author: ELMO B. HUNTER, Senior District Judge.

text:
    Rebecca W. WILSON, SSN: [ XXX-XX-XXXX ], Plaintiff, v. Margaret M. HECKLER, Secretary Health and Human Services, Defendant.
    No. 85-0046-CV-W-3.
    United States District Court, W.D. Missouri, W.D.
    April 19, 1985.
    Larry O. Denny, Kansas City, Mo., for plaintiff.
    Frederick O. Griffin, Asst. U.S. Atty., Kansas City, Mo., for defendant.
   OPINION AND ORDER

ELMO B. HUNTER, Senior District Judge.

Before the Court is defendant’s motion for consolidation of this case with case number 82-040l-CV-W-8. The case before this Division is an appeal from the final decision of the Secretary after a remand in case number 82-0401-CV-W-8. The Secretary has filed a supplemental transcript in the earlier case and seeks to stop the independent processing of this case. Plaintiff opposes the motion solely on the ground that the complaint is concerned with a new final decision which is not dependent on any previous decision.

It is the position of the Secretary that her suggested procedure of reopening the previous appeal is required by 42 U.S.C. § 405(g) which in pertinent part provides:

[T]he Secretary shall, after the case is remanded, and after hearing such additional evidence if so ordered, modify or affirm his findings of fact on his decision, or both, and shall file with the court any such additional and modified findings of fact and decision, and a transcript of the additional record and testimony upon which his action in modifying or affirming was based. Such additional or modified findings of fact and decision shall be reviewable only to the extent provided for review of the original findings of fact and decision.

The Secretary takes this language to require her, in any remanded case, to file a supplemental transcript and obtain judicial review of her post-remand decision. See Brown v. Secretary of Health and Human Services, 747 F.2d 878, 884 (3rd Cir.1984). In effect, the Secretary reads the statute as providing that every remand to her agency made by the district court is analogous to a court of appeals’ “limited remand” wherein jurisdiction is retained for appellate action after remand. See 16 Wright, Miller Cooper, & Gressman, Federal Practice and Procedure § 3937 (1977). In cases involving that procedure, however, jurisdiction is retained in contemplation' of post-remand appellate action on issues arising before remand. See, e.g., Citizens State Bank of Marshfield v. F.D.I.C., 718 F.2d 1440 (8th Cir.1983) (remand for agency’s clarification of the reasons for its decision-jurisdiction retained to review order after remand proceedings), Webb v. Arresting Officers, 749 F.2d 500 (8th Cir.1984) (remand for further findings before application of standard of review). In other words, appellate action on the case is postponed pending resolution of an issue necessary or helpful to the proposed appellate action.

When read in context, and with an historical perspective, the statutory language relied on by the Secretary and quoted above does not appear to apply to remands generally, but rather to a particular type of remand. The language originally appeared in the following sentence:

The court shall, on motion of the Board made before it files its answer, remand the case to the Board for further action by the Board, and may, at any time, on good cause shown, order additional evidence to be taken before the Board, and the Board shall, after the case is remanded, and after hearing such additional evidence if so ordered, modify or affirm its findings of fact or its decision, or both, and shall file with the court any such additional and modified findings of fact and decision, and a transcript of the additional record and testimony upon which its action in modifying or affirming was based.

Social Security Act Amendments of 1939, ch. 666, 53 Stat. 1360 at 1371.

Under that sentence, the agency had the power, before it filed its answer, to require the court to remand the case. Additionally, the court could, in its discretion upon a finding of good cause, send the case back to the agency for further proceedings before even deciding the issues on appeal. Congress became concerned about the availability of a remand without a decision:

Some critics have suggested that such absolute discretion gives the Secretary potential authority to remand cases back so that they can be strengthened to sustain court scrutiny. Others have suggested that such a device also may have the tendency to lead to laxity in appeals council review in that it will give the council another look at the case if the claimant decides to go to court.
Similarly, under existing law the Court itself, on its own motion or on motion of the claimant, has discretionary authority “for good cause” to remand the case back to the AU. It would appear that, although many of these court remands are justified, some remands are undertaken because the judge disagrees with the outcome of the case even though he would have to sustain it under the “substantial evidence rule.”

S.Rep. No. 96-408, 96th Cong., 2nd Sess. 58 (1979), reprinted in 1980 U.S.Code Cong. & Ad.News 1277, 1336.

The first part of the sentence, describing when a case may be remanded, was amended in 1980 to its present form to limit the reasons a case may be remanded.

The effect and intent of the second part of the sentence was fairly clear before the amendment.' If the agency called for a remand before it answered, or if the judge needed additional information in order to decide the case, the case would be remanded and the agency would file the results of the remand proceedings with the court for its decision. In the language relied upon by the Secretary, the phrase “after the case is remanded” referred to the earlier part of the sentence giving the Secretary the right to obtain a remand. The phrase “and after hearing additional evidence if so ordered” referred to the earlier part of the sentence giving the judge discretion to “at any time ... order • additional evidence to be taken before the Board____”

If there was any question that the grant of power to “order additional evidence” at any time did not refer to post-decision remands, it was removed by the 1980 amendment. Under that amendment, the grant of authority was limited to cases wherein there would be a showing that “there is new evidence which is material and that there is good cause for the failure to incorporate such evidence into the record in a prior proceeding.” 42 U.S.C. 405(g). The House Committee on Ways and Means, through which the amendment passed made it clear that they did not perceive the sentence to apply to eases remanded after the Secretary’s decision had been reversed. In discussing the limitation on when a Court may remand the case, the committee reported:

(O)nly 249 of these [1,257 reversals] were reversed directly by the court while 1,008 were reversed after being remanded to the appeals council. Undoubtedly, many of these court remands are justified because of the insufficiencies of the prior proceedings. However, it appears that some of the remands are made because the judge disagrees with the outcome of the case which he might have to sustain under the “substantial evidence rule.”
Your committee’s amendment would require that a remand would be authorized only on a showing that there was good cause for failure to incorporate it into the record in a prior proceeding____ This language is not to be construed as a limitation of judicial remands currently recognized under the law in cases which the Secretary has failed to provide a full and fair hearing, to make explicit findings, or to have correctly apply [sic] the law and regulations.

House Report on Ways and Means on Disability Insurance Amendments of 1979, 96th Cong., 1st Sess. 13 (1979) (emphasis supplied). If the Secretary’s reading, under which the sentence applies to all remands, were to be adopted it would follow that a court could remand a case only upon a finding that there is new material evidence to be heard.

The Court is aware of judicial views contrary to the approach taken by it. See, i.e., Brown v. Secretary of Health and Human Services, 747 F.2d 878, 884 (3rd Cir.1984); Guthrie v. Schweiker, 718 F.2d 104 (4th Cir.1983). Those cases, however, were concerned with when judgments become final for purposes of the EAJA and did not expressly analyze the arguments here present. The Secretary is free, of course, to continue her practice as she proposes and as outlined by the above cases. The Court’s decision today is not that the procedure followed by the Secretary is prohibited by the statute, it is only that such a cumbersome, wasteful procedure is not required.

To this Court it appears that the disputed sentence allowed a court to order additional evidence to be taken in a case before making any decision on the merits, and yet retain ultimate control of review as a matter of course without an express retention of jurisdiction. Due to a perceived abuse, the circumstances under which the procedure could be used was narrowed, but the basic procedure remained the same. It provided a mechanism through which a court could reopen the proceedings below in order to decide the appeal before it. Many cases are remanded, under basic principles of administrative law, after the issues on appeal have been fully decided. If, for example, the reviewing court holds in favor of the appellant and finds that the Secretary’s position is contrary to law in that she failed to consider the claimant’s complaints of pain, the appeal has been decided, but the case must generally be remanded to allow the Secretary to make the initial finding of disability vel non. If the Secretary then correctly considers the proper elements, but the claimant believes that her findings are again contrary to law, arbitrary, or not supported by substantial evidence, he can, of course, appeal again. The appeal however is a new appeal of a new final decision by the Secretary. The issues have no necessary connection with the previous appeal.

To hold that the Secretary must file a supplemental transcript in the district court for every case that is remanded, and that the court must again rule on the case, subjects the Secretary and the courts to a cumbersome and often useless duty. The remand may result in a decision favorable to the claimant, or the claimant may decide for other reasons not to pursue a second appeal.

The Secretary should not be the party to initiate a second appeal from her own decision. If, after a “post-decision remand” the decision of the Secretary is wholly favorable, the case should be over, unless the district court expressly retained jurisdiction for a particular purpose.. If the second administrative decision is unfavorable in whole or in part, the claimant should be notified of his time within which to appeal. If, as a matter of housekeeping, the Secretary or the court prefers to have the second case bear the same file number as the previous appeal (as it is the practice of this Court to do) the notice should contain instructions to that effect.

Although the Court finds that the procedure suggested by the Secretary is not required by 42 U.S.C. § 405(g), the Court’s internal operating procedures supply a similar procedure without requiring useless paperwork on the part of the Secretary and the Court. Administrative Directive Number 8 provides:

If, after a civil ... or admiralty action is filed and assigned to a district judge, and the action is dismissed or a final judgment has been entered and, thereafter, a complaint is filed in the Western Division of the Western District of Missouri which alleges at least one claim for relief which is the same as a claim for relief sought in the earlier filed but previously dismissed or judicially determined action or is based upon the same factual circumstances which the earlier filed but previously dismissed or judicially determined action was based, the later filed action shall be assigned to the district judge to whom the earlier filed but previously dismissed or judicially determined action was assigned.

The claim for benefits involved in this case covers the time period covered in the 1982 case, and deals with the Secretary’s determination that plaintiff is not entitled to the benefits. In fact, the complaints in both cases are identical. The procedure used by the Court is primarily a matter of housekeeping and in no way affects plaintiff’s substantive rights. No explicit “retention of jurisdiction” is necessary for such a procedure.

When a social security case is remanded to the Secretary after a decision by the Court that the Secretary’s decision was not supported by substantial evidence, was arbitrary and capricious or was otherwise contrary to law, the case is administratively closed. Upon filing of new papers in the case, it is reopened. Neither a new file number, nor a new judge is assigned.

It is currently the practice of the Secretary, in remand cases, automatically to file a supplemental record when benefits are denied on remand. Plaintiff then is ordered to brief the issues he wishes to appeal within 30 days. Plaintiff could take the initiative to file a supplemental complaint. Either of these filings will cause the case to be reopened. For purposes of determining the length of time a case has been pending, the new filing date is used. For all practical purposes, it is a new case with an old number.

The use of this method achieves two ends. First, it assures consideration by the same judge who previously decided to remand the case. While the issues on appeal may change, many of the underlying facts usually remain the same in these cases. Consideration by the same judge tends to promote judicial economy.

Second, this system avoids maintaining duplicate files. Although plaintiff claims that, in her case, the previous record is irrelevant, in many if not most cases, the prior record will be relevant. When the Secretary is ordered to take into account an additional factor, she may, but is not required to, begin the proceeding anew. If she does not, her final decision will be based at least in part on the previous record, which must be made part of the record on appeal. Additionally, the prior record could be relevant in determining whether the Secretary complied with the earlier order remanding the case. That record is already on file in the court’s records from the appeal before the remand. The method used by the court saves the court the expense of maintaining duplicate files, and saves taxpayers the expense of preparing duplicate or useless transcripts. The plaintiffs are in no way prejudiced. In effect, the method used by the Court serves the same ends as the procedure proposed by the Secretary but avoids useless filings.

A consolidation of cases would not result in the economy of filing sought to be achieved under the Court’s internal procedures. Had the intake clerk been able to know the entire situation, no new number would have been assigned. The Court will therefore dismiss the newly filed cause as duplicative, in favor of continuing the proceedings in Division 8. To insure that there will be no possibility of prejudice to plaintiff’s position the Clerk will be ordered to refile the complaint in this case in the Division 8 case, as of the date it was filed in this case.

Accordingly, it is hereby ordered:

(1) that the complaint in this case, filed January 14, 1985, (the date of plaintiff’s application to proceed in forma pauperis) be filed in Rebecca Wilson v. Margaret M. Heckler, Civil No. 82-0401-CV-W-8, and docketed by the Clerk as of January 14, 1985, nunc pro tunc; and

(2) This case is dismissed as raising claims raised in another proceeding between identical parties before this Court, and as having been assigned a new number as a result of unavoidable error.

      . The sentence now reads:
      The court may, on motion of the Secretary made for good cause shown before he files his answer, remand the case to the Secretary for further action by the Secretary, and it may at any time order additional evidence to be taken before the Secretary, hut only upon a showing that there is new evidence which is material and that there is good cause for the failure to incorporate such evidence into the record in a prior proceeding; and the Secretary shall, after the case is remanded, and after hearing such additional evidence if so ordered, modify or affirm his findings of fact or his decision, or both, and shall file with the court any such additional and modified findings of fact and decision, and a transcript of the additional record and testimony upon which his action in modifying or affirming was based. 42 U.S.C. § 405(g). (Emphasis supplied.)

      . It is this Court’s experience that the Secretary, herself, does not follow the section as she would have it read. Under her reading, a supplemental transcript shall be filed in any case remanded. When the additional proceedings in a post-decision remand case result in a decision favorable to the claimant, the Secretary sometimes merely files a request for dismissal, and sometimes files nothing at all — as this Court suggests today. See Guthrie v. Schweiker, 718 F.2d 104, 106 (4th Cir.1983) (Secretary filed nothing with district court following second remand). In cases wherein the decision on remand is partially favorable, and partially unfavorable, it appears to be her practice to notify the claimant that he has 10 days within which to notify her if he desires to appeal. If so, she will prepare a supplemental transcript. If not, then again, either a motion to dismiss or nothing is filed. On its face this procedure appears to attempt to deprive a claimant of his right to appeal within 60 days of her decision — as provided by statute. The Secretary’s failure to follow her own reading of the statute except when expedient is an indication of how burdensome and excessive the procedure would be under such a reading.

      . For example, a remanding court may retain jurisdiction to rule on an EAJA claim after it has been determined whether the claimant will be awarded benefits. This would appear to solve the problem raised in Brown, 747 F.2d at 883-84. An express retention of the attorney’s fee issue may be advisable even where no EAJA claim is involved to avoid jurisdictional questions. But cf. Wilson v. Gardner, 282 F.Supp. 287, 289 (S.D.Ohio, 1967) (court has jurisdiction to approve attorney’s fees after original judgment and remand.)

      . There should be no problem with the time constraints for filing an appeal where the Secretary’s procedure is followed since any delay caused by the Secretary would be taken as an implicit extention of time to file under 42 U.S.C. § 405(g).


source: Caselaw Access Project

author: HAROLD L. MURPHY, District Judge.

license: Public Domain

text:
    Joe BENHAM, et al., Plaintiff, v. James LEDBETTER, et al., Defendant.
    Civ. A No. C80-78R.
    United States District Court, N.D. Georgia, Rome Division.
    April 22, 1985.
    Phyllis J. Holmen, Douglasville, Ga., Howard Sokol, Macon, Ga., Kay Giese, Athens, Ga., for plaintiff.
    Carol Atha Cosgrove, Atlanta, Ga., for defendant.
   ORDER

HAROLD L. MURPHY, District Judge.

In this class action brought pursuant to 42 U.S.C.A. § 1983 (West 1981), plaintiffs challenge Georgia’s procedures governing the involuntary commitment and the release from state mental hospitals of persons who have been acquitted of criminal charges by reason of insanity (insanity acquittees). In November of 1980, this Court found Georgia’s commitment and release procedures unconstitutional and granted plain tiffs’ motion for a preliminary injunction. See Benham v. Edwards, 501 F.Supp. 1050 (N.D.Ga.1980). On appeal, the former Fifth Circuit affirmed this Court’s findings as to the unconstitutionality of Georgia's commitment proceedings, but held that Georgia’s release procedures, in so far as they required court approval before the release of certain insanity acquittees, did not violate the Constitution. The court of appeals also held that the state could not constitutionally place the burden of proof on insanity acquittees in commitment and release hearings. See Benham v. Edwards, 678 F.2d 511 (5th Cir.1982) (Unit B). The former Fifth Circuit’s opinion was vacated by the Supreme Court to be reconsidered in light of its decision in Jones v. United States, 463 U.S. 354, 103 S.Ct. 3043, 77 L.Ed.2d 694 (1983). See Ledbetter v. Benham, 463 U.S. 1222, 103 S.Ct. 3565, 77 L.Ed.2d 1406 (1983). This case is now before the Court on remand from the Court of Appeals to be reconsidered in light of Jones v. United States. 719 F.2d 772 (5th Cir.1983). The Court finds that Jones mandates judgment for the defendants.

DISCUSSION

The statute governing the commitment of insanity acquittees that the Court earlier found unconstitutional was amended in 1982. See O.C.G.A. § 17-7-131 (Supp. 1984) (amending O.C.G.A. § 17-7-131 (1982). The procedure for the commitment and release of insanity acquittees was thus modified in part. Under the amended statute, when a person is found not guilty by reason of insanity, the court retains jurisdiction over the person and orders him to be detained in a state mental health facility for an evaluation period not to exceed thirty days. Upon completion of the evaluation, the hospital officials send a report of the defendant’s present mental condition to the trial judge and the attorneys in the case. If the hospital report indicates that the defendant does not meet the criteria for civil commitment under the Georgia Code provisions in Chapter 37-3 or 4, the trial judge may discharge the defendant from custody without a hearing. If the defendant is not so discharged, the trial judge orders a mandatory commitment hearing which must be conducted within thirty days after the prosecuting attorney receives the hospital report. Unless the defendant is able to show by a preponderance of the evidence that he does not meet the criteria for civil commitment, he may be ordered committed to the Georgia Department of Human Resources and may not be released without approval of the committing court. The Georgia Court of Appeals has indicated that, under the amended statute, a defendant in a commitment or release hearing not only bears the burden of persuasion, but must overcome a presumption of insanity as a result of the plea of insanity at the trial. Cox v. State, 171 Ga.App. 550, 551, 320 S.E.2d 611 (1984); Moses v. State, 167 Ga.App. 556, 307 S.E.2d 35 (1983).

In the Court’s original opinion in this case, as modified by the Court of Appeals, the Court found: (1) that both the Equal Protection Clause and the Due Process Clause required Georgia to provide insanity acquittees with a state-initiated commitment hearing; (2) that the Equal Protection Clause and Due Process Clause required the state to bear the burden of proving, by clear and convincing evidence, the commitment criteria at the initial commitment hearing and at subsequent release hearings; and (3) that the Equal Protection Clause barred the state from creating a presumption of continuing mental illness based on a judgment of not guilty by reason of insanity.

Fundamental to the Court’s constitutional analysis in the original opinion were two premises. First, the Court reasoned that determining a defendant’s mental state as it relates to moral culpability under a criminal charge and determining a defendant's mental state as it relates to mental illness requiring confinement involve completely different investigations that have little bearing on one another. Moreover, the Court found little support for the notion that a person’s mental state at one point in time has relevance to a person’s mental state at another point in time. Second, the Court reasoned that a judgment of acquittal by reason of insanity bore no relation to whether or not the defendant could be considered dangerous. (The Court offered the example of passing bad checks.) From these basic premises, the Court concluded that the state could show no rational reason for treating insanity acquittees differently from persons committed under the civil commitment provisions, or for denying insanity acquittees the due process rights accorded other persons involuntarily committed to mental hospitals.

The Supreme Court, in Jones v. United States, 463 U.S. 354, 103 S.Ct. 3043, 77 L.Ed.2d 694 (1983), rejected this Court’s basic premises. The Supreme Court held that a finding of insanity at trial could lead to the presumption of mental illness for purposes of confinement, and that a judgment of acquittal by reason of insanity would establish that the defendant is dangerous. Id. at 363, 103 S.Ct. at 3049, 77 L.Ed.2d at 705. A judgment of acquittal by reason of insanity thus provides the state a rational reason for treating insanity acquittees differently from other persons involuntarily committed to state health facilities. The Eleventh Circuit concluded that “an acquittee may be automatically committed for an indefinite period of time after he has proved at his criminal trial by a preponderance of the evidence that mental illness caused his criminal act.” Williams v. Wallis, 734 F.2d 1434, 1439 (11th Cir.1984).

The Eleventh Circuit in Williams expressly withheld ruling on the continued viability of the Benham holding that due process and equal protection considerations require that the state bear the burden of proof at release proceedings. The court did note that Jones required a reevaluation of this Benham holding, as the holding flowed directly from the overruled Ben-ham conclusion that the state must bear the burden of proof at commitment proceedings. In light of the Supreme Court’s rejection of the fundamental premises on which this Court built its constitutional analysis in the Court’s first Benham decision, and in light of the Supreme Court’s holding with respect to commitment hearings, the Court must conclude that the Constitution provides no right in insanity acquittees to be free of the burden of proof in release proceedings.

As for the constitutionality of a presumption of continuing mental illness based on a judgment of not guilty by reason of insanity, the Supreme Court made explicit reference to the issue in Jones v. United States.

Nor can we say that it was unreasonable for Congress to determine that the insanity acquittal supports an inference of continuing mental illness. It comports with common sense to conclude that someone whose mental illness was sufficient to lead him to commit a criminal act is likely to remain ill and in need of treatment. The precise evidentiary force of the insanity acquittal, of course, may vary from case to case, but the Due Process Clause does not require Congress to make classifications that fit every individual with the same degree of relevance.

Jones v. United States, 463 U.S. 354, 366, 103 S.Ct. 3043, 3050, 77 L.Ed.2d 694, 706 (1983). This Court ,thus concludes that each of its holdings in the first Benham case must be reversed in light of the Jones case.

ACCORDINGLY, the Court grants JUDGMENT FOR THE DEFENDANT in this case remanded from the Eleventh Circuit.

      . This issue is now moot in light of Georgia’s amended statute that provides for a state-initiated commitment hearing.

      . This Court also held that the state could not constitutionally require a court order before releasing non-dangerous insanity acquittees from mental facilities. The court of appeals held that this Court needlessly reached the constitutional issue, as the state required a court order only for dangerous insanity acquittees. As the statute governing the release of insanity acquittees was amended subsequent to the court of appeals’ decision, the plaintiffs raise again in their briefs on remand the question of the constitutionality of treating insanity acquittees differently from other committees to mental hospitals by requiring a court order for release. In light of the Supreme Court’s ruling in Jones, however, it can no longer be argued that this difference in treatment violates the Equal Protection clause. As for due process, the adversarial proceeding provided by the Georgia scheme satisfies constitutional requirements. See Williams v. Wallis, 734 F.2d 1434, 1437-39 (11th Cir.1984); Hickey v. Morris, 722 F.2d 543, 547-49 (9th Cir.1983).


author: JARVIS, District Judge.

text:
    Jack E. SOMERFIELD, Plaintiff, v. FEDERAL DEPOSIT INSURANCE CORPORATION, et al., Defendants.
    Civ. No. 3-85-253.
    United States District Court, E.D. Tennessee, N.D.
    April 25, 1985.
    Charles A. Wagner, III, Knoxville, Tenn., for plaintiff.
    John Gill, U.S. Atty., Nancy Palmer, Asst. U.S. Atty., Knoxville, Tenn., James A. Clark, John C. Murphy, F.D.I.C., Washington, D.C., for defendants.
   MEMORANDUM

JARVIS, District Judge.

This is a cause of action for declaratory judgment and injunctive relief. The case is before the Court on the following motions: (1) motion for preliminary injunction by plaintiff (Doc. # 2); (2) request for continuance by Federal Deposit Insurance Corporation (FDIC) (Doc. #7); (3) motion for transfer to Northeastern Division by defendant FDIC (Doc. # 8); (4) motion to dismiss by defendants (Doc. # 12).

This cause of action arises out of the issuance by the FDIC'of a “Notice of Intention to Remove and to Prohibit From Further Participation” against plaintiff Jack E. Somerfield, which alleged that Somerfield had committed violations of law, rules and regulations and engaged or participated in unsafe or unsound practices in connection with the operation of the Peoples Bank and Trust Company, Wartburg, Tennessee. (Doc.. # 1, Exh. # 1). The Notice of Removal sets forth specific acts of violations which allegedly occurred during plaintiff’s tenure as Chairman of the Board of Directors and Chief Executive Officer of the Bank. Id. The Notice further alleges that the Bank has suffered or will probably suffer substantial financial loss or other damage and that plaintiff has received financial gain by reason of such violations and breached his fiduciary duties, thereby demonstrating the unfitness of plaintiff to serve as a director or officer and/or to participate in the conduct of the affairs of the Bank or any other bank insured by the FDIC. Id. The Notice further provides that a hearing will be held at Knoxville, Tennessee, commencing 60 days from service of the Notice of Intention to Remove and to Prohibit From Further Participation. Id. The Notice of Intention to Remove was served on plaintiff on November 2, 1984; however, plaintiff allegedly resigned his position with the Bank on November 1, 1984.

The FDIC is empowered to serve on an officer or director of a bank or a participant in the affairs of a bank a notice of intention to remove him from office when, in the opinion of the FDIC, the director, officer or participant has committed any violation of law,-rule or regulation or engaged or participated in any unsafe or unsound practice in connection with the bank, or breached a fiduciary duty in connection with his duties with the bank. 12 U.S.C. § 1818(e). Plaintiff’s contention is that § 1818(e) is applicable only to present officers and participants and therefore that the FDIC exceeded its statutory authority in issuing the notice of removal against him because he resigned prior to the date the notice was issued. Plaintiff moved the Administrative Law Judge (“AU”), before whom the case was set, to dismiss the administrative proceeding on the basis of clear lack of jurisdiction. The AU denied the motions and plaintiff filed a request for special permission to appeal to the FDIC Board of Directors. Apparently that request is currently before the FDIC Board of Directors. The administrative hearing of which plaintiff complains is scheduled to begin the week of July 8, 1985.

Plaintiff contends that he is entitled to injunctive relief because the FDIC exceeded its statutory authority in issuing the notice against him and that he will be irreparably harmed by being forced to defend this proceeding.

Deferidants say that plaintiff is not entitled to a preliminary injunction because it is unlikely that plaintiff will prevail on the merits because this Court has no jurisdiction to review a notice of removal; litigation expense is not a ground of irreparable harm; and the issuance of a preliminary injunction would cause substantial harm to the public.

Further, defendants move to dismiss the case on the grounds that this Court lacks jurisdiction to grant the relief plaintiff seeks. Defendants say that Congress has plainly and unequivocally divested district courts of jurisdiction to review a notice of removal. 12 U.S.C. § 1818(i). Defendants say the- only provision for district court review of a removal or suspension order is in 12 U.S.C. § 1818(f), which gives the district court jurisdiction to stay an order of suspension and/or prohibition pending completion of the administrative proceedings. Because plaintiff failed to seek a stay of the notice, defendants say plaintiff must wait until the FDIC issues a final decision and may then seek review in the Court of Appeals. 12 U.S.C. § 1818(h). Defendants say that the exception to exhaustion of administrative remedies is not applicable in this case because a fact question exists whether plaintiff participated in the affairs of the Bank after his alleged resignation as director, and that this fact question should be determined in the administrative proceeding. Further, defendants say that the agency should be given the opportunity to determine whether it has jurisdiction. Finally, defendants say that the statutory scheme contemplates that FDIC can issue against former officers and participants of a bank a notice of intention to remove because only those officers who have been issued a notice of intention to remove can be prevented from participating in the affairs of other insured banks.

The Court is of the opinion that a fact question exists whether plaintiff was participating in the affairs of the Bank on the date of the notice of intention to remove, and that this fact question is properly resolved in the administrative proceedings. The Court further is of the opinion that whether FDIC is empowered to issue a notice of removal against a former officer or participant is a question to be addressed to the Court of Appeals pursuant to the provisions for judicial review provided in 12 U.S.C. § 1818(h). Finally, the Court is of the opinion that it lacks jurisdiction of this action pursuant to 12 U.S.C. § 1818(i).

For the foregoing reasons, plaintiff's Motion for Preliminary Injunction be and the same hereby is DENIED; FDIC’s request for a continuance is DENIED as moot; FDIC’s Motion for Transfer to Northeastern Division be and the same hereby is DENIED; and defendant’s Motion to Dismiss for lack of jurisdiction be and the same hereby is GRANTED.

Order accordingly.

       Section 1818(i) states in part:
      [E]xcept as otherwise provided in this section no court shall have jurisdiction to affect by injunction or otherwise the issuance or enforcement of any notice or order under this section, or to review, modify, suspend, terminate, or set aside any such notice or order.


author: ROY, District Judge.

text:
    UNITED STATES of America, Plaintiff, v. Anthony ALARDIN, Defendant.
    No. LR—CR—83—34.
    United States District Court, E.D. Arkansas, W.D.
    April 25, 1985.
    Ted Skokos and Mike Rainwater, Little Rock, Ark., for defendant.
    Kenneth Stoll, Asst. U.S. Atty., Little Rock, Ark., for the U.S.
   ORDER

ROY, District Judge.

The Court having revoked the probation of the Defendant after a hearing on April 19, 1985, hereby issues its written findings. The inquiry in a probation revocation proceeding follows a two step procedure. First, the Court must make a factual finding that the defendant violated one or more conditions of his probation; then the Court must decide if commitment to prison is appropriate under the circumstances. The Court’s decision to revoke in this case was certainly not undertaken lightly. The Court finds that the Defendant’s behavior demonstrates that he “cannot be counted on to avoid antisocial activity.” Morrissey v. Brewer, 408 U.S. 471, 479, 92 S.Ct. 2593, 2599, 33 L.Ed.2d 484 (1972).

In reaching its decision the Court has only considered the evidence introduced at the hearing that was relevant to the violations of Probation Conditions Nos. 2 and 6 and Special Condition No. 2 as provided in the Petition for Probation Action. The Court has not considered any allegations concerning Michelle Cochran’s grand jury testimony about the Defendant. The Court finds that the Defendant had adequate notice of the allegations against him and was provided ample opportunity at the hearing to present evidence and cross-examine witnesses.

As to Condition No. 2: “You shall associate only with law-abiding persons and maintain reasonable hours,” the Defendant’s violation of this condition was gross and willful. He repeatedly placed himself in position to see and visit with Ron O’Neal at his nightclub. The Defendant even participated with O’Neal in a scheme to covertly videotape a couple having sex in the Defendant’s apartment so that O’Neal could gain “leverage”. over the unsuspecting male partner. O’Neal who was on federal parole at the time and who is now serving an extended term in federal prison for various bombing violations, was allowed by the Defendant to use not only his apartment but also his videotape equipment and allowed O’Neal to install a two-way mirror to effect the scheme. The fact that the Defendant received no monetary gain from this scheme is no defense to the charge of violation of this Condition. Nor does the Court find that the Defendant’s statement that he was afraid of O’Neal an acceptable explanation of the association he had with O’Neal. The association lasted over a period of several months in which the Defendant was a willing if not eager participant.

As to Condition No. 6: “Follow the probation officer’s instructions,” on November 19, 1984, Officer Noble warned the Defendant not to associate with O’Neal but as the Defendant has admitted, the association continued beyond that date.

As to Special Condition No. 2: “You shall not have firearms (or other dangerous weapons) in your possession,” the Defendant admitted to Officer Noble and to the Court that he was given a .22 caliber Ruger pistol by O’Neal and kept it for a period of a week or ten days before he turned it in to Officer Noble, after having received a call from Treasury Agent Spurgeon in the O’Neal investigation.

The Court finds that there is overwhelming evidence of violation of each of these conditions. In fact, the Defendant and his counsel did not deny these violations at the hearing but merely asserted as a primary defense that the Defendant was using cocaine and alcohol regularly during this period.

The Court appreciated the testimony of the two experts for the Defendant. Dr. Stevens admitted that the Defendant knew what he was doing and was able to assist in his own defense. He is working for a securities firm requiring intelligence and ability in financial matters. Certainly the Defendant is experiencing some anxiety because of these proceedings but this does not excuse his probation violations nor prohibit the Court from imposing incarceration.

The Court finds that allowing the Defendant to remain on probation will not contribute to his rehabilitation. His behavior demonstrates an unwillingness to follow the rehabilitation program. He has been unable to accept responsibility and live within the probation program’s rules. In reaching its decision the Court has followed the Eighth Circuit’s guidelines found in United States v. Reed, 573 F.2d 1020 (8th Cir.1978) and United States v. Burkhalter, 588 F.2d 604 (8th Cir.1978).

IT IS ORDERED:

That the Defendant’s probation is terminated and he is committed to the custody of the Attorney General or his authorized representative for a period of two years. The Court recommends that he be incarcerated in an institution where he can receive treatment for alcohol, drug and emotional problems.


author: JOHN W. OLIVER, Senior District Judge.

text:
    Charles Louis BANDY, Petitioner, v. Carl WHITE, Superintendent, Respondent.
    No. 83-0149-CV-W-1-R.
    United States District Court, W.D. Missouri, W.D.
    April 26, 1985.
    Charles L. Bandy, pro se.
    Joseph P. Teasdale, Kansas City, Mo., for petitioner.
    William Webster, Atty. Gen., Lew A. Kollias, Asst. Atty. Gen., Jefferson City, Mo., for respondent.
   MEMORANDUM AND ORDER

JOHN W. OLIVER, Senior District Judge.

I.

Petitioner currently confined at the Missouri Training Center for Men located at Moberly, Missouri amended his petition for a writ of habeas corpus so that his unexhausted claims are no longer mixed with his exhausted claim. Petitioner challenges his incarceration pursuant to his plea of guilty to the offense of murder in the second degree. That plea was tendered to and accepted in the Circuit Court of Jackson County, Missouri on July 19, 1979. It is conceded that petitioner has exhausted his available State court postconviction remedies in regard to the claim presented in the amended petition before the Court. See Bandy v. State, 639 S.W.2d 136 (Mo.Ct. App.1982).

We have considered the briefs of the parties, the filings and exhibits in the case, and conclude that the petition should be denied.

II.

Petitioner implicitly contends that this Court may properly make an independent appraisal of the evidence presented in prior proceedings in the trial and appellate courts of the State of Missouri and thereafter make findings of fact inconsistent with those made by the State courts. Petitioner’s contention is untenable. See Maggio v. Fulford, 462 U.S. 111, 113, 103 S.Ct. 2261, 2262, 76 L.Ed.2d 794 (1983).

Section 2254(d) of Title 28, U.S. Code, provides that the State court’s determination of the merits of a factual issue made in an appropriate State court proceeding “shall be presumed to be correct,” subject only to the establishment of one of the eight exceptions set forth in that section. See the Eighth Circuit’s most recent review of the standards established by Section 2254(d) in Corcoran v. Wyrick, 757 F.2d 207, 208-09 (8th Cir.1985) (citing Wainwright v. Witt, — U.S. —, —, —, 105 S.Ct. 844, 853-54, 83 L.Ed. 841 (1985); Sumner v. Mata, 455 U.S. 591, 592, 102 S.Ct. 1303, 1304, 71 L.Ed.2d 480 (1982)). We review the State court proceedings in light of the standard provided in Section 2254(d).

Petitioner’s Missouri Rule 27.26 motion presented the same question as that presented in his pending federal habeas corpus petition. After conducting an appropriate evidentiary hearing, the State trial court denied petitioner’s postconviction motion. The Missouri Court of Appeals, Western District, affirmed the State trial court’s denial of petitioner’s Missouri Rule 27.26 motion. Bandy v. State, supra. In so doing, the Missouri Court of Appeals accurately stated that “Bandy’s sole point on appeal is that the trial court erred because his pleas of guilty were not knowingly and voluntarily made, he did not understand the nature of the charges against him, and there was no factual basis for the pleas.”

The State trial court’s findings of fact, which the Missouri Court of Appeals concluded were “not clearly erroneous,” were set forth in the following portion of the Missouri Court of Appeals opinion:

After considering all of the evidence, Judge Hanna in this 27.26 proceeding found as follows: “The Court finds that the movant was fully aware of the factual basis for the plea to the charge of murder second degree as well as the charge of capital murder and to the charge of assault. The Court finds that those facts had been discussed repeatedly with his attorney before the plea, the movant understood that those were the facts and . that they constituted the crimes charged.” Judge Hanna then concluded: “The Court can only conclude and does, that at the time the pleas were given the defendant understood the nature of the charges against him; the range of punishment for each of the offenses; that the pleas were made understandingly and knowingly; * * * The Court further concludes that the defendant entered his pleas of guilty of his own free will and volition, understood all of his constitutional rights and freely and voluntarily waived those rights.”

Petitioner more or less concedes that the presumption of correctness mandated by 28 U.S.C. § 2254(d), must be given the factual determinations made by the State courts as stated in the opinion of the Missouri Court of Appeals. Petitioner relies, however, on Beavers v. Anderson, 474 F.2d 1114 (10th Cir.1973), in support of an argument that a “degree of uncertainty exists as to the voluntariness of the guilty plea which the presumption of the validity of the state court proceedings does not dispel without further inquiry.” Pet. Brief at 2. We disagree. Beavers, does not support petitioner’s implicit argument that this Court is free to make an independent review of the State court’s findings of fact following petitioner’s plea of guilty and Rule 27.26 hearing.

Beavers, supra, involved a claim that Beavers’ guilty plea was coerced by the sheriff. There was no transcript of record of the State court guilty plea proceeding nor, apparently; was Beavers ever afforded a State court postconviction evidentiary hearing. Id. at 1116. Beavers has been limited to its apparent facts and has been distinguished in the only Eighth Circuit decision which cites that case. Subsequent decisions in both the Sixth and Tenth Circuits have accorded Beavers the same treatment. See Stephens v. Wyrick, 659 F.2d 94, 97 (8th Cir.1981) (citing Sumner v. Mata, 449 U.S. 539, 101 S.Ct. 764, 66 L.Ed.2d 722 (1981)); Roddy v. Black, 516 F.2d 1380, 1383-84 (6th Cir.), cert, denied, 423 U.S. 917, 96 S.Ct. 226, 46 L.Ed.2d 147 (1975); Hopkins v. Anderson, 507 F.2d 530, 532 (10th Cir.1974), cert, denied, 421 U.S. 920, 95 S.Ct. 1586, 43 L.Ed.2d 788 (1975).

The record of the State court proceedings before this Court establishes that the claims that petitioner attempts to raise in this Court were all considered and rejected by both the State trial court and by the Missouri Court of Appeals. Petitioner’s brief in the Missouri Court of Appeals presented the same arguments and cited most of the cases contained in his current federal habeas corpus brief. The Missouri Court of Appeals affirmed the State trial court’s determination that petitioner’s guilty plea was voluntary and supported by an appropriate factual basis. We cannot say that the factual determination made by the Missouri courts was not fairly supported by the record within the meaning of Section 2254(d)(8).

In addition to the determination of the factual questions made pursuant to petitioner's Missouri Rule 27.26 proceeding, it should be further noted that the record in regard to petitioner’s guilty plea is well developed and contains extensive colloquys between petitioner and his defense counsel and between petitioner and the prosecutor in regard to medication petitioner may have taken and the effect, if any, it might have had in regard to the petitioner’s ability to understand and comprehend the guilty plea. The transcript shows the following:

[Defense counsel]
Q. Do you feel that [the medication taken taken on the day petitioner’s guildy plea was accepted] affects your ability to understand the proceedings going on today?
A. No. I feel like it helps me.
Q. You feel like it helps you?
A. Yes.
[Prosecutor]
Q. You took the same dosage [of Mellaril today] that you have been taking for the last few months?
A. Yes.
Q. In fact, have you been taking this dosage ever since you returned from Fulton Hospital?
A. Yes.
Q. That is about what, 6 months or 7, about 5 or 6 months?
A. About 5 or 6 months.
Q. And in that time have grown accustomed to the effect that it has on you, you can handle yourself pretty well, even after you have taken the Mellaril, can’t you.
A. Yes.
Q. And you are able to handle yourself well, and understand exactly what is going on here, right?
A. Yes.
Q. You have grown accustomed to the feel you have after taking the 250 milligrams?
A. Yes.
Q. In fact, it helps you to understand what is going on around you, and to comprehend what is happening, is that correct?
A. Yes.

Resp. Exh. A, Tr. 14, 26-28.

Petitioner’s responses to additional questions asked him by his counsel at the guilty plea proceeding included the following:

Q. Okay. Now, Mr. Bandy, the Court has made a determination already that they feel you are competent to proceed. Let me ask you a little bit about that. We have several reports that we have here from both Fulton and the Fulton Mental Hospital and Dr. Franklin here that we have retained ourselves to have you examined. Do you feel today that you fully understand what is going on, and that you are capable or in a position at this time to enter pleas of guilty to those charges?
A. Yes, I do.
Q. Okay. Do you feel that you are able to cooperate with me in your defense on all of these charges, not just the Capital Murder, but the Burglary and Stealing, the Assault and other charges? Do you feel like you understand what we have been discussing back and forth all along?
A. ' Yes.

Resp. Exh. A, Tr. 10-11.

III.

We find and conclude that the State trial court’s determination, affirmed on appeal, that petitioner’s plea of guilty was knowingly and voluntarily made must be presumed to be correct. Maggio, supra, 462 U.S. at 117, 103 S.Ct. at 2264. We further find and conclude that the State court record fully and fairly supports the State court finding that petitioner’s plea of guilty was knowing and voluntary. We finally conclude that it would be improper for this Court to make any further inquiry or to conduct any further hearing under the circumstances of this case. The petition for a writ of habeas corpus will therefore be denied.

Accordingly, it is

ORDERED that petitioner’s petition for a writ of habeas corpus should be and is hereby denied.

      . Petitioner’s attempts to obtain review of claims for which he had not exhausted his State court remedies were addressed in this Court’s Orders entered April 8, 1983 and March 6, 1985.

      . A transcript of those proceedings was attached as Exhibit A to respondent's response to order to show cause. Subsequent references to exhibits are to the additional exhibits attached to respondent’s response.

      . Petitioner would have this Court find, contrary to the findings of fact made by the State courts, that petitioner’s plea of guilty was not knowingly and voluntarily made because [1] there was no factual basis for the plea, and [2] at the time such plea was entered petitioner was under the influence of a narcotic substance.

      . 28 U.S.C. § 2254(d) provides in pertinent part: [A] determination after a hearing on the merits of a factual issue, made by a State court of competent jurisdiction in a proceeding to which the applicant for the writ and the State or an officer or agent thereof were parties, evidenced by a written finding, written opinion, or other reliable and adequate written indicia, shall be presumed to be correct, unless the applicant shall establish or it shall otherwise appear, or the respondent shall admit—
      (1) that the merits of the factual dispute were not resolved in the State Court hearing;
      (2) that the factfinding procedure employed by the State court was not adequate to afford a full and fair hearing;
      (3) that the material facts were not adequately developed at the State court hearing;
      (4) that the State court lacked jurisdiction of the subject matter or over the person of the applicant in the State court proceedings;
      (5) that the applicant was an indigent and the State court, in deprivation of his constitutional right, failed to appoint counsel to represent him in the State court proceedings;
      (6) that the applicant did not receive a full, fair, and adequate hearing in the State court proceeding; or
      (7) that the applicant was otherwise denied due process of law in the State court proceeding;
      (8) or unless that part of the record of the
      State court proceeding in which the determination of such factual issue was made, pertinent to a determination of the sufficiency of. the evidence to support such factual determination, is produced as provided for hereinafter, and the Federal court on a consideration of such part of the record as a whole concludes that such factual determination is not fairly supported by the record: ____


text:
    PBI-GORDON CORPORATION, Plaintiff, v. Lee M. THOMAS, Administrator, Environmental Protection Agency, Defendant.
    No. 84-1147-CV-W-1.
    United States District Court, W.D. Missouri, W.D.
    April 26, 1985.

      John T. Maughmer, Stephen W. Jacobson, Lathrop, Koontz, Righter, Clagett & Norquist, Kansas City, Mo., for plaintiff.
    Charles A. O’Connor III, McKenna, Conner & Cuneo, Washington, D.C., for amicus curiae.

      Charles E. DiLeva, Dept, of Justice, Washington, D.C., Robert G. Ulrich, U.S. Atty., Vernon A. Poschel, Asst. U.S. Atty., Kansas City, Mo., for defendant.
   MEMORANDUM AND ORDER

JOHN W. OLIVER, Senior District Judge.

This case pends on the parties’ cross-motions for summary judgment, filed April 10, 1985. Chemical Specialties Manufacturers Association (CSMA), in accordance with the consent of the parties and leave of court, filed a brief amicus curiae on that date. Defendant filed a response to plaintiff’s cross-motion on April 17, 1984 and plaintiff has informed the Court that it does not intend to file a response to defendant's motion. Accordingly, the cross-motions in regard to EPA’s authority to adopt 40 C.F.R. § 152.85 are in an appropriate posture for ruling pursuant to Rule 56 of the Federal Rules of Civil Procedure. For reasons stated below, plaintiff’s motion for summary judgment will be denied and defendant’s motion for summary judgment will be granted.

I.

The material facts in this case are not in dispute. They have been stipulated by the parties and, accordingly we make the following findings of fact:

1. Venue in the United States District Court for the Western District of Missouri is not contested. 28 U.S.C. § 1391(e)(4). [3]

2. The subject matter of this action is limited to the provisions of FIFRA, Section 3, established under the 1978 Amendments to FIFRA.... [6]

3. PBI-Gordon Corporation is a producer of pesticide products, including manufacturing concentrates, formulation, and end-use products. [8]

4. Manufacturing concentrates and formulation intermediaries are pesticide products that combine the purest form of an active pesticide ingredients) (technical products) to formulate substances used for the formulation of end-use products. [9]

5. End-use products are developed, produced and/or formulated by combining or diluting technical products, manufacturing concentrates and/or formulation intermediaries with inert ingredients. [11]

6. 40 C.F.R. § 162.9-7(c). states:

(c) as used in this section, the term “end-use product” means a pesticide product whose labeling bears instructions for using or applying the product (as packaged and sold, or after dilution by the applicator) for controlling pests or regulating plant growth. The term excludes products whose labeling allows use of the product to formulate other pesticide products. [10]

7. FIFRA requires that all persons or entities desiring to sell pesticide products in the United States must obtain registration of those products with the Environmental Protection Agency. [12]

8. Section 3(c)(1)(D) of FIFRA requires, if requested by the EPA Administrator, that applicants for registration of pesticide products must submit or cite data to the Environmental Protection Agency demonstrating the safety and efficacy of the pesticide products for which registration is sought. [13]

9. Section 3(c)(2)(D) of FIFRA,. 7 U.S.C. § 136a(c)(2)(D), provides an exemption to certain of the registration requirements of Section 3(c)(1)(D). [14]

10. The exemption in Section 3(c)(2)(D) of FIFRA is commonly referred to as the formulator’s exemption. [15]

11. The regulation to be codified as 40 C.F.R. § 152.85 would extend the formulator’s exemption from certain registration requirements to include not only end-use products, but manufacturing concentrates and formulation intermediaries, which products contain active ingredients which are purchased registered pesticide products. [16]

II.

A.

Plaintiff contends that EPA’s expansion of the formulator’s exemption to other than end-use products and EPA’s new regulation codified at 40 C.F.R. § 152.85 “contravene the clear, unambiguous language of section 3(c)(2)(D) of FIFRA,” because that section directly refers to and limits application of the formulator’s exemption to end-use products:

Exemptions — no applicant for registration of a pesticide who proposes to purchase a registered product from another producer in order to formulate such purchased pesticide into an end-use product shall be required to____ (7 U.S.C. § 136a(c)(2)(D) (emphasis added)).

PI. Brief at 7. There is no dispute in regard to plaintiff’s assertion that the current definition of “end-use” product “excludes products whose labeling allows use of the product to formulate other pesticide products.” 40 C.F.R. § 162.9-7(c)(1984). Plaintiff asserts that this definition is a statutory limitation of the formulator’s exemption to end-use products which “is clear and must be given legal effect because specific exemption is given to ‘end-use’ products to the exclusion of -all other types of products, including formulation intermediaries and manufacturing concentrates.”

Plaintiff further argues that section 3(c)(2)(A) only gives EPA authority to establish guidelines for the kinds of information submitted by applicants and not authority to exempt classes of pesticide products from the requirements of section 3(c)(1)(D). Similarly, plaintiff also contends that EPA’s exemption authority pursuant to section 25(b) of FIFRA does not apply in this case because there, is no claim that the products are either adequately regulated by another federal agency or that they are of a character which is unnecessary to be subject to the Act. Pl. Brief at 11.

In short, plaintiff contends that under Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., — U.S. —, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984), the statutory exemption should be given its “plain, clear and common meaning,” because “[i]n the present case, FIFRA is not silent or ambiguous respecting the meaning and scope of the formulator’s exemption.” Pl. Brief at 13.

In the alternative, plaintiff also argues that the agency’s interpretation should not be afforded a certain deference in this case because EPA’s most recent interpretation of the formulator’s exemption is inconsistent with EPA’s prior interpretation of that exemption and the agency has not identified any justification for completely abandoning its prior interpretation. PL Brief at 22.

B.

Defendant contends “construing all provisions of FIFRA, that [its regulation should be upheld because] EPA was granted unambiguous authority by Congress to eliminate unnecessary registration requirements” and that such authority is found in sections 3(c)(1)(D) and 25(a) of the Act [7 U.S.C. §§ 136a(e)(l)(D) and 136w(b)]. D.Resp. Brief at 2-3. Defendant argues that “FIFRA nowhere states that end-use formulators are the only formulators eligible for exemptions from data requirements ... the most that can be said ... [against the new regulation] is that section 3(c)(2)(D) is ambiguous on the issue of whether the formulator’s exemption may be extended to intermediate products.” Defendant further contends that this Court should, therefore, “grant deference to EPA’s interpretation of FIFRA and uphold 40 C.F.R. § 152.85 since there exists a rational basis for promulgation.” D.Resp. Brief at 2, 3 (also citing Chevron, supra, and Chemical Manufacturer’s Assn. v. NRDC, — U.S. —, 105 S.Ct. 1102, 84 L.Ed.2d 90 (1985)).

C.

CSMA supports defendant’s position and contends that “the intermediate formulator exemption is a reasonable exercise of both rulqmaking authority under §§ 3(c)(2)(C) and 25(a)(1) and agency discretion under § 3(c)(1)(D), and is not barred by, or inconsistent with, § 3(c)(2)(D).” CSMA argues that “Congress gave the Administrator broad authority to relieve formulators of the registration burdens” which S.Rep. No. 334 noted had “ground [pesticide registrations] to a virtual halt.” Amicus Brief at 16. CSMA also argues that broadening the formulator’s exemption is not only within the EPA’s authority but is a reasonable exercise of that authority because it is consistent with congressional intent:

By limiting the exemption to intermediate formulators who purchase registered active ingredients, the Administrator assures that the basic registrant who generated or paid for production of the safety data on the underlying registered active ingredient receives compensation through the purchase price of the pesticide.

Amicus Brief at 17-18.

Finally, CSMA also implicitly contends that EPA has the authority to expand the formulator’s exemption because the statute is silent or ambiguous in that “Congress did not further analyze the category of pesticide formulator, or otherwise seek to distinguish formulators of intermediate pesticides from formulators of end-use pesticides.” Amicus Brief at 14.

III.

Both parties and amicus appropriately cite Chevron in regard to the standard of review which applies in this case. The first question is “whether Congress has directly spoken to the precise question at issue. If the intent of Congress is clear, that is the end ’ of the matter; ... if the statute is silent or ambiguous with respect to the specific issue, the question is ... whether the agency’s answer is based on a permissible construction of the statute.” Chevron, — U.S. at—, 104 S.Ct. at 2781.

A.

The Federal Pesticide Act of 1978, Pub.L. No. 95-396, 92 Stat. 819, codified at 7 U.S.C. §§ 136(a) through 136y, expressly authorizes the Administrator of the EPA “to prescribe regulations to carry out the provisions” of the Act and to “take into account the difference in concept and usage between various classes of pesticides and differences in environmental risk and the appropriate data for evaluating such risk between agricultural and nonagricultural pesticides.” 7 U.S.C. § 136w(a)(l). Thus, Congress clearly granted the Administrator authorization to prescribe regulations which take into account environmental risk.

Congress provided a procedure for applicants to register products not exempt from the general registration requirement:

Each applicant ... shall file ... a statement which includes—
(A) the name and address of the applicant; ...
(B) the name of the pesticide;
(C) a complete copy of the labeling of the pesticide; ...
(D) except as otherwise provided in subsection (c)(2)(D) of this section, if requested by the Administrator, a full description of the tests made and the results thereof upon which the claims are based, or alternatively a citation to data that appear in the public literature or that previously had been submitted to the Administrator and that the Administrator may consider in accordance with the following provisions:
(i) With respect to pesticides containing active ingredients that are initially registered under this subchapter after September 30, 1978, data submitted to support the application for the original registration of the pesticide, or an application for an amendment adding any new use to the registration and that pertains solely to such new use, shall not, without the written permission of the original data submitte[r], be considered by the Administrator to support an application by another person during a period of ten years following the date the Administrator first registers the pesticide: Provided, That such permission shall not be required in the case of defensive data;
(ii) except as otherwise provided in subparagraph (D)(i) of this paragraph, with respect to data submitted after December 31,1969, by an applicant or registrant to support an application for registration, experimental use permit, or amendment adding a new use to an existing registration, to support or maintain in effect an existing registration, or for reregistration, the Administrator may, without the permission of the original data submitter, consider any such item of data in support of an application by any other person (hereinafter in this subparagraph referred to as the “applicant”) within the fifteen-year period following the date the data were originally submitted only if the applicant has made an offer to compensate the original data submitter and submitted such offer to the Administrator accompanied by evidence of delivery to the original data submitter of the offer.
(E) the complete formula of the pesticide; and
(F) a request that the pesticide be classified for general use, for restricted use, or for both.

7 U.S.C. § 136a(c)(l)(D) (emphasis added). Section 136a(c)(2)(A) provides in part:

“The Administrator shall publish guidelines specifying the kinds of information which will be required to support the registration of a pesticide and shall revise such guidelines from time to time.”
Although the Act specifically defines 31 terms, it does not define the terms whose meaning has been stipulated by the parties: “manufacturing concentrates”; “formulation products”; “end-use products”; and “formulation intermediaries.” The term “producer,” which appears in the formulator’s exemption, is defined as “the person who manufactures, prepares, compounds, propagates, or processes any pesticide or device or active ingredient used in producing a pesticide____ The dilution by individuals of formulated pesticides for their own use ... shall not of itself result in such individuals being included in the defiriition of ‘producer’ for the purposes of this sub-chapter.” 7 U.S.C. § 136(w).

B.

Congress did not explicitly exclude formulation intermediaries, nor did it even define them or distinguish them as separate products. The formulator’s exception recognizes only two types of pesticides, “registered pesticide,” which comes from a producer as defined by section 136(w), and “end-use product.” This dichotomy is placed in clearer focus by the legislative history of the Act. The House version of the formulator’s exemption, which was not adopted by the joint conference committee, states:

[N]o applicant for registration of a pesticide who proposes to purchase a registered basic pest control chemical from another producer in order to formulate the purchased pesticide into an end-use product shall be required to (i) submit or cite data pertaining to the safety of the basic pest control chemical as opposed to the safety of the formulated pesticide, or (ii) offer to pay reasonable compensation otherwise required for the use of such data. The term “basic pest control chemical” is defined to mean a pesticide that is not intended to be applied for pest control purposes without further formulation, but is intended to be used in producing a formulated pesticide; and the term “formulated pesticide” is defined to mean a pesticide that is intended to be applied for pest control purposes without further mixing or formulation, or after mixing with water or other dilutant by the applicator. (Emphasis in original).

H.R.Rep. No. 1560, 95th Cong. 1st Sess. 33, reprinted in 1978 U.S.Code Cong. & Ad. News 1966, 2043, 2049.

Comparison of the above House version with the formulator’s exemption as finally adopted and codified establishes that the-statute addresses only two categories of pesticides, “registered” and “end-use.”

In Ruckelshaus v. Monsanto Co., — U.S.—,—,—, 104 S.Ct. 2862, 2870, 2880, 81 L.Ed.2d 815 (1984), the Supreme Court implicitly affirmed the district court’s findings that FIFRA deals with only two groups, manufacturers of “manufacturing-use products not generally sold directly to users of pesticides” and “formulators” who add inert ingredients to dissolve, dilute or stabilize active components, thereby producing “end-use products.”

Accordingly, we find and conclude that the statute is silent and has not spoken to the “precise question” at issue, the permissible scope of the formulator’s exemption. We further find that the Act vests defendant with the authority to prescribe regulations to carry out the provisions of the Act, to request information from prospective registrants and to publish guidelines specifying the kinds of information required to support the registration of pesticide products. We conclude, therefore, that the Act authorizes defendant to adopt regulations in regard to the kinds of information which are subject to the general filing requirements of section 136a(c)(l)(D) and in regard to the provisions of section 136a(c)(2)(D), the formulator’s exemption.

C.

Having answered the question as to defendant’s authority to promulgate regulations in the affirmative, the next inquiry is whether the Agency’s regulation 40 C.F.R. 152.85 is based on a permissible construction of the statute. Chevron, supra, — U.S. at—, 104 S.Ct. at 2781.

This Court need not conclude that the Administrator’s construction of the Act was the only one the Agency could have adopted to uphold the regulation, or even the conclusion this Court would have reached. Chevron appropriately stated that it is a “well-settled” principle that “considerable weight” should be accorded to an executive department’s construction of a statutory scheme it is entrusted to administer. Id.; see e.g., Brotherhood of Railway and Airline Clerks, 722 F.2d 380, 381 (8th Cir.1983). The regulation must be upheld unless it is arbitrary and capricious, that is, where it is “not supportable on any rational basis.” 722 F.2d at 381 (citing additional Eighth Circuit cases).

Plaintiff’s brief at page 22 concedes, as it must, that an agency interpretation of the statute it administers “should normally be afforded a certain deference.” Plaintiff contends, however, that in this case “deference should not be accorded EPA’s most recent interpretation of the formulator’s exemption when that interpretation is inconsistent with EPA’s prior interpretation ... made contemporaneously with the enactment of the exemption.”

Plaintiff’s attempt to assert an implicit theory of estoppel is unpersuásive for two reasons. First, EPA’s “prior interpretation” at 40 C.F.R. § 162.9-7(c) construed the term “end-use product.” It did not purport to prohibit extension of. section 3(c)(2)(D) itself. Secondly, while a prior consistent interpretation or a record of flexible definitions would add force to the Agency’s assertion that deference is due to the current interpretation, the absence of those factors carries no presumption that the Agency’s interpretation is unreasonable, arbitrary or capricious. Chevron noted that:

An initial agency interpretation is not instantly carved in stone. On the contrary, the agency, to engage in informed rulemaking, must consider varying interpretations and the wisdom of its policy on a continuing basis.

Chevron, supra, — U.S.—, 104 S.Ct. at 2792.

The legislative history of the statutory provisions dealing with compensation for data used in obtaining registration of pesticides pursuant to the Act shows that those provisions were “the subject of tremendous controversy between the basic manufacturers of technical grade material and pesticide formulators.” H.R.Rep. No. 343, 95th Cong. 1st Sess. 3, reprinted in 1978 U.S. Code Cong. & Ad.News (92 Stat) 1966, 1968. The House Report accompanying H.R. 8681, reprinted in 1978 U.S.Code Cong. & Ad.News, supra at 1991, stated that the bill “struck a careful balance between the interests of the small formulator and the need for encouraging competition in the pesticide business, on the one hand, and the need to assure the continued research and development of new pesticides by recognizing the limited proprietary interest of those who have incurred the expense of developing ... data.”

The then Administrator of the EPA echoed that concern in his testimony before the Congress, see footnote 6, supra, and his successor has reiterated the same balancing of interests in support of regulation 152.85:

Since the costs that FIFRA section 3(c)(1)(D) is intended to recoup for producers are generally included in the purchase price of the pesticide they sell, that section would have the effect of requiring producers who purchase these pesticides in effect to pay data development costs twice — once as a condition of obtaining registration, and thereafter as part of the price of the pesticide they purchase to make their products. Although section 3(c)(2)(D) specifies that only end-use producers are eligible for the formulator’s exemption, the legislative history of the statute offers additional guidance on the intent of Congress. The Report of the House Committee on Agriculture states:
[The House bill] would obviate the need for formulators to furnish certain registration data by providing authority for “generic” registration. Under the “generic” registration plan, detailed submissions and evaluations of the basic chemical need not be repeated with each formulation ... Applications will be simplified and formulators relieved of the need to offer to pay for the registration data except in the purchase price of the basic pest control chemical. [H.Rep. No. 95-663, 95th Congress, 1st Session, p. 19.] It seems clear that the purpose of the formulator’s exemption was to eliminate duplicative payment of data development costs. The same rationale that underlies the exemption for end-use products would also hold true for any other product whose active ingredients were purchased from another producer in the form of a registered product.
By limiting the exemption to end-use products, FIFRA section 3(c)(2)(D) fails, perhaps intentionally, to acknowledge the substantial body of products that are neither technical grade chemicals nor end-use products, and that logically could or should be included within the formulator’s exemption. Thus the language of the statute is constraining both upon the Agency and upon applicants for registration of other types of products whose ingredients are both registered and purchased. The Agency, therefore, interprets FIFRA section 3(c)(2)(D) to apply to any product whose ingredients are both registered and purchased, without limitation as to the intended use of the product. Products that are eligible for the formulators’ exemption under this interpretation include not only end-use products but also so-called “formulation intermediates” or “technical concentrates,” whose producers purchase registered products which are technical grade active ingredients and reformulate them into a less concentrated intermediate product that is sold for reformulation into an end-use product.

49 Fed.Reg. 30,892 (1984) (to be codified at 40 C.F.R. § 152.85), attached as Exh. A to the parties’ stipulation of facts.

Plaintiff’s reliance on National Agricultural Chemicals Association, Inc. v. U.S.E.P.A., 554 F.Supp. 1209, 1211 (D.D.C. 1983), is inapposite. That case involved an EPA interpretation of section 3(c)(1)(D) which required applicants to meet more costly registration requirements by citing all data in EPA’s files to support their registration, in violation of the plain language permitting “alternatively a citation to data that appear in the public literature.” Here EPA’s regulation makes registration less costly and more expeditious for certain categories of applicants.

D.

Plaintiff’s motion seeks inter alia preliminary and injunctive relief. PI. Motion at 2. Assuming arguendo that defendant’s regulation may somehow undermine a “reasonable investment-backed expectation,” the Supreme Court has held that “where the operation of the data-consideration and data-disclosure provisions of FIFRA effect a taking of property ..., an adequate remedy for the taking exists under the Tucker Act.” Ruckelshaus, supra, — U.S. at —, 104 S.Ct. at 2880. Even if plaintiff can establish standing sufficient to withstand a motion to dismiss, plaintiff has an adequate remedy at law. Therefore plaintiff is not entitled to the equitable, injunctive relief prayed for in its present motion for summary judgment.

IV.

We stress that EPA’s rationale need not be the only permissible construction of the formulator’s exemption and the congressional intent behind it. We find merely that EPA’s regulation is a reasonable interpretation of the formulator’s exemption and that regulation 152.85 does “take into account the difference in concept and usage between various classes of pesticides,” under the Agency’s general authorization to promulgate regulations pursuant to 7 U.S.C. § 136w. We conclude, therefore, that EPA’s understanding of this very complex statute is a sufficiently rational one to preclude this Court from substituting its judgment for that of EPA. See Chemical Manufacturer’s Assn., supra, — U.S. at —, 105 S.Ct. at 1108 (quoting Train v. NRDC, 421 U.S. 60, 75, 95 S.Ct. 1470, 1479, 43 L.Ed.2d 731 (1975) and citing Chevron, supra, — U.S. at —, 104 S.Ct. at 2781).

Accordingly, it is

ORDERED (1) that plaintiffs motion for summary judgment should be and is hereby. denied. It is further

ORDERED (2) that defendant’s motion for summary judgment should be and is hereby granted. It is further

ORDERED (3) that the Clerk of the Court shall enter judgment against plaintiff and in favor of the defendant pursuant to Rule 58 of the Federal Rules of Civil Procedure.

      . The regulation states in pertinent part:
      (a) FIFRA [Federal Insecticide, Fungicide and Rodenticide Act] Section 3(c)(2)(D) excuses an applicant from the requirement to submit or cite data pertaining to the safety of any ingredient (or mixture of ingredients) contained in his product that is derived solely from one or more EPA-registered products (which the applicant purchases from another producer.)

      . In preparation for the filing of their cross-motions, on April 1, 1985 the parties agreed upon and filed a commendably detailed stipulation of facts, with attachments. The original paragraph numbers of the stipulations are shown in parentheses following the paragraphs, which have been renumbered for clarity.

      . Pertinent portions stated infra.

      . Codified at 7 U.S.C. § 136w(b).

      . 7 U.S.C. §§ 136(a) through 136(ee).

      . The then current Administrator testified during hearings on the bill in favor of a "generic approach” to registration "in which it is the technical material which becomes the focal point for registration, ... rather than the end-use registrations.” The Administrator stated that ”[t]his would mean that the issues of compensation for the most expensive data ... would be worked out among the registrants of technical products. The cost of that data could be included in the price for which the technical product sells. Thus, the formulator would in effect be buying data rights along with the technical material, without having to go through the 3(c)(1)(D) procedures." 1978 U.S.Code Cong. & Ad.News at 1976. Defendant’s current position, although advanced by a new Agency Administrator under a new Administration, is entirely consistent with EPA's earlier one: ”[t]here is no reason to distinguish between formulators- of intermediaries and end-use products for registration purposes, since registrants who have submitted data can pass on the costs of generating that data to formulators in the purchase price regardless of the type of product the formulator sells.” D. Brief at 11-12.

      . At pretrial conference held March 20, 1985, the parties agreed defendant’s first objection in opposition to plaintiffs previous motion for summary judgment should be ruled separately from the parties' present cross-motions for summary judgment in regard to EPA’s authority to adopt Rule 152.85. They further agreed that additional discovery should be conducted on the issue of whether plaintiff has shown the existence of a judicially cognizable injury sufficient to establish standing, let alone entitlement to summary judgment granting injunctive relief. Our decision today makes that issue moot.


author: RYMER, District Judge.

text:
    Darlene SOLORZANO, Plaintiff, v. AMERICAN NATIONAL INSURANCE COMPANY, a corporation, and Does 1 through 50, inclusive, Defendants.
    Nos. CV 83-4850-PAR(Kx), CV 84-7706-PAR(Kx).
    United States District Court, C.D. California.
    April 26, 1985.
    Walter J. Lack, Engstrom, Lipscomb & Lack, Los Angeles, Cal, for plaintiff.
    James J. Moak, Adams, Duque & Hazel-tine, Los Angeles, Cal., for defendants.
   MEMORANDUM OF DECISION AND ORDER

RYMER, District Judge.

Plaintiff brought suit against defendant in state court on March 18, 1983 claiming bad faith denial of insurance benefits. Since plaintiff is a California citizen and defendant is a Texas corporation, defendant filed for removal on July 27, 1983. On August 9, 1983, this Court issued an Order to Show Cause Re: Remand because the complaint listed Doe defendants. In plaintiff’s Memorandum of Points and Authorities in Support of Remand, dated August 30, 1983, she indicated that she planned to name the office manager of defendant’s San Gabriel office as Doe I and that she was attempting to obtain his name through discovery.

This cause was remanded August 27, 1984. On August 6 plaintiff served defendant with a request for the production of documents. Defendant responded on August 24 by serving objections to the request. On September 7, 1984, plaintiff filed an At-issue Memorandum in state court pursuant to Rule 206 of the California Rules of Court. Various communications occurred between counsel regarding the discovery both before and after the Memorandum was filed, ultimately resulting in plaintiffs granting an extension for response to the request until October 23, 1984. On October 5, defendant again sought to remove. Plaintiff has moved to remand and seeks sanctions in the form of attorneys’'fees in the amount of $500 on account of defendant’s having acted in bad faith.

The only change since the prior removal is the filing of the At-issue Memorandum. Because that Memorandum under the circumstances of this case does not eliminate the possibility that any Doe defendants will be named that might destroy diversity, the action must be remanded again.

The Ninth Circuit has determined that it is not until plaintiff takes some affirmative action to sever the cause of action against potentially non-diverse defendants that the right to remove the cause arises. Preaseau v. Prudential Ins. Co., 591 F.2d 74, 76 (9th Cir.1979); Southern Pacific Co. v. Haight, 126 F.2d 900, 905 (9th Cir.), cert, denied 317 U.S. 676, 63 S.Ct. 154, 87 L.Ed. 542 (1942). In this case, the At-issue Memorandum is not sufficient affirmative action to make removal proper.

Rule 206 does not provide that Doe defendants be dismissed before the At-issue Memorandum can be filed, but it does require that the Memorandum state “That all essential parties have been served with process or appeared and that the case is at issue as to those parties.” The fact that the word parties is modified by “essential” seems to indicate that some parties might properly remain to be served. Other rules likewise suggest that parties can be served after filing the At-issue Memorandum. Rule 211(f) provides that “at the pretrial conference, the judge shall determine whether any party remains in the case who has not been served____” Rule 220.3 states that “The Court shall not: ... (3) Dismiss fictitious defendants or condition that setting of a trial date upon the dismissal of such fictitious defendants without the consent of all parties.” Neither the pretrial nor the trial setting conference can be set until the At-issue Memorandum has been filed. If the filing of the Memorandum were to cut off Doe pleading, then neither of these provisions would make sense. Moreover, it is my understanding that practice in the Los Angeles Superior Court is to dismiss unserved Doe defendants at the trial setting conference.

Barngrover v. M.V. Tunisian Reefer, 535 F.Supp. 1309 (C.D.Cal.1982) does not compel a different result. Although the language of Barngrover supports defendant’s position, the factual situation upon which Judge Tashima based his decision differs significantly from the one before this Court. First, the language of the At-Issue Memorandum itself is different. In addition to stating that all essential parties had been served, the Memorandum before the court in Barngrover stated that “to my knowledge no other parties will be served with a summons prior to the time of trial____” The Memorandum in this case made no such representation, and Rule 206 does not require this additional statement. Secondly, in Barngrover, considerable discovery had been conducted, one Doe defendant had actually been served, and there was no indication that defendant intended to name any additional defendants. In this case the defendant was aware that the plaintiff intended to name the office manager as Doe I and was in the process of discovery to obtain his identity when the petition for removal was filed.

Thus Goodman v. Travelers Insurance Company, 561 F.Supp. 1111 (N.D.Cal.1983) is more closely on point. As it suggests, the At-issue Memorandum “should be considered along with other factors in determining the intent of the plaintiff at the time the petition for removal was filed.” Id. at 1113. Here plaintiff has evidenced both to the defendant and to the court an intention to name the San Gabriel office manager as Does I as soon as his/her identity is revealed through the discovery which the plaintiff was attempting to obtain at the time the petition for removal was filed.

In oral argument, counsel for defendant raised the concern of certainty as to when the cause becomes removable. This question need not be addressed in the instant case since plaintiff clearly evinced an intent not to abandon her claim against Doe defendants at the time she filed the At-Issue Memorandum. However, the court notes that had discovery regarding the Does been completed when plaintiff filed the At-Issue Memorandum, it may have been reasonable to construe the Memorandum as a “paper from which it may first be ascertained that the case is one which is or has become removable” per 28 U.S.C. 1446(b) thus triggering the 30-day period for removal. In the instant case, the removal period will probably be triggered by an order dismissing the Doe defendants at the trial setting conference unless before that time some other paper is received by defendant indicating that removal is then proper, or a non-diversee defendant is named thus making removal improper.

Finally, the court notes that the removal statute is to be strictly construed against removal and in favor of remand. Goodman, id. at 1112; Shamrock Oil & Gas v. Sheets, 313 U.S. 100, 61 S.Ct. 868, 85 L.Ed. 1214 (1941); Libhart v. Santa Monica Dairy Co., 592 F.2d 1062, 1065 (9th Cir.1979).

Even though the defendant did not properly remove the case, sanctions are not warranted due to the strong support for its position from the Barngrover opinion and the policy of encouraging removal as soon as possible. Preaseau v. Prudential Ins. Co., 591 F.2d 74 (9th Cir.1979); Pullman Co. v. Jenkins, 305 U.S. 534, 59 S.Ct. 347, 83 L.Ed. 334 (1939).

IT IS THEREFORE ORDERED that Civil Actions No. 83-4580-PAR and. 84-7706-PAR are hereby remanded for all further proceedings to the Superior Court of the State of California for the County of Los Angeles from which it was improperly removed.