author: ERAM, District Judge.

text:
    UNITED STATES of America, v. George Philip NELSON, Hak Soo Ghun, a/k/a “Hak Soo Dickenson,” Thomas S. Galgano, and Robert Thomas Harvey, Defendants.
    No. 84 Cr. 293 (SWK).
    United States District Court, S.D. New York.
    April 11, 1985.

      Rudolph W. Giuliani, U.S. Atty., S.D.N.Y. by Frank Maas, Asst. U.S. Atty., New York City, for U.S.
    Ease & Druker, Garden City, N.Y., for George Philip Nelson; James O. Druker, Paul Schwartz Frome, Garden City, N.Y., of counsel.
    David Cooper, New York City, for Hak Ghun.
    Eramer, Levin, Nessen, Eamin & Frankel, New York City, for Robert T. Harvey; Gary P. Naftalis, Scott D. Heller, New York City, of counsel.
   MEMORANDUM OPINION AND ORDER

ERAM, District Judge.

The indictment in the instant criminal prosecution was filed on May 14, 1984. This indictment contained forty-six counts, and originally included seven defendants. The indictment alleged that the defendants devised, and participated in, a scheme to defraud approximately twelve hundred investors out of more than eleven million dollars.

The indictment alleged that the defendants were all connected, in a variety of capacities, with the firm of Nelson, Ghun and Associates, Inc. (hereinafter referred to as “NGA”). Through their connection with NGA, the defendants are alleged to have defrauded investors out of thousands of dollars by obtaining investors’ funds for managed commodity futures accounts, for managed commodity futures pools, and for a “private placement program” through which investors could lend funds to NGA.

Five counts of the indictment in the instant case have been completely resolved through the entry of guilty pleas by the three defendants named in those counts. David Alan Franklin, George Wilson Glass and Robert V. Simon have entered guilty pleas. Only Simon remains to be sentenced. Thus, forty-one counts of the indictment and four defendants remain in the instant case.

Counts one through three and five through thirty-seven charge that the remaining four defendants committed various acts of mail and wire fraud in violation of 18 U.S.C. §§ 1341 and 1343. Counts thirty-seven through forty charge that the defendants Nelson and Ghun committed commodity fraud in violation of 7 U.S.C. §§ 6o and 13. Counts forty-one and forty-two charge that Nelson and Ghun gave false testimony under oath in violation of 18 U.S.C. § 1623.

The indictment alleges that Nelson and Ghun were officers and principals of NGA. It also alleges that Harvey was a salesman, a sales manager, and eventually, the chief operating officer of NGA. It further alleges that Galgano was a salesman for NGA. Defendants’ Motions

Defendants Nelson, Ghun, and Harvey have filed a series of motions. Galgano has neither filed any motions nor joined in his codefendants’ motions. Harvey has requested this Court to issue the following orders:

1) For an order dismissing the instant indictment;
2) In the alternative, for an order severing his trial from that of his three remaining codefendants;
3) For an order granting a bill of particulars;
4) For an order compelling the production of a Government witness list;
5) For an order compelling early disclosure of Brady material;
6) For an order granting certain discovery pursuant to Fed.R.Crim.P. 16.

See Harvey’s Notice of Motion, dated November 2, 1984.

Ghun in his omnibus motion, has requested this Court to issue the following orders:

1) That Ghun be provided with the names of all witnesses, and with the following information for each witness:
a. A full record of arrests and criminal convictions of any prospective witness the government intends to call at the trial of the above-captioned matter.
b. The full and complete statement of all promises, rewards, and/or inducements of any kind made by the government, its prosecutors, its agencies, or its agents to induce or encourage the giving of testimony or information made to: (1) any prospective witness whom the government intends to call at the trial of the above-captioned matter; (2) any witness who testified before the grand jury; or (3) any witness who assisted the government in its investigation and preparation of the above-captioned matter.
c. A declaration as to whether the witness has ever testified before, and if so, the circumstances of that testimony.
d. Any evidence which may be used to impeach or discredit any witness the government intends to call at the trial of the above-captioned matter, particularly, but not exclusively, inconsistent statements of a witness or between witnesses, statements of bias or prejudice against the defendant by a witness, or admissions of poor memory by a witness.
e. A full and complete statement of any and all criminal cases presently known by the government to be pending against any witness the government intends to call in its presentation of its case in chief at the trial of the above-captioned matter, regardless of whether or not these cases are the subject of promise, reward or inducement.
f. A full and complete statement of any and all criminal conduct which the government has knowledge has been committed by any witness the government tends to call in its case in chief at trial regarding which there has been no conviction, regardless of whether or not these crimes are presently the subject of a promise, reward or inducement, and regardless of whether or not these crimes are presently the subject of a pending criminal charge.
g. Whether or not the government has requested or authorized the payment of any sums of money to any informant, cooperating witness, or co-conspirator who has agreed to testify for the government, who participated in the investigation which generated the above-captioned indictment, or to any other prospective witness.
h. Any logs, records, or other documents relating to the payment of any sums of money to any individual set forth in subparagraph (g), and the source of any such payment.
i. The identities of any and all witnesses who have been offered immunity by the government.
j. Whether or not any government witnesses have been hospitalized or treated for psychiatric or emotional disorders or alcoholism or drug abuse, and if so, the names of any institutions involved and the dates of any hospitalization, and any and all reports relating to any treatment for such condition.
k. Whether any prospective witness has been incarcerated in federal or state prison, and if so, the prison records of any such witness.
2) Directing the Government to disclose, in advance of trial, all evidence of alleged prior or subsequent similar acts which it intends to introduce at trial.
3) Directing the Government to provide Ghun with a premarked exhibit list no later than one week prior to trial and to also provide Ghun with drafts of any transcripts of conversations which the Government will utilize at trial.
4) Directing the Government to disclose statements it intends to offer pursuant to Fed.R.Evid. 803(24) or 804(b)(5).
5) Directing the government to furnish Ghun with the substance of all statements it intends to offer pursuant to Fed.R.Evid. 801(d)(2), (C), (D) and (E).
6) Granting on behalf of Ghun all motions made by codefendants which are not inconsistent with the particular motions filed by Ghun.
7) Granting a bill of particulars.
8) Dismissing counts thirty-seven through forty of the indictment.

See Ghun’s Notice of Omnibus Motion, dated November 20, 1984.

Nelson has requested this Court to issue the following orders:

1) Severing his trial from that of his codefendants, pursuant to Fed.R.Crim.P. 8(b) and 14.
2) Severing Counts forty-one and forty-two from the instant indictment pursuant to Fed.R.Crim.P. 8(a).
3) Dismissing Counts thirty-seven through forty pursuant to Fed.R.Crim.P. 12(b)(2) and because these counts are duplicitious.
4) Granting all of the motions filed by his codefendants to the extent that they apply to him.

See Nelson’s Notice of Motion, dated November 2, 1984.

A discussion of the resolution of these motions follows.

Dismissal of The Indictment

Harvey has moved to dismiss the indictment. This is required, he contends, because the Government failed to present to the grand jury evidence which was available to the Government and which substantially tended to negate any guilt by Harvey. Harvey contends that the Government had an affirmative obligation to present this so-called exculpatory evidence to the grand jury. He further contends that the Government’s failure to present this evidence “was clear prejudice to Harvey” and, therefore, dismissal of the indictment is mandated.

The alleged exculpatory evidence, which Harvey asserts the Government had an affirmative obligation to present to the grand jury, consists of three specific items. These are:

1) An alleged “finding”, by Judge Duffy of this Court, that Harvey’s testimony in an NGA-related civil action, which charged Harvey with fraud, was credible.
2) The results of a polygraph examination which “found” that Harvey was telling the truth when he denied having committed fraud with regard to his activities at NGA.
3) The “fact” that only one of several victims of Harvey’s alleged fraud brought a Commodities Futures Trading Commission (hereinafter referred to as “CFTC”) reparations proceeding against Mr. Harvey.

An examination of Harvey’s contentions and the Government’s conduct in presenting the instant case to the grand jury leads the Court to the clear conclusions that there is no basis to dismiss the indictment and that the Government fully performed all of its ethical obligations regarding the presentation of a case to a grand jury. Based on the reasons which follow, the motion to dismiss the indictment is DENIED.

As for Harvey’s first item of so-called exculpatory evidence, the Government has satisfactorily demonstrated to the Court that this information was, in fact, adequately presented to the grand jury which handed up Harvey’s indictment. See Affidavit of Assistant United States Attorney Frank Maas, sworn to on January 11, 1985, at ¶¶ 25-26, 30-33. Thus, Harvey’s contention with respect to Judge Duffy’s “finding” is meritless.

Harvey next contends that the Government had an affirmative obligation to present to the Grand Jury the results of a polygraph examination conducted by Harvey. Harvey alleges that the results of this examination show that he was telling the truth when he denied committing any fraud while working at NGA.

“The law of this Circuit is that dismissal of an indictment is justified to achieve either of two objectives: to eliminate prejudice to a defendant; or, pursuant to our supervisory power, to prevent prosecutorial impairment of the grand jury’s independent role.” United States v. Hogan, 712 F.2d 757, 761 (2d Cir.1983) (citations omitted). Neither objective would be furthered by dismissal of the instant indictment.

Harvey contends that the Government’s clear ethical obligation and affirmative duty to present to a grand jury the results of a polygraph examination conducted by a prospective defendant which are favorable to the defendant was recognized by the Court in United States v. Roberts, 481 F.Supp. 1385 (C.D.Cal.1980). A close reading of that case, however, indicates that no such duty was recognized. First, the Roberts court clearly stated that dismissal of the indictment was required because “it was returned by less than twelve informed grand jurors.” Id. at 1388. It was only as an additional, alternative ground, that the Court dismissed the indictment, due to what it described as “prosecutorial abuse [of the grand jury process] that was arbitrary, capricious, and unreasonable, rising to Constitutional dimensions and violative of due process.” Id. at 1390.

In Roberts, supra, the prosecutor violated a specific promise to the Court that all exculpatory evidence, including the polygraph evidence, would be presented to the grand jury and also erroneously informed the grand jury that such evidence was not admissible at trial. Id. at 1389. No such conduct occurred in the instant case.

Harvey’s claim has already been clearly rejected by this Court. See United States v. Tolchin, 79 Cr. 858 (LWP), slip op. at p. 2-5, n. 1 (S.D.N.Y. April 3, 1980). Moreover, the Court of Appeals for the Second Circuit continues to adhere to the view “that polygraph evidence is speculative ...” United States v. Bari, 750 F.2d 1169, 1179 (2d Cir.1984) (citations omitted). Based on the foregoing, the Court con-eludes that the polygraph evidence in the instant case was not evidence “negating guilt which, if presented, would ‘reasonably be expected to lead the jury not to indict.’ ” United States v. Dyman, 739 F.2d 762, 768 (2d Cir.1984). Thus, the Government had no affirmative obligation to present this evidence to the grand jury.

The third item of evidence which Harvey contends should have been, but was in fact not presented to the grand jury, is the “fact” that only one of Harvey’s former customers filed a CFTC reparations proceeding against Harvey. This “fact” has absolutely no relevance to the issue of whether probable cause existed to believe that Harvey committed the acts alleged in the indictment. Moreover, it would appear that Harvey never requested the Government to present this evidence to the grand jury. See Maas Affidavit, supra, ¶¶ 34-38. “Despite recent movements for revision of grand jury procedure, a prosecutor is not presently obligated to search for and submit to a grand jury evidence favorable to the defense or negating guilt, when it has not been requested by the grand jury.” United States v. Ciambrone, 601 F.2d 616, 622 (2d Cir.1979) (footnote and citations omitted).

Even if this evidence had specifically been brought to the Government’s attention, however, the Court concludes that this is not the quality or type of evidence which the Government has an affirmative obligation to present to the grand jury. Thus, Harvey’s motion to dismiss the indictment is DENIED. Although Ghun and Nelson have joined in all motions made by other defendants which apply to them, they have made no claim similar to Harvey’s with respect to this indictment. To the extent that they join in the motion to dismiss the indictment, the motion is DENIED with respect to Ghun and Nelson as well. Severance

Harvey and Nelson, specifically, have moved for severances. Harvey asserts two reasons in support of his request for a severance. First, he contends that he is a “minor and peripheral figure” in the scheme charged in the indictment. See Harvey’s Memorandum of Law, dated November 2, 1984, at p. 18. In view of this, he contends that he will be subject to prejudicial spillover, presumably from the vast quantity of evidence which -will be introduced against other defendants, but not him. Secondly, Harvey contends that there is a “critical need” to obtain the testimony of his codefendant Nelson, and that this can only be done if Harvey’s trial is severed from Nelson’s trial. Affidavit of Gary P. Naftalis, sworn to on November 2, 1984, at 1ÍU 20-22.

Harvey’s motion for a severance is made pursuant to Fed.R.Crim.P. 14. That rule states:

If it appears that a defendant or the government is prejudiced by a joinder of offenses or of defendants in an indictment or information or by such joinder for trial together, the court may order an election or separate trials of counts, grant a severance of defendants or provide whatever other relief justice requires. In ruling on a motion by a defendant for severance the court may order the attorney for the government to deliver to the court for inspection in camera any statements or confessions made by the defendants which the government intends to introduce in evidence at the trial.

Fed.R.Crim.P. 14.

The Court strongly disagrees with Harvey’s characterization of himself as a “minor and peripheral figure.” Harvey is named in twelve of forty-one counts which remain to be tried. The Government contends that he was a salesman, sales manager and, ultimately, the chief operating officer of NGA. This hardly renders him a minor figure in the alleged scheme to defraud investors. Moreover, the counts in which he is charged allege conduct which is clearly a part of the overall larger scheme or transaction to defraud NGA investors.

In view of his alleged role in NGA’s affairs and the scheme charged in the indictment, the Court fails to see how there could be any prejudice to Harvey from a joint trial with his three remaining codefendants. And Harvey does not raise any claim that he wishes to present a defense which may conflict with those of his codefendants. A severed trial would serve only to delay the complete resolution of this indictment while unduly taxing scarce judicial resources. Should it appear to the Court that there is any danger of even slight prejudice to Harvey during the trial, this can be remedied by appropriate instructions to the jury during the charge.

Harvey also contends that the need to obtain Nelson’s testimony requires that Harvey receive a severed trial. In considering this point the Court relies upon United States v. Finkelstein, 526 F.2d 517 (2d Cir.1975), cert. denied, 425 U.S. 960, 96 S.Ct. 1742, 48 L.Ed.2d 205 (1976), for guidance. This Court can properly consider the following factors:

1) the sufficiency of the showing that the co-defendant would testify at a severed'trial and waive his Fifth Amendment privilege;
2) the degree to which the testimony would be cumulative;
3) the counter arguments of judicial economy; and
4) the likelihood that the testimony would be subject to substantial, damaging impeachment.

Id. at 523-524 (citations omitted).

With regard to the first factor, Harvey has submitted an affidavit, sworn to by Nelson on November 21, 1984. In this affidavit Nelson asserts that he has not yet decided whether to testify at his own trial. He then asserts that he would be willing to testify at a separate trial for Harvey if that were held subsequent to Nelson’s trial. He does not state that he would waive his Fifth Amendment privilege at a subsequent trial, even though, in the event he was convicted at his own trial, Nelson would retain this privilege while his conviction was appealed. Because of this, and because there is no guarantee that a severed trial for Harvey would be held subsequent to Nelson’s trial, the showing as to Nelson’s likelihood to testify and waive his Fifth Amendment privilege is insufficient. This is particularly true where, as here, Nelson has specifically expressed a concern about possibly waiving his Fifth Amendment privilege at his own trial. See Nelson Affidavit, supra, at ¶ 2.

The second factor to be considered is the degree to which the proferred testimony would be cumulative. Nelson asserts that he would testify to the following:

a. that, to the best of my [Nelson’s] recollection Mr. Harvey had no role in the preparation of the sales literature distributed by NGA;
b. that, to my knowledge, Mr. Harvey never lied to customers or instructed salesmen to lie to customers;

Nelson Affidavit at p. 2.

As to the first item of Nelson’s proffered testimony, the Government has represented that it does not dispute the fact that Harvey “played no role in the preparation of the NGA sales literature.” Maas Affidavit, supra, at 1121. Thus, this item of testimony would be entirely cumulative and totally unnecessary.

As to the second item of testimony, while it would not necessarily be cumulative there appears to be a significant likelihood that such testimony would be subject to substantial and damaging impeachment. See Maas Affidavit, at ¶1¶ 22-24.

Finally, the considerations of judicial economy are substantial in this case. The trial of this case is expected to last for a lengthy period of time, and will involve a large number of documents. Separate trials would involve essentially the same proof, including many if not most of the same documents. Indeed, if the Court were to grant Harvey’s and Nelson’s severance motions, four separate trials would be required for the instant indictment. Thus, consideration of the factor of judicial economy militates strongly in favor of denying Harvey’s severance motion.

In view of the foregoing discussion, it appears that pursuant to the guidelines established in United States v. Finkelstein, supra, Harvey has not made the requisite showing to obtain a severance. Accordingly, Harvey’s motion, pursuant to Fed.R.Crim.P. 14, for a severed trial is hereby DENIED.

Nelson has also moved for a separate, severed trial pursuant to Rules 8(b) and 14 of the Federal Rules of Criminal Procedure. In addition, he has moved, pursuant to Fed.R.Crim.P. 8(a), for a severed trial on Counts forty-one and forty-two of the indictment. With regard to his request for a severed trial from that of his codefendants, Nelson advances two arguments. First, he contends that the instant indictment charges two separate, independent schemes; one involving fraudulent activity with managed commodity futures pools and accounts, and the second involving loans to NGA through a “private placement program,” and that he is not involved in this latter scheme. Nelson’s second reason for a severance is that he will suffer prejudicial spill-over from evidence which will be admitted at trial against his codefendants but not against him.

The Court rejects Nelson’s request pursuant to Fed.R.Crim.P. 8(b) for a severance. The Court is not persuaded by Nelson’s attempt to bifurcate and characterize one overall scheme to defraud NGA customers into two separate schemes or transactions. The instant indictment properly alleges one overall scheme to defraud NGA investors. This scheme allegedly involved many acts and various types of fraudulent activity. All of the offenses charged in the indictment are part of “the same series of acts or transactions.” Fed.R.Crim.P. 8(b). Therefore, all of the offenses charged in the instant indictment were initially properly joined together in the same indictment.

With regard to Nelson’s request for a severance pursuant to Fed.R.Crim.P. 14, this argument is also meritless. Nelson is alleged to have been one of the two principals of NGA. He is alleged to have played a pervasive role in the attempt to defraud NGA investors. The Government intends to offer a substantial amount of evidence against Nelson in an attempt to show his dominant role in NGA’s affairs. The Court, therefore, fails to see how Nelson could possibly suffer “prejudicial spillover” from a joint trial. As with Harvey, should it appear to the Court that there is any danger of even slight prejudice to Nelson during the trial, this will be remedied by appropriate instructions to the jury during the charge.

Nelson also urges this Court to grant him a separate trial on Counts forty-one and forty-two. Nelson has moved for this severance pursuant to Fed.R.Crim.P. 8(a). The thrust of Nelson’s argument is that it is improper to charge perjury in this indictment because the alleged acts of perjury were not a part of the scheme to defraud NGA investors which is charged in the indictment.

The Court begins by noting that Fed.R.Crim.P. 8(b), and not 8(a), is the applicable rule. United States v. Turbide, 558 F.2d 1053, 1061 n. 7 (2d Cir.), cert. denied, 434 U.S. 934, 98 S.Ct. 421, 54 L.Ed.2d 293 (1977). Having noted this, the Court concludes that the two counts alleging perjury were not improperly joined in this indictment. The alleged perjurious acts involve testimony given by Nelson and Ghun in a civil proceeding. The civil proceeding involves a suit by former NGA investors to recover monies they claim were lost due to the fraudulent activities of NGA. The alleged perjurious testimony relates to the fraudulent activity of NGA, and thus deals with the very activity charged in the instant indictment. The alleged acts of perjury are, therefore, part of “the same series of acts or transactions” charged in the indictment. Fed.R.Crim.P. 8(b). And they are a part of the alleged overall scheme to defraud NGA investors. Accordingly, joinder of counts forty-one and forty-two in the instant indictment was not improper, and the request for a severed trial on these two counts is DENIED. To summarize, Nelson’s motions, pursuant to Rules 8(b) and 14 of the Federal Rules of Criminal Procedure, for a severed trial from that of his codefendants, and, pursuant to Fed.R.Crim.P. 8(a), and for a severed trial on Counts forty-one and forty-two are DENIED.

To the extent that Ghun joins in the motions of Harvey and Nelson for severances, these motions, as they may apply to Ghun, are also DENIED.

Dismissal of Counts Thirty-seven through Forty.

Both Nelson and Ghun have moved to dismiss Counts thirty-seven through forty. They argue that these counts fail to allege essential elements of the offenses charged, that the counts are duplicitous, and that the conduct described in these counts doesn’t conform to the crime charged. The apparent confusion over these four counts seems to have resulted from a typographical error and from a misreading of the violation charged.

The indictment, in Counts thirty-seven through forty, charges violations of 7 U.S.C. §§ 6o and 13(a). The defendants misread the indictment by claiming that a violation of 7 U.S.C. § 60 is charged. In addition, the Government has represented that there is a typographical error contained in the indictment, in that the indictment charges a violation of 7 U.S.C. § 13(a) when it should charge a violation of 7 U.S.C. § 13(b).

The Government has urged the Court to make the ministerial change so that the counts properly denominate 7 U.S.C. § 13(b). A ministerial change of this nature can be made by the Court as the defendants would suffer no prejudice from such a change. United States v. McGrath, 558 F.2d 1102, 1105 (2d Cir.1977), cert. denied, 434 U.S. 1064, 98 S.Ct. 1239, 55 L.Ed.2d 765 (1978); United States v. Cirami, 510 F.2d 69, 72-74 (2d Cir.), cert. denied, 421 U.S. 964, 95 S.Ct. 1952, 44 L.Ed.2d 451 (1975). The Court, therefore, will make the requested change and hereby directs that Counts thirty-seven through forty should now be read to state a violation of 7 U.S.C. §§ 6o and 13(b).

This correction, and a correction of the defendants’ error in reading 7 U.S.C. § 6o as 7 U.S.C. § 60, disposes of all of the arguments the defendants raise to dismiss these counts. Accordingly, the motions to dismiss Counts thirty-seven through forty are DENIED.

Discovery Requests

The defendants have moved to compel pre-trial disclosure of a wide array and vast amount of information which they contend they are entitled to and which they also contend the Government possesses and has a duty to disclose. At the outset, it is useful to note what the Government has produced and what it intends to produce.

The Government has thus far provided the defendants with the following pre-trial discovery:

1) The Government has granted the defendants access, for copying and inspection, of virtually its entire documentary evidence file.
2) The Government has provided the defendants with copies of the defendants’ statements that were given to law enforcement officials and copies of defendants’ prior criminal records, if any.
3) The Government has supplied copies of all tape-recorded conversations involved in this case and has agreed to provide transcripts of these tapes and summaries of NGA’s customer accounts.

In addition to the foregoing, the Government has also agreed to do the following:

1) To produce all “3500” material for a witness no later than the night before the witness testifies.
2) With respect to Brady material:
(A) To produce all “3500” material for impeachment of a witness by no later than the night before that witness’s direct testimony.
(B) To produce the criminal records of all Government witnesses no later than the night before that particular witness begins his or her direct testimony.
(C) All promises and inducements to testify and all benefits conferred upon a witness will be disclosed by that witness in his or her direct testimony. If the witness fails to do this the Government will promptly advise defense counsel of any omitted facts.
(D) All other Brady material which the government is in possession of or which the Government knows to exist will be turned over to the defendants no later than two weeks prior to the commencement of the trial.
3) The Government will produce for the defendants a copy of its exhibit list one week prior to trial.
4) If the Government decides to offer any evidence pursuant to Rule 803(24) or 804(b)(5) of the Federal Rules of Evidence, it will give the defendants prompt notice of this.
5) The Government will provide ample pre-trial notice of its intention to present “similar act” evidence.
6) The Government will disclose the names of any witnesses who will testify about “similar acts.”
7) The Government has already provided the defendants with a list of the names of all persons the Government believes to be “co-schemers.”

In short, the Government has provided the defendants with open file discovery and has complied with the discovery obligations it has in a criminal case.

Of course, pre-trial discovery in criminal cases is strictly circumscribed. Rule 16 of the Federal Rules of Criminal Procedure defines the general permissible limits of pre-trial discovery in criminal cases. With this in mind, a discussion of the extensive discovery requests interposed by the defendants follows.

Harvey has moved to compel the Government to provide him with a list of Government witnesses for trial. Ghun has joined in this request and has also requested the pre-trial disclosure of a wide array of information pertaining to these witnesses. However, the defendants here have “presented the court with no specific evidence of the existence, much less the extent, of [their] need for disclosure to counter the government’s evidence of the need for concealment.” United States v. Cannone, 528 F.2d 296, 302 (2d Cir.1975). No “specific evidence of the need for disclosure” of a witness list has been provided to the Court. Id. And the Government’s concerns regarding pre-trial disclosure of witness’ identities are unrefuted by the defendants. See Maas Affidavit, supra, at Hit 49-56. Accordingly, the defendants’ requests for pre-trial disclosure of a witness list are hereby DENIED.

The defendants have also requested that they be provided with any statements made by any of the alleged coschemers. However, “Rule 16(a) simply does not encompass these statements, nor does the Jencks Act permit their disclosure over the objection of the government.” United States v. Percevault, 490 F.2d 126, 131 (2d Cir.1974). Accordingly, the defendants’ requests for the information are DENIED. Similarly, their request for the disclosure of the coschemers’ addresses is also DENIED.

The defendants also request that the Government produce all of the statements of potential Government witnesses in which any of the defendants’ statements are repeated. This request by the defendants is merely an attempt to obtain by the back door what they are not entitled to obtain by the front door. “[B]ecause the statement [of a defendant] was memorialized originally only in the recollection of a witness, it is not discoverable.” United States v. Viserto, 596 F.2d 531, 538 (2d Cir.), cert. denied, 444 U.S. 841, 100 S.Ct. 80, 62 L.Ed.2d 52 (1979) (citation omitted). Neither Fed.R.Crim.P. 16(a) nor the Jencks Act, 18 U.S.C. § 3500, provides for the pre-trial disclosure of witnesses’ statements. Yet this is precisely what the defendants seek to obtain. Fed. R.Crim.P. 16(a) simply does not extend this far. Accordingly, defendants’ request for these statements is also hereby DENIED. Similarly, Fed.R.Crim.P. 16(a) does not authorize the pre-trial disclosure of statements the Government intends to offer at trial pursuant to Fed.R.Evid. 801(d)(2)(C), (D), and (E). The request for this information is also DENIED.

The defendants’ remaining discovery requests do not merit specific discussion. The Court has considered each of them and concluded that the Government has either agreed to provide the requested material, or the defendants are not entitled to the pre-trial disclosure of such information. Accordingly, these requests, except to the extent the Government already has agreed to provide such information, are DENIED.

Bill of Particulars

Ghun and Harvey have requested this Court to order the Government to provide them with an extensive Bill of Particulars. Nelson presumably joins in this request. For the following reasons these requests are DENIED.

The function of a bill of particulars is not to require the Government “to disclose its evidence in advance of trial.” United States v. Gottlieb, 493 F.2d 987, 994 (2d Cir.1974) (emphasis added). Rather, “... the principal function of a bill of particulars is to apprise a defendant of the essential facts of the crime for which he has been indicted, ...” United States v. Salazar, 485 F.2d 1272, 1278 (2d Cir.1973), cert. denied, 415 U.S. 985, 94 S.Ct. 1579, 39 L.Ed.2d 882 (1974) (emphasis added).

In the instant case the indictment provides great detail and is highly specific with regard to the alleged offenses and the alleged overall scheme to defraud NGA investors. Moreover, the defendants have already received extensive pre-trial discovery, including essentially “open file” discovery, from the Government. In view of this, they are neither entitled to nor do they need, in order to be adequately apprised of the charges, the information sought in their very broad proposed bills of particulars. Accordingly, the defendants’ requests for bills of particulars are DENIED.

Conclusion

The foregoing discussion disposes of all of the motions filed by the defendants. This case shall proceed to trial as scheduled on May 6, 1985 at 10:00 a.m.

SO ORDERED.

      . In Roberts, supra, the prosecutor's statement was erroneous because the Court of Appeals for the Ninth Circuit has concluded that polygraph evidence is admissible within the trial court’s discretion. Roberts at 1389, n. 10. This is not the case in this Circuit.

      . Four separate trials would result because Nelson has, in effect, asked for two separate trials for himself (one dealing with the two perjury counts and the other for the remaining counts), Harvey has requested a separate trial and Galgano and Ghun would remain to be tried together.

      . The Court notes that Ghun has apparently failed to comply with Rule 3(d) of the Local Criminal Rules for the Southern District of New York. The Court does not rely on this noncompliance as a basis for denying any of Ghun’s discovery motions. The Court does not condone this conduct, however, and strongly urges that in the future this rule be strictly adhered to.


source: Caselaw Access Project

author: EDWARD WEINFELD, District Judge.

license: Public Domain

text:
    UNITED STATES of America, v. Gerassimos VINIERIS, Defendant.
    SSS 83 Cr. 68 (EW).
    United States District Court, S.D. New York.
    April 12, 1985.

      See also, D.C., 595 F.Supp. 88.

      Rudolph W. Giuliani, U.S. Atty. for the S.D.N.Y., New York City, for the U.S.; Robert Garcia, Asst. U.S. Atty., New York City, of counsel.
    Schulman & Laifer, Brooklyn, N.Y., for defendant; Barry E. Schulman, Brooklyn, N.Y., of counsel.
   OPINION

EDWARD WEINFELD, District Judge.

The defendant Gerassimos Vinieris, found guilty on all three counts in which he was named in an indictment with others, moves pursuant to Rule 29, Fed.R.Crim.P., after the discharge of the jury for judgment of acquittal or for a new trial under Rule 33. He contends: (1) as to all three counts the Government failed to carry its burden of proof that it made no use, direct or indirect, of his immunized testimony before the Grand Jury as required under United States v. Kastigar; (2) as to Count Five, interstate transportation of stolen property, there was no evidence upon which the jury could have found that any illegal act of the defendant occurred from, through, or into the Southern District of New York as the venue statute requires; and (3) as to Count One, the conspiracy count, there was insufficient credible evidence that defendant was a participant in the conspiracy. We consider each of these contentions separately.

THE CLAIM WITH RESPECT TO THE USE OF IMMUNIZED TESTIMONY

Prior to trial, Vinieris moved to dismiss the indictment upon the ground that it and the evidence to be used against him at trial were obtained through the use of his immunized testimony before the Grand Jury on July 13 and 22, 1983. In considering that motion, it was recognized that while the Government was free to prosecute him it had “the affirmative duty to prove that the evidence it proposes to use against him upon the trial is derived from a legitimate source wholly independent of Vinieris’s compelled testimony.” The Court observed that

[wjhether or not [this burden is met by the Government] may require a hearing, or the trial itself may establish the Government’s position and obviate the need for a hearing. Whether or not a hearing is required in the instant case, it would best be deferred until after the trial ... at which time a proper evaluation could be made as to whether in fact the evidence offered was obtained from wholly independent sources____ Accordingly, Vinieris may renew his motion for a “taint” hearing after the trial, if necessary.

After a trial of nearly four weeks’ duration, Vinieris moves to vacate the conviction upon a claim that the Government failed to sustain its burden under Kastigar. Upon a consideration of the defendant’s renewed argument in support of his contention and a complete review of the entire trial transcript consisting of more than 2500 pages of testimony, the Court concludes that the Government has sustained its burden of proof.

Vinieris’s claim of the use of “tainted” evidence upon the trial is directed toward two items of evidence. First, he contends that financial information derived and compiled from nine bank accounts and five certificates of deposit maintained by him in his name and the names of his mother, wife, and a corporation of which he was the controlling stockholder, showing that he made net deposits in excess of $500,000 between February 9 and June 10, 1983 — that is, from about the time Vinieris picked up, as the Government charges, two trunks containing a portion of the stolen Sentry money at the Iakovidis residence to the day he was first questioned by FBI agents — was obtained and interpreted by the Government on the basis of Vinieris’s immunized testimony. Specifically, Vinieris claims that, although the Government may have subpoenaed the bank records before he gave his immunized testimony, it developed the significant information from his immunized testimony so that, as his counsel argued, “the cash flow from those accounts only became apparent as a result of the immunized testimony.”

With respect to this alleged taint by the use of the bank records, the Court interrupted the trial proper and conducted a hearing outside the presence of the jury. The evidence established that although the Government received documents from the bank on a continuing basis after Vinieris testified under a grant of immunity, these records were obtained pursuant to two Grand Jury subpoenas served on June 14 and 20, 1983, several weeks before Vinieris appeared before the Grand Jury on July 13, 1983 and, after asserting his Fifth Amendment privilege, was granted immunity and testified. FBI Agent Walter Carroll, who analyzed the bank records upon which the summary charts and his interpretation of the evidence were based, swore that he never read Vinieris’s Grand Jury testimony. He further swore that apart from the bank records themselves — the first of which he received from FBI Agent Coleman, who was in charge of the investigation, and the rest of which he thereafter obtained directly from the bank — he received no information whatsoever from any Assistant United States Attorney, any FBI Agent, or any other governmental individual, and that he prepared the materials and summary charts in reliance solely upon those documents. At the conclusion of that hearing, during which Carroll was cross-examined by defense counsel, the Court ruled that the Government had sustained its Kastigar burden beyond a reasonable doubt and that the financial information was admissible. Nothing has been presented on this post-verdict motion that requires reconsideration and change of that ruling or a further hearing.

The second item of evidence which the defendant challenges relates to the Grand Jury testimony of E.T. Barwick and Mr. & Mrs. Max Crawford, none of whom was called as a trial witness by the Government or the defendant. Vinieris contends that his immunized testimony led to the disclosure of the identity of these witnesses and so to their Grand Jury testimony, of which he claims the Government made direct or indirect use against him or which he claims was otherwise prejudicial to him. His challenge with respect to E.T. Barwick can readily be disposed of since it appears that as of June 10,1983, more than a month before Vinieris gave his immunized testimony to the Grand Jury, Vinieris had already informed FBI agents of his business dealings with E.T. Barwick.

With respect to the Crawfords, it does appear that their names were obtained by the Government during the course of Vinieris’s immunized testimony. However, the Government denies the use, direct or indirect, in any respect, of their Grand Jury testimony. It categorically denies that their Grand Jury testimony was the source of any evidence or any information that led to evidence that played any part in the investigation or in the case presented against defendant.

The Crawfords’ Grand Jury testimony is not before the Court. Although the defendant asserts he was without knowledge of the substance of their testimony, he claims that it must have been the source of or led to evidence or information used by the Government, the nature of which is not stated. Vinieris contends that without access to the Grand Jury minutes he cannot specify matters to substantiate his claim. The Government’s response is twofold: first, having decided not to call the Craw-fords as trial witnesses, it was not required to provide the defendant with their Grand Jury testimony either under Rule 16 of the Federal Rules of Criminal Procedure or 18 U.S.C. § 3500; and second, it urges that at no time either before or during the trial did defendant make any showing of a “particularized need” for disclosure of their Grand Jury testimony as required under Rule 6(e).

The Crawfords were no strangers to Vinieris. They were his close personal friends. He and his counsel were aware in advance of trial that they had testified before the Grand Jury. As witnesses, they were under no restraint from disclosing the nature or substance of their testimony. Defense counsel had interviewed them “at length” and made no motion to obtain their Grand Jury testimony as permitted under Rule 6(e)(3)(C)(i). Now the defendant argues that he was foreclosed from using the Crawfords’ testimony upon the trial proper because, asserting he was unaware of the nature of their Grand Jury testimony, these potential witnesses were “compromised so that they could not ... be used as witnesses by the defendant” and the Government by reason of its knowledge of their Grand Jury testimony was able to “anticipate possible defenses.” Vinieris further contends that he refrained from calling the Crawfords as character witnesses because their Grand Jury testimony might have been used by the Government for purposes of cross-examination. Upon argument of this motion, counsel stated that after an extensive interview of the Crawfords he was of the view “[t]hey would have been wonderful character witnesses” but decided not to call them since, without knowing their precise Grand Jury testimony, to do so “would have just opened a Pandora’s box.”

This claim is pure conjecture and without substance. The fact is that, after the Government rested, at no time did the defendant indicate that he proposed to call the Crawfords to testify, whether as character witnesses or otherwise, and was deterred from doing so because he lacked knowledge as to the nature of their Grand Jury testimony. Nor did Vinieris make any application to the Court to obtain the minutes of the Crawfords’ Grand Jury testimony. In response to this Court’s questioning on the argument of the motion, counsel gave vague answers as to what the substance of the Crawfords’ proposed trial testimony might have been. There is not an iota of factual matter before the Court to suggest the nature of evidence that the Crawfords could have offered that was foreclosed from use upon the trial.

In sum, the claim made upon the argument of this motion that Vinieris was precluded upon the trial from calling the Crawfords as witnesses because they had previously been questioned before the Grand Jury is specious. The decision not to call them was a calculated and deliberate act made by experienced counsel. Indeed, counsel acknowledged that his decision not to call the Crawfords as trial witnesses was also due to “their obvious reluctance to become involved,” from which he concluded “it was just clear they would make very frightened and very poor witnesses.” Nor is there anything before the Court even suggesting how the Government’s categorical representation that none of the evidence it offered upon the trial in support of its case was derived directly or indirectly from the Crawfords’ Grand Jury testimony might be questioned. Under these circumstances, there is no basis upon which to conduct a post-trial Kastigar hearing.

FAILURE TO ESTABLISH AN ACT WITHIN THE SOUTHERN DISTRICT

The defendant next contends that the prosecution failed to introduce evidence to indicate, or from which it could have been inferred, that defendant engaged in interstate transportation of stolen property from, through, or into the Southern District of New York, as required by the venue statute, 18 U.S.C. § 3237(a). Since the offense charged under Count Five is a “continuing offense” under the venue statute, the Government must prove “by a preponderance of the evidence that ‘any part of the crime was committed within the [Southern District.’ ” Venue may be proved by circumstantial evidence. The indictment charges that Vinieris picked up two trunks containing stolen Sentry funds at the Iakovidis residence in Queens, New York (Vinieris denied knowledge of the illicit nature of the funds and contended that he picked up only one trunk), which is within the Eastern District, and transported at least one trunk containing the money first to his apartment in Brooklyn, also in the Eastern District, and then to his new apartment in Hackensack, New Jersey, in the District of New Jersey. Thus, the venue requirement would be satisfied if there were sufficient evidence upon which a jury could find by a preponderance of the evidence that Vinieris passed through Manhattan, in the Southern District, when he transported the Sentry money from his Brooklyn apartment to his new Hackensack apartment.

The charge to the jury did not contain a specific instruction on venue. However, the Court read to the jury that portion of Count Five of the indictment which charged that Vinieris committed the transportation offense in the Southern District of New York, and previously, in its instruction to the jury under the conspiracy count, the Court noted parenthetically “that Manhattan and the Bronx are both within the Southern District of New York” and again, with respect to the overt acts charged thereunder, made reference to “the Southern District of New York, which, as I have already told you, includes Manhattan and the Bronx.”

Vinieris does not direct his motion to the charge nor did he submit a specific request for an instruction on venue. Rather, he attacks the sufficiency of the evidence on the venue issue. The rule in this circuit is that a venue objection is waived “ ‘when, after the government has concluded its case, the defendant specifies grounds for acquittal but is silent as to venue.’ ” Vinieris’s counsel, at the close of the entire case, moved pursuant to Fed.R.Crim.P. 29 for judgment of acquittal on the three counts in which his client was named solely upon the grounds of insufficient evidence, failure by the Government to sustain its burden under Kastigar, and violation of Vinieris’s right to confront witnesses against him; significantly, no venue claim was urged or mentioned. Also, Vinieris made no motion of any kind, let alone one based on the venue claim now advanced, at the close of the Government’s case-in-chief. The first reference to the omission of a specific venue instruction came following the charge to the jury, when counsel objected to the failure to charge.

The failure of defense counsel “specifically [to] articulate[ ]” improper venue as a basis for a judgment of acquittal at the close of either the Government’s or the entire case constituted a waiver of the issue, and that waiver was not cured by the exception following the charge. But even if Vinieris did not waive the issue, it was within the Court’s discretion to decline to give a venue charge, “even had one been properly formulated and timely proposed,” where, as here, there was substantial evidence to support a finding that venue was proper. As already noted, the jury was instructed twice that Manhattan was within the Southern District of New York. The jury, based on common knowledge as to methods of travel by vehicle from the Metropolitan New York area to New Jersey, could reasonably have found that Vinieris, in transporting stolen money from his apartment in Brooklyn to his new home in Hackensack, New Jersey, of which there was substantial evidence, travelled through Manhattan, via the Holland or Lincoln Tunnel or the George Washington Bridge. Since the standard of proof on the venue issue is only a preponderance of the evidence, and since on this motion the evidence must be viewed in the light most favorable to the Government, the challenge to the alleged deficiency of evidence to support venue is denied.

THE ALLEGED INSUFFICIENCY OF EVIDENCE THAT VINIERIS WAS A MEMBER OF THE CONSPIRACY

Finally, Vinieris alleges that there was insufficient nonhearsay evidence to link him to the conspiracy, a contention the Court rejected when a motion was made for a verdict of acquittal at the close of the entire case. Nothing has been presented on this application that requires a different disposition. A defendant making an insufficiency claim bears a “very heavy burden.” “The verdict of a jury must be sustained if there is substantial evidence ... to support it,” and the evidence must be viewed in the light most favorable to the Government and all reasonable inferences must be drawn and all issues of credibility must be resolved in favor of the jury's verdict.

The “independent” evidence included Vinieris’s own statement to FBI agents that he picked up one trunk containing cash at the Iakovidis residence in February 1983; Gabriel Iakovidis’s testimony that a man picked up two trunks from his house in the dead of night, just before one a.m., in February 1983; Vinieris’s explanation to the FBI agents that the cash was to be used to finance a rice deal, which William Conner testified never was consummated; the fact that some of the money Vinieris took from the Iakovidis residence contained bills traceable to Waldbaum’s Supermarkets and thus to Sentry; plus statements Vinieris made during the course of a recorded conversation with Gerassimos Pavlatos. Moreover, the jury could readily have found that Vinieris made false exculpatory statements when he told the FBI agents he picked up one and not two trunks and that the cash in the one trunk was in connection with a rice deal. This evidence was more than sufficient to meet the Geaney test of a “fair preponderance of the evidence independent of the hearsay utterances” and for the jury to pass upon whether or not Vinieris participated in the conspiracy. Thus, the jury could also consider the hearsay evidence, which included Eddie Argitakos’s testimony that Pavlatos told him Vinieris was helping Pavlatos to get the Sentry loot out of the country to Switzerland. When all the evidence, hearsay and non-hearsay, is considered, the jury reasonably could have found beyond a reasonable doubt that the conspiracy charged existed and that Vinieris was a participant in it. Moreover, even if the Government asserted that Vinieris stole the money from the other conspirators, there is still sufficient evidence that Vinieris did not do so until after he participated in the conspiracy by helping Pavlatos to move the money from the Iakovidis residence. Again, the governing standard is “substantial” evidence, “taking the view most favorable to the Government” and drawing all reasonable inferences in its favor. Accordingly, the motion is denied.

So ordered.

      . 406 U.S. 441, 92 S.Ct. 1653, 32 L.Ed.2d 212 (1972).

      . United States v. Gregory, No. SSS 83 Crim. 68, slip op. at 17 (S.D.N.Y. Jan. 28, 1985) (citing Kastigar, 406 U.S. at 461-62, 92 S.Ct. at 1665-66).

      . Id. at 18, 19.

      . Record at 1882; Schulman post-trial affidavit at 11.

      . Id. at 1881-83, 1887-88, 1931-33, 1943-44, 1951.

      . Id. at 1919, 1957-58.

      . Id. at 1962.

      . See id. at 1519.

      . The Government’s reliance upon United States v. Percevault, 490 F.2d 126 (2d Cir.1974), for this proposition is questionable. See United States v. Klauber, 611 F.2d 512, 515 (4th Cir.1979), cert. denied, 446 U.S. 908, 100 S.Ct. 1835, 64 L.Ed.2d 261 (1980); United States v. Shoher, 555 F.Supp. 346, 353 (S.D.N.Y.1983).

      . See Dennis v. United States, 384 U.S. 855, 869-70, 86 S.Ct. 1840, 1848-49, 16 L.Ed.2d 973 (1966).

      . United States v. Sells Eng'g, Inc., 463 U.S. 418, 103 S.Ct. 3133, 3138-39, 77 L.Ed.2d 743 (1983); Fed.R.Crim.P. 6(e)(2).

      . Hearing of April 2, 1985 at 5.

      . See Pittsburgh Plate Glass Co. v. United States, 360 U.S. 395, 79 S.Ct. 1237, 3 L.Ed.2d 1323 (1959); see also United States v. Procter & Gamble Co., 356 U.S. 677, 78 S.Ct. 983, 2 L.Ed.2d 1077 (1958) (access to Grand Jury minutes for use in civil litigation).

      . The suggestion that the defense was unaware of the substance of the Crawfords’ testimony strains credulity. See hearing of April 2, 1985 at 7.

      . Schulman post-trial affidavit at 13.

      . Hearing of April 2, 1985 at 6, 7.

      . Id. at 6.

      . United States v. Potamitis, 739 F.2d 784, 791 (2d Cir.) (quoting United States v. Panebianco, 543 F.2d 447, 455 (2d Cir.1976), cert. denied, 429 U.S. 1103, 97 S.Ct. 1128, 51 L.Ed.2d 553 (1977)), cert. denied, 105 S.Ct. 297, 332, 83 L.Ed.2d 232 (1984).

      . United States v. Gargiso, 456 F.2d 584, 588 n. 5 (2d Cir.1972).

      . Record at 2652, 2678, 2693.

      . United States v. Menendez, 612 F.2d 51, 55 (2d Cir.1979) (quoting United States v. Price, 447 F.2d 23, 27 (2d Cir.), cert. denied, 404 U.S. 912, 92 S.Ct. 232, 30 L.Ed.2d 186 (1971)); see Potamitis, 739 F.2d at 791; United States v. Boney, 572 F.2d 397, 400 (2d Cir.1978).

      . Record at 2284-89.

      . Id. at 2183.

      . Id. at 2739.

      . See United States v. Grammatikos, 633 F.2d 1013, 1022 (2d Cir.1980).

      . See id. at 1023.

      . Potamitis, 739 F.2d at 791.

      . Glosser v. United States, 315 U.S. 60, 80, 62 S.Ct. 457, 469, 86 L.Ed. 680 (1942); United States v. Carson, 702 F.2d 351, 361 (2d Cir.), cert. denied, 462 U.S. 1108, 103 S.Ct. 2456, 77 L.Ed.2d 1335 (1983).

      . United States v. Soto, 716 F.2d 989, 991 (2d Cir.1983).

      . Glosser, 315 U.S. at 80, 62 S.Ct. at 469; Carson, 702 F.2d at 361.

      . United States v. Young, 745 F.2d 733, 762 (2d Cir.1984); United States v. Bargaric, 706 F.2d 42, 64 (2d Cir.), cert. denied,-U.S.-, 104 S.Ct. 133, 134, 283, 78 L.Ed.2d 128 (1983); Carson, 702 F.2d at 361.

      . Record at 1480-82, 1510-11.

      . Id. at 1361-62, 1366.

      . Id. at 1481, 1549-52.

      . Id. at 1440.

      . Id. at 1700.

      . See Government's exhibits 948, 948-A.

      . United States v. Geaney, 417 F.2d 1116, 1120 (2d Cir.1969), cert. denied, 397 U.S. 1028, 90 S.Ct. 1276, 25 L.Ed.2d 539 (1970).

      . Record at 460-65.

      . See id. at 460-65, 1486.

      . Young, 745 F.2d at 762; Carson, 702 F.2d at 361.


author: GLEN M. WILLIAMS, District Judge.

text:
    Ralph KENNEDY, Plaintiff, v. John BLOCK, Secretary Department of Agriculture, Gilliam Court, Ltd., et al., Defendants.
    Civ. A. No. 84-0157-B.
    United States District Court, W.D. Virginia, Big Stone Gap Division.
    April 15, 1985.

      Jamie Aliperti, Client Centered Legal Services of Southwest Virginia, Castlewood, Va., for plaintiff.
    U.S. Atty. Morgan E. Scott for DOA.
    William J. Sturgill, Norton, Va., for Gilliam Court, Ltd.
   MEMORANDUM OPINION

GLEN M. WILLIAMS, District Judge.

This case comes before the court on the plaintiff’s Motion for Summary Judgment and Permanent Injunction. The material facts are not in dispute. As both parties have briefed their respective positions, the court will proceed with an examination of the plaintiff’s request for a permanent injunction.

The plaintiff, Ralph L. Kennedy, lives in a rental apartment complex in Wise, Virginia. The apartment is owned and operated by defendant Gilliam Court, Ltd., a limited partnership which is based in Roanoke, Virginia. The plaintiff, whose apartment is located in the complex referred to as Gilliam Court, states, and defendants do not deny, that the construction of Gilliam Court was subsidized by funds provided through the Farmers Home Administration’s (FmHA) Section 515 program, 42 U.S.C. § 1485 et seq. The Section 515 program authorizes the Secretary of Agriculture to insure loans, made to entities such as Gilliam Court, Ltd., which are used to construct rental housing for moderate income persons in rural areas. In addition, under the FmHA’s Section 515 program, the plaintiff qualified for and received a monthly rent subsidy from FmHA, as evidenced by the lease agreement between the plaintiff and defendant Gilliam Court. (Plaintiff’s Exhibit # 2).

On August 7, 1984, plaintiff received a letter from Stewart Trinkle which stated that plaintiff’s lease would terminate thirty days from the date of his receipt of the letter. Mr. Trinkle was an employee of Trinkle and Associates, Inc., the management agent for Gilliam Court, Ltd. and served as property manager for Gilliam Court Apartments. The letter alleges that plaintiff had continued, after having been warned, in a course of conduct which harassed both the management and the tenants of Gilliam Court. Plaintiff came before this court on September 22, 1984 and, with the aid of counsel, presented evidence and argument in support of a preliminary injunction preventing his eviction. That same day, this court entered an order which enjoined the defendants from instituting an eviction action in a state court of Virginia.

Plaintiff advances three legal theories as separate and independent grounds for the granting of a permanent injunction against the defendants: (1) that a 1978 amendment to the National Housing Act requires that FmHA implement a process whereby a tenant in a Section 515 apartment complex be given an administrative hearing prior to institution of an eviction action in a state court; (2) that FmHA’s amendment of 7 C.F.R. § 1944.551 et seq. was arbitrary and capricious and thus in violation of the Administration Procedures Act; (3) that the plaintiff’s statutory and constitutional rights will be violated if FmHA is allowed to prosecute an eviction action in a Virginia General District Court.

I. THE 1978 AMENDMENT TO SECTION 510 OF THE NATIONAL HOUSING ACT

Section 510 of the National Housing Act, 42 U.S.C. § 1471 et seq., was amended in 1978 to read as follows:

In carrying out the provisions of this subchapter the Secretary shall have the power to—
issue rules and regulations which assure that applicants denied assistance under this subchapter or persons or organizations whose assistance under this sub-chapter is being substantially reduced or terminated are given written notice of the reasons for denial, reduction or termination and are provided at least an opportunity to appeal an adverse decision and to present additional information relevant to that decision to a person, other than the person making the original determination, who has authority to reverse the decision.

42 U.S.C. § 1480(g).

The plaintiff contends that 42 U.S.C. § 1480(g), as amended, was intended by Congress to require the Secretary of Agriculture to devise and implement an administrative hearing procedure as opposed to allowing FmHA or a borrower to resort initially to evictions via state court actions. FmHA did promulgate a final rule, effective September 24, 1979, which created an administrative hearing procedure for tenants of FmHA Section 515 housing projects who faced eviction. 7 C.F.R. § 1944.555 et seq. However, an amendment by way of a subsequent final rule with an effective date of December 19, 1983, allowed a borrower such as Gilliam Court, Ltd. to proceed with a termination of tenancy and eviction via judicial process under state law without first affording the tenant an administrative hearing. Assuming, arguendo, that the amendment .process complied with the requirements of the Administrative Procedures Act, the court will address the plaintiffs contention that 7 C.F.R. § 1944.551 et seq., as amended December 19, 1983, conflicts with the Congressional mandate contained in the 1978 amendment (g) to 42 U.S.C. § 1480.

The plaintiff submitted as amendments to memoranda filed with the court certain parts of the published legislative history of the (g) amendment to 42 U.S.C. § 1480. Included is the conference committee’s version of the bill, which states:

The conferees expect that the Secretary will insure that such appeals procedure will include at least a written notice of the ability to appeal an adverse decision, an opportunity to appeal to a person who had no role in making the original determination and who has the authority to reverse the decision, an opportunity to inspect agency records relevant to the initial decision, to present additional relevant information and to receive the reviewing official’s final decision with supporting reasons in writing. This procedure should apply to all persons and organizations, including tenants in FmHA financed dwelling units whose assistance has been denied, substantially reduced or terminated.

H.R. 95-1792, 95th Cong. 2nd Sess. 88 (1978) at 89, U.S. Code Cong. & Admin. News 1978, 4773, 4909.

The plaintiff argues that the committee report evidences Congressional intent to provide FmHA Section 515 tenants who face eviction with a prior administrative hearing. The plaintiff further argues that since FmHA borrower-landlords have always had to utilize state eviction procedures, Congress must have intended, by this amendment, to cause the FmHA to promulgate a process in addition to the process incident to state eviction action.

The court is not persuaded that 42 U.S.C. § 1480(g) requires a prior administrative hearing in eviction situations. As this court has held previously, when a statute is unambiguous on its face, there is no need to consider the legislative history. Cooper v. Tazewell Square Apartments, Ltd,., 577 F.Supp. 1483, 1487 (W.D.Va.1984); citing Brown v. Porcher, 502 F.Supp. 946, 955-56 n. 17 (D.S.C.1980), affirmed as modified, 660 F.2d 1001 (4th Cir.1981). However, since the portion of the legislative history submitted to the court by the plaintiff undermines the plaintiff’s interpretation of Congress’ intent, it is proper to include a discussion of legislative history. The plaintiff’s argument that, unless Section 1480(g) intended to create an administrative process for evictions, it was “merely redundant” in light of existing procedures ignores the fact that Section 1480(g) was intended to cover other situations in which the tenant’s or applicant’s assistance was “denied, substantially reduced, or terminated.” The amendment was directed not only to evictions of current tenants, but also to the denial of benefits to applicants (i.e., prospective tenants), the borrower landlord’s failure to maintain the rental premises properly, violations by the borrower-landlord of lease covenants and rules, unauthorized rent increases, etc. The plaintiff’s argument is flawed in that it treats Section 1480(g) as if it were meant to apply only to evictions, which it clearly was not. Thus situations involving evictions can be omitted from the grievance appeal process without rendering Section 1480(g) redundant.

The plaintiff’s concern with the legislative history also serves to draw attention to an issue which will be considered more thoroughly in a later section of this opinion: what procedural elements ought to be included in the hearing and appeal afforded by Section 1480(g)? Section 1480(g) as enacted into law in its final form by Congress, differs materially from the conferees’ version as described in the portion of the legislative history provided above. The conferees’ report included these elements which are not present in the actual amendment: (1) an opportunity to inspect relevant agency records and (2) the right to receive the reviewing official’s final decision, along with supporting reasons, in writing. By not including these provisions expressly, given that they were presented in the conference version of the bill which went to the full Congress, Congress clearly intended to exclude these two elements from the required procedure. The court is of the opinion that the statutory procedures required by Section 1480(g) can be satisfied by an appropriate form of judicial action. Whether Virginia’s eviction procedure satisfies the statutory requirements of Section 1480(g) will be considered together with the question of what procedures the statute requires in the third portion of this opinion.

II. FmHA’S 1983 REVISION OF 7 C.F.R. § 1944.551 ET SEQ.

FmHA first promulgated a “Tenant Grievance and Appeal Procedure” on September 24, 1979. This included in the administrative hearing process those tenants which the borrower-landlord wished to dispossess from an apartment by eviction. These provisions were contained at 7 C.F.R. § 1944.551 et seq. (1979), 44 Fed. Reg. 54983 (1979). The objective of the regulation requiring a hearing was “... to insure the fair treatment of tenants (and applicants) while providing for an equitable manner by which borrowers can operate, maintain, and safeguard rental property.” 7 C.F.R. § 1944.552, 44 Fed.Reg. 54983 (1979). The stated objective includes a point too easily overlooked, that the grievance and appeals process involves not only the rights and expectations of a tenant who faces eviction, but necessarily also involves and affects the rights and expectations of other tenants in the complex and of the borrower-landlord and his employees.

FmHA’s final rule, 7 C.F.R. § 1944.551 et seq., effective September 24, 1979, 44 Fed.Reg. 54983 (1979), reveals the difficulty an agency has when attempting to fulfill its duty to promulgate rules which comport with the Congressional delegation of rule-making authority. In this instance Congress, by 42 U.S.C. § 1480(g), delegated to FmHA the responsibility of insuring procedural safeguards for individuals who either apply to receive, or receive, FmHA housing subsidies. A statement contained in the “Summary” preceding the September 1979 final rule represents FmHA’s understanding of why an administrative hearing and appeal process was needed, and how the promulgated final rule was to address this need:

The intended effect of this new regulation is to provide a means whereby a tenant can present a grievance against or appeal an FmHA borrower-landlord’s proposed adverse action, such as termination of the lease and eviction. The appeal right also would extend to persons who have been denied admission to occupancy as tenants. This action is needed since at present the only grievance and appeal procedure in existence for tenants in FmHA-financed rental units and those denied admission to occupancy as tenants is the recourse available under the Fair Housing Act of Title VIII of the Civil Rights Act of 1968, which provides protection against discrimination because of race, color, religion, sex, marital status, or national origin. Legislation and public comment have indicated a need for such procedures.

7 C.F.R. Part 1944 (Summary, 44 Fed.Reg. 54983 (1979).

The Summary, in that it mentions the Fair Housing Act as the only grievance and appeals procedure available to both tenants and applicants, suggests that FmHA in 1979 was overlooking state judicial eviction actions as an appeal procedure available to tenants. The effect of the September 1979 rule was two-fold. In the case of applicants who were denied FmHA assistance or tenants who had grievances against the borrower-landlord, it created an administrative procedure, to be conducted by FmHA, which afforded such an aggrieved individual a hearing and right of appeal. This result was intended, and created a new procedure to safeguard rights which had previously been left unprotected. However, as to tenants which the borrower-landlord sought to evict, the new regulations first required that the FmHA grievance and appeal process be followed, and then, if a borrower-landlord prevailed, the borrower was permitted to go forward with the eviction action in state court.

The recognition of a duplication of procedure was first made by FmHA in a revision to 7 C.F.R. Part 1944, effective October 27, 1980, 45 Fed.Reg. 70841 (1980). In a section preceding the 1980 revisions to the 1979 final rule, FmHA noted that a major concern evidenced in the comments received by the agency relating to 7 C.F.R. Part 1944 was that state laws established procedures to be followed in the case of tenant lease termination and eviction. FmHA’s response to this concern with duplication was that

[t]he procedures are intended to discourage evictions for other than material noncompliance with the lease or other good cause. Section 1944.554 has been amended to state that if the proposed eviction is due to the tenant’s failure to make timely rental payments including any “grace period” under the lease, the tenant waives his/her rights under Tenant Grievance and Appeals Procedure unless the past-due rent is paid and rental payments are made on a timely basis while the appeal is in process. The procedure has also been amended to state that the procedure does not apply to eviction situations where a tenant’s continued occupancy constitutes a threat to the health or safety of other residents or management employees (normally involving a violent action such as the use of firearms, arson, etc.) and judicial process is undertaken.

45 Fed.Reg. 70841 (1980).

The October 27, 1980 amendment is significant to the matters involved in the case sub judice in two distinct ways. First, it documents and dates recognition by FmHA of the availability of state procedures for terminations of leases and evictions. However, FmHA’s response that the procedures were intended to discourage evictions except for good cause suggests that FmHA was concerned that borrowers might seek other than good-cause evictions, i.e., end of term evictions, and FmHA saw the prior administrative hearing as one means to prevent such evictions. The second significant inference that can be drawn from the amendment is FmHA’s recognition of the duty it had to three separate groups of individuals. Certainly FmHA had and recognized a duty, as delegated by Congress via 42 U.S.C. § 1480(g), to tenants faced with lease terminations and evictions which required FmHA to insure that borrower-landlords observed certain procedural steps, in the course of both lease terminations and evictions, designed to safeguard the rights of tenants. However, the October 27, 1980 amendment also shows FmHA’s recognition of the need to balance its duty to tenants facing eviction with the rights of borrower-landlords and other tenants in the apartment complex. The 1980 amendment added economic protection for borrower-landlords by allowing resort to state judicial actions when a tenant was in default on rent. Also, FmHA waived the administrative hearing when a tenant was considered to pose a physical threat to other tenants or management employees.

FmHA was apparently still dissatisfied with 7 C.F.R. Part 1944, when on April 22, 1982, it issued notice of a proposed rule which would remove from the grievance process all eviction actions which were governed by state law. 47 Fed.Reg. 17300 (1982). The purpose given for the proposed amendment was as follows:

The intended effect is to remove from the grievance process all eviction actions which are governed by State law ... These changes resulted from objections from the FmHA personnel and owners and managers of FmHA projects that the existing grievance procedure required by this regulation is difficult and burdensome to administer.

47 Fed.Reg. 17300 (1982).

The notice of the proposed rule required that comments to be received on or before June 21, 1982.

The 1983 revision to 7 C.F.R. Part 1944, which plaintiff contends was done arbitrarily and capriciously by FmHA in violation of the Administrative Procedures Act (APA), was published as a Final Rule in Volume 48, Number 244 of the Federal Register beginning on page 56175 (December 19, 1983). The amendment allowed a borrower-landlord to institute a termination of tenancy and eviction action in state court without requiring the borrower-landlord to provide an administrative hearing to the tenant. The “intended effect (was) to reduce the burden of a duplication of effort in determination of tenancy and eviction process and to provide for the prompt resolution of the borrower-tenant disputes.” 48 Fed.Reg. 56175 (1983).

The plaintiff does not allege that FmHA failed to follow the requisite procedural steps in the rule-making process. FmHA did publish a notice of a proposed change, held the record open for public written comment, conducted an open hearing on the proposed change in Washington, D.C., and published a final rule together with relevant comments. Plaintiff does contend, however, that the final rule promulgated by FmHA lacks a rational connection to the facts which Congress intended FmHA to consider.

The analysis of an agency’s action necessarily begins by establishing the appropriate standard of review. As stated earlier, the APA dictates FmHA’s rule-making process. The appropriate standard of review, as established by the APA and the Supreme Court, is that an agency’s promulgated rule must be set aside if found to be “arbitrary, capricious, an abuse of discretion or otherwise not in accordance with the law.” 5 U.S.C. § 706(2)(A); Motor Vehicle Mfrs. Ass’n v. State Farm Mutual Ins. Co., 463 U;S. 29, 103 S.Ct. 2856, 2865, 77 L.Ed.2d 443 (1983); Citizens to Preserve Overton Park v. Volpe, 401 U.S. 402, 414, 91 S.Ct. 814, 822, 28 L.Ed.2d 136 (1971); Bowman Transportation, Inc. v. Arkansas Best Freight Systems, Inc., 419 U.S. 281, 95 S.Ct. 438, 42 L.Ed.2d 447 (1974). Plaintiff advances three grounds as separate bases for holding FmHA’s actions arbitrary and capricious: (1) FmHA relied on factors which Congress did not intend for it to consider; (2) FmHA failed to examine all relevant data; (3) FmHA failed to make a considered evaluation of alternatives to the selected amendments.

Plaintiff argues that Congress did not “intend for FmHA to instantly capitulate to complaints by agency personnel and administrators that the grievance procedure is burdensome and difficult to administer.” Plaintiff characterizes the amendment as a sign of capitulation by FmHA to the borrowers’ demands, which plaintiff argues Congress did not intend for FmHA to consider. The Congressional delegation of authority to FmHA, contained in 42 U.S.C. § 1480(g), makes no reference to what FmHA was to consider in making the rule which implemented Section 1480(g). Congress does include in many statutes by which it delegates rule-making authority instructions as to what shall be considered in making the rule. The National Traffic and Motor Vehicle Safety Act of 1966, for example, directed the Secretary of Transportation to consider “relevant available motor vehicle safety data,” whether the proposed standard “is reasonable, practicable and appropriate” for a particular type of motor vehicle, and the extent to which such standard will contribute to carrying out the purposes of the Act. 15 U.S.C. § 1392(f)(1), (3), (4), as cited in Motor Vehicle, 103 S.Ct. at 2862.

In the absence of Congressional direction as to what elements are to be considered in promulgating the rule, the presumption is that Congress is entrusting the decision as to what to consider to the hands of the agency in deference to agency expertise. Such is the case with 42 U.S.C. § 1480(g), as there is included in § 1480(g) no Congressional directive regarding consideration of relevant elements. The comments published along with the 1980 amendment to 7 C.F.R. Part 1944 illustrate that FmHA was considering not only the landlord’s concerns, but also FmHA employees, tenants facing evictions, and other tenants in a housing complex. FmHA was acting properly in considering the rights of all persons affected by the amendment. The plaintiff would have FmHA consider only the interests of the tenant facing eviction, which clearly is not FmHA’s duty, nor is it in the best long-term interest of all FmHA Section 515 tenants.

The plaintiff argues that FmHA failed to examine relevant data prior to making its decision to amend 7 C.F.R. Part 1944. This contention is untenable in light of the discussion published along with the amendment. See Discussion of Comments, 47 Fed.Reg. 56176 (1983). The comments suggest that FmHA weighed the protection of tenants’ statutory and constitutional rights against the needs of landlords, tenants, and FmHA employees in deciding how to deal with tenants who are in material non-compliance with their leases.

Included in the materials submitted to the court by the plaintiff is a copy of a report done in 1981 by a student at American University about FmHA’s Grievance and Appeals Procedures. Plaintiff argues that the report “contradicts virtually every conclusion reached by the agency in promulgating the revised procedures.” The court would state initially that the relevance and weight to be accorded this report, for purposes of reviewing the agency’s action, is minimal since the report is not among the matters which the APA requires an agency to consider. The APA provides the procedure which an agency must follow in the rule-making process, including directions as to what an agency is to consider:

After notice required by this section, the agency shall give interested persons an opportunity to participate in the rule-making through submission of written data, views, or arguments with or without opportunity for oral presentation. After consideration of the relevant matter presented, the agency shall incorporate in the rules adopted a concise general statement of their basis and purpose.

5 U.S.C. § 553(c).

Assuming, arguendo, that the report which plaintiff relies upon so heavily was submitted in response to the notice of the proposed rule change (plaintiff does not make such an assertion), the agency’s action does not suggest that the report or the material which it contained was not considered. The report noted that of twelve proposed eviction cases which proceeded to the hearing stage, six were resolved in favor of the tenant. Thus, plaintiff argues, without the administrative hearing, six tenants would have been unjustly evicted. Plaintiff further argues that the administrative hearing was a cheaper process than state court eviction. Figures included in the report are not broken down so that the cost of eviction hearings and appeals can be determined. However, it was reasonable for FmHA to decide to avoid the duplication caused in the eviction process by the administrative hearing by instead relying solely upon traditional state eviction proceedings to safeguard the rights of tenants who faced unwarranted evictions. Furthermore, since the state proceedings represented a fixed cost in that they were required whether there was a duplicate FmHA proceeding or not, discontinuing the FmHA proceeding represented an immediate savings to borrowers and FmHA. The foregoing is not intended by the court to “... supply a reasoned basis for the agency’s action that the agency has not given,” SEC v. Chenery Corp., 332 U.S. 194, 196, 67 S.Ct. 1575, 1577, 91 L.Ed. 1995 (1947), but suggests that the raw data contained in the report will support conclusions opposite to those reached by the report’s author and subsequently adopted by the plaintiff.

Plaintiff faults FmHA and seeks to have the amendment set aside because of the alleged failure of FmHA to consider alternatives to the removal of evictions from the grievance and appeals process. However, published with the proposed rule in April of 1982 was the following summary of FmHA’s consideration of alternatives to the amendment:

The alternatives to issuance of the proposed regulations which were considered included not changing existing regulations and allowing each FmHA State Office to establish procedures consistent with local practices. These alternatives were rejected because they did not promote efficiency in Agency operations, nor assure long term compliance with the objectives for which the FmHA assistance was provided. Moreover, they could lead to a proliferation of regulations and requirements inconsistent between States and regions, causing confusion to the public, especially to those borrowers with operations in more than one jurisdiction. On this basis, the Agency has determined that the chosen alternative maximizes the net benefit to society at the lowest cost.

47 Fed.Reg. 17300 (1982). The court is of the opinion that FmHA’s treatment of alternatives as set out above satisfies the requirements of the APA. The alternatives were concisely stated, the problems they created and shortcomings they possessed were described, and the rejection was justified on the basis of net benefit to society.

The plaintiff has urged the court to adopt the reasoning of the Supreme Court which is set forth in Motor Vehicle, 103 S.Ct. at 2856. This court is of course bound by the reasoning of the Supreme Court, and has applied it to the facts in the present case. FmHA’s rule-making actions, under the Motor Vehicle analysis, withstand challenge under the arbitrary and capricious standard. The Supreme Court stated its approval of the following interpretation of the arbitrary and capricious standard:

... A reviewing court may not set aside an agency rule that is rational, based on consideration of the relevant factors and within the scope of the authority delegated to the agency by the statute ____

Id. 103 S.Ct. at 2866.

This court holds that FmHA’s actions in promulgating the 1983 changes to 7 C.F.R. Part 1944 were not arbitrary and capricious. The amendment was rational as it was an attempt to allow better administration of FmHA dwelling complexes while protecting the rights of tenants who faced evictions. The court finds that the agency’s decision was based on a consideration of relevant factors and contained no clear error of judgment. See Motor Vehicle, 103 S.Ct. at 2865; Citizens, 401 U.S. at 416, 91 S.Ct. at 823; Bowman, 419 U.S. at 285, 95 S.Ct. at 441.

Furthermore, this court would note that the initial agency action, evidenced by the promulgation in 1979 of 7 C.F.R. Part 1944 in response to 42 U.S.C. § 1480(g), and the evolution of Part 1944 via the rule-making process as evidenced by FmHA’s subsequent revisions, represent an agency’s attempt to arrive at a rule which both complies with the Congressional delegation of rule-making authority and serves the beneficiaries of the agency. 7 C.F.R. Part 1944 has been amended twice since its promulgation in 1979. To amend a rule dealing with procedural protection for low income tenants twice within a four year period is not excessive. The court realizes that changes to the eviction process are very important to FmHA Section 515 tenants, and should only be undertaken with appropriate deliberation and concern for those affected. The history of 7 C.F.R. Part 1944 evidences the agency’s good faith attempt to satisfy its duty to Congress and to all the people the agency was created to serve.

III. DUE PROCESS PROTECTIONS UNDER THE CURRENT EVICTION PROCEDURES

In this third section of the court’s Opinion, the 1983 revisions to 7 C.F.R. Part 1944 will be analyzed to determine whether they afford plaintiff protection of the rights guaranteed by the statute and by the United States Constitution.

Plaintiff contends that 42 U.S.C. § 1480(g) requires FmHA and borrower-landlords to follow certain procedures in the course of an eviction. Section 1480(g) provides three procedural safeguards which enure to tenants facing evictions: (a) written notice of the reasons for eviction or termination, (b) the opportunity to appeal an adverse decision to someone other than the person making the original decision, who has the power to reverse the original decision, and (c) the right to present additional relevant information to the person hearing the appeal. 42 U.S.C. § 1480(g).

The court must look initially to the language of the statute to determine whether Congress intended the requirements of 42 U.S.C. § 1480(g) to be mandatory. The statute is worded as follows: “In carrying out the provisions of this subchapter, the Secretary shall have the power to — (g) issue rules and regulations ...” 42 U.S.C. § 1480(g) (emphasis added). The statute is not in the mandatory language which would substantiate a claim that Congress meant to require FmHA to implement the contents of paragraph (g). Instead the language represents only a grant of rulemaking authority to FmHA. Congress, by using the language “shall have the power to issue,” was committing to the agency the final decision of whether such provisions were necessary and appropriate, and if so, the authority to devise a procedure to implement the provisions.

Assuming, arguendo, that Congress intended to require FmHA to insure that the procedural components of Section 1480(g) were followed, the inquiry would become whether FmHA’s eviction procedures, utilizing Virginia’s judicial eviction action, contained the requisite procedural components of Section 1480(g). Congress established the minimum process to be provided FmHA Section 515 tenants in Section 1480(g)! That section required written notice and the opportunity to appeal and present additional evidence to someone having the power to reverse.

FmHA’s current process for terminations and evictions requires the borrower to comply with FmHA regulations and state judicial eviction procedures. The FmHA regulation governing evictions, as amended December 19, 1983, provides:

Notice of Termination of Tenancy and Eviction.
Notification of termination of tenancy and eviction is to be handled in accordance with Paragraph XIV B of Exhibit B of Subpart C of Part 1930 of this Chapter and according to State or local laws. Termination of Tenancy and Eviction by Judicial Action as Proscribed by State or Local Law.
Termination of tenancy and eviction must be based on material violation of the lease terms or other good cause as determined by the borrower or the project manager in accordance with Paragraph XIV A of Exhibit B of Subpart C of Part 1930. The borrower shall not evict any tenant except by judicial action pursuant to State or local law and in accordance with the requirements of this Subpart.

7 C.F.R. § 1944.553(e), (f). Part 1930, Subpart C, Exhibit B, Paragraph XIV states in pertinent part:

B. Notice of Termination

1. ... [TJenants will be given prior notice of eviction according to State or local law. The notice must: a. Refer to relevant provisions in the lease, b. State the reasons for termination with enough specificity to enable the tenant to prepare a response, c. State that the tenancy is terminated on a date specified, d. Advise the tenant ... that the borrower may seek to enforce the termination only by bringing a judicial action, at which time the tenant may present a defense.

The Virginia judicial procedure for evictions, which is an action for unlawful entry and detainer, provides that if a landlord

... thinks a tenant is unlawfully detaining an apartment, the landlord may present a sworn statement of facts authorizing the removal of the tenant to a magistrate, clerk or judge of a General District Court. Then the official shall issue a summons against the tenant and have it served upon him. After the service is returned, the judge of the General District Court hears and decides the case.

Cooper v. Tazewell Square Apartments, Ltd., 577 F.Supp. 1483, 1489 (W.D.Va.1984).

The process which a borrower-landlord must follow to evict a Section 515 FmHA tenant is sufficient to protect the tenant’s due process guarantees established by Section 1480(g). FmHA’s own regulations require the borrower to provide the tenant with written notice of the reasons for the tenant’s termination and eviction. Part 1930, Subpart C, Exhibit B, Paragraph XIV. The judge of the General District Court hears the eviction on first impression and his decision is appealable by right to a Virginia Circuit Court. Va.Code § 8.01-129. In a situation where the borrower has prevailed in General District Court and the case is on appeal before the judge of the Circuit Court, the tenant has the right to present additional evidence and the judge may reverse the decision of the General District Judge.

The plaintiff argues that the case sub judice should be controlled by this court’s ruling in Cooper v. Tazewell Square Apartments, supra. In Cooper, this court held that an action for unlawful entry and detainer (eviction) in General District Court did not provide an adequate legal remedy, and thus did not preclude the award of injunctive relief, to a plaintiff who alleged non-compliance with the regulations contained at 7 C.F.R. § 1944.556 by an FmHA borrower who had attempted to evict the plaintiff. This court held in Cooper that the defendant borrower had failed to provide an impartial decision-maker at the hearing level, as required by then existent FmHA regulations. In addition, this court held that

An action in general district court is no substitute (for a hearing before an impartial decision-maker) ... the borrower must afford the tenant the protections set forth in the Tenant Grievance and Appeals Procedure before resorting to state action.

Id. at 1489.

The holding in Cooper is not dispositive of the issue presented in this case because Cooper was decided on the basis of 7 C.F.R. Part 1944 as it read prior to the December 19, 1983 revisions. When, in Cooper, the borrower attempted to resort to state action without having complied with FmHA regulations, the effect was to deny the tenant procedural guarantees created in the FmHA regulations themselves. The General District Court procedure did not satisfy the then existing FmHA internal regulations, thus it was an inadequate legal remedy for the deprivation of procedural guarantees created by the FmHA regulations. The court has found that these regulations were properly amended in December, 1983 to remove tenancy termination and evictions from the administrative hearing process. Accordingly, the court’s reasoning in Cooper is not applicable to this case.

The plaintiff contends that an administrative grievance hearing must be afforded him, prior to his eviction as required by Due Process Clause of the Fourteenth Amendment to the United States Constitution. The Court of Appeals for the Fourth Circuit has said:

For the due process clause of the Fourteenth Amendment to dictate the procedure to be followed before a tenant is evicted, two conditions must be met. First the tenant must have an expectation, rising to the status of property interest, of remaining in his home in the absence of good cause for eviction. Second, an eviction must constitute state action.

Swann v. Gastonia Housing Authority, 675 F.2d 1342, 1345-1346 (4th Cir.1982).

FmHA regulations create an expectation of continued tenancy which rises to the level of a property interest. According to 7 C.F.R. § 1944.553(n), “Termination of tenancy and eviction must be based on material violation of the lease terms or for other good cause ____ It is now beyond question that such statutory entitlements are protected by the due process clause.” Id. at 1346, citing Goldberg v. Kelly, 397 U.S. 254, 261-262, 90 S.Ct. 1011, 1016-1017, 25 L.Ed.2d 287 (1970). The proposed eviction of the plaintiff also involves state action. Utilizing criteria employed by the Fourth Circuit in Swann, this court finds a “substantial continuing agency involvement in the tenancy.” Swann, 1346. FmHA subsidized the initial construction costs of the apartment complex and pays a substantial portion of the plaintiff’s monthly rent ($138 of the total $215) directly to the borrower defendant. The borrower agrees to be bound by FmHA regulations which govern significant aspects of the operation of the apartment complex, including the procedures for termination of tenancies and evictions. Most significantly, FmHA sets the guidelines which a borrower or project manager must follow to determine if good cause exists for eviction.

The court finds that the plaintiff has a reasonable expectation of continued occupancy in Gilliam Court, and that the borrower defendant’s intended eviction would constitute state action. Therefore the question of what process is due plaintiff prior to the eviction is governed by the Due Process Clause of the Fourteenth Amendment.

When the Court of Appeals for the Fourth Circuit addressed the issue now before this court, the Fourth Circuit held that the procedures incident to an eviction by state judicial process are adequate to protect the due process rights of a public housing tenant, provided the eviction is for good cause and not simply because the lease has expired (an end of term eviction). Swann v. Gastonia Housing Authority, 675 F.2d 1342, 1347-1348 (4th Cir.1982). In Caulder v. Durham Housing Authority, 433 F.2d 998 (4th Cir.1970), cert. denied, 401 U.S. 1003, 91 S.Ct. 1228, 28 L.Ed.2d 539 (1971), the court upheld an injunction preventing an eviction because the state court eviction process did not afford due process protection where the eviction was prosecuted on grounds of the tenant’s “continuing in possession of demised premises after her term had expired.” Id. at 1002. However, it is well settled that due process rights of a tenant in a public housing project are protected in a state court eviction action provided the eviction is for good cause, which must be proved by the landlord during the state proceedings. Swann v. Gastonia Housing Authority, 675 F.2d 1342 (4th Cir.1982); Joy v. Daniels, 479 F.2d 1236 (4th Cir.1973); Johnson v. Tamsberg, 430 F.2d 1125 (4th Cir.1970)

The FmHA regulations require that the borrower make a determination of the existence of good cause to evict prior to the institution of state eviction procedures. Plaintiff does not allege that the borrower was attempting to evict him on the basis of his presence in the apartment after the lease expired. The facts before the court suggest that the defendant’s eviction of the plaintiff is based on a good faith belief by the defendant that good cause does exist to evict. The state eviction action will provide the forum to test the adequacy of the factual allegations to determine whether the allegations, if proven, amount to good cause to evict. This court expects the eviction action in state court to be either based on material violations of the lease provisions or for good cause.

In accordance with the reasoning above, the motion for permanent injunction is denied, the temporary injunction is dissolved and the case is stricken from the docket.

The Clerk is directed to send certified copies of this Memorandum Opinion to counsel of record.

      . The court notes that FmHA’s present eviction process insures only eviction for cause. Accordingly, the reasons stated by FmHA for the inclusion of evictions in the administrative hearing process, "... to discourage evictions for other than material non-compliance with a lease or other good cause,” is no longer a true concern. Instead, FmHA has insured only "good cause” evictions by process of a prior determination by the borrower of good cause, which is tested in state court as “good cause" must be the basis of the eviction.