author: LASKER, District Judge.

text:
    The BUCKEYE CELLULOSE CORPORATION, Plaintiff, v. ATLANTIC MUTUAL INSURANCE COMPANY, Defendant.
    No. 82 Civ. 7411(MEL).
    United States District Court, S.D. New York.
    July 15, 1985.
    Hill, Rivkins, Carey, Loesberg, O’Brien & Mulroy, New York City, for plaintiff; Vincent J. Ryan, Brian M. Murphy, George W. Clarke, New York City, of counsel.

      Bigham, Englar, Jones & Houston, New York City, for defendant; Joseph J. Magrath, New York City, of counsel.
   LASKER, District Judge.

Buckeye Cellulose Corporation (“Buckeye”) moves for summary judgment to establish that its insurance contract with defendant Atlantic Mutual Insurance Company (“Atlantic”) applies to a lost cargo claim based upon fraudulent conversion. Atlantic cross-moves for summary judgment to dismiss the complaint on the ground that the contract in question is ambiguous and should be construed against Buckeye. In the alternative, Atlantic argues that questions of fact preclude awarding Buckeye summary judgment. For the reasons set forth below, both motions are denied.

I.

The Transaction

Buckeye, a subsidiary of the Proctor & Gamble Company (“Proctor & Gamble”), entered into three contracts in late December 1978 and early January 1979 to sell to the Thomas P. Gonzalez Corporation (“TPGC”), 3,500 metric tons of cottonseed oil valued at over $2.5 million. TPGC in turn had contracted to sell the oil to an agency of the Egyptian Government. Financing for these transactions were to be accomplished through inter-connecting letters of credit.

In accordance with the terms of the Buckeye-TPGC contracts, TPGC opened three irrevocable letters of credit at the Credit Lyonnais Bank in Los Angeles for the contract price of $2.5 million. The letters of credit provided that Credit Lyonnais would pay Buckeye by honoring sight drafts presented on Buckeye’s behalf once Buckeye’s bank, Central Trust of Cincinnati, presented to Credit Lyonnaise various documents verifying that the cargo of oil had been completely loaded in good order and condition on the vessel M/V GLOBE VENUS. That ship had been chartered by TPGC to load cottonseed oil at Bayport, Texas, Houston and New Orleans and to carry the cargo to Alexandria, Egypt.

The conditions of the letters of credit of particular importance to this case specified that Credit Lyonnais was to receive clean negotiable mates receipts on or before the amended expiration date for the letters of February 16, 1979. The mates receipts were the sole documents of title for the cargo and stated on their face that negotiable bills of lading for the oil would be issued to take the place of the receipts only if the receipts were surrendered by their holder.

After these arrangements had been made, Buckeye contracted with its suppliers to transfer 3,500 tons of cottonseed oil to the tanks of the GLOBE VENUS. The oil was loaded in the three Gulf Coast ports between January 31 and February 2, 1979, and Buckeye received from its suppliers, in return for payment to them in early February, the documents specified in the Credit Lyonnais letters of credit, including the negotiable mates receipts.

As set forth in Buckeye’s Memorandum of Law in support of its motion, had the transaction between Buckeye and TPGC proceeded in a regular fashion, Buckeye would have gathered and presented the specified letters of credit documents to its bank, Central Trust, which in turn would have presented the documents together with sight drafts for $2.5 million to Credit Lyonnais. Credit Lyonnais would then have paid Buckeye the $2.5 million and would have delivered the mates receipts to TPGC, which would then have surrendered the receipts to the agent for the GLOBE VENUS, Universal Transport Corporation (“Universal”), in exchange for negotiable bills of lading. With the bills of lading in hand, TPGC would have settled up with the Egyptian government agency that had contracted to purchase the cottonseed oil for payment for the oil in exchange for the bills.

In the final step of this hypothetical series of transactions, designed to maintain cargo ownership in the hands of the holder of the negotiable documents issued by the carrier, the Egyptian purchaser would have presented the bills of lading to the GLOBE VENUS in order to take delivery of the cargo.

In fact, to accomplish the penultimate step of obtaining bills of lading in exchange for payment, the Egyptian purchaser actually opened a letter of credit in favor of TPGC with the Wells Fargo Bank in Los Angeles which specified, inter alia, that TPGC had to present negotiable bills of lading as a condition of payment.

The Cargo Loss

The reader may by now have anticipated that all did not work out according to plan. On February 2, 1979 TPGC managed to obtain from Universal signed bills of lading for the cargo of cottonseed oil without surrendering the negotiable mates receipts. No explanation as to how this occurred is in the record. On that date, the receipts were in fact still in the hands of Buckeye’s suppliers who had not yet received payment from Buckeye for the oil. TPGC nonetheless proceeded to obtain payment from the Egyptian purchaser. On February 5, 1979, TPGC presented to Credit Lyonnais the bills of lading, and other documents specified in the Wells Fargo letter of credit, and Credit Lyonnais, acting on behalf of TPGC, presented these materials to Wells Fargo for payment under the terms of the letter of credit. Wells Fargo paid Credit Lyonnais and on February 8 Credit Lyonnais applied this money against outstanding debts owed by TPGC to the bank.

In the meantime, Buckeye, ignorant of this state of affairs, proceeded to pay its suppliers for the cottonseed oil transferred to the GLOBE VENUS and in return obtained the mates receipts for the cargo from the suppliers. Buckeye had collected all the receipts by February 16 and forwarded them to Central Trust. Central Trust, in turn, mailed the receipts, and the other documents specified in the Credit Lyonnais letters of credit by registered mail to Credit Lyonnais in Los Angeles for payment of the $2.5 million owed to Buckeye by TPGC in accordance with their contracts. The documents were not received by Credit Lyonnais until February 20,1979, four days after the February 16 expiration date for the three letters of credit.

Credit Lyonnais subsequently advised Central Trust that the letters of credit had expired and that late presentation of the specified documents would not be waived. The negotiable mates receipts were then returned to Buckeye.

In contrast to the confused state of affairs between Buckeye, TPGC, and their corresponding banks, the GLOBE VENUS’ journey to Egypt proceeded without incident. On February 28 the vessel arrived in Alexandria and the cargo was discharged by March 5.

On March 6 or 7, Buckeye, still ignorant as to the true facts, instructed Universal that the cargo was to be unloaded only for Buckeye’s own account inasmuch as it continued to own the cottonseed oil by virtue of its retention of the mates receipts. Universal responded to this direction by notifying Buckeye that the oil had been discharged for the account of the Egyptian purchaser. Buckeye’s subsequent efforts to claim title to the oil and alternatively to recover the $2.5 million payment from TPGC and Credit Lyonnais proved to be unavailing.

The Atlantic Cargo Insurance Claim

The open marine cargo policy at issue in this ease had insured Proctor & Gamble and its subsidiaries, including Buckeye, for cargo losses beginning in July of 1968 and was in effect at the time of sale and shipment of the cottonseed oil. With the exception of a two page printed cover form prepared by Atlantic, the policy, twenty one pages, not including endorsements, was drafted by Johnson & Higgins, Proctor & Gamble’s insurance broker.

On April 17, 1979, a Proctor & Gamble employee notified Johnson & Higgins of Buckeye’s cargo loss as a prerequisite to making a claim under the open cargo policy. Johnson & Higgins advised Atlantic of the claim in a letter dated April 26, 1979. Atlantic, in a letter to Johnson & Higgins dated April 30, 1979, declined the claim on the ground that the cargo policy did not cover the loss because there was no physical loss or damage to the cargo.

Proctor & Gamble made quarterly reports of cargo shipments to Johnson & Higgins. In the report dated May 23, 1979 for the quarter ending February 28, 1979, Proctor & Gamble did not include Buckeye’s shipment of cottonseed oil. Moreover, Proctor & Gamble had never paid an insurance premium for the shipment, nor had it been billed by Johnson & Higgins for the shipment.

In April of 1979, Buckeye sued the owner of the GLOBE VENTURE, Universal, TPGC and Credit Lyonnais to recover for the loss of the cottonseed oil. The case against these parties was eventually settled out of court for approximately $2.41 million but Proctor & Gamble maintained its right to recover the remainder of its loss under the cargo policy and attorney’s fees, and so advised Atlantic. The parties agree that if the lost cargo is covered by the policy Buckeye would have recovered its value which, depending upon which clause of the policy governed, would be either the cargo invoice value of approximately $2.51 million or $2.76 million, the latter figure representing 110% of the invoice value. See Stipulation of Facts ¶ 42.

II.

Buckeye contends that the lost cargo of cottonseed oil was covered under the policy pursuant to Clauses 3 and 27 of the policy rider drafted by Johnson & Higgins quoted in the margin. Clause 3 states that the policy covers goods in which Proctor & Gamble “may have an interest in any way” and Buckeye asserts that it continued to cover the property insured until, under Clause 27, the relevant title documents “have been taken up by the consignee[] and actual payment made by” it. Since the consignee in this case, TPGC’s Egyptian purchaser, never received valid title documents, Buckeye contends that the policy remained in force at the time the cargo was lost through fraudulent conversion.

Buckeye also relies upon Clause 12(A), which states that the policy insures

“[a]ga.inst all risk of physical loss or damage from any external cause.” It argues that conversion was a covered risk under the clause.

Atlantic contends that the policy was not in force at the time of Buckeye’s loss because the transaction between Buckeye and TPGC was financed through letters of credit which, in accordance with the terms of Clause 31 quoted in the margin, caused the termination of coverage under the policy once the letters were opened by TPGC in Buckeye’s name at Credit Lyonnais. Atlantic also refers to the prior dealings between the parties and between Buckeye and TPGC to support its claim that Buckeye did not consider the shipment of cottonseed oil at issue to be subject to coverage under the cargo policy. Atlantic particularly refers to three Buckeye-TPGC transactions for vegetable oil in the latter half of 1978 which were never reported to Atlantic and for which Atlantic contends Buckeye paid no insurance premiums.

Atlantic challenges Buckeye’s reliance on Clause 27 as a basis for coverage, arguing that that provision applies only to “shipments sold on sight draft terms-payment against documents.” See note 7, supra. Atlantic asserts, inter alia, that the various Buckeye documents relating to the contracts between Buckeye and TPGC for cottonseed oil either fail to specify payment terms or refer only to the Credit Lyonnais letters of credit and that therefore Clause 27 is inapplicable.

Atlantic also disputes Buckeye’s contention that the cargo policy applies to fraudulent conversion of a cargo. Atlantic as-serfs that conversion is not one of the traditional marine “perils” enumerated on its printed form attached to the policy and that no conversion occurred in any event because the actual voyage of the cottonseed oil from the United States to Egypt occurred without physical incident. Finally, Atlantic argues that Buckeye’s failure to declare the cargo as subject to insurance coverage should be regarded as evidence that it did not believe that the shipment was covered by Atlantic’s policy.

Buckeye responds that Clause 31, which terminated coverage once the letters of credit were opened in Buckeye’s name, is inapplicable to the facts of this case because Buckeye financed its transaction with TPGC with both letters of credit and “payment against documents” terms, the latter provision giving rise to the application of Clause 27, which applies to “shipments sold on sight draft terms-payment against documents.” Clause 31, in Buckeye’s view, is supplemental to the policy and therefore separately enforceable. Buckeye also argues that policy coverage should not be denied on the ground that Atlantic was not provided with a declaration for the cottonseed oil shipment because Johnson & Higgins’ failure to include the claim occurred only after Atlantic notified the broker of its decision to decline to cover for the loss and a report therefore would have been futile. Finally, Buckeye asserts that its failure to declare the 1978 shipments involving TPGC does not mean that it waived coverage for the cargo or conceded that it was not covered. Buckeye contends that, far from believing that the cargo was undeclarable, it had a compelling reason for declaring this shipment in light of the fact that, unlike the usual transaction in which it would give up its interest in the cargo soon after loading aboard the vessel, the failure of the Credit Lyonnais letters of credit meant that it had to assume the risk of loss and insurable interest in the cargo for the entire voyage to Egypt without prior notice. They do not, however, explain why, if there was such a compelling reason to declare, no declaration was made.

III.

In light of the foregoing arguments, we find, drawing reasonable inference in favor of Buckeye and Atlantic respectively, that questions of fact preclude awarding summary judgment to either party. Notwithstanding Atlantic’s contention, termination of policy coverage under Clause 31 does not extinguish the policy because that provision is supplemental to the policy since it extends coverage for Buckeye’s benefit and requires Buckeye to pay an additional premium. If Clause 31 constituted the sole basis for coverage then Atlantic would be correct that the opening of the TPGC letters of credit on Buckeye’s behalf at Credit Lyonnais would have terminated coverage. However, if another clause in the policy provided for continuing coverage, the operation of Clause 31 would not in itself determine whether the policy was in force at the time of Buckeye’s loss.

In this case, Buckeye asserts that Clause 27 determines whether the policy was in effect when the cargo was lost and we find that a question of fact exists as to whether that provision is applicable to the Buckeye-TPGC transaction. As discussed supra, Clause 27 applies to “shipments sold on sight draft terms-payment against documents” and states, inter alia, that policy coverage continues until title documents have been taken up by the consignee.

Although this clause might support Buckeye’s contention that the policy was in effect at the time the cottonseed oil was lost, it is not clear whether the provision applies to the Buckeye-TPGC transaction. Buckeye’s confirmation forms which describe its three contracts for cottonseed oil with TPGC do not specify the financing terms of the agreement, but instead leave blank the lines on the documents which describe the transactions’ financing terms. In addition, Buckeye’s shipping invoices for the cottonseed oil refer only to the three Credit Lyonnais letters of credit in the box on each invoice left open for terms. See Exhibits B-G attached to Affidavit of Joseph J. Magrath 3d, filed Dec. 9, 1983. These documents are sufficient to create a fact question regarding whether “payment against documents” was actually one of the terms in the Buckeye-TPGC transaction in addition or as a complement to the Credit Lyonnais letters of credit. Accordingly, neither party is entitled to summary judgment.

Other questions of fact relate to the scope of coverage under the policy and the parties’ understanding of the scope. Although portions of the policy appear to possess a quality akin to transluscent glass, Atlantic has not established, as a matter of law, that its policy does not provide coverage for conversion of a cargo resulting from fraudulent procurement of bills of lading. Clauses 3 and 12(A) state respectively that the policy covers goods in which Proctor & Gamble “may have an interest in any way” and that goods are insured “[ajgainst all risks of physical loss or damage from any external cause____” We find these terms to be sufficiently expansive in their “plain meaning” to support an inference favorable to Buckeye that the policy might have covered the kind of cargo loss at issue in this case. See, e.g., Murray Oil Products, Inc. v. Royal Exchange Assurance Co., 21 N.Y.2d 440, 445-446, 235 N.E.2d 762, 764, 288 N.Y.S.2d 618, 620-21 (1968) (finding insurance policy intended to cover every possible contingency).

On the other hand, Buckeye’s failure to declare the shipment of cottonseed oil, or to pay insurance premiums upon it, and its failure to report earlier shipments arising out of transactions with TPGC supports the inference favorable to Atlantic that it did not believe that conversion was a covered risk and that its transactions with TPGC were subject to coverage under Atlantic’s cargo policy. These inferences accordingly provide further support for denying summary judgment to both parties.

We conclude that in spite of the wide area of agreement between the parties as to the facts, we are unable to discern the meaning of the various clauses of the policy on papers alone. Because the construction of the policy is not self-evident, even as supplemented by the agreed facts, its meaning will have to be determined on the basis of the testimony of appropriate witnesses so that findings as to the intention of the parties can be made.

Plaintiff’s motion and defendant’s cross-motion for summary judgment are denied.

It is so ordered.

      . Unless otherwise noted the facts discussed here are drawn from the parties’ Stipulation of Facts, filed Nov. 1, 1983 (hereinafter "Stipulation of Facts").

      . Buckeye and TPGC agreed that the cottonseed oil was to be delivered F.O.B. vessel, Houston. TPGC’s contract with its Egyptian purchaser provided for the sale of the oil on C & F Alexandria terms. See Stipulation of Facts ¶¶ 4 & 6.

      . See Plaintiff's Memorandum of Law in Support of Its Motion for Summary Judgment, filed Nov. 1, 1983, at 6-7.

      . Credit Lyonnais also advised TPGC of the late presentation and TPGC responded by noting that it had already been paid by the Egyptian purchaser and that this money had been credited to debts owed by TPGC to Credit Lyonnais. TPGC did state that it was prepared to sign notes so as to permit Credit Lyonnais to pay Buckeye. Credit Lyonnais, however, believed that TPGC would be unable to repay an additional $2.5 million loan and declined to follow this procedure. See Stipulation of Facts ¶¶ 24-25.

      . This policy remained in force until March 31, 1979 when it was replaced by a new policy which was cancelled for reasons unrelated to this case. See Stipulation of Facts ¶ 1.

      . See Plaintiff's Exhibit 6 in Support of Its Motion for Summary Judgment, filed Nov. 1, 1983 (hereinafter "Plaintiff's Exhibit —”).

      . The policy is reprinted in Plaintiff’s Exhibit 1. Clause 3 provides in relevant part:
      To cover goods and/or merchandise of every description, ... shipped by or to the Assured [ (Proctor & Gamble) ] or by or to others for the Assured’s account or in which the Assured may have an interest in any way....
      Clause 27 further states in relevant part:
      ON SHIPMENTS SOLD ON SIGHT DRAFT TERMS-PAYMENT AGAINST DOCUMENTS—Notwithstanding anything to the contrary contained herein, this policy covers the Assured against loss or damage (by perils covered by this policy) to merchandise insured hereunder until the documents have been taken up by the consignees and actual payment made by them but not after delivery into consignees’ warehouse____

      . Clause 31(A) provides in relevant part:
      This policy is extended to cover the interest of The Buckeye Cellulose Corporation with respect to export shipments sold on F.A.S., F.O.B. or similar terms whereby insurance for the ocean voyage by others than the Assured [ (Proctor & Gamble) ]. This insurance to attach at the time title and risk of loss passes to the buyer and covers continuously thereafter, subject to all the terms and conditions of this policy, until the Assured receives payment and/or an irrevocable letter of credit is opened in the name of the Assured whichever first occurs. (Emphasis added).

      . Atlantic also challenges the "all risk” scope of coverage found in Clause 12(A) because it is contradicted by the language found in Clause 12(D). It is unclear, however, whether 12(D) remains in force in light of multiple endorsements to the policy, most notably Endorsement No. 18 dated July 30, 1971 which cancelled earlier endorsements amending the provision. As a result, we do not attribute any weight to Atlantic’s argument in the absence of a persuasive explanation of the effect of these endorsements upon the scope of the policy.


source: Caselaw Access Project

author: LUONGO, Chief Judge.

license: Public Domain

text:
    Ramon CAMACHO v. COVE TRADER, INC. and Cove Shipping, Inc.
    Civ. A. No. 85-1816.
    United States District Court, E.D. Pennsylvania.
    July 15, 1985.
    Simon W. Tache, Philadelphia, Pa., for plaintiff.
    A. Robert Degen, Philadelphia, Pa., for defendants.
   OPINION

LUONGO, Chief Judge.

Plaintiff Ramon Camacho is a seaman who was discharged from service aboard the SS “Cove Trader,” a ship owned and operated by defendants. He brought this action in the Philadelphia County Court of Common Pleas, alleging that he had been wrongfully deprived of wages. Defendants, invoking the diversity jurisdiction of the federal courts, 28 U.S.C. § 1332, removed the action to this court under 28 U.S.C. § 1441. Presently before me are plaintiff’s motion to remand the case to state court and defendants’ motion to amend their removal petition. In addition, the parties have moved for imposition of sanctions under Fed.R.Civ.P. 11. For the reasons stated below, I will deny plaintiff's motion to remand and grant defendants' motion to amend. I disposed of the parties’ motions for sanctions at time of oral argument, and will make no further comment concerning those motions at this time.

Under 28 U.S.C. § 1333, the district courts have original and exclusive jurisdiction of civil admiralty or maritime cases, “saving to suitors in all cases all other remedies to which they are otherwise entitled.” As the parties recognize, this action was properly brought in state court pursuant to the “saving to suitors” clause of § 1333(1). See Leon v. Galceran, 78 U.S. 185, 20 L.Ed. 74 (1871); 1 Benedict on Admiralty § 123 at 8-9 (7th ed. 1985). The question raised by plaintiff’s motion to remand is whether an action brought in state court pursuant to this provision can be removed to federal court on grounds of diversity of citizenship.

In support of his motion to remand, plaintiff contends that a maritime claim of which a state court has concurrent jurisdiction cannot be removed to federal court. In Romero v. International Terminal Operating Co., 358 U.S. 354, 79 S.Ct. 468, 3 L.Ed.2d 368 (1959), the United States Supreme Court held that a maritime claim properly brought in state court cannot be removed solely on the basis of the federal admiralty and maritime jurisdiction provided for in § 1333. Defendants, however, seek to remove this action not on the basis of § 1333, but on the basis of diversity of citizenship. Romero does not preclude removal of a maritime case where there is an independent basis for federal jurisdiction, such as diversity. See id. at 363, 377, 79 S.Ct. at 475, 482. The Court of Appeals for the Fifth Circuit, recognizing the removability of maritime actions on diversity grounds, has stated:

The “saving to suitors” clause does no more than preserve the right of maritime suitors to pursue nonmaritime remedies. It does not guarantee them a nonfederal forum, or limit the right of defendants to remove such actions to federal court where there exists some basis for federal jurisdiction other than admiralty.

Poirrier v. Nicklos Drilling Co., 648 F.2d 1063, 1066 (5th Cir.1981).

The federal courts have consistently held that federal diversity jurisdiction can be invoked in maritime cases. Continental Casualty Co. v. Canadian Universal Insurance Co., 605 F.2d 1340, 1344 (5th Cir.1979), cert. denied, 445 U.S. 929, 100 S.Ct. 1317, 63 L.Ed.2d 762 (1980); Pryor v. American President Lines, 520 F.2d 974, 976-77 (4th Cir.1975), cert. denied, 423 U.S. 1055, 96 S.Ct. 787, 46 L.Ed.2d 644 (1976); Jordine v. Walling, 185 F.2d 662, 667 (3d Cir.1950); Metropolitan Dade County v. One (1) Bronze Cannon, 537 F.Supp. 923, 927 (S.D.Fla.1982); Pacific Far East Line, Inc. v. Ogden Corp., 425 F.Supp. 1239, 1242-43 (N.D.Cal.1977); Eastern Steel & Metal Co. v. Hartford Fire Insurance Co., 376 F.Supp. 763, 765 (D.Conn.1974); Monarch Industrial Corp. v. American Motorists Insurance Co., 276 F.Supp. 972, 978 (S.D.N.Y.1967). See also 1A J. Moore, Moore’s Federal Practice ¶ 0.167[3.-3] at 469 (2d ed. 1985). Even the cases cited in plaintiff’s memorandum of law expressly support the proposition that maritime cases can be removed to federal court on diversity grounds. See J.J. Ryan & Sons, Inc. v. Continental Insurance Co., 369 F.Supp. 692, 695-97 (D.S.C.1974); Hill v. United Fruit Co., 149 F.Supp. 470, 472 (S.D.Cal.1957).

In further support of his motion to remand, plaintiff contends that defendants’ removal petition is fatally defective. The petition alleges that each defendant is a New York corporation with its principal place of business in New York, but fails to set forth plaintiff’s citizenship. The allegation that plaintiff is a resident of Pennsylvania does not meet the jurisdictional requirement of 28 U.S.C. § 1332(a). See, e.g., Guerrino v. Ohio Casualty Insurance Co., 423 F.2d 419, 421 (3d Cir.1970). Defendants seek leave to amend the removal petition to allege that plaintiff is a citizen of Pennsylvania.

Because the 30-day filing deadline has expired, defendants may amend their removal petition under 28 U.S.C. § 1653 only to cure technical defects and faulty allegations, not to supply missing allegations. See D.J. McDuffie, Inc. v. Old Reliable Fire Insurance Co., 608 F.2d 145, 146-47 (5th Cir.1979), cert. denied, 449 U.S. 830, 101 S.Ct. 97, 66 L.Ed.2d 35 (1980); Harper v. National Flood Insurers Association, 494 F.Supp. 234, 236 (M.D.Pa.1980). I agree with defendants that the error in their petition is, in the context of the petition as a whole, a technical defect. The removal petition clearly states that defendants were seeking removal on the basis of diversity of citizenship. Defendants now seek only to allege more specifically the plaintiff’s citizenship, not to set forth a ground for federal jurisdiction that was missing in the original petition.

The cases cited in plaintiff’s memoranda do not persuade me that leave to amend should be denied. Plaintiff cites Yarbrough v. Blake, 212 F.Supp. 133, 137 (W.D.Ark.1962), and Thompson v. Gillen, 491 F.Supp. 24, 27-29 (E.D.Va.1980), for the proposition that a defendant should not be permitted to amend a removal petition which alleges the parties’ residence rather than their citizenship. In both cases, however, a jurisdictional allegation was entirely absent, since the petitions did not state that removal was based upon diversity of citizenship.

Plaintiff has also cited authority supporting a more restrictive view of the right to amend a removal petition. See Van Horn v. Western Electric Co., 424 F.Supp. 920 (E.D.Mich.1977). Although I recognize that the federal courts have only limited jurisdiction on removal, I will not adopt a view which, in the words of the Tenth Circuit Court of Appeals, is

too grudging with reference to the controlling statute, [28 U.S.C. § 1653], too prone to equate imperfect allegations of jurisdiction with the total absence of jurisdictional foundations, and would tend unduly to exalt form over substance and legal flaw-picking over the orderly disposition of eases properly committed to federal courts.
... Without questioning that removal requirements should be strictly applied, the statute authorizing correction of defects by amendment to conform to the true facts should not be dissipated in the process, but should be given practical effect in accordance with its apparent intent.

Hendrix v. New Amsterdam Casualty Co., 390 F.2d 299, 301-02 (10th Cir.1968) (footnotes omitted). See also Kinney v. Columbia Savings & Loan Association, 191 U.S. 78, 24 S.Ct. 30, 48 L.Ed. 103 (1903); Armada Coal Export, Inc. v. Interbulk, Ltd., 726 F.2d 1566, 1568 (11th Cir.1984); D.J. McDuffie, Inc. v. Old Reliable Fire Insurance Co., 608 F.2d 145, 146-47 (5th Cir.1979), cert. denied, 449 U.S. 830, 101 S.Ct. 97, 66 L.Ed.2d 35 (1980); Kingman v. Sears, Roebuck & Co., 526 F.Supp. 1182, 1185-86 (D.Me.1981); Harper v. National Flood Insurers Association, 494 F.Supp. 234, 235-36 (M.D.Pa.1980); Board of Education v. Travelers Indemnity Co., 486 F.Supp. 129, 130 (D.Md.1980); Powell v. Sterling Drugs, Inc., 455 F.Supp. 369, 370 (E.D.Mich.1978); McGuigan v. Roberts, 170 F.Supp. 372, 373-74 (S.D.N.Y.1959).

A footnote in Perks v. Firestone Tire & Rubber Co., 611 F.2d 1363 (3d Cir.1979), gives some indication that the Third Circuit would approve the Hendrix approach. In Perks, the court upheld the sufficiency of a removal petition which stated only that plaintiff and defendant were “citizens of different states.” Because the complaint set forth facts which established diversity of citizenship, the court held that the petition need not be amended. The court clearly implied, however, that amendment would be permissible under 28 U.S.C. § 1653. Id. at 1366 n. 8 (citing Wymard v. McCloskey & Co., 342 F.2d 495 (3d Cir.), cert. denied, 382 U.S. 823, 86 S.Ct. 52, 15 L.Ed.2d 68 (1965)).

Defendants’ removal petition clearly states that it is based upon diversity of citizenship. Plaintiff has not suggested that diversity is absent, nor that he would be prejudiced if the petition is amended. I will grant defendants leave to amend their petition for removal.

ORDER

This 15th day of July, 1985, it is

ORDERED that:

1. Plaintiff’s Motion to Remand is DENIED;

2. Defendants’ Motion for Leave of Court to Amend Petition for Removal is GRANTED; and

3. The parties’ Motions for Sanctions are DENIED.

      . Under 28 U.S.C. § 1446(b), a petition for removal must be filed within 30 days after the defendant receives a copy of the initial pleading setting forth a claim for relief. Plaintiff's complaint was served upon the instant defendants in early March of 1985.

      . Section 1653 provides: “Defective allegations of jurisdiction may be amended, upon terms, in the trial or appellate courts."


author: SPRIZZO, District Judge:

text:
    Sandy BECK, Petitioner, v. SURO TEXTILES, LTD., Respondent.
    No. 84 Civ. 6206 (JES).
    United States District Court, S.D. New York.
    July 15, 1985.
    Kreindler & Relkin, P.C., New York City, for petitioner; Kenneth A. Schulman, Bruce S. Nathan, Lori B. Cohen, New York City, of counsel.
    Levy, Sonet & Siegel, New York City, for respondent; Alan M. Siegel, Stephen B. Schulman, New York City, of counsel.
   OPINION AND ORDER

SPRIZZO, District Judge:

Petitioner Sandy Beck seeks to stay an arbitration sought by respondent Suro Textiles Ltd. (“Suro”). Beck contends that he may not properly be compelled to arbitrate because he did not sign and was not a party to the arbitration agreement, which he alleges was between his corporate entity, It’s My Turn, Inc., and the respondent. In sum, he concedes an obligation to arbitrate on behalf of the corporate entity, but denies an obligation to arbitrate personally. See Petition in Support of Application to Stay Arbitration (“Petition”) at U 7.

Suro argues that petitioner was in fact a proper party to the arbitration agreement. In so doing, respondent relies upon the purchase orders in issue. See Exhibit A to Answering Affidavit in Opposition to the Order to Show Cause to Stay Arbitration (“Answering Affidavit”). Respondent maintains that petitioner signed at least one purchase order personally, see id., and did not therein indicate that he was signing as an agent for any corporate entity. In further support of its contention, Suro refers to a letter dated April 13, 1984, addressed to Suro, and signed by Sandy Beck. This letter contains no indication that it was executed by Beck as an agent for or on behalf of the corporate entity. See Exhibit D to Answering Affidavit.

Where a contract is signed by an agent who does not indicate therein that he is signing as an agent on behalf of a disclosed principal, the agent is deemed to be contracting on his own behalf. See, e.g., Orient Mid-East Lines v. Albert E. Bowen, Inc., 458 F.2d 572, 575-76 (2d Cir.1972); Special Sections, Inc. v. Rappaport Co., 25 A.D.2d 896, 896, 269 N.Y.S.2d 319, 319 (3d Dep’t.1966); Unger v. Travel Arrangements, Inc., 25 A.D.2d 40, 47, 266 N.Y.S.2d 715, 722 (1st Dep’t. 1966); see also Restatement (Second) of Agency §§ 4, 321, 322 (1957).

Here, all three purchase orders contained the arbitration agreement. One of those purchase orders was signed by Sandy Beck, with no indication that he was executing the document on behalf of the corporate entity. See Exhibit A to Answering Affidavit (Purchase Order dated “1/25/84”). Neither of the other two purchase orders contains any indication that it was signed by Beck as an agent. See id. (unsigned Purchase Orders dated “2/29/84” and “4/9/84”). The documents do not therefore support petitioner’s claim that he is not bound by the arbitration agreement contained in the purchase order which he signed. See In Re Rieger, 34 Misc.2d 359, 228 N.Y.S.2d 242 (Sup.Ct.1962). Moreover, although Sandy Beck has submitted affidavits dealing with the facts surrounding the incorporation of It’s My Turn, Inc., see Exhibit B to Petition, he has not by affidavit supported his claim that he signed the purchase orders as an agent. This failure is especially significant since the documents submitted to the Court clearly demonstrate that It’s My Turn, which is the name appearing on those purchase orders along with the name of the petitioner, is a trade name under which Sandy Beck has done business. See Exhibit B to Answering Affidavit.

It follows that since petitioner has failed to demonstrate that he is not bound by the arbitration agreement he signed, his application to stay arbitration must be denied.

It is SO ORDERED.

      . The Purchase Order dated "1/25/84" refers to “It’s My Turn/Sandy Beck" as the purchaser. The Purchase Order dated "2/29/84" refers to “Sandy Beck/It’s My Turn" as the purchaser. The Purchase Order dated "4/9/84" lists "Sandy Beck & Associates" and "It's My Turn" as the purchaser(s) under the same heading, "Sold To,” which denotes the purchasers in the other two Purchase Orders. See Exhibit A to Answering Affidavit.


author: BALDOCK, District Judge.

text:
    Randol NICHOLS, Plaintiff, v. UNITED STATES of America, Defendant.
    No. CIV 84-1810 BB.
    United States District Court, D. New Mexico.
    July 17, 1985.

      David Duhigg, Duhigg & Cronin, Leon J. Thomas, Albuquerque, N.M., for plaintiff.
    William L. Lutz, U.S. Atty., James D. Tierney, Asst. U.S. Atty., Albuquerque, N.M., for defendant.
   MEMORANDUM OPINION

BALDOCK, District Judge.

This matter comes on for consideration of defendant’s Motion to Dismiss, filed March 21, 1985. The court, having considered the memoranda submitted by the parties, the oral arguments of counsel, the relevant law, and otherwise being advised fully in the premises, finds that the motion is well taken and should be granted.

This action was brought by the plaintiff pursuant to the Federal Tort Claims Act, 28 U.S.C. § 2671, et seq. The Act waives sovereign immunity only for injuries “caused by the negligent or wrongful act or omission of any employee of the Government while acting within the scope of his office or employment ____” 28 U.S.C. § 1346(b). Plaintiff, a security guard for Teledyne Economic Development Company, was bitten by Gerald L. Lopez, a Job Corps enrollee, at the Albuquerque, New Mexico, Job Corps Center. Mr. Lopez was at the Job Corps Center in an intoxicated condition and was being escorted to an isolation area in handcuffs by plaintiff when the incident occurred.

Mr. Lopez, as a Job Corps enrollee, is considered a federal employee for purposes of the Federal Tort Claims Act. 29 U.S.C. § 1706(a)(3). Because the alleged tort occurred in New Mexico, whether Mr. Lopez was acting within the scope of his employment is determined by the law of New Mexico. Williams v. U.S., 350 U.S. 857, 76 S.Ct. 100, 100 L.Ed. 761 (1955) (per curiam). In New Mexico, an act of an employee is within the scope of his employment if:

1. It was something fairly and naturally incidental to the employer’s business assigned to the employee, and
2. It was done while the employee was engaged in the employer’s business with the view of furthering the employer’s interest and did not arise entirely from some external, independent and personal motive on the part of the employee.

N.M.U.J.I.Civ. 4.7. Scope of Employment Definition; Samedan Oil Co. v. Neeld, 91 N.M. 599, 603, 577 P.2d 1245 (1978). The purpose of Job Corps and, consequently, the governmental employer’s business, is “to assist young individuals who need and can benefit from an unusually intensive program, operated in a group setting, to become more responsible, employable, and productive citizens; and to do so in a way that contributes, where feasible, to the development of national, State, and community resources, and to the development and dissemination of techniques for working with the disadvantaged that can be widely utilized by public and private institutions and agencies.” 29 U.S.C. § 1691.

As already noted, Mr. Lopez was intoxicated, was handcuffed, and was being led to an isolation area. Being in an intoxicated condition and requiring isolation certainly cannot be considered in furtherance of the purposes of the Job Corps Act. The unfortunate event that led to the amputation of plaintiff’s finger, therefore, does not fall within the federal government’s waiver of sovereign immunity. Defendant’s motion will be granted. An order will be entered accordingly.


text:
    The INSURANCE COMPANY OF the STATE OF PENNSYLVANIA and Starr Associates, Inc., Plaintiffs, v. J.L. KELLEY, INC., Joseph L. Kelley, and Presidio Insurance Company, Defendants.
    No. 83 Civ. 6839(MEL).
    United States District Court, S.D. New York.
    July 18, 1985.
    Michael S. Davis, New York City, for plaintiffs.
    Ford Marrin Espositio & Witmeyer, New York City (Elizabeth M. DeCristofaro, New York City, of counsel), for defendants J.L. Kelley Inc. and Joseph L. Kelley.
    Davis Markel Dwyer & Edwards, New York City (Jay E. Gerber, New York City, of counsel), for defendant Presidio Ins. Co.
   LASKER, District Judge.

This action arises out of an attempt by plaintiffs, the Insurance Company of the State of Pennsylvania and its managing general agent, Starr Associates (hereinafter collectively referred to as “ISOP”), to obtain contracts of reinsurance on a group of its policies. To that end, ISOP engaged an intermediary, J.L. Kelley, Inc. and Joseph L. Kelley (hereinafter collectively referred to as “Kelley”), to find reinsurers willing to purchase shares in a specific group of policies. One of the reinsurers Kelley approached for this purpose was defendant Presidio Insurance Co. (hereinafter referred to as “Presidio”). ISOP sought to recover from Presidio that share of the losses sustained on the policies allegedly covered by the contract of reinsurance with Presidio, and when ISOP’s demand for payment received no response, ISOP commenced this suit.

Three motions are now pending. Presidio moves for summary judgment dismissing the complaint on the ground that no reinsurance contract existed between itself and ISOP. ISOP moves for summary judgment, seeking' indemnification from Kelley, in the event no contract is found to exist. Kelley moves for summary judgment, claiming that its actions are irrelevant since ISOP’s failure to pay any premiums to Presidio caused a breach of any contract alleged. For the reasons set forth below, the motions are denied.

Presidio argues that no contract existed between itself and ISOP because the parties engaged only in a series of counter-offers. To show the absence of a contract, Presidio contends that material differences exist between the two proposals made to it in contemplation of a contract for reinsurance. It appears that these proposals were to form the basis for the terms of the reinsurance contract, yet when approached by Kelley in 1980, the proposal made to Presidio had different terms from the proposal made when Kelley approached Presidio in 1981. In addition, Presidio claims that no formal contract was ever signed and that premiums that would have been owing under a reinsurance agreement were never made.

ISOP moves for summary judgment against Kelley on an indemnity theory in the event it is established that no contract existed between Presidio and ISOP. ISOP asserts that Kelley misrepresented the existence of the contract between Presidio and ISOP, and that Kelley, as intermediary, is liable for indemnification to ISOP for that share of the losses it represented had been undertaken by Presidio.

Kelley opposes ISOP’s motion and moves for summary judgment dismissing the complaint, arguing that a contract did in fact exist between ISOP and Presidio, but that ISOP breached this contract due to its failure to pay premiums that were owing under its terms. As a result, Kelley contends that it is not liable for misrepresentation.

All of the above motions are denied because there remain in dispute genuine issues of material fact: specifically, whether a contract was ever entered into by Presidio and ISOP and whether, if such contract did exist, a breach occurred because payment was never made under the contract’s terms or pursuant to methods practiced by the industry.

The parties dispute whether their negotiations resulted in a contract and the documents submitted create a question of fact as to whether there was a meeting of the minds. While it is possible to grant summary judgment when the parties are in dispute as to whether a contract has been entered into via correspondence, see, e.g., United States v. Braunstein, 75 F.Supp. 137 (S.D.N.Y.1947) (offer and acceptance didn’t mirror each other, leading the court to grant summary judgment finding that no contract was entered into), in this ease, determination of the intent of the parties is necessary to decide whether or not a contract existed because of the ambiguous nature of the correspondence between Presidio and Kelley documenting their negotiations. As in Ralli v. Tavern on the Green, 566 F.Supp. 329 (S.D.N.Y.1983), the determination of intent, and therefore of whether a contract exists, “should not be resolved as a matter of law when [it] depends on ... a choice among reasonable inferences.” Id. at 331.

As to Kelley’s motion, if the existence of a contract is established, it would seem to be an easy matter to determine whether ISOP made premium payments to Presidio. However, this question is complicated by the fact that ISOP employed accounting procedures which it claims are “typical practice” in the reinsurance industry. These procedures raise a question of fact as to whether payment of the premiums had been made at all. A determination must be made of whether the set-off method of payment described by ISOP is indeed “typical practice” and sufficient to constitute payment of premiums. This determination is not an appropriate one for summary judgment because of its factual nature.

Decision on ISOP’s motion for indemnification from Kelley is reserved, pending a determination of whether Presidio and ISOP entered into a contract.

For the foregoing reasons, summary judgment is denied on the motions of Presidio and Kelley and decision is reserved on ISOP’s motion for summary judgment against Kelley.

It is so ordered.


author: EDWARD WEINFELD, District Judge.

text:
    Raymond WERNER, Plaintiff, v. Margaret M. HECKLER, Secretary of Health and Human Services, Defendant.
    No. 84 Civ. 3858.
    United States District Court, S.D. New York.
    July 18, 1985.
    Freedman, Wagner, Tabakman & Weiss, New City, for plaintiff; Lewis B. Insler, New York City, of counsel.
    Rudolph W. Giuliani, U.S. Atty. for S.D. N.Y., New York City, for defendant; Neal S. Mann, Sp. Asst. U.S. Atty., New York City, of counsel.
   OPINION

EDWARD WEINFELD, District Judge.

Plaintiff seeks to review the denial by the Administrative Law Judge of his application for disability insurance benefits under Title II of the Social Security Act. Plaintiff failed to file a timely appeal within the sixty days allowed under § 205(g) of the Act. The Appeals Council issued an order dismissing his untimely appeal, stating that plaintiff had not shown good cause to extend the time for filing. Thereafter, plaintiff commenced this action. Presently before this court are defendant’s motion to dismiss the complaint and plaintiff's motion to remand to the Appeals Council for reopening of the decision.

Plaintiff contends that the failure to file within the sixty day period was caused by his counsel’s difficulty in acquiring medical records intended to support the claim before the AU and the Appeals Council. Plaintiff’s medical situation appears to have deteriorated during the course of the proceedings; plaintiff underwent a complete hip replacement procedure after the order of the Appeals Council, and was subsequently granted disability benefits without a hearing. At issue now is plaintiff’s claim to back benefits from August 1978 until an unspecified date after March 1984 on which plaintiff began receiving disability benefits.

The Secretary contends that the decision of the Appeals Council to dismiss an appeal for untimely filing is not a final determination of the Secretary within the meaning of § 205(g), and thus that this court lacks subject matter jurisdiction. This position is entirely consistent with the decision of our Court of Appeals in Maloney v. Harris.' The plaintiff in Maloney had also filed an untimely appeal; the district court held that plaintiff had not exhausted his administrative remedies and dismissed for want of jurisdiction.

The ruling in Maloney was reiterated by the Court of Appeals in Dietsch v. Schweiker, In Dietsch the district court dismissed for want of jurisdiction after plaintiff had mailed his request for review on the last day of the sixty-day period and the Appeals Council had dismissed for untimeliness. The Court of Appeals noted that “such a dismissal is not reviewable by the district court because it is not a ‘final decision’ within the meaning of § 405(g).”

The plaintiff here attempts to distinguish Maloney on the factual grounds of the plaintiff’s hospitalization shortly after the ALJ’s original decision and the subsequent failure by the Administrative Law Judge to reconsider his decision in light of the changed circumstances. These are distinctions without differences. The changes in the plaintiff’s circumstances are germane to the continuing responsibility of the Social Security Administration to review his state of disability; it has done so and he is now receiving benefits. They are not germane to the exhaustion question, or to the legal determination as to whether a decision of the Secretary is final. The statute establishes a procedure for the orderly review of disability determinations; an essential element of that procedure is the sixty-day period for filing with the Appeals Council. As the Supreme Court has said: “Congress’ determination so to limit judicial review ... is a policy choice obviously designed to forestall repetitive or belated litigation of stale eligibility claims. Our duty, of course, is to respect that choice.”

For the foregoing reasons, defendant’s motion to dismiss the complaint is granted, and plaintiff’s motion to remand is denied.

So ordered.

      . 42 U.S.C. § 405(g) (1983). The section provides, in pertinent part, that "[a]ny individual, after any final decision of the Secretary made after a hearing to which he was a party ... may obtain a review of such decision by a civil action commenced within sixty days ... or within such further time as the Secretary may allow.” Section 405(h) makes this procedure the exclusive mechanism for challenging the decisions of the Secretary.

      . 526 F.Supp. 621 (E.D.N.Y.1980), aff'd mem, 657 F.2d 264 (2d Cir.1981).

      . 700 F.2d 865 (2nd Cir.1983).

      . 700 F.2d at 867. The Court reversed on other grounds, however, holding that it was within the mandamus jurisdiction of the district court to require the Secretary to hear the appeal, since the procedural structure of the Social Security Administration equated mailing with filing. The Court sharply distinguished between this permissible procedural claim and review on the merits of the Secretary’s decision. 700 F.2d at 868.

      . Plaintiff’s contention that the ALJ’s failure to reconsider his determination should be grounds for judicial review is clearly foreclosed by the decision of the Supreme Court in Califano v. Sanders, 430 U.S. 99, 97 S.Ct. 980, 51 L.Ed.2d 192 (1977), holding that review of a denial of reconsideration is not authorized under 42 U.S.C. § 405(g).

      . Califano v. Sanders, 420 U.S. 99, 108, 97 S.Ct. 980, 985, 51 L.Ed.2d 192 (1977).


author: GENE CARTER, District Judge.

text:
    Jeannette M. NORTON, Plaintiff, v. Margaret HECKLER, Secretary of Health & Human Services, Defendant.
    Civ. No. 84-0382 P.
    United States District Court, D. Maine.
    July 18, 1985.

      Robert J, Jacobs, York, Me., for plaintiff.
    Paula D. Silsby, Asst. U.S. Atty., Portland, Me., for defendant.
   ORDER REMANDING ACTION TO THE SECRETARY

GENE CARTER, District Judge.

This action is brought under section 205(g) of the Social Security Act [Act], 42 U.S.C. § 405(g), to review the final determination of the Secretary of Health and Human Services [Secretary], denying the Plaintiff’s application for Supplemental Security Income [SSI]. Plaintiff filed an application for SSI on July 8, 1983, alleging an inability to work due to hypertension, depression, bursitis, and headaches. The application was denied initially and upon reconsideration. A de novo hearing was held on February 15, 1984, before a Social Security Administration administrative law judge [ALJ], and on May 25, 1984, the ALJ found that Plaintiff was not disabled within the meaning of the Act. On September 12, 1984, the ALJ’s decision became the “final decision” of the Secretary upon its affirmance by the Appeals Council.

Plaintiff has exhausted her administrative remedies and moves for summary judgment. In the alternative, Plaintiff asks that this Court remand the matter back to the Secretary for consideration of new medical evidence submitted after the Appeals Council’s decision. The Defendant has filed a motion for an order affirming her “final decision,” together with a certified copy of the transcript of the entire record of the proceedings relating to Plaintiff’s application, including the testimony and documentary evidence upon which the decision of the ALJ and Appeals Council were based.

The ALJ in this case determined that Plaintiff was not under a “disability” as defined in the Social Security Act, as amended, because he found Plaintiff did not suffer from any impairment or combination of impairments which imposed significant limitations upon her ability to perform basic work activities. The ALJ found that the Plaintiff suffered from the following medically determinable impairments: (1) status post cancer of the cervix, in remission; (2) vulvar itching; (3) muscle tension headaches; (4) a large ovarian cyst; and (5) mild panic attacks. The ALJ wrote “[t]he evidence fails to persuade me that any of these impairments imposes significant limitations upon the claimant’s ability to perform ... basic work activities.... ” Tr. at 11.

In concluding that the combination of impairments from which Plaintiff suffered did not constitute a “severe” impairment, the ALJ applied Social Security Ruling 82-55, which he quoted in pertinent part as follows:

Inasmuch as a non-severe impairment is one which does not significantly limit basic work-related functions, neither will a combination of two or more such impairments significantly restrict the basic work-related functions needed to do most jobs. However, when a non-severe impairment is imposed upon a severe impairment, the combined effect of all impairments must be considered in assessing [residual functional capacity].

Tr. at 12. This policy states that in making the initial determination as to severity of impairment, the Secretary shall consider each impairment individually, but that in determining residual functional capacity once the severity requirement has been met, the impact of all impairments shall be considered. Following his quotation of the ruling above, the AU wrote: “[t]hus I am constrained to conclude that the claimant’s impairments, considered in combination, also do not impose significant limitations upon her ability to perform basic work activities.” Tr. at 12.

The Social Security Disability Benefits Reform Act of 1984 [Reform Act] enacts a new standard of review for cases involving multiple impairments. Section 4 of the Reform Act provides that, when a claimant has multiple impairments, none of which are individually severe enough to qualify the claimant for benefits, the Secretary shall consider the combined effect of the impairments in determining whether a claimant is disabled. 42 U.S.C. § 423(d) (2)(C). See 42 U.S.C. § 1382c(a)(3)(G), 20 C.F.R. § 416.923 (1985). The statute reversed the Secretary’s prior policy regarding multiple impairments, which was applied by the AU in deciding this Plaintiff’s claim.

The effective date provision of Section 4 of the Reform Act provides:

(c) The amendments made by this section shall apply with respect to determinations made on or after the first day of the first month beginning after 30 days after the date of the enactment of this Act.

The Reform Act was enacted on October 9, 1984. Section 4 therefore applies to all “determinations” made on or after December 1, 1984. The AU’s decision was made on May 25, 1984.

This Court has concluded that Section 4 should be applied by the Court in its “determinations” on review of decisions of the Secretary which were made before the effective date of the Act, based on the statute’s broad language, on Bradley v. Richmond School Board, 416 U.S. 696, 94 S.Ct. 2006, 40 L.Ed.2d 476 (1974), and on the fact that no manifest injustice would result. Boisvert v. Secretary of Health and Human Services, No. 84-0292-P (D.Me. Dec. 14, 1984). Consistent with that conclusion, this Court has also decided that it is appropriate to remand to the Secretary cases decided under the former multiple impairment standard. Id. In Boisvert, as here, the Court was faced with “the option of attempting to apply the new standard to a factual record that was developed with reference to an entirely different standard, or remanding to permit the Secretary to take additional evidence and perform her statutorily-designated factfinding role.” Id., slip op. at 4. The Court determined that a remand was necessary, and this conclusion is equally applicable here.

Accordingly, it is ORDERED that the decision of the Secretary of Health and Human Services is VACATED, and that this case is REMANDED to the Secretary for application of Section 4 of the Social Security and Disability Benefits Reform Act of 1984.

So ORDERED.


author: KOCORAS, District Judge:

text:
    Duke B. KELLY, Plaintiff, v. WAUCONDA PARK DISTRICT, a local Governmental Agency of the State of Illinois, Defendant.
    No. 85 C 1462.
    United States District Court, N.D. Illinois, E.D.
    July 25, 1985.

      Timothy P. Whelan, Locke & Learn, Glen Ellyn, 111., for plaintiff.
    Jeffrey D. Colman, Daniel R. Warren, Jenner & Block, Chicago, III., for defendant.
   MEMORANDUM OPINION

KOCORAS, District Judge:

This matter comes before the court on defendant Wauconda Park District’s motion to dismiss. For the following reasons, the motion will be granted.

Plaintiff Duke Kelly was employed by defendant as a maintenance worker from 1972 until he was terminated on February 15, 1983. He alleges he was discriminatorily terminated on the basis of his age in violation of the Age Discrimination in Employment Act, 29 U.S.C. §§ 621, et seq. (“ADEA”). Defendant has moved to dismiss on the ground that because it is not an “employer” as defined by 29 U.S.C. § 630(b), it is not subject to the provisions of the ADEA.

The ADEA applies to “employers” which it defines as follows:

The term ‘employer’ means a person engaged in an industry affecting commerce who has twenty or more employees for each working day in each of twenty or more calendar weeks in the current or preceding calendar year.

29 U.S.C. § 630(b). When originally enacted in 1967, the ADEA specifically exempted government employers. In 1974, however, Congress amended section 630(b) to include state and local government employers. The 1974 amendment added the following language:

The term [‘employer’] also means ... a State or political subdivision of a State and any agency or instrumentality of a State or a political subdivision of a State

Plaintiff argues that since the amendment does not expressly state that government employers are subject to the statute’s 20-employee minimum, that Congress did not intend to limit the ADEA’s application to state employers with a minimum of 20 employees. The court disagrees. The legislative history of the 1974 amendment, the similarities between it and a parallel amendment of Title VII, and common sense all indicate that Congress did not intend to make the ADEA applicable to government employers of less than 20 employees.

In 1973, the Senate’s Special Committee on Aging recommended that the ADEA be extended to protect government employees because “it is difficult to see why one set of rules should apply to industry and varying standards to government.” Special Committee on Aging, TJ.S. Senate, Improving the Age Discrimination Law, at p. 17 (1973). When the 1974 amendment to the ADEA was enacted, its sponsor, Senator Lloyd Bentson of Texas, observed, “[t]he passage of this measure ensures that Government employees will be subject to the same protection against arbitrary employment [discrimination] based on age as are employees in the private sector.” 120 Cong.Rec. 8768 (1974). Moreover, as the Seventh Circuit noted in EEOC v. Elrod, 674 F.2d 601 (7th Cir.1982), “[t]he final enactment of the ADEA amendment in 1974 completed coverage of public employees on the same basis as private employees.” Id. at 607.

The ADEA followed the same legislative pattern as Title VII. Title VII, like the ADEA, originally applied only to private employers who had the requisite number of employees; Title VII is limited to employers of 15 or more persons. 42 U.S.C. § 2000e(b). The language of the 1972 amendment to Title VII, and the cases applying that amendment clearly establish that Title VII’s 15-employee requirement applies to both private and government employers. 42 U.S.C. § 2000e(b); Rogero v. Noone, 704 F.2d 518, 520 (11th Cir.1983); Dumas v. Town of Mount Vernon, Alabama, 612 F.2d 974, 977 (5th Cir.1980).

The parallel amendments of Title VII and ADEA were clearly motivated by the same legislative purpose. As Senator Bentson explained, the Senate approved the amendment of Title VII in 1972 on the theory “that employees of state and local governments are entitled to the same benefits and protections in equal employment as the employees in the private sector of the economy.” 118 Cong.Rec. 15895 (1972). As Senator Bentsen further stated, “the principles underlying these provisions in the EEOC bill are directly applicable to the Age Discrimination in Employment Act.” Id.

Just as Title VII was amended for the express purpose of ensuring that government and private employers would be subject to the same standards, so does it appear that in amending the ADEA in 1974, Congress intended to expose government employers to the same—though no broader—coverage as that of private employers. There is no reason to presume that Congress intended the ADEA to place state and local government employers on anything other than equal footing as private employers—all of whom are subject to liability under the ADEA only if they have the requisite number of employees. Moreover, it would be unreasonable to presume that Congress intended the Title VII amendment to apply that statute’s numerical employee minimum to government and private employers alike, but did not intend the ADEA amendment to do the same.

Since it is undisputed that the Wauconda Park District has not had more than three employees who have worked five days in each of twenty or more weeks during any calendar year since 1981, the Park District does not meet the ADEA’s definition of employer, a necessary prerequisite to the ADEA’s applicability. For that reason, defendant’s motion to dismiss will be granted.

      . The original § 630(b) thus went on to state: "but such term ['employer'] does not include ... a State or a political subdivision of a State.” 29 U.S.C. § 630(b).

      . The federal courts have recognized the "important similarities” between Title VII and the ADEA in terms of their objectives, substantive prohibitions, and legislative histories. Lorillard v. Pons, 434 U.S. 575, 584, 98 S.Ct. 866, 872, 55 L.Ed.2d 40 (1978); EEOC v. Elrod, 674 F.2d 601, 607 (7th Cir.1982).


author: FOREMAN, Chief Judge:

text:
    Danny MELVIN and Janet Melvin, Individually and as next friend of Shanie Melvin, a Minor, Plaintiffs, v. OLD BEN COAL COMPANY, a corporation, Defendant.
    Civ. No. 84-4343.
    United States District Court, S.D. Illinois, Benton Division.
    July 26, 1985.
    Harold B. Culley, Jr., West Frankfort, 111., for plaintiffs.
    William W. Hart, Jr., Hart & Hart, P.C., Benton, 111., for defendant; Campbell & DiVencenzo, Chicago, 111., Edmund J. Moriarty, Mark M. Pierce, Stephen J. Birek, Jr., Old Ben Coal Co., Lexington, Ky., of counsel.
    Mark A. LaRose, Asst. Atty. Gen., State of 111., Springfield, 111., for 111. Dept, of Mines & Minerals.
   MEMORANDUM AND ORDER

FOREMAN, Chief Judge:

Defendant Old Ben Coal Company has moved this Court to reconsider and clarify its Memorandum and Order of May 24, 1985, wherein the Court held, inter alia, that defendant was subject to the performance standards, including the subsidence control provisions, of the Illinois Permanent Coal Mining Reclamation Program, despite defendant’s status as an interim permittee at the time of the mining at issue and despite the fact that longwall mining is involved in this case. Upon a thorough review of the applicable law, the Court is firmly convinced that its prior analysis was correct in every respect, but the Court shall further address the concerns raised by defendant in an effort to clarify defendant’s misconceptions as to the applicable law and as to the effect of the Court’s prior opinion.

Defendant misconstrues the Court’s prior opinion as mandating an absolute and total prohibition on subsidence caused by coal mining. A careful review of the opinion, however, reveals that the Court did not hold that the Illinois Permanent Coal Mining Reclamation Program, which includes the Surface Coal Mining Land Conservation and Reclamation Act, Ill.Rev.Stat. ch. 96V2, § 7901 et seq. (1983) [“Illinois Permanent Act”] and the Surface Coal Mining Land Conservation and Reclamation Act State Program Rules and Regulations, absolutely prohibits subsidence caused by longwall mining. The Court’s opinion reflected a determination that defendant is required to follow the law as set forth by the Illinois legislature and the rules and regulations promulgated by the Illinois Department of Mines and Minerals in accordance with that law. It is clear that the Illinois Permanent Act allows subsidence under certain circumstances, such as longwall mining, where “the mining technology used requires planned subsidence in a predictable and controlled manner.” Ill.Rev.Stat. ch. 96V2, § 7904.02. This provision, however, does not serve to exempt longwall mine operations from all provisions in the Illinois Program relating to subsidence control. To hold otherwise would grant longwall mine operators a license to unilaterally ignore federal and state law regarding coal mining; this was clearly not the legislative intent behind the coal mining legislation.

Defendant asserts that it does not have a duty to repair subsidence damage to structures because the Illinois structure repair requirements are more stringent than the federal requirements and because plaintiffs’ deed contains a waiver of rights to surface support. According to defendant, the Office of Surface Mining has suspended 30 C.F.R. § 817.121(e)(2), the federal regulation requiring operators to repair subsidence damage to structures. Further, defendant argues that § 817.121(c)(2) merely provided for the repair of subsidence damage “in accordance with State law,” and because Illinois case law historically upheld the validity of waivers, defendant would not have a duty to repair structures under federal law.

Defendant’s argument is misleading in that the portion of § 817.121(c)(2) which was suspended was the phrase “to the extent required by State law.” See 50 Fed. Reg. 7274, 7276, 7278. This phrase had been added in June, 1983, and was suspended in March, 1985. As the Illinois subsidence mitigation requirements found at 62 Ill.Admin.Code § 1817.121 and § 1817.124, mirror 30 C.F.R. § 817.121 and § 817.124 at the time of the mining in question and presently, defendant’s argument is without merit. Further, as noted at 50 Fed.Reg. 7274:

Most State programs were approved prior to the promulgation of the 1983 rules. In a few instances, State program amendments were approved based on the 1983 revision. State programs will remain in effect until the Director of OSM has examined the provisions of each State program to determine whether changes are necessary and has notified the State regulatory authority pursuant to 30 C.F.R. 732.17(d) that a State program amendment is required.

Regarding defendant’s argument that federal law mandates the enforcement of waivers to preclude compensation for damages, the Court notes that:

Section 516(b)(1) of the Act specifically protects the surface environment for the present and future, regardless of ownership. The Act does not contemplate that private parties can, by contract or purchase of resources, avoid the Congressional mandate for environmental and other property protection.
* 4s * * 4s sfc
Several comments on Section 817.124 questioned whether the underground operator should be required to protect surface structures or land in cases where the operator either owns the surface or has a specific waiver of damage. The Office has modified this Section because of the shift of emphasis in subsidence control imperatives but has retained the basic tenets of surface protection for both present and future owners, as mandated by the Act’s requirement for maintenance of the surface’s value and reasonably foreseeable future uses. (Section 516(b)(1) of the Act).
The Office believes that Congress enacted Section 526(b)(1) of the Act in part because State initiative has not in the past adequately met the subsidence damage problem. These rules intend to set the minimum standards for future State regulation. Section 817.124 is appropriate in that is provides options for the operator while providing protection to the surface resources in accordance with the intent of the Act.
The Act recognizes that subsidence cannot always be prevented, but attempts to lessen the effects of subsidence, through planning. Section 817.-124 has been redrafted to strengthen protection of the surface owner and surface values from damages caused by mining.

44 Fed.Reg. 15274-75.

Clearly, the enforcement of waivers regarding subsidence damage is not contemplated by federal coal mining laws and regulations or by the analogous Illinois laws and regulations. The position taken by the Illinois Department of Mines and Minerals that all operators are required to control the adverse effects of subsidence damage by mitigating the same and compensating surface owners for damages does not support defendant’s argument that the subsidence damage waiver is valid and enforceable. As defendant concedes, “Federal courts commonly give great deference to the interpretation of a statute by the agency that is charged with the enforcement or administration thereof, provided the interpretation is consistent with the express Congressional purpose.” Defendant’s Memorandum in Support of Old Ben Coal Company’s Motion for Reconsideration and Clarification, at 9.

That one Illinois circuit court, after this Court rendered its opinion, denied a motion for a preliminary injunction preventing longwall mining in a different action involving different plaintiffs on different land does in no way indicate that the position taken by this Court in the instant case was erroneous. In Phillips v. Old Ben Coal Company, No. 85-CH-7 (Circuit Court of the Second Judicial Circuit, Franklin County, Illinois May 28, 1985), the Circuit Judge ascertained that where the surface owner’s deed contained a waiver of subjacent surface support, ¶ 7904.02 did not serve to prohibit longwall mining. The state court’s holding is not in conflict with this Court's position. The question whether such a waiver would relieve the longwall operator of its duty to compensate surface owners pursuant to the regulations was not before the state court. The Court predicts that when faced with such an issue, the state courts will hold such waivers to be unenforceable as regards the duty to compensate surface owners. Any other construction would render the Illinois legislation and regulations, as well as the federal legislation and regulations, meaningless.

Defendant’s contention that its status as an interim permittee exempted it from following the provisions of the Illinois Permanent Program was conclusively addressed in the Court’s prior opinion. See Melvin v. Old Ben Coal Company, 610 F.Supp. 131, (S.D.Ill.1985). No further clarification of the Court’s prior opinion as to this issue is necessary. The Court notes, however, that while defendant used the Illinois Permanent Act as a shield with which to defend itself against an attack on its authority to operate without having been issued a permanent permit in Phillips v. Old Ben Coal Company, No. 84-4442 (S.D.Ill. Sept. 21, 1984), defendant now attempts to prevent the applicability of the Illinois Permanent Program. In the previous federal Phillips case, this Court found that defendant was authorized under the transition sections of the Illinois Permanent Act to continue operations under an expired interim permit. In reaching this conclusion, the Court specifically addressed the question whether defendant was in compliance with the permanent state and federal programs. Had defendant not been found to be in compliance, a different result may have been reached in Phillips.

To sum, the Court’s current position is consistent with its prior decision in Phillips v. Old Ben Coal Company, No. 84-4442 (S.D.Ill. Sept. 21, 1984), and the state court decision in Phillips v. Old Ben Coal Company, No. 85-CH-7 (Circuit Court of the Second Judicial Circuit, Franklin County, Illinois, May 28, 1985). Defendant’s position that the longwall mining exemption from the prohibition against causing subsidence serves to exempt longwall mine operators from other laws and regulations regarding coal mining was and is appropriately rejected.

Accordingly, defendant’s Motion to Reconsider and Clarify (Document No. 34) is hereby GRANTED IN PART, insofar as this Court has clarified its position herein, and DENIED IN PART, insofar as the Court affirms its prior Memorandum and Order.

IT IS SO ORDERED.


author: GASCH, Presiding Judge:

text:
    Glen D. BOETTJER, Gary A. Carpenter and United Transportation Union, by Hugh A. Cobb, General Chairman (C & O—Proper), Plaintiffs, v. CHESAPEAKE AND OHIO RAILWAY COMPANY, Defendant.
    Civ. A. No. 83-5.
    Special Court, Regional Rail Reorganization Act.
    July 9, 1985.

      Nelson G. Grills, Indianapolis, Ind., for plaintiffs Glen D. Boettjer, et al.
    D. Christopher Ohly, H. Russell Smouse, Melnicove, Kaufman, Weiner & Smouse, P.A., Baltimore, Md., Nicholas S. Yovanovic, Chesapeake and Ohio Ry. Co., Cleveland, Ohio, for defendant Chesapeake and Ohio Ry. Co.
    Before GASCH, Presiding Judge, and BRYANT and WEINER, Judges.
   MEMORANDUM

GASCH, Presiding Judge:

This is an action for declaratory, injunctive and other relief arising out of defendant Chesapeake and Ohio Railway Company’s alleged violation of the Indiana Minimum Crew Law and a 1982 crew consist agreement between plaintiff The United Transportation Union and defendant. Presently before the Court are the parties’ cross motions for summary judgment.

BACKGROUND

As amended in 1972, Indiana’s Minimum Crew Law provides that a carrier may operate within Indiana freight trains consisting of more than 70 cars with fewer than six crew members if the Indiana Public Service Commission (“PSC”) determines, after notice and hearing, that a crew of fewer than six persons is provided for by a collective bargaining agreement between the carrier and a labor organization and is adequate for safe train operations. The law further provides that train carriers shall employ six-man crews to the extent necessary to provide continued employment at the governing terminal for employees with a seniority date on or before the date of the law’s 1972 amendment and for whom no other employment is available in freight train or switching service. Indiana Code § 8-9-2-10 (1972).

The crew consist agreement between the Union and the Railway, effective June 14, 1982, provides that “[t]he protection against furlough for employees protected under preexisting crew consist agreements is preserved.” Prior crew agreements included the protections under the Indiana Minimum Crew Law.

In June 1982, the union filed a complaint with the Indiana PSC on behalf of its union members alleging that the Railway’s discontinuance of employment of third brakemen on trains with more than 70 cars operating in Indiana violated the Indiana Minimum Crew Law and the 1982 crew consist agreement between the Union and the Railway. After this action was filed, the Indiana PSC dismissed the Union’s complaint with leave to refile if this Court finds that Section 711 of the Northeast Rail Service Act of 1981 does not deny the Indiana PSC authority to determine whether train crews of specific sizes must be used in Indiana.

DISCUSSION

Plaintiffs raise several constitutional challenges to Section 711 of the Regional Rail Reorganization Act of 1973 (“3R Act”), as amended by the Northeast Rail Service Act of 1981 (“NRSA”), 45 U.S.C. § 797j. Plaintiffs apparently contend that Section 711 does not preempt Indiana’s Minimum Crew Law, and that Section 711 deprives them of the protections of the Indiana law in violation of the tenth amendment and the due process and equal protection principles of the fifth amendment. Defendant argues that Congress expressly intended to preempt state minimum crew laws such as Indiana’s, that Congress validly exercised its power under the Commerce Clause in preempting state minimum crew laws, and that Section 711 does not violate plaintiffs’ fifth amendment rights.

Plaintiffs’ claims do not require elaborate discussion as this Court recently ruled on virtually identical claims. As to plaintiffs’ preemption argument, it is well settled that “when acting within its constitutional limits, Congress is empowered to pre-empt state law by so stating in express terms.” Hillsborough County v. Automated Medical Laboratories, Inc., — U.S.-, 105 S.Ct. 2371, 2375, 85 L.Ed.2d 714 (1985); see also Jones v. Rath Packing Company, 430 U.S. 519, 525, 97 S.Ct. 1305, 1309, 51 L.Ed.2d 604 (1977). The language of Section 711 makes it unequivocally clear that Congress expressly intended to preempt state minimum crew laws such as Indiana’s. Indeed, this Court so held in Keeler v. Consolidated Rail Corporation, 582 F.Supp. 1546 (Regional Rail Reorg.Ct. 1984); see also Norfolk and Western Railway Company v. Public Utilities Commission of Ohio, 582 F.Supp. 1552 (Regional Rail Reorg.Ct.1984) (Ohio full crew law preempted by Section 711).

In Norfolk and Western Railway Company, this Court also rejected the argument that Section 711 applies only to Conrail, holding that the prohibition against state enforcement of full crew laws covers all “railroads” in the “Region.” 582 F.Supp. at 1556. As defined by NRSA, “Region” includes the State of Indiana and “railroad” includes the defendant Railway. 45 U.S.C. § 702(17), (15).

Plaintiffs’ due process and equal protection challenges to Section 711 are based primarily on the argument that such provision deprives non-Conrail employees of the protections under the Indiana Minimum Crew Law without providing the alternative benefits available to Conrail employees. In Norfolk and Western Railway Company, this Court rejected the same argument, finding that Section 711 is rationally related to the 3R Act’s and NRSA’s purpose of preserving essential rail service in the Northeast and Midwest Regions. 582 F.Supp. at 1557-58.

Plaintiffs also contend that somehow Section 711 violates the tenth amendment, apparently arguing that it is an invalid exercise of congressional power under the Commerce Clause because state-mandated minimum crews designed to ensure safe train operations are exempt from federal regulation. Plaintiffs rely principally on National League of Cities v. Usery, 426 U.S. 833, 840, 96 S.Ct. 2465, 2468, 49 L.Ed.2d 245 (1976), which established a four-part test to determine whether a state activity is immune from federal regulation under the Commerce Clause. The Supreme Court recently overruled National League of Cities in Garcia v. San Antonio Metropolitan Transit Authority, — U.S.-, 105 S.Ct. 1005, 83 L.Ed.2d 1016 (1985), which held that the defendant transit authority was not immune from the minimum wage and overtime requirements of the Fair Labor Standards Act (“FLSA”). Abandoning the “traditional governmental function” test articulated in National League of Cities, the Court reasoned that the FLSA requirements were not “destructive of state sovereignty or violative of any constitutional provision.” 105 S.Ct. at 1020. After Garcia, the principal limit on the federal commerce power is the internal safeguards of the political process against laws unduly burdensome on states. Id.

Plaintiffs’ tenth amendment challenge is without merit. Section 711 does not destroy state sovereignty nor is it unconstitutional. It contravenes “no affirmative limit on Congress’ power under the Commerce Clause.” Id. As this Court stated in Keeler v. Consolidated Rail Corporation, 582 F.Supp. 1546, 1551 (Regional Rail Reorg.Ct.1984), the preemption provisions of NRSA and the 3R Act are reasonably related to the expressed goal of a viable Conrail and northeastern rail service.

Lastly, plaintiffs claim that Section 711 does not render invalid the minimum crew provisions in the 1982 crew consist agreement between the Union and the Railway. Congress has the power to invalidate existing private contracts which interfere with its exercise of constitutional authority. Norman v. Baltimore & Ohio Railroad Company, 294 U.S. 240, 306-09, 55 S.Ct. 407, 415-17, 79 L.Ed. 885 (1935); Railway Labor Executives’ Association v. United States, 575 F.Supp. 1554, 1559 (Regional Rail Reorg.Ct.1983); see generally United Transportation Union v. Consolidated Rail Corporation, 535 F.Supp. 697, 706-07 (Regional Rail Reorg.Ct.1982). Neither the plain language of Section 711 nor its legislative history, however, evidences any Congressional intent to extend that provision to private agreements applicable to non-Conrail employees such as the collective bargaining agreement between the Union and the Railway.

This case is readily distinguishable from Railway Labor Executives’ Association v. United States, 575 F.Supp. 1554 (Regional Rail Reorg.Ct.1983), in which the plaintiffs claimed that a contract between Conrail and a union incorporated certain employee protections of Title V of the 3R Act and that the protections remained binding on Conrail even after Congress repealed Title V. The Court held that even assuming the collective bargaining agreement did in fact incorporate Title V’s labor protection provisions, the provisions were superseded by Congress’ subsequent repeal of Title V, and thus Conrail’s refusal to pay benefits under the repealed provisions did not violate the collective bargaining agreement or the Railway Labor Act. In that case, the legislative history evidenced Congress’ intent to preempt any inconsistent collective bargaining agreement. 575 F.Supp. at 1559. In the instant case, the intent to have Section 711 override inconsistent private contracts involving non-Conrail employees is missing.

The collective bargaining agreement between the Union and the Railway included minimum crew protections available under the Indiana Minimum Crew Law. Thus the question remains whether as a matter of contract law the minimum crew protections in the collective bargaining agreement remain viable. See Railway Labor Executives’ Association v. Grand Trunk Western Railroad Company, 594 F.Supp. 758, 761 (Regional Rail Reorg.Ct.1984). The parties proposed at oral argument, and the Court agrees, that this question should be submitted for resolution to the National Railroad Adjustment Board.

CONCLUSION

Preemption of Indiana’s Minimum Crew Law under Section 711 of the 3R Act, as amended, is constitutional under the fifth and tenth amendments. As Section 711 was not intended to extend to private collective bargaining agreements governing non-Conrail employees, the question of whether the minimum crew protections of the crew consist agreement between the Union and Railway remains valid as a matter of contract law should be submitted to the National Railroad Adjustment Board.

      . The individual plaintiffs Glen Boettjer and Gary Carpenter, who are members of the Union, were employed as brakemen by the Railway prior to 1972 but were furloughed before this suit was filed in February 1983.

      . Section 711 provides:
      § 797j Preemption
      No State may adopt or continue in force any law, rule, regulation, order, or standard requiring the Corporation, the National Railroad Passenger Service Corporation, or the Amtrak Commuter Services Corporation to employ any specified number of persons to perform any particular task, function, or operation, or requiring the Corporation to pay protective benefits to employees, and no State in the Region may adopt or continue in force any such law, rule, regulation, order, or standard with respect to any railroad in the Region.

      . Plaintiffs apparently have dropped their claim that Section 711 violates the ninth amendment.

      . At oral argument, plaintiffs' counsel seemed to concede his tenth amendment claim in view of the Garcia decision.

      . Section 708 of the 3R Act, 45 U.S.C. § 797g, which applies only to collective bargaining agreements between Conrail and its employees, expressly prohibits such agreements from including any job stabilization provisions that are inconsistent with those established under the Act.

      . See also United Transportation Union v. Consolidated Rail Corporation, 535 F.Supp. 697 (Regional Rail Reorg.Ct.1982), which held that a crew consist agreement between Conrail and UTU regarding overmanning was superseded by Section 702 of the 3R Act, as amended. Significantly, the Court did not rely on Section 711, noting only that Section 711 insures that elimination of brakemen by Conrail would not run afoul of state full crew laws. 535 F.Supp. at 704.