U.S. Attorney’s Rule 6[e] argument is lacking in merit. It is not clear from the brief or oral argument of the U.S. Attorney that the FBI file even contains such documents. On page 2 of the United States Attorney’s Motion to Quash, he states that “the materials sought also raise Rule 6[e] issues since much of the FBI agent’s reports flow from records obtained in response to grand jury subpoenas. [Emphasis added.] The U.S. Attorney merely infers that the substance of the reports is derived from records obtained in response to grand jury subpoenas; he never states that the records themselves are included in the file.

The final argument posed by the U.S. Attorney is that the disclosure of financial records obtained by grand jury subpoenas may violate the Right to Financial Privacy Act. He presented no authority on this issue and research by the court has not revealed any case law to support his theory. Further, it would appear that the proper party to challenge any such disclosure of financial records is the individual whose records are being subject to scrutiny. Larry Winsch is a third-party defendant in this action and has been served with a copy of all motions or briefs relevant to the U.S. Attorney’s Motion to Quash. Winsch has not appeared before the court personally to object to the subpoena duces tecum of Paine Webber nor has he filed any pleadings objecting to the discovery request. The court, therefore, will not bar disclosure on this ground.

The file of the U.S. Attorney for the Winsch case, No. SCR 82-36, contains a copy of the indictment, a copy of the petition to enter a plea of guilty, a copy of the judgment, a transcript of the grand jury proceedings resulting in Winsch’s indictment and a copy of the subpoenas to testify and to produce records, miscellaneous notes made by the U.S. Attorney’s staff and the copies of the FBI investigative reports. Paine Webber has stated “that it is willing to forego any claim that the U.S. Attorney produce minutes of any grand jury proceedings.” Paine Webber’s Memorandum In Opposition to the U.S. Attorney’s Motion to Quash, April 24, 1985 p. 6. The court interprets this to mean that Paine Webber waives any request for the grand jury transcripts of the proceedings leading to the indictment of Larry Winsch. To this list of exemptions, the court will add any and all copies of subpoenas to testify and to produce records before the grand jury contained in the Winsch file of the U.S. Attorney.

Accordingly, it is the order of this court that the motion to quash of the U.S. Attorney be, and is hereby, DENIED. It is further ordered that with the exception of the transcript of the grand jury proceedings and copies of the subpoenas to testify and to produce records leading to the indictment of Larry Winsch, the U.S. Attorney is hereby ordered to produce the remaining documents to counsel for Paine Webber within thirty [30] days of receipt of this order at a time and place mutually agreed to by the parties. SO ORDERED.

      . Paine Webber filed a memorandum in opposition to the United States Attorney’s motion to quash on April 24, 1985. Oral argument was heard by the court on this motion at the pretrial conference held on May 17, 1985 in South Bend, Indiana.

      . Fed.R.Civ.P. 34[c] applies the general scope of discovery with respect to documents to persons not a party to the action.
      It provides in pertinent part:
      [c] Persons Not Parties. This rule does not preclude an independent action against a person not a party for production of documents and things and permission to enter upon land.

      . It is settled that "privilege” as used in Rule 26 means privilege as determined by the Federal Rules of Evidence. United States v. Reynolds, 345 U.S. 1, 6, 73 S.Ct. 528, 531, 97 L.Ed. 727 [1953], Rule 501 of the Federal Rules of Evidence provides:
      Rule 501. GENERAL RULE
      Except as otherwise required by the Constitution of the United States or provided by Act of Congress or in rules prescribed by the Supreme Court pursuant to statutory authority, the privilege of a witness, person, government, State, or political subdivision thereof shall be governed by the principles of the common law as they may be interpreted by the courts of the United States in the light of reason and experience. However, in civil actions and proceedings, with respect to an element of a claim or defense as to which State law supplies the rule of decision, the privilege of a witness, person, government, State or political subdivision thereof shall be determined in accordance with State law.
      Rule 501 differentiates between actions involving federal question jurisdiction and those where diversity jurisdiction applies. In criminal and federal question civil cases, federally evolved rules on privilege should apply since federal policy is being enforced. Conversely, in diversity cases where the litigation in question turns on a substantive question of state law, state rules of privilege should apply unless the proof is directed at a claim or defense for which federal law supplies the rule of decision. See Fed.R.Evid. 501, Notes of Committee on the Judiciary Senate Report No. 93-1277, 28 U.S. C.A. at pp. 369-70.
      In the absence of Indiana authority on the privilege attached to investigative files, the court turns to the common law on privileges as set out in numerous federal cases.

      . Paine Webber’s response to this contention of the U.S. Attorney is tantamount to a showing of necessity for disclosure of the investigative file, a burden Paine Webber need not carry in light of this court’s finding that the U.S. Attorney has not presented a proper privilege claim. Nevertheless, the court presents Paine Webber’s response in an effort to set forth its entire case.


author: EARL E. O’CONNOR, Chief Judge.

text:
    AMERICAN AIRLINES, INC., Plaintiff, v. FEDERAL DEPOSIT INSURANCE CORPORATION, Defendant.
    Civ. A. No. 83-2401.
    United States District Court, D. Kansas.
    June 5, 1985.

      Richard N. Roe, George A. Lowe, Lowe, Terry & Roberts, Olathe, Kan., David E. Everson, Jr., Stephen J. Owens, Stinson, Mag & Fizzell, Kansas City, Mo., for plaintiff.
    Michael C. Manning, Morrison, Hecker, Curtis, Kuder & Parrish, Overland Park, Kan., James C. Mordy, Stanley A. Reigel, Morrison, Hecker, Curtis, Kuder & Parrish, Kansas City, Mo., for defendant.
   MEMORANDUM AND ORDER

EARL E. O’CONNOR, Chief Judge.

This matter comes before the court on the motion of American Airlines, Inc., (American) for summary judgment on Count I of the complaint, and on the motion of the Federal Deposit Insurance Corporation (FDIC) for summary judgment on the entire complaint.

Summary judgment “shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” Fed.R.Civ.P. 56(c). In considering such a motion, however, we must examine all evidence in the light most favorable to the party opposing the motion. Mogle v. Sevier County School District, 540 F.2d 478, 482 (10th Cir.1976), cert. denied, 429 U.S. 1121, 97 S.Ct. 1157, 51 L.Ed.2d 572 (1976). Where differing inferences can be drawn from conflicting affidavits, depositions, and exhibits, summary judgment should be denied. United States v. Diebold, Inc., 369 U.S. 654, 655, 82 S.Ct. 993, 994, 8 L.Ed.2d 176 (1962).

There are no material facts in dispute. American entered into various lease and payment agreements with Global International Airways, Inc. (Global). To provide American with security against Global’s possible default, Global requested that Indian Springs State Bank (the Bank) issue a letter of credit naming American as beneficiary. On April 21, 1983, the Bank issued Letter of Credit No. G-301 in the amount of $195,000.00, naming American as beneficiary. That letter of credit was to expire after October 21, 1983.

On October 19, 1983, Global filed a petition in bankruptcy, seeking corporate reorganization under Chapter 11. Two days later, Dick Hlinko of American’s Dallas-Fort Worth, Texas, office arrived at the Bank and hand delivered the following documents: (1) the letter of credit, (2) an affidavit, (3) a sight draft in the amount of $195,000.00, and (4) a cover letter to Steven Spence, Executive Vice-President of the Bank. The Bank has admitted that Spence received the documents from American and was aware of the identity of the letter of credit on which American was seeking payment. Spence gave Hlinko a signed receipt which stated, “RECEIVED of American Airlines, Inc. one Irrevocable Letter of Credit # G-301, one sight draft for $195,-000.00, and one affidavit of unpaid sums due from Global International Airways.” The sight draft delivered to Spence referred to the letter of credit as “Irrevocable Letter of Credit G0391 dated April 21, 1983.” (Emphasis added.) The cover letter, however, correctly referred to the instrument as “letter of credit no. G-301 issued in behalf of American Airlines, Inc. by order of Global International Airways, Inc. dated April 21, 1983.” (Emphasis added.)

On October 25, 1983, Spence sent a telex to Hlinko at American, refusing to honor the sight draft for the stated reason that the draft contained a typographical error in its identification of the letter of credit’s reference number. After this lawsuit was filed, the Bank was declared insolvent. FDIC took charge of the Bank’s properties and assets and was substituted for the Bank as defendant in this lawsuit.

American contends that the Bank’s dishonor of the sight draft was wrongful because American sufficiently complied with the requirements of the letter of credit. It argues that the apparent typographical error in the reference number on the sight draft was an immaterial defect.

FDIC argues, however, that the attempted presentment did not comply with the terms of the letter of credit in that the writing submitted as a sight draft (1) was not a draft because it failed to designate a drawee, (2) was not drawn by American as the drawer, and (3) did not refer to the correct number of the letter of credit.

Because FDIC’s motion relates not only to Count I of the complaint, but also to Counts II and III, its brief addresses American’s alternative arguments that FDIC waived or is estopped to assert certain defenses. Specifically, American argues that by referring only to the draft’s erroneous letter of credit reference number in its telex of October 25, 1983, the Bank (and now FDIC) may not rely on the draft’s alleged failure to designate a drawee or to indicate that it was drawn by American as the drawer.

In response to American’s waiver and estoppel arguments, FDIC asserts that those doctrines apply only where a beneficiary detrimentally relied on an issuer’s failure to state all its grounds for dishonor in its original notice thereof. No such reliance was possible here, argues FDIC, because K.S.A. 84-5-112(l)(a) expressly confers upon an issuer the right to “defer honor until the close of the third banking day following receipt of the documents.” Because this draft was presented fewer than three days prior to the letter of credit’s expiration date, FDIC contends that American forfeited its right to correct any errors found to exist in its original draft.

The parties also disagree as to the standard by which we should judge FDIC’s duty to honor American’s draft. The relevant Kansas U.C.C. provision reads as follows:

(1) An issuer must honor a draft or demand for payment which complies with the terms of the relevant credit regardless of whether the goods or documents conform to the underlying contract for sale or other contract between the customer and the beneficiary.

K.S.A. 84-5-114(1) (emphasis added).

As the 1983 Kansas Comment to this provision notes, “The key question is whether the court will require ‘strict compliance’ and make the beneficiary meet the letter of the letter, or will allow ‘substantial compliance’ and thus lessen the margin within which the issuing bank is free to dishonor.” The Comment further indicates that, as to this question, “Kansas law has no decisions to date.” (Indeed, we have found no reported Kansas decisions concerning any aspect of the article on letters of credit.) Not surprisingly, FDIC urges us to hold that Kansas law requires strict compliance, while American asserts that substantial compliance with the terms of the letter of credit should suffice. As fallback positions, each party also argues that it is entitled to a judgment even if this court adopts the standard sought by its opponent.

Fortunately, we find it unnecessary to decide most of the legal questions pressed upon us by the parties. Even if (1) FDIC did not waive, and is not estopped to assert, the defenses omitted from its telex, and (2) Kansas would adopt the strict compliance standard, American is nonetheless entitled to a judgment as a matter of law. Our reasoning turns on a proper understanding of the phrase “strict compliance.”

The term “strict compliance” is not so absolute as FDIC would wish. In a leading decision, the First Circuit explained:

We take as a starting point the substantial body of case law which establishes and supports the general rule that documents submitted incident to a letter of credit are to be strictly construed. This is because international financial transactions rest upon the accuracy of documents rather than on the condition of the goods they represent. But we note some leaven in the loaf of strict construction. Not only does haec verba not control absolutely, but some courts now east their eyes on a wider scene than a single document. We are mindful, also, of the admonition of several legal scholars that the integrity of international transactions (i.e., rigid adherence to material matters) must somehow strike a balance with the requirement of their fluidity (i.e., a reasonable flexibility as to ancillary matters) if the objective of increased dealings to the mutual satisfaction of all interested parties is to be enhanced.

Banco Espanol de Credito v. State Street Bank & Trust Co., 385 F.2d 230, 234 (1st Cir.1967) (citation omitted). Subsequent decisions have heeded the teachings of Banco Español. While expressly applying the strict compliance standard, the First Circuit held that “a variance between documents specified and documents submitted is not fatal if there is no possibility that the documents could mislead the paying bank to its detriment.” Flagship Cruises, Ltd. v. New England Merchants National Bank of Boston, 569 F.2d 699, 705 (1st Cir.1968) (emphasis in original). This same standard was applied in the more recent strict compliance cases of Tosco Corp. v. F.D.I.C., 723 F.2d 1242, 1247-48 (6th Cir. 1983), and U.S. Industries, Inc. v. Second New Haven Bank, 462 F.Supp. 662, 665 (D.Conn.1978).

In the case at hand, we conclude that there was no possibility that the Bank could have been misled by the documents submitted to it by American. Even under the rule of strict compliance, a beneficiary may establish compliance with the terms of a letter of credit via documents submitted in conjunction with the disputed draft. U.S. Industries, 462 F.Supp. at 664. Here, the documents submitted along with American’s draft clearly indicated the correct letter of credit reference number and the proper drawee (the Bank).

While those accompanying documents also revealed that “B.W. Baldwin, Assistant Vice President, Aircraft Sales and Services” had signed the draft as American’s agent, no such documentation was even necessary. Under K.S.A. 84-3-403(1), “[a] signature may be made by an agent or other representative, and his authority to make it may be established as in other cases of representation.” As the Comment to this provision notes, “when relevant [,] parol evidence is admissible to prove or to deny” such authority. FDIC does not dispute that, if it were admitted, parol evidence would establish Mr. Baldwin’s authority to sign this draft on American’s behalf. Accordingly, the draft did strictly comply with the letter of credit’s requirement that any drafts be submitted by American.

The undisputed facts indicate that, as to Count I of its complaint, American is entitled to a judgment as a matter of law. We will thus grant its motion for summary judgment on that Count. As American stated in its brief, “Judgment in favor of plaintiff under any one of the counts would dispose of the entire action.” Accordingly, Counts II and III of the complaint will now be dismissed as moot. FDIC’s motion for summary judgment must, of course, be denied.

IT IS THEREFORE ORDERED that plaintiff’s motion for summary judgment on Count I of the complaint is granted.

IT IS FURTHER ORDERED that Counts II and III of the complaint are dismissed as moot.

IT IS FURTHER ORDERED that defendant’s motion for summary judgment on the complaint is denied.

Counsel for plaintiff are directed to prepare a proposed journal entry of judgment, to circulate said proposal to opposing counsel, and then to submit it for the court’s approval.


author: HADEN, Chief Judge.

text:
    Carolyn Buchanan KENNEDY, Plaintiff, v. MCDONALD’S CORPORATION and Franchise Development Systems, Inc., Defendants.
    Civ. A. No. 84-2076.
    United States District Court, S.D. West Virginia, Charleston Division.
    June 5, 1985.
    Douglas Miller, Charleston, W.V., for plaintiff.
    William W. Booker, Love, Wise & Woodroe, Charleston, W.V., for McDonald’s Corp.

      Stephen A. Weber, Kay, Casto & Chaney, Charleston, W.V., for Franchise Development Systems, Inc.
   ORDER

HADEN, Chief Judge.

Pending is the Defendant McDonald’s Corporation’s motion for summary judgment filed April 5, 1984, and the Plaintiff’s motion for summary judgment filed April 1, 1985.

This is a Title VII action in which the Plaintiff, a black female, in two charges before the West Virginia Human Rights Commission filed on or about June 16, 1983, claims sex and race discrimination. Each of the charges concern the events on or about May 17, 1983, where disciplinary action was taken against the Plaintiff. The Plaintiff was employed in several restaurants operating under the name McDonald’s in the Charleston area. She began her employment with Franchise Development Systems, the owner of the McDonald’s stores May 10, 1978, and she was terminated December 24, 1983. In May, 1983, the Plaintiff was suspended twice, once with pay and once without pay. She was also demoted in May, 1983, and suffered a loss of salary of $1,000 per annum.

The Plaintiff’s charge filed on or about June 16, 1983, names “McDonald’s — General Office” as the respondent. The Plaintiff in the action before this Court names McDonald’s Corporation and Franchise Development Systems, Inc. each as Defendants. Franchise Development Systems, Inc. is the owner and operator of five stores in Kanawha County doing business as McDonald’s of Greater Charleston. There is no common financial control between Franchise Development Systems and McDonald’s Corporation. Further, there are no common employees, no common officers in the corporations, no employee of McDonald’s corporation owns stock in Franchise Development Systems, nor is Franchise Development Systems required to consult or obtain permission of any officer, employee or agent of McDonald’s corporation to hire, fire or discipline employees of Franchise Development Systems.

Franchise Development Systems did not, in fact, consult with McDonald’s Corporation to discipline and ultimately discharge the Plaintiff. The decision was made by Samuel McBride, the owner of Franchise Development Systems, and David Young, the store manager of the establishment in which the Plaintiff worked in May, 1983.

The Plaintiff has responded to the Defendant McDonald’s Corporation’s motion by filing her own motion for summary judgment and as she does not place any new matters on the record with her motion, she apparently relies upon the record as developed by Franchise Development Systems and McDonald’s Corporation’s pleadings.

The principal issue raised by McDonald’s Corporation in its motion for summary judgment is whether it is the Plaintiff's employer for the purposes of Title VII. While Title VII is not to be construed narrowly, there is nothing in the legislative history of the act which indicates that Congress intended to reach anything other than employment or potential employment relationships. EEOC v. Zippo Mfg. Co., 713 F.2d 32, 37 (5th Cir.1983); Cobb v. Sun Papers, Inc., 673 F.2d 337, 339 (11th Cir. 1982).

In Title VII cases, determination of employee status includes both common law principles and the “economic realities” test. Garrett v. Phillips Mills Co., 721 F.2d 979, 981 (4th Cir.1983). Common law determines employee status on factors focused upon the control of the purported employer exerted over the purported employee. Garrett, at 981; Cobb, at 340. Among the factors considered in the common law analysis are the kind of occupation engaged in, the skill required in the occupation, whether the employer furnishes equipment and a place to work for the employee, the method of payment, the manner in which the work relationship would be terminated, the length of time the employee has worked with the purported employer, whether annual leave is provided, whether work is an integral part of the business of the employer, whether the worker accumulated benefits, whether the employer pays the Social Security taxes of the employee, and the intention of the parties. Garrett, at 982; Zippo, at 37; and Cobb, at 340.

The economic realities test is enunciated in Bartels v. Birmingham, 332 U.S. 126, 130, 67 S.Ct. 1547, 1549, 91 L.Ed. 1947 (1947):

“Obviously control is characteristically associated with the employer-employee relationship, but in the application of social legislation employees are those who as a matter of economic reality are dependent upon the business to which they render service.”

In the instant case, the Plaintiff asserts that she is not only the employee of Franchise Development Systems, which is admitted, but also the employee of McDonald’s Corporation. The deposition and affidavit record show that the Plaintiff took instructions from McBride, the owner of Franchise Development Systems, and Young, the employee of Franchise Development Systems. The Plaintiff took direct instructions only from these persons. The premises at which she worked and the equipment which she used were owned by Franchise Development Systems. The decision to hire, fire and discipline her was made by Franchise Development Systems officers, agents or employees. Her paycheck and taxes were paid by Franchise Development Systems. As noted earlier, the disciplinary action of Franchise Development Systems were taken without consultation or approval by McDonald’s Corporation. As a matter of dependence, the Plaintiff drew no salary from McDonald’s Corporation, only Franchise Development Systems.

Accordingly, upon the facts as presented, the Court finds that there is no genuine issue of fact and that McDonald’s Corporation is entitled to judgment as a matter of law as it does not employ the Plaintiff for the purposes of Title VII.

This lack of an employment relationship similarly invalidates the Plaintiff’s Equal Pay Act claim against McDonald’s Corporation. Donovan v. Agnew, 712 F.2d 1509, 1510-11 (1st Cir.1983).

With respect to the Plaintiff’s claim under 42 U.S.C. § 1985(3), the Plaintiff would be required to establish (1) that the Defendants entered into an agreement; (2) that the Defendants or one of them engaged in an overt act in furtherance of the agreement; (3) that the agreement had an unlawful purpose; and (4) that the Plaintiff suffered actual damages. See Halberstam v. Welch, 70S F.2d 472, 477 (D.C.Cir.1983). Further, the Supreme Court of the United States held in Great American Federal Savings and Loan Association v. Novotny, 442 U.S. 366, 378, 99 S.Ct. 2345, 60 L.Ed.2d 957 (1979), that 42 U.S.C. § 1985(3) cannot be invoked to remedy violations of Title VII.

As no communications between Franchise Development Systems and McDonald’s Corporation concerning the Plaintiff’s employment can be shown under these facts, there could be no agreement concerning the Plaintiff’s discipline or discharge. Further, the Plaintiff asserts only one cause of action which lumps together the Equal Pay Act claim, the Title VII claim and the § 1985(3) claim, and for this reason also, the Plaintiff’s § 1985(3) claim is dismissed pursuant to McDonald’s Corporation’s motion for summary judgment.

Accordingly, McDonald’s Corporation’s motion for summary judgment filed April 5, 1984, is granted, and the Plaintiff shall take nothing from the Defendant McDonald’s Corporation.

With respect to the Plaintiff’s motion for summary judgment filed April 1, 1985, considering the memoranda offered by the parties and the documentation offered by the Defendant Franchise Development Systems, the Court finds that there is a genuine issue of material fact and denies the Plaintiff’s motion for summary judgment.