author: YOUNG, District Judge.

text:
    In re PRODUCTION OF RECORDS TO the GRAND JURY.
    No. 85-629-Y.
    United States District Court, D. Massachusetts.
    Oct. 2, 1985.

      Susan Via, Asst. U.S. Atty., Boston, Mass., for U.S.
   AMENDED MEMORANDUM AND ORDER

YOUNG, District Judge.

On September 6, 1985, the United States petitioned this court for an order directing the Massachusetts Department of Social Services (“Department”) to furnish to the Grand Jury of the United States District Court for the District of Massachusetts all records, reports, and memoranda required for their investigation of a suspected crime committed within the jurisdiction of this federal court. Responding to an earlier request by the United States Attorney, the Department stated by letter that it would not produce the documents requested. The Department claims a privilege against disclosure based on Mass.Gen.Laws, chs. 66A, 112 § 135, and 119 § 51E — state statutes protecting communications to a social worker in his or her professional capacity or relating to such confidentiality.

The United States now comes before this court requesting an Order to compel the Department to produce the records, reports, and memoranda above. The United States submits only a general affidavit in support of this petition. On this record, for the reasons stated below, and in reliance upon the decision of the Court of Appeals for the First Circuit in In Re Hampers, 651 F.2d 19 (1st Cir.1981), this court Denies the petition of the United States without prejudice.

First, the Grand Jury has not yet subpoenaed the requested records, apparently believing that — in view of the letter from the Department — such a subpoena would be a futility. Still, it is much to be preferred that a Grand Jury proceed in such circumstances by way of a formal subpoena. See In re Melvin, 546 F.2d 1, 4-5 (1st Cir.1976). Proceedings to enforce or quash a subpoena are desirable as they avoid the ex parte nature of the present application.

Second, this court recognizes, as a matter of federal evidentiary law, a qualified privilege for those records of the Department which concern communications made to a social worker in his or her professional capacity, whether acquired from a specific patient or a third party, insofar as the communication relates to the care and treatment of the patient. As a qualified privilege, it may be overcome by the Grand Jury upon affidavit by its Foreperson establishing two specific elements. The affidavit must show that:

1) The Grand Jury needs the documents in a federal criminal investigation conducted pursuant to its duty under law, and
2) The requested documents, or equally probative information, cannot be obtained elsewhere through reasonable efforts.

Should such an affidavit be filed with the court, the court will review the matter afresh.

I.

The United States argues that the Department errs in claiming a privilege under Massachusetts state law because state-created privileges are not controlling in federal criminal cases but, rather, are determined by federal common law. United States v. Chiarella, 588 F.2d 1358, 1372 (2d Cir.1978), rev’d on other grounds, 445 U.S. 222, 100 S.Ct. 1108, 63 L.Ed.2d 348 (1980). Therefore, the United States reasons that federal law pertaining to privileges applies in criminal cases tried in federal courts. Fed.R.Evid. 501; See United States v. Craig, 528 F.2d 773, 776 (7th Cir.), cert. denied, 425 U.S. 973, 96 S.Ct. 2171, 48 L.Ed.2d 796 (1976), reh’g, 537 F.2d 957 (7th Cir.), cert. denied, 429 U.S. 999, 97 S.Ct. 526, 50 L.Ed.2d 609 (1976). In effect, the United States suggests that because the federal common law has not created any of the privileges asserted in this case by the Department, this court should not recognize them now.

On the other hand, the Department contends that it is bound by Massachusetts law and cannot release these records without the written consent of the subject, his parents, or guardian, or pursuant to an order from a court of competent jurisdiction. Mass.Gen.Laws chs. 66A, 112 § 135, 119 § 51E. The Department specifically draws the attention of the court to a decision of the Massachusetts Supreme Judicial Court interpreting this privilege. Commonwealth v. Collett, 387 Mass. 424, 439 N.E.2d 1223, 1226 (1982).

II.

Even were the state privilege to have the scope described by the Department, this court is not required to recognize this privilege in federal criminal proceedings. United States v. Gillock, 445 U.S. 360, 368, 100 S.Ct. 1185, 1191, 63 L.Ed.2d 454 (1980) (Where Tennessee law recognized a legislative privilege for state senators, the federal court in a criminal prosecution was not required to recognize an analogous privilege). In addition, Fed. R.Evid. 501 instructs this court that recognition of a privilege “shall be governed by the principles of the common law as they may be interpreted by the courts of the United States in light of reason and experience.” Above all, Rule 501 envisions the flexible development of the federal common law of privilege on a case-by-case basis. Gillock, 445 U.S. 360, 367, 100 S.Ct. 1185, 1190.

In developing the federal common law of privilege, this court must appraise both the federal and state interests in this matter. The purpose and force of the particular federal interest involved must be balanced against the rationale and comparative strength underlying the particular evidentiary privilege claimed. Ott v. St. Luke Hospital of Campbell County, Inc., 522 F.Supp. 706, 707 (E.D.Ky.1981). Moreover, as a principle of comity, federal courts should recognize state evidentiary privileges where this can be accomplished at no substantial cost to federal substantive and procedural policy. In Re Jury Impanelled January 21, 1981, 535 F.Supp. 537, 541 (D.N.J.1982); Shafer v. Parkview Memorial Hospital, 593 F.Supp. 61, 63 (N.D.Ind.1984) [Both citing United States v. King, 73 F.R.D. 103, 105 (E.D.N.Y.1976) ].

III.

In Re Hampers, supra, suggests the analytical framework for balancing the differing state and federal interests in this case. In Hampers the Court of Appeals applied a four point analysis to determine whether, and to what extent, the federal common law of privilege would recognize a statutory privilege against disclosure given the State Tax Commissioner under Mass. Gen.Laws ch. 62C, §§ 21 and 22. Simply phrased, the four factors follow:

1. Would the courts of Massachusetts recognize such a privilege?
2. Is the state’s asserted privilege “intrinsically meritorious in our independent judgment”?
3. Should such a privileged relationship be “sedulously fostered”?
4. Is injury that would inure to the relation by the disclosure of the communication greater than the benefit thereby gained?

In Re Hampers, 651 F.2d 19, 22-23, relying on American Civil Liberties Union of Mississippi, Inc. v. Finch, 638 F.2d 1336 (5th Cir.1981). See Schafer v. Parkview Memorial Hospital, Inc., 593 F.Supp. at 64.

Under the Hampers analysis, the court initially must ask whether the courts of Massachusetts would recognize such a privilege. That they would — and have — is incontrovertible. The Massachusetts legislature speaks clearly about privileged communications between a patient and his or her social worker. Mass.Gen.Laws chs. 66A, 112 § 135, and 119 § 51E. Barring the application of a statutorily specified exception, all communications to a social worker, in his or her professional capacity, whether they were acquired from a specific client or a third party, are privileged. Commonwealth v. LeCain, 19 Mass.App.Ct., 1034, 477 N.E.2d 205, 206 (1985) (citing Commonwealth v. Collett, 387 Mass. 424, 428-430, 439 N.E.2d 1223 (1982)); see Commonwealth v. Dunne, 394 Mass. 10, 474 N.E.2d 538, 543 (1985). Certainly the Commonwealth of Massachusetts recognizes the social worker-patient privilege.

Second, this court asks whether the state social worker-patient privilege is “intrinsically meritorious.” The court so rules. The very confessional required for a patient’s cure should not lightly be used to cause him harm. Between a social worker and a patient, the avenues of painful and even embarrassing disclosure must not be obstructed by fear and mistrust. With reason and from experience, this court respects both the legislative policy evident in Mass.Gen.Laws chs. 66A, 112, § 135, and 119, § 135, and the judicial process made manifest in the decisions of the courts of the Commonwealth. Under these circumstances and upon the meager record in this case, this court can see no reason to second-guess the Massachusetts legislative determination that the patient-social worker relationship should be “sedulously fostered.”

At this point in time the Grand Jury offers little to substantiate the benefit to be gained by ordering the Department to disclose its records. Only an adequate affidavit could provide such evidence. Absent this, the court concludes that the potential for injury to the social worker-patient relationship could well be greater than the benefit gained by the Grand Jury.

IV.

The court does not underestimate the difficulty of the Grand Jury’s task as it performs its legal duty as charged. To accommodate both the public policy of the Commonwealth and the orderly and effective prosecution of federal crimes, the privilege against disclosure accorded the Department in regard to communications to social workers is not absolute but qualified. It may, therefore, be set aside if by affidavit the Grand Jury satisfies this court that it 1) needs the documents in a federal criminal investigation conducted pursuant to its duty under law, and 2) cannot obtain the requested documents, or equally probative information, elsewhere through reasonable efforts. It is not necessary that probable cause be shown to believe that these particular records contain some specified data. That is too heavy a burden at this point. Criminal investigation must begin somewhere and a Grand Jury has a proper investigative function. Rather, it is sufficient to show the nexus between 1) the pending investigation and the documents in question, and 2) the reasons why the Grand Jury believes it cannot obtain equally probative information by following out some non-privileged approach. Should such an affidavit be presented, this court will then be in a position to determine whether to hold a hearing in chambers during which both the United States and the Department may be heard on the issue of whether the qualified privilege ought yield to the interest in effective enforcement of the federal laws. On the present record, however, the requested order must be denied without prejudice to its renewal with proper supporting affidavits should the Department not comply with a subpoena for the requested records.

It is so ordered.

      . This ruling in no way disturbs the existing statutory exceptions operative under the law of the Commonwealth.

      . The Courts of Appeal generally adopt a standard of flexibility and discretion in the recognition of state privileges in the federal courts. See e.g., In Re Hampers, 651 F.2d 19, 22 (1st Cir.1981); Memorial Hasp, for McHenry County v. Shadur, 664 F.2d 1058, 1061 (7th Cir.1981); United States v. Chiarella, 588 F.2d 1358, 1372 (2nd Cir.1978); United States v. Craig, 528 F.2d 773, 776 (7th Cir.1976), United States v. Meaqher, 531 F.2d 752, 753 (5th Cir.1976).

      . The Massachusetts legislature has recognized analogous privileges for psychiatrists and psychotherapists. Mass.Gen.Laws ch. 233, § 20B; Commonwealth v. Kobrin, 395 Mass. 284, 479 N.E.2d 674, 680, 682 (1985) (recognizing a psychotherapist-patient privilege though ordering psychiatrist to disclose to a grand jury records of patient appointments and fees where Medicaid fraud was at issue). See also Alberts v. Devine, 395 Mass. 59, 479 N.E.2d 113, 119 (1985); Commonwealth v. Rexach, 20 Mass.App.Ct. 919, 478 N.E.2d 744, 746-747 (1985).

      . This court is not alone in following the First Circuit to find a qualified privilege through a balancing analysis. In Re Cruz, 561 F.Supp. 1042, 1046 (D.Conn.1983); In Re Jury Impanelled January 21, 1981, 535 F.Supp. 537, 542 (D.N.J.1982). While these matters involved privileges asserted by several state Tax Commissioners as against a Grand Jury, this court finds no compelling reason to distinguish the privileges asserted by the Department and those asserted by the Tax Commissioners. Thus, upon reflection and as a matter of federal common law, this court is reluctant to pick and choose among state privileges where the legislature has created similar privileges by similar statutes.

      . Such a procedure need not result in disclosure to the Department of the confidences of the Grand Jury. In Re Grand Jury, 751 F.2d 13, 15 (1st Cir.1983) (“The district court held a closed evidentiary hearing on the attorneys’ motion [to quash grand jury subpoenas]____ The government also filed an in camera affidavit that described the nature of its investigation and the basis for the subpoenas in greater detail”). See e.g. In Re Grand Jury Proceedings (Gordon), 722 F.2d 303, 309 (6th Cir.1983); In Re Grand Jury Proceedings (Freeman), 708 F.2d 1571, 1575 (11th Cir.1983) and cases cited therein.


source: Caselaw Access Project

author: GENE CARTER, District Judge.

license: Public Domain

text:
    Carol A. STROUT, Plaintiff, v. GTE PRODUCTS CORPORATION, et al., Defendants.
    Civ. No. 85-0196 P.
    United States District Court, D. Maine.
    Oct. 2, 1985.

      Jeffrey T. Shedd, Bernstein, Shur, Sawyer & Nelson, Portland, Me., for plaintiff.
    Paul P. Driscoll, Verrill & Dana, Charles S. Einsiedler, Jr., Pierce, Atwood, Scribner, Allen, Smith & Lancaster, Portland, Me., for defendants.
   ORDER

GENE CARTER, District Judge.

This case concerns the right of the Plaintiff, Carol A. Strout, to recover benefits allegedly due her under the terms of the GTE Sylvania Pension Plan for Hourly Employees and the GTE Sylvania Welfare Plan for Hourly Employees. Plaintiff brings this action under section 502(a)(1)(B) (29 U.S.C. § 1132(a)(1)(B)) of the Employee Retirement Income Security Act of 1974 (“ERISA”).

Plaintiff filed a demand for jury trial in this Court on June 28,1985, and Defendant Traveler’s Insurance Co. (“Traveler’s”) filed a motion to strike Plaintiff’s jury trial demand on July 19, 1985. Defendant GTE Products Corporation joined in Traveler’s motion on July 31, 1985.

Plaintiff is not entitled to a jury trial in an action to recover benefits under ERISA for the following reasons.

Merely alleging that this action is one for breach of contract does not alone give rise to a jury trial right. As other courts have held, a suit for pension benefits under ERISA essentially is based on the law of trusts and the conduct of the trustee, rather than on the law of contracts. Thus, a legal rather than an equitable remedy only would arise if one is seeking to enforce a duty to pay benefits due immediately and unconditionally, such as in a standard breach of contract action. Wardle v. Central States, Southeast & Southwest Areas Pension Fund, 627 F.2d 820, 829 (7th Cir.1980), citing Restatement (Second) of Trusts §§ 197-198 (1959). Other actions such as the case at hand, akin to a claim by a beneficiary against a trustee, should be treated as equitable in nature. As the Wardle court concluded, Congress, in enacting ERISA, “intended to provide general federal jurisdiction over these equitable suits that had traditionally been brought in state courts.” Id. at 829. See also In re Vorpahl, 695 F.2d 318, 321 (8th Cir.1982); Calamia v. Spivey, 632 F.2d 1235, 1237 (5th Cir.1980). A contrary position can be found in Pollock v. Castrovinci, 476 F.Supp. 606, 608-09 (S.D.N.Y.1979), aff'd without opinion, 622 F.2d 575 (2d Cir.1980).

A further reason for treating section 502(a)(1)(B) ERISA actions as equitable in nature is that courts have applied the “arbitrary and capricious” standard of review for such actions, the standard applied to previous pension benefits cases. As the court in Vorpahl noted,

such a limited scope of review “bespeaks a legislative scheme granting initial discretionary decisionmaking to bodies other than the federal courts, with which federal jury trials have proved incompatible” Wardle v. Central States, Southeast & Southwest Areas Pension Fund, 627 F.2d at 830. The court viewed this incompatibility as further evidence of the lack of any implied congressional intent to grant a right to a jury trial. We concur in this determination.

In re Volpahl, 695 F.2d at 321.

Finally, Plaintiff suggests that the reasoning of the court in Paladino v. Taxicab Industry Fund, 588 F.Supp. 37 (S.D.N.Y.1984), should be adopted over that of the Fifth, Seventh and Eighth Circuits noted above. In particular, the Paladino and Pollock courts have noted the wording of the legislative history of ERISA as indicating a right to a jury trial in such cases. The Joint Explanatory Statement of the Committee of Conference states in part:

All such actions in Federal or state courts are to be regarded as arising under the laws of the United States in similar fashion to those brought under section 301 of the Labor-Management Relations Act of 1947.

H.R.Conf.Rep. No. 93-1280, 93rd Cong., 2d Sess., reprinted in 1974 U.S.Code Cong. & Admin.News, pp. 4639, 5038, 5107. The Paladino court construes this language as indicating that ERISA claimants have the same jury trial right as claimants under section 301 of the Labor-Management Relations Act.

This reasoning is flawed in that the statement in the legislative history “merely indicates Congress’ intent that federal courts should create federal common law in civil actions under § 502(a)(1)(B) of ERISA [citations omitted] ... not that the identical rules of federal common law are necessarily to apply in both statutory claims.” Wardle v. Central States, Southeast & Southwest Areas Pension Fund, 627 F.2d at 829.

The equitable nature of a section 502(a)(1)(B) suit for pension benefits, the Courts’ interpretation of ERISA claims as similar to beneficiary claims against a trustee, and the Courts’ view of the relevant ERISA legislative history all indicate that claimants, as a matter of law, have no right to a jury trial in such actions.

Accordingly, the motion of Defendants Traveler’s Insurance Company and GTE Products Corporation to strike Plaintiff’s demand for jury trial is hereby GRANTED. The Plaintiff’s demand for jury trial is hereby STRICKEN.

So ORDERED.


author: WARRINER, District Judge.

text:
    OUTDOOR WORLD CORPORATION v. Richard W. CALVERT.
    Civ. A. 85-0403-R.
    United States District Court, E.D. Virginia, Richmond Division.
    Oct. 2, 1985.
    Francis T. Eck, Hooker & Eck, Richmond, Va., for plaintiff.
    Dennis W. Dohnal, Stephen W. Bricker, Bremner, Baber & Janus, Richmond, Va., David C. Vladeck, Alan B. Morrison, Public Citizen Litigation Group, Washington, D.C., for defendant.
   OPINION

WARRINER, District Judge.

Plaintiff initiated this action on 20 March 1985 by filing a bill for injunctive relief in the Circuit Court of Caroline County, Virginia. Plaintiff sought to enjoin defendant from distributing to plaintiff’s prospective customers leaflets in which defendant asserted that membership in plaintiff’s campground was an unwise, or at least a risky investment. On 20 March 1985, the State trial judge issued a temporary injunction which was due to expire on 20 April 1985 and ordered the matter transferred to the Circuit Court of Westmoreland County, Virginia. At a hearing in the Circuit Court of Westmoreland County on 12 April 1985, the trial judge ordered the temporary injunction continued through the trial date of 24 May 1985.

On 18 April 1985 defendant filed his removal petition with this Court, alleging that defendant was a citizen of Virginia and that plaintiff was a Pennsylvania corporation. On 9 May 1985 this Court dissolved the preliminary injunction.

At initial pretrial conference held on 3 July 1985, the question of the Court’s removal jurisdiction in this diversity suit was raised by the Court. Under a briefing schedule then agreed to defendant filed his brief on 15 July to which plaintiff filed a reply brief on 24 July. No rebuttal brief has been filed. Indeed, no rebuttal brief would be necessary since the parties have fully exhausted the law, I believe, in the briefs filed.

The issue is simple. In his removal petition, defendant averred that defendant was a citizen of Virginia at the time of removal and that plaintiff was a citizen of Pennsylvania as of removal. Defendant failed to aver the citizenship of either party as of the time the suit was filed in State court. See Hubbard v. Tripp, 611 F.Supp. 895 (E.D.Va.1985). Defendant argues that an allegation of citizenship as of the time the suit was filed in State court is not essential to confer removal jurisdiction. Plaintiff urges the contrary. Defendant argues that even if such an allegation be required, the omission can be supplied by amendment. Plaintiff says an amendment is not availing.

There is reason to support the two views the parties take of the issues presented. Learned judges have ruled in. ways supportive of each side of the issue. I have considered the reasons the judges have given for taking the respective positions they have taken. I have also considered the argument of counsel in this case.

Essentially defendant argues that the Court has adopted a one-slip-and-you-are-lost approach that was supposed to have disappeared with common law pleading. Plaintiff counters that removal petitions are specifically required to be under oath emphasizing the necessity of completeness; that removal is in derogation of jurisdiction that otherwise belongs in the State courts; and that removal petitions should be strictly construed so that a court of doubtful jurisdiction does not take a case from a court of assured jurisdiction. I think plaintiff has the better of this argument and I have in the past adhered to the view adopted by those judges who concur.

Defendant counters that even if the Court adhered to such a crabbed view, surely he has a right to amend by supplying the omission in his pleading. Again defendant finds respectable support in the cases and in the treatises. Plaintiff also finds respectable support. I have considered the reasons advanced by authorities on both sides of this issue and, again, I concur with plaintiff.

An essential element of removal jurisdiction is celerity. Congress wants the matter to proceed to trial in one court or the other and Congress wants the issue of which court settled without delay. It is for this reason (despite the fact that district courts assuredly may be subject to error in this area as in others) that no appeal is permitted. 28 U.S.C. § 1447(d); see 1A Moore’s Federal Practice, ¶ 0.169[2.-1] (1985). Congress believes that it is better for the matter always to be settled quickly than that it always be settled properly.

This same end is served by the thirty-day rule of 28 U.S.C. § 1446(b). If a party wants removal he cannot delay. His petition must be filed within thirty days after receipt of the initial pleadings or the opportunity is lost. To permit the filing of amended petitions for removal after the expiration of thirty days for the purpose of supplying essential omitted allegations amounts to an unwarranted judicial extension of the thirty days set by Congress. Congress dealt with the question of amendment but in so doing limited the right to amend to defective pleadings, not omitted pleadings. 28 U.S.C. § 1653.

A judge without jurisdiction is no more than a man in the street. What his views may be with respect to a given issue presented to him are but of passing moment. Jurisdiction either exists or it does not. The issue of jurisdiction can be raised at any time, even, as has been said, on a petition for a rehearing after a unanimous decision by the Supreme Court. See City of Indianapolis v. Chase National Bank, 314 U.S. 63, 69, 62 S.Ct. 15,16, 86 L.Ed. 47, reh’g denied, 314 U.S. 714, 62 S.Ct. 355, 86 L.Ed. 569 (1941). Thus when a choice exists between a court where jurisdiction is questionable and a court where jurisdiction is assured, the weighing of factors respecting jurisdiction should be heavily in favor of the court with assured jurisdiction. For all these reasons and having fully reconsidered the issues, I adhere to the views I expressed in Hubbard v. Tripp, 611 F.Supp. 895 (E.D.Va.1985).

It is accordingly ORDERED that this action be REMANDED to the Circuit Court of Westmoreland County, Virginia, at defendant’s costs.

And it is so ORDERED.

      . Compare D.J. McDuffie, Inc. v. Old Reliable Fire Insurance Co., 608 F.2d 145, 146 (5th Cir.1979); Hendrix v. New Amsterdam Casualty Company, 390 F.2d 299, 300-02 (10th Cir.1968); Kentucky Solar Energy Controls, Inc., 497 F.Supp. 555, 556 (E.D.Ky.1980); with Fort v. Ralston Purina Co., 452 F.Supp. 241, 241-43 (E.D.Tenn.1978); Carlton Properties, Inc. v. Crescent City Leasing Corp., 212 F.Supp. 370, 370-71 (E.D.Pa.1962); Lancer Industries, Inc. v. American Insurance Company, 197 F.Supp. 894, 895-96 (W.D.La.1961).

      . See 28 U.S.C. § 1653; McDuffie v. Old Reliable Fire Insurance Co., 608 F.2d 145, 146 (5th Cir. 1979); Firemen’s Insurance Company of Newark, N.J. v. Robbins Coal Co., 288 F.2d 349, 350 (5th Cir.1961); 14A Wright, Miller & Cooper, Federal Practice and Procedure, § 3733 (1985 ed.).

      . Richmond, Fredericksburg & Potomac Railroad Co. v. Intermodal Services, Inc., 508 F.Supp. 804, 807 (E.D.Va.1981) (citing Van Horn v. Western Electric Co., 424 F.Supp. 920, 924-27 (E.D.Mich.1977)); see also Winters Government Securities Corp. v. NAFI Employees Credit Union, 449 F.Supp. 239, 243 (S.D.Fla.1978); Fort v. Ralston Purina Co., supra, 452 F.Supp. at 242.


author: DIANA E. MURPHY, District Judge.

text:
    TRACK 12, INC., Plaintiff, v. DISTRICT ENGINEER, UNITED STATES ARMY CORPS OF ENGINEERS, ST. PAUL, MINNESOTA, an agency of the United States of America, Defendant.
    Civ. No. 4-84-888.
    United States District Court, D. Minnesota, Fourth Division.
    Oct. 2, 1985.

      James Malecki, Gislason, Dosland, Hunter & Malecki, New Ulm, Minn., for plaintiff.
    Carol B. Swanson, Asst. U.S. Atty., Minneapolis, Minn., for defendant.
   MEMORANDUM OPINION AND ORDER

DIANA E. MURPHY, District Judge.

Plaintiff, Track 12, Inc., brought this action against the District Engineer, United States Army Corps of Engineers (the “Corps”). Plaintiff seeks review of defendant’s order, made pursuant to the Clean Water Act, 33 U.S.C. § 1344, denying plaintiff permission to place fill material on a parcel of land it wishes to prepare for development. Plaintiff also seeks declaratory and injunctive relief. It alleges federal question jurisdiction pursuant to 28 U.S.C. § 1331. Defendant has counterclaimed for injunctive relief and civil penalties, asserting that plaintiff violated the Clean Water Act by placing dredged or fill material in navigable waters without the authorization of the Secretary of the Army. The matter is now before the court on defendant’s motion for summary judgment.

Background

Track 12 owns an 18 acre tract of land near Montevideo, Minnesota. The historical character of the land has been the subject of considerable controversy. For the purposes of this motion for summary judgment, the court accepts as true the plaintiff’s assertion that the land is not natural wetland. The court further accepts plaintiff’s assertion that various acts of state and local authorities, including the construction of a highway and a storm sewage system, have changed the character of the tract into artificial wetland.

Plaintiff purchased the land in 1977 and began to place fill on it in preparation for commercial development. There is no dispute that the tract was wetland by that time. Plaintiff states, without contradiction, that state and local officials had previously assured Tract 12 that a permit would be unnecessary. In 1979, the Corps notified plaintiff that the filling was illegal and that development required a federal permit. Plaintiff ceased filling and applied for a retroactive permit. The application process was interrupted by a Minnesota Department of Natural Resources (MDNR) assertion of jurisdiction, pursuant to new state regulations, and its denial of a state permit. Plaintiff appealed this MDNR decision and won a determination that Minnesota lacked regulatory jurisdiction over the property because it was not a “natural wetland.”

After its state court victory, plaintiff reapplied for a Corps permit in January 1984. In the time since the original federal application, federal regulations had been amended and the proposed fill could have been authorized pursuant to a “nationwide permit.” Plaintiff asserts that defendant failed to inform it of this change and that it therefore filed the additional application needlessly. Defendant asserts that the St. Paul District of the Corps exercised its regulatory prerogative to request discretionary authority from the Division Engineer to process plaintiff’s application on an individual basis. Plaintiff’s individual permit application was denied on June 20, 1984. Defendant stressed the importance of the tract as a wildlife habitat, floodwater storage area, and source of water quality benefits. Defendant also relied on federal regulations discouraging filling of wetlands when alternative upland sites exist.

Plaintiff seeks review of the Corps determination on two grounds: first that the Corps lacks jurisdiction over the tract and second, that the Corps’ actions on the nationwide and individual permits were arbitrary and capricious.

Discussion

In passing upon a motion for summary judgment, the court must view the facts in the light most favorable to the opposing party; the movant has the burden of establishing that no genuine issue of material fact exists and that the case may be decided as a matter of law. Buller v. Buechler, 706 F.2d 844, 846 (8th Cir.1983); Ralph’s Distributing Co. v. AMF, Inc., 667 F.2d 670 (8th Cir.1981). The opposing party is entitled to the benefit of all reasonable inferences to be drawn from the underlying facts disclosed in pleadings and affidavits. Vette Co. v. Aetna Casualty & Surety Co., 612 F.2d 1076 (8th Cir.1980). For the purposes of this motion, the parties agree that there is no genuine issue of material fact. A. Jurisdiction

The Clean Water Act, section 301, 33 U.S.C. § 1311 makes it illegal to discharge fill into “navigable waters” unless such discharge is in compliance with specified provisions of the Act. Section 404 of the Act, 33 U.S.C. § 1344 authorizes the Secretary of the Army, to issue permits specifying disposal sites for the discharge of fill material into “navigable waters.” The Secretary has delegated this authority to the Corps, 33 C.F.R. 325.8. The Clean Water Act, section 502(7), 33 U.S.C. § 1362(7) defines “navigable waters” as “... waters of the United States, including the territorial seas.” “Waters of the United States” is defined by 33 C.F.R. § 323.2(a) to include seven categories, most pertinently wetland. See 33 C.F.R. § 323.2(a)(7). 33 C.F.R. § 323.2(c) defines wetlands as “those areas that are inundated or saturated by surface or ground water at a frequency and duration sufficient to support, and that under normal circumstances do support, a prevalence of vegetation typically adapted for life in saturated soil conditions.” (Emphasis added.)

Plaintiff's argument that the Corps lacks jurisdiction is quite specific: the tract is not natural wetland and therefore cannot be said to support the required “prevalence of vegetation” “under normal circumstances.” Plaintiff’s argument has some logical appeal, but is contrary to legislative and judicial authority. In United States v. Ciampitti, 583 F.Supp. 483 (D.N.J.1984), the court considered the legislative and regulatory history of the Clean Water Act and related legislation and found that “the fact that part of the area may have become wetlands because of a man-made connection between the site and the tidal waterways is not dispositive of the Corps’ jurisdiction____ [FJederal jurisdiction is determined by whether the site is presently wetlands and not by how it came to be wetlands.” Id. at 494 (emphasis omitted). See also United States v. Holland, 373 F.Supp. 665, 673 (M.D.Fla.1974) (finding “inescapable” the conclusion that Congress intended the Clean Water Act to extend to artificially-created canals); United States v. Bradshaw, 541 F.Supp. 880, 883 (D.Md. 1981) (historical condition of land irrelevant where area was wetland at time Corps asserted jurisdiction).

Plaintiff argues that Ciampitti is contrary to authority in this circuit and relies on United States v. City of Fort Pierre, South Dakota, 747 F.2d 464 (8th Cir.1984). As this court reads Fort Pierre, however, the facts are distinguishable from the instant case, and the reasoning supports the Corps’ position. In Fort Pierre, the Eighth Circuit held that the Corps lacked jurisdiction over a privately-owned slough within Fort Pierre. The slough was originally a side-channel of the Missouri River, but had been transformed into dry land by various railroad and highway construction. In 1968, the Corps’ routine river dredging again transformed the slough into a wetland of sorts. Unlike Track 12’s land, however, the slough was “stagnant and polluted,” and “devoid of wildlife, supporting] no fish or fowl, and ... not conductive to recreation or other significant use by the public.” Id. at 467. More significantly, the court emphasized the policy reasons for its decision: if the- court permitted the Corps to exercise jurisdiction over wetland the Corps itself had created, it “would allow the Corps to enlarge its jurisdiction beyond the scope originally intended by Congress.” Id. Further, the court explicitly limited its holding:

our holding does not challenge the Corps’ jurisdiction with regard to any other artificially created wetland-type environment. Rather, our holding is limited to the situation in which the Corps, as an unintended byproduct of ordinary river maintenance, inadvertently creates a wetland-type ecological system on private property where no such system previously existed.

Id. Fort Pierre can therefore be read to support the Corps’ jurisdiction over artificially created wetlands unless the Corps itself was the creator.

B. The Permit Denials

Plaintiff acknowledges that the standard of review for defendant’s discretionary authority is whether the decision was arbitrary or capricious. The Corps has submitted volumes of paper to demonstrate the extensive nature of its deliberations and its strict adherence to regulatory procedures. Plaintiff’s argument does not demonstrate that defendant acted arbitrarily or capriciously, but at most that an alternative result would have been reasonable.

For these reasons the court is persuaded that the defendant is entitled to summary judgment as a matter of law.

ORDER

Accordingly, based on the above and all the files, records, and proceedings herein,

IT IS HEREBY ORDERED that the motion of the District Engineer, United States Army Corps of Engineers for summary judgment in its favor is granted, and the complaint of Tract 12, Inc. is dismissed.

LET JUDGMENT BE ENTERED ACCORDINGLY.


author: MURRAY M. SCHWARTZ, Chief Judge.

text:
    EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Applicant, v. DELAWARE STATE POLICE, Respondent.
    Misc. No. 85-44.
    United States District Court, D. Delaware.
    Oct. 3, 1985.

      Edmond Falgowski, Asst. U.S. Atty., Wilmington, Del., Susan DeLarm, E.E.O.C., Philadelphia, Pa., for applicant.
    James J. Hanley, Deputy Atty. Gen., Wilmington, Del., for respondent.
   OPINION

MURRAY M. SCHWARTZ, Chief Judge.

This case involves a challenge by the respondent Delaware State Police (“the State Police”) to the relevancy of certain parts of a subpoena duly issued by the applicant, the Equal Employment Opportunity Commission (“the EEOC”).

FACTS

Pursuant to its authority under the Age Discrimination in Employment Act, 29 U.S.C. § 621 et seq. (“the ADEA”), the EEOC is investigating employment practices of the Delaware State Police which involve mandatory retirement and age limitations in hiring. 29 U.S.C. § 626(a) (1982). In the course of its investigation, the EEOC on January 9, 1985, issued a subpoena to the State Police.

The subpoena requests eight categories of documents. The respondent has refused to answer, asserting the EEOC’s request for certain information cannot be relevant to the EEOC investigation. The EEOC requests summary judgment to compel the production of the requested documents under Fed.R.Civ.P. 81(a)(3), which provides the Federal Rules of Civil Procedure are applicable to administrative-agency subpoenas.

ANALYSIS

The Supreme Court articulated the requirements for enforcement of a subpoena issued by an administrative agency in United States v. Powell, 379 U.S. 48, 57-58, 85 S.Ct. 248, 254-55, 13 L.Ed.2d 112 (1964). The government must prove a) the investigation has a legitimate purpose, b) the inquiry may be relevant to the purpose, c) the information sought is not within the agency’s possession, and d) the agency has followed the proper administrative steps in issuing the subpoena. The Court of Appeals for the Third Circuit has applied the criteria of Powell in the context of challenged EEOC subpoenas. See EEOC v. University of Pittsburgh, 643 F.2d 983, 985 (3d Cir.), cert. denied, 454 U.S. 880, 102 S.Ct. 362, 70 L.Ed.2d 190 (1981).

. To determine the relevancy of information sought by subpoena in an ongoing ADEA administrative investigation by the EEOC, the Court looks to the remedial purpose of the ADEA. The statute requires that the material requested “relate[] to unlawful employment practices” and be “relevant to the charge under investigation.” 42 U.S.C. § 2000e-8(a); EEOC v. University of Pittsburgh, 643 F.2d at 986.

1. Statute-of-Limitations Objection

The State Police object to THT 6 and 7 of the administrative-agency subpoena to the extent that the EEOC has requested information for the past three years. The State Police contend the EEOC is entitled to information for only two years because the applicable statute of limitations is purportedly two years. Respondent argues that information dating back three years can be relevant only if the EEOC could successfully establish the State Police “willfully” violated the ADEA. The State Police urge a charge of “willfulness” cannot be sustained, because the ADEA was held to apply to the states only in EEOC v. Wyoming, 460 U.S. 226, 103 S.Ct. 1054, 75 L.Ed.2d 18 (1983), which was decided less than three years ago.

The law is against respondent’s position. A party may not defeat an agency’s authority to investigate by raising what could be a defense if the agency subsequently decides to bring an action against the party. EEOC v. Children’s Hospital Med. Ctr., 719 F.2d 1426, 1429 (9th Cir.1983). In Pacific Maritime Association v. Quinn, 491 F.2d 1294, 1296-97 (9th Cir.1974), the Court of Appeals for the Ninth Circuit held it is premature to allow a party being investigated by the EEOC to raise the statute of limitations as a defense to a demand for documents. Accord, EEOC v. South Carolina Nat’l Bank, 562 F.2d 329, 332 (4th Cir.1977).

There is no complaint pending against the respondent by either the EEOC or some allegedly injured party. It would be an inappropriate exercise of judicial power in an administrative subpoena enforcement proceeding to determine the merits of a statute of limitations defense that might be raised to a hypothetical future complaint by the EEOC against the State Police. Respondent may raise its defense based on the statute of limitations only at such time as a complaint against it is filed.

The State Police have not otherwise challenged the relevancy of the EEOC’s request for information dating back three years. The information sought relates to possible unlawful employment practices of the State Police and is therefore relevant to the agency’s broad investigation of possible Delaware State Police ADEA violations.

2. BFOQ Objection

The Delaware State Police also object to the EEOC’s requests in ¶1¶ 3(E), 4, and 5 for physical-fitness tests, training, and programs, and for documents concerning periodic medical examinations. Respondent asserts these requests are not relevant because the information sought relates only to respondent’s possible bona fide occupational qualification (BFOQ) defense to a prima facie case of age discrimination.

Respondent’s position assumes that the EEOC as part of its investigatory power under the ADEA has no authority to investigate whether there might be a valid statutory defense to a prima facie case of age discrimination. Respondent’s assumption is wrong.

The ADEA provides that “[i]t shall not be unlawful for an employer ... to take any action otherwise prohibited ... where age is a bona fide occupational qualification reasonably necessary to the normal operation of the particular business, or where the differentiation is based on reasonable factors other than age.” 29 U.S.C. § 623(f)(1) (1982). This provision under-girds the EEOC’s claim of relevance.

Since an employer may lawfully use age qualifications in certain instances, the EEOC must be able to determine whether the Delaware State Police are using age qualifications properly. If the EEOC concludes that the State Police are using age criteria in a legally permissible manner, it then can terminate its investigation without taking any further administrative or judicial enforcement actions. The EEOC’s request for information on physical fitness and medical examinations is therefore highly relevant to the EEOC’s investigation of the State Police.

An order will be entered granting the EEOC’s motion for an order directing compliance with the administrative subpoena. Respondent will be given 30 days within which it shall comply with the subpoena.

      . The EEOC originally issued the subpoena to the State Police on March 15, 1984. The respondent refused to comply, on the ground that the EEOC lacked authority to enforce the ADEA because of the Supreme Court’s decision in INS v. Chadha, 462 U.S. 919, 103 S.Ct. 2764, 77 L.Ed.2d 317 (1983). After Pub.L. No. 88-532 was passed and the challenge to EEOC's enforcement power mooted, the EEOC issued a new subpoena.

      . The EEOC had earlier filed an application for an order to show cause why its subpoena should not be enforced by the Court. On May 17, 1985, the Court granted the application and ordered a hearing to be held on June 27, 1985. On June 21, 1985, the Court vacated its May 17 order because the EEOC had not served the respondent. A hearing on the motion was rescheduled for September 24, 1985.

      . Paragraph 6 and 7 of the challenged subpoena read:
      6. For each [employment] position [in the workforce of the Delaware State Police which has a maximum hiring age], submit documents showing the following information relating to all persons who sought to apply or applied for the position but were disqualified due to the age qualification for the past three years;
      A. Name and address,
      B. The position sought or applied for and the date(s) he/she sought to apply or applied,
      C. If he/she completed an application, submit a copy of the application,
      D. If a letter of disqualification was sent, submit a copy of the letter,
      E. If the person’s age or date of birth is known, submit documents showing this information. If not known, submit documents showing the basis upon which it is known that the person was disqualified due to the age qualification.
      7. For all [employment positions in the workforce of the Delaware State Police which are] subject to mandatory retirement, submit the following documents for each employee who retired within the last three years:
      A. Name, address and telephone number,
      B. The position/rank held prior to the date the retirement commenced,
      C. The date retirement commenced,
      D. If the retirement commenced at an age or time different from that stated in the statute or regulation, submit documents which show each and every reason for the exception.

      . The challenged portions of the administrative subpoena are:
      3. For each [employment position in the workforce of the Delaware State Police] which has a mandatory retirement age, submit documents showing the following:
      E. Any physical fitness tests or physical training administered to employees while they are in these positions.
      4. If D.S.P. [Delaware State Police] has an ongoing physical fitness program for all police officers and higher ranked officers, submit documents which show and describe the following:
      A. The nature and purpose of the physical fitness program, including the physical fitness regimen and its duration,
      B. The title of D.S.P. positions not required to comply with the program,
      C. The specific steps taken to see that employees are adhering to the physical fitness program.
      5. For each [employment position in the workforce of the Delaware State Police which has a mandatory retirement age], if the D.S.P. periodically requires the administration of medical examinations, submit documents which show the following information:
      A. The extent of the medical examination,
      B. The frequency of the medical examination,
      C. The specific physical standards that must be met,
      D. The D.S.P. positions not required to submit to periodic medical examination and the reasons for not requiring a medical examination for each.


author: MacLAUGHLIN, District Judge.

text:
    James R. GRIFFIN, Plaintiff, v. AMERICAN MOTORS SALES CORPORATION, Defendant.
    No. Civ. 4-85-450.
    United States District Court, D. Minnesota, Fourth Division.
    Oct. 4, 1985.
    Joseph F. Schmidt, Minneapolis, Minn., for plaintiff.
    Roy S. Ginsburg, Dorsey & Whitney, Minneapolis, Minn., for defendant.
   MEMORANDUM AND ORDER

MacLAUGHLIN, District Judge.

This matter is before the Court on defendant’s motion for summary judgment. The Court will grant defendant’s motion. FACTS

Plaintiff James R. Griffin alleges that defendant American Motors Corp. wrongfully discharged him in violation of his employment contract. Plaintiff did not have an express written employment contract with defendant, rather, he alleges that a de facto contract of employment existed by virtue of defendant’s written manuals, policy statements and oral assurances. Plaintiffs claim of contractual breach is based on the decisions of the Minnesota courts in Pine River State Bank v. Mettille, 333 N.W.2d 622 (Minn.1983), establishing a cause of action for breach of contract based on certain guarantees which appeared in an employee handbook, and Eklund v. Vincent Brass and Aluminum Co., 351 N.W.2d 371 (Minn.App.1984), recognizing a cause of action on an oral contract of employment. The essence of plaintiffs complaint is that he was discharged solely because of his immediate supervisor’s personal dislike for him.

For purposes of this motion only, defendant is willing to concede that defendant’s “written manuals, policy statements and oral assurances” constituted an employment contract, and that the terms of that contract were breached. Defendant nevertheless urges this motion for summary judgment in its favor, on the ground that plaintiff’s action is time-barred.

Plaintiff’s employment was terminated by defendant on March 12, 1979. This action was not commenced until February 26, 1985; a nearly six-year delay. It is defendant’s position that the limitations period applicable to a Pine River wrongful discharge action is the two-year period of Minn.Stat. § 541.07(5), providing for the recovery of wages and related damages.

Plaintiff argues in the alternative that (1) Michigan and not Minnesota law controls this action, and hence the six-year limitations period of the Michigan Statute, Mich. Comp.Laws Ann. § 600.5807(8), for breach of an employment contract applies; or (2) the Minnesota statute for breach of contract, Minn.Stat. § 541.05, subd. 1(1), with its six-year limitations period applies to plaintiff’s claim, and not the section 541.-07(5) statutory period for a wages recovery action.

DISCUSSION

1. Choice of Laws — Applicable Law

The jurisdictional basis of the instant case is the diversity jurisdiction of the federal courts, 28 U.S.C. § 1332. In diversity cases the federal courts are bound to apply the choice of law principles of the forum state. Klaxon v. Stentor Electrical Manufacturing Co., Inc., 313 U.S. 487, 61 S.Ct. 1020, 85 L.Ed. 1477 (1940). Minnesota choice of law principles dictate that where the conflict is between substantive laws of the states, the better law methodology adopted by the Minnesota Supreme Court in Milkovich v. Saari, 295 Minn. 155, 203 N.W.2d 408 (1973) is determinative. When the conflict is between procedural laws, however, the United States Court of Appeals for the Eighth Circuit in Cuthbert son v. Uhley, 509 F.2d 225 (8th Cir.1975) found that Minnesota follows the rule that the procedural laws of the forum state apply automatically without reference to the Milkovich standards. Cuthbertson, 509 F.2d at 226. See American Mutual Liability Ins. Co. v. Reed Cleaners, 265 Minn. 503, 122 N.W.2d 178, 180, n. 1 (1963); Allen v. Nessler, 247 Minn. 230, 76 N.W.2d 793, 798-99 (1956); Knipfer v. Buhler, 227 Minn. 334, 35 N.W.2d 425, 426 (1948); In Re Daniel’s Estate, 208 Minn. 420, 294 N.W. 465, 469 (1940); Weston v. Jones, 160 Minn. 32, 199 N.W. 431, 432-433 (1924); Restatement, Second, Conflict of Laws § 142; Leflar, American Conflicts Law 303-305 (1968). Statutes of limitations are “procedural” and not “substantive;” hence, the federal courts are bound to observe Minnesota’s statutory limitations period when applying Minnesota law in a diversity action. Cuthbertson, 509 F.2d at 226.

II. Minnesota Statutory Limitations Periods in a Pine River Action

Given that Minnesota law governs this action, the next issue before the Court is whether the two-year limitations period of Minn.Stat. § 541.07(5) or the six-year limitations period of Minn.Stat. § 541.05, subd. 1(1) applies in a Pine River wrongful discharge chase. In Pine River State Bank v. Mettille, 333 N.W.2d 622 (Minn.1983) the Minnesota Supreme Court recognized a cause of action for breach of an employment contract consisting of procedural termination guarantees appearing in an employee handbook. For purposes of this motion, defendant admits that it was engaged in a Pine River contractual relationship with the plaintiff, based on defendant’s written manuals, policy statements, and oral assurances. Neither Pine River, Eklund v. Vincent Brass (recognizing cause of action for oral contract of employment), nor subsequent decisions of the Minnesota courts have established a limitations period in a de facto employment contract setting.

In a line of cases predating Pine River, however, the Minnesota courts clearly established that an action for breach of a contract of employment, whether oral or written, is governed by the two-year limitations period of Minn.Stat. § 541.07(5). In Kohout v. Shakopee Foundry Co., 281 Minn. 401, 162 N.W.2d 237 (1968) it was declared that a claim of breach of the terms of a collective bargaining agreement was governed by the two-year limitations period of section 541.07(5). The Kohout court stated:

[I]n the absence of some valid reason for treating common-law wage claims differently from those arising under a statute, we hold they are both governed by the 2-year limitation prescribed by Minn.St. 541.07(5).

162 N.W.2d at 239.

In Roaderick v. Lull Engineering Co., 296 Minn. 385, 208 N.W.2d 761 (1973) the section 541.07(5) limitations period was applied in a claim for breach of an oral contract of employment. In Worwa v. Solz Enterprises, Inc., 307 Minn. 490, 238 N.W.2d 628 (1976) the Minnesota Supreme Court reaffirmed that a claim for breach of an oral contract of employment was essentially a section 541.07(5) wages action, not a section 541.05 contract action, and that the two-year limitations statute governed.

The only case contrary to this line of authority is Buchholtz v. Swift & Co., 62 F.R.D. 581 (D.Minn.1973), in which the section 541.05, subd. 1(1) limitations period was held applicable to an employee’s joint claims against his employer and his union. Buchholtz is not controlling for two reasons.

First, Buchholtz was an action brought under section 301 of the Federal Labor Management Relations Act, 29 U.S.C. § 185(a), not a state law breach of employment contract case.

Second, Buchholtz was not a discharge case. In that case former employees sought unpaid vacation benefits. The essence of the Buchholtz cause of action was for breach of a collective bargaining agreement by the employer and breach of the union’s duty of fair representation. Finally, the Court notes that Buchholtz is no longer good law. When faced with precisely the same issue — an employee’s claim against the employer for breach of a collective bargaining agreement and against the union for breach of the duty of fair representation — the United States Supreme Court in DelCostello v. International Brotherhood of Teamsters, 462 U.S. 151, 103 S.Ct. 2281, 76 L.Ed.2d 476 (1983) held the six-year limitations period provided by state law inapplicable, opting instead for the six-month limitations period of section 10(b) of the National Labor Relations Act, 29 U.S.C. § 160(b). The DelCostello Court expressly found that the six-year limitations period for breach of contract provided by state law was “too long” in a labor context, 103 S.Ct. at 2291, relying on United Parcel Service, Inc. v. Mitchell, 451 U.S. 56, 101 S.Ct. 1559, 67 L.Ed.2d 732 (1981). An employer must know with reasonable certainty the nature and extent of potential legal liabilities against him. A waiting period of up to six years impairs the employer’s ability to plan effectively, and to assess the state of current operations. As stated in Peterson v. Parsons, 73 F.Supp. 840, 847 (D.Minn.1947):

[TJhere is nothing which an employer can do about determining the [wage claims against him] prior to the commencement of actions against him unless he engages in declaratory judgment litigation.

The Supreme Court in DelCostello found and the Court agrees that a limitations period shorter than the six-year breach of contract limitations period is necessary in the employment context to assure certainty in labor relations.

The fact that plaintiff’s is a Pine River claim does not change the analysis. As in Kohout, Roaderick, and Worwa, plaintiff’s is essentially a claim for breach of an oral contract of employment. The fact that some of the terms of the contract are drawn from defendant’s written manuals and policy statements on the strength of Pine River does not alter the conclusion reached in Kohout and progeny that a claim under an oral contract of employment is essentially a wages claim and not a contract action. The same policy concerns militating in favor of the shorter section 541.-07(5) limitations period — certainty in labor relations, the speedy resolution of labor disputes — are present in a Pine River wrongful discharge case.

Plaintiff’s cause of action arose on March 12, 1979, more than four years prior to the Minnesota Supreme Court’s Pine River decision. Nevertheless, the state of the law on the date plaintiff’s cause of action arose was as established in Kohout and related cases; a two-year statute of limitations in an action for the breach of an oral contract of employment. The fact that Pine River subsequently strengthened plaintiff’s claim does not alter the fact that at the time that case was decided he had already allowed the section 541.07(5) limitations period to run.

Plaintiff appears to be attempting to resurrect a stale claim given greater substance by Pine River. Nothing in Pine River or subsequent decisions of the Minnesota courts authorizes such a revival of a long-neglected action.

III. Tolling of the Section 541.07(5) Limitations Period

Defendant’s final arguments are that: (1) the running of the section 541.07(5) limitations period should be tolled during the pendency of plaintiff’s administrative complaint before the Minnesota Department of Human Rights; (2) defendant’s wrong was “ongoing,” so that section 541.07(5) operates to deprive plaintiff of his claim for the period March 12, 1979 to March 28, 1983 only, and not for the two years immediately preceding the filing of this action.

A. Tolling

Plaintiff filed a complaint with the Minnesota Department of Human Rights shortly after the termination of his employment, alleging age discrimination. His claim took more than five years to process, culminating in the Department’s decision not to pursue the complaint. It was after receiving notification of this decision of the Commission, plaintiff contends, that he filed the instant suit. Plaintiff’s position is that the section 541.07(5) period should be tolled while his claim was pending before the Commission.

Minnesota law is silent on the tolling of claims during the pendency of an administrative proceeding. In Soriano v. United States, 352 U.S. 270, 77 S.Ct. 269, 1 L.Ed.2d 306 (1957) the United States Supreme Court held that the filing of an administrative claim did not toll the limitations provisions of the Tucker Act where the administrative proceeding was not a prerequisite to filing suit. Plaintiff’s age discrimination claim was not a prerequisite to the instant suit; in fact, the claims appear to be totally unrelated, inasmuch as plaintiff does not allege in this action that his firing was based on age. The section 541.07(5) limitations period was not tolled while plaintiff pursued administrative remedies.

B. “Ongoing” Breach

Plaintiff next argues that because defendant’s breach of contract was “ongoing,” the section 541.07(5) statute of limitations ran only as to the first four years of his claim, and not as to the two years immediately preceding the filing of this action. In Brotherhood of Railway and Steamship Clerks v. State, 303 Minn. 178, 229 N.W.2d 3 (1975) a racial discrimination claim was found to be “ongoing,” so that a cause of action which arose in 1960 was not barred by the applicable six-month limitations period when brought in 1966. In that case, however, plaintiff employees remained on the defendant employer’s payroll. The effect of the discriminatory practice was not discharge, but rather a reduction in wages and loss of seniority. Where an employee is discharged, the Minnesota Supreme Court in Richardson v. School Board of I.S.D. No. 271, 297 Minn. 91, 210 N.W.2d 911 (1973) has stated that the date of discharge commences the statutory period of limitations. 210 N.W.2d at 916. While recognizing that acts continuing in nature would toll the applicable statute of limitations, the Richardson court declared that an “act of discharge was a single discriminatory practice, not continuing in nature____” Railway Clerks, 229 N.W.2d at 12 (emphasis added), citing Richardson, 210 N.W.2d at 916. The fact that damages continue to accrue from date of discharge to date of trial in a Pine River case, Pine River, 333 N.W.2d at 632, does not aid plaintiff inasmuch as any recovery is ultimately permised upon a timely filing of the complaint.

Plaintiff is not confronted with an ongoing disavowal of the terms of an employment contract, as in Railway Clerks, but with one rather dramatic breach, which completely severed the contractual relationship, and which took place nearly six years ago. The date of discharge triggers the running of the statutory period in a Pine River discharge action.

It is never satisfying to deny a party an opportunity to present its case on the ground that the applicable statute of limitations has run. Nevertheless, in some circumstances even a sympathetic claim must be so denied.

Based on the foregoing, IT IS ORDERED that defendant’s motion for summary judgment is granted.

LET JUDGMENT BE ENTERED ACCORDINGLY.

      . Minn.Stat. § 541.05 provides:
      Subdivision 1. Except where the uniform commercial code otherwise prescribes, the following actions shall be commenced within six years:
      (1) Upon a contract or other obligation, express or implied, as to which no other limitation is expressly prescribed;

      . Minn.Stat. § 541.07 provides:
      Except where the uniform commercial code or this section otherwise prescribes, the following actions shall be commenced within two years:
      (5) For the recovery of wages or overtime or damages, fees or penalties accruing under any federal or state law respecting the payment of wages or overtime or damages____

      . Plaintiff is a Minnesota resident; defendant is a Delaware corporation with its principal place of business in Michigan.

      . Minnesota choice of law principles dictate that in an action for breach of contract the five factor test of Milkovich v. Saari, 295 Minn. 155, 203 N.W.2d 408 (1973), is determinative. Hime v. State Farm Fire & Casualty Co., 284 N.W.2d 829 (Minn.1979). In Milkovich, the Minnesota courts abandoned the traditional lex loci test in favor of a “methodology of analysis” in which five factors are to be consulted in determining the governing law:
      (1) predictability of result;
      (2) maintenance of interstate and international order;
      (3) simplification of the judicial task;
      (4) advancement of the forum’s governmental interest;
      (5) application of the better rule of law.

        Hime, 284 N.W.2d at 833. The Court must determine as an initial matter whether the contacts with the forum state are sufficient to make application of that state’s law consistent with due process. Hime, 284 N.W.2d at 832, citing Clay v. Sun Ins. Office, Ltd., 377 U.S. 179, 182, 84 S.Ct. 1197, 1198, 12 L.Ed.2d 229 (1964).

      . The only case to which the Court’s attention has been drawn in which the issue has been addressed is Portlance v. Golden Valley State Bank, Henn.Co.File. No. 84-02682 (Aug. 16, 1985) (Durda, J.). There, the Minnesota district court found the six-year limitations period of section 541.05, subd. 1(1) applicable in a Pine River action. In that case, however, plaintiff sought reinstatement and incidental and consequential damages in addition to back pay. In the instant case, plaintiff seeks only wages.
      The Court finds doubtful the Portlance court’s reliance on a distinction in the damages sought. Under such a scheme, Pine River plaintiffs could willfully manipulate the applicable limitations period through a simple choice of damages pled. Minn.Stat. § 541.07(5) provides that "the term 'wages’ means all remuneration for services or employment.” (Emphasis added.) It seems unlikely that the Minnesota Legislature envisioned one limitations period for a wages claim, and another completely different limitations period in an action for wages plus reinstatement.

      . See also Funchie v. Packaging Corp. of America, 494 F.Supp. 662 (D.Minn.1980), holding that the section 541.07(5) period applied to a claim of lost wages and benefits under a collective bargaining agreement -under Minnesota law. Brotherhood of Railway and Steamship Clerks v. State, 303 Minn. 178, 229 N.W.2d 3 (1975), holding that the two-year limitations period applied for recovery of back wages in a dispute involving alleged racial discrimination against two black employees.

      . See Auto Workers v. Hoosier Cardinal Corp., 383 U.S. 696, 707, 86 S.Ct. 1107, 1114, 16 L.Ed.2d 192 (1966). (The relatively rapid disposition of labor disputes is a goal of federal labor law.)

      . Pine River was decided April 29, 1983.

      . Plaintiff's claim was filed March 28, 1985. Plaintiff was discharged March 12, 1979.

      . See also Honn v. National Computer Systems, Inc., 311 N.W.2d 1 (Minn.1981) in which the Minnesota Supreme Court declared “[w]here a money obligation is payable in installments, the general rule is that a separate cause of action arises on each installment and the statute of limitations begins to run against each installment when it becomes due." Honn, 311 N.W.2d at 2. That case concerned a section 541.05(1) contract action, however, not a section 541.07(5) wages claim. Further, the rationale supporting a payment date determinative limitations period in an installment contract setting is simply not present in a wrongful discharge case. The danger that failure to litigate a single missed installment will void a contract breach action years later does not arise when discharge itself constitutes the sole wrongful act.


author: DORSEY, District Judge.

text:
    Albert PALMUCCI and Elizabeth Palmucci v. GENERAL MOTORS ACCEPTANCE CORP.
    Civ. No. N-83-280 (PCD).
    United States District Court, D. Connecticut.
    Oct. 4, 1985.

      William H. Clendenen, Jr., Clendenen & Lesser, New Haven, Conn., for plaintiffs.
    Cheever Tyler, Wiggin & Dana, New Haven, Conn., for defendant.
   RULING ON CROSS-MOTIONS FOR SUMMARY JUDGMENT

DORSEY, District Judge.

Cross-motions for summary judgment on the sole remaining count in this consumer action require analysis of the tangled web of the truth-in-lending laws, i.e., the Consumer Credit Protection Act of 1968, as amended, particularly by the Truth-in-Lending Simplification Reform Act of 1980, codified at 15 U.S.C. §§ 1601, et seq.; Federal Reserve Board Regulation Z, 12 C.F.R. § 226 Supp. 1 (Reg. Z); and the Federal Reserve Board Staff Interpretations, 12 C.F.R. § 226(a) (Commentary), revised in 1981. Plaintiffs assert that parts of the standard retail installment contract (contract) used by General Motors Acceptance Corporation (GMAC) violate various format requirements imposed by truth-in-lending regulations. For the reasons below, and cognizant that so holding creates a split of authority within this district, summary judgment shall enter for defendant.

Facts

On December 3, 1982, plaintiffs executed a retail installment contract to finance the purchase of a 1983 Chevrolet. The contract, attached as Exhibit A, was assigned to defendant, GMAC. GMAC’s lien on the automobile was recorded on the vehicle’s certificate of title for which plaintiffs were charged $1.00. That charge was specified on Line 4D of the “Itemization of Amount Financed” in the contract. Mr. Palmucci also agreed to purchase optional credit life and credit disability insurance offered by GMAC and he so indicated by signing his name in a separate box in the contract labeled “Optional Credit Insurance.” The premium for the insurance was specifically disclosed on Line 4C of the “Itemization of Amount Financed,” and was referred to in the “Optional Credit Insurance” box in which those who purchase the insurance are informed that its cost is shown on Line 4C. Neither the lien fee nor the optional insurance premium was included in the “Finance Charge.” They were included in the “Amount Financed.”

Discussion

The Board of Governors of the Federal Reserve System is responsible for the implementation of truth-in-lending legislation. The Board’s regulations and staff interpretations translate the general goals and provisions of truth-in-lending laws into the detailed rules which govern credit transactions. Regulation Z, for example, promotes “the informed use of consumer credit by requiring disclosures about its terms and costs.” 12 C.F.R. § 226.1(b). It contains numerous technical specifications for the form and content of disclosures required of creditors. Failure to comply with either the substantive or format requirements of Reg. Z subjects the creditor to various civil liabilities. 15 U.S.C. § 1640.

Subpart C of Reg. Z contains the disclosure requirements for “closed-end” credit transactions, such as the simple, fixed-term installment loan in the instant case. Extensive excerpting of ¶¶ 17 and 18, the Commentary thereto, and the references therein, will aid in the resolution of the issues raised by the pending motions.

Regulation 226.17 General disclosure requirements

(a) Form of disclosures. (1) The creditor shall make the disclosures required by this subpart clearly and conspicuously in writing, in a form that the consumer may keep. The disclosures shall be grouped together, shall be segregated from everything else and shall not contain any information not directly related to the disclosures required under § 226.18. The itemization of the amount financed under § 226.18(c)(1) must be separate from the other disclosures under that section.

COMMENTARY:

17(a) Form of disclosures.
Paragraph 17(a)(1).
1. Clear and conspicuous. This standard requires that disclosures be in a reasonably understandable form. For example, while the regulation requires no mathematical progression or format, the disclosures must be presented in a way that does not obscure the relationship of the terms to each other. In addition, although no minimum type size is mandated, the disclosures must be legible, whether typewritten, handwritten, or printed by computer.
2. Segregation of disclosures. The disclosures may be grouped together and segregated from other information in a variety of ways. For example, the disclosures may appear on a separate sheet of paper or may be set off from other information on the contract or other documents:
—By outlining them in a box.
—By bold print dividing lines.
—By a different color background.
—By a different type style.
3. Location. The regulation imposes no specific location requirements on the segregated disclosures. For example:
—They may appear on a disclosure statement separate from all other material.
—They may be placed on the same document with the credit contract or other information, so long as they are segregated from that information.
—They may be shown on the front or back of a document.
—They need not begin at the top of a page.
—They may be continued from one page to another.
4. Content of segregated disclosures. Footnotes 37 and 38 contain exceptions to the requirement that the disclosures under § 226.18 be segregated from material that is not directly related to those disclosures. Footnote 37 lists the items that may be .added to the segregated disclosures, even though not directly related to those disclosures. Footnote 38 lists the items required under § 226.18 that may be deleted from the segregated disclosures and appear elsewhere. Any one or more of these additions or deletions may be combined and appear either together with or separate from the segregated disclosures. The itemization of the amount financed under § 226.18(c), however, must be separate from the other segregated disclosures under § 226.-18.
5. Directly related. The segregated disclosures may, at the creditor’s option, include any information that is directly related to those disclosures.

Regulation 226.18 Content of disclosures.

For each transaction, the creditor shall disclose the following information as applicable:
(a) Creditor. The identity of the creditor making the disclosures.
(b) Amount financed. The “amount financed,” using that term, and a brief description such as “the amount of credit provided to you or on your behalf.” The amount financed is calculated by:
(1) Determining the principal loan amount or the cash price (subtracting any downpayment);
(2) Adding any other amounts that are financed by the creditor and are not part of the finance charge; and
(3) Subtracting any prepaid finance charge.
(c) Itemization of amount financed.
(1) A separate written itemization of the amount financed, including:
(i) The amount of any proceeds distributed directly to the consumer.
(ii) The amount credited to the consumer’s account with the creditor.
(iii) Any amounts paid to other persons by the creditor on the consumer’s behalf. The creditor shall identify those persons.
(iv) The prepaid finance charge.
(2) The creditor need not comply with paragraph (c)(1) of this section if the creditor provides a statement that the consumer has the right to receive a written itemization of the amount financed, together with a space for the consumer to indicate whether it is desired, and the consumer does not request it.
(d) Finance charge. The “finance charge,” using that term, and a brief description such as “the dollar amount the credit will cost you.”
(e) Annual percentage rate. The “annual percentage rate,” using that term, and a brief description such as “the cost of your credit as a yearly rate.”
if if if if if if
(n) Insurance. The items required by § 226.4(d) in order to exclude certain insurance premiums from the finance charge.
(o) Certain security interest charges. The disclosures required by § 226.4(e) in order to exclude from the finance charge certain fees prescribed by law or certain premiums for insurance in lieu of perfecting a security interest.

COMMENTARY:

18(c) Itemization of amount financed. 1. Disclosure required. The creditor has 2 alternatives in complying with § 226.18(c):
—The creditor may inform the consumer, on the segregated disclosures, that a written itemization of the amount financed will be provided on request, furnishing the itemization only if the customer in fact requests it.
—The creditor may provide an itemization as a matter of course, without notifying the consumer of the right to receive it or waiting for a request.
Whether given as a matter of course or only on request, the itemization must be provided at the same time as the other disclosures required by § 226.18, although separate from those disclosures. 2. Additional information. Section 226.18(c) establishes only a minimum standard for the material to be included in the itemization of the amount financed. Creditors have considerable flexibility in revising or supplementing the information listed in § 226.18(c) and shown in model form H-3, although no charges are required.
18(n) Insurance.
1. Location. This disclosure may, at the creditor’s option, appear apart from the other disclosures. It may appear with any other information, including the amount financed itemization, any information prescribed by state law, or other supplementary material. When this information is disclosed with the other segregated disclosures, however, no additional explanatory material may be included.
18(o) Certain security interest charges. 1. Format. No special format is required for these disclosures; under § 226.4(e), taxes and fees paid to government officials with respect to a security interest may be aggregated, or may be broken down by individual charge. For example, the disclosure could be labelled ‘filing fees and taxes’ and all funds disbursed for such purposes may be aggregated in a single disclosure. This disclosure may appear, at the creditor’s option, apart from the other required disclosures. The inclusion of this information on a statement required under the Real Estate Settlement Procedures Act is sufficient disclosure for purposes of Truth in Lending.

Regulation 226.4 Finance charge

(a) Definition. The finance charge is the cost of consumer credit as a dollar amount. It includes any charge payable directly or indirectly by the consumer and imposed directly or indirectly by the creditor as an incident to or a condition of the extension of credit____
(d) Insurance. (1) Premiums for credit life, accident, health, or loss-of-income insurance may be excluded from the finance charge if the following conditions are met:
(i) The insurance coverage is not required by the creditor, and this fact is disclosed.
(ii) The premium for the initial term of insurance coverage is disclosed. If the term of insurance is less than the term of the transaction, the term of insurance also shall be disclosed. The premium may be disclosed on a unit-cost basis only in open-end credit transactions, closed-end credit transactions by mail or telephone under § 226.17(g), and certain closed-end credit transactions involving an insurance plan that limits the total amount of indebtedness subject to coverage.
(iii) The consumer signs or initials an affirmative written request for the insurance after receiving the disclosures specified in this paragraph. Any consumer in the transaction may sign or initial the request.
(e) Certain security interest charges. If itemized and disclosed, the following charges may be excluded from the finance charge:
(1) Taxes and fees prescribed by law that actually are or will be paid to public officials for determining the existence of or for perfecting, releasing or satisfying a security interest.

COMMENTARY:

4(d) Insurance.
1. General. Section 226.4(d) permits insurance premiums and charges to be excluded from the finance charge. The required disclosures must be made in writing. The rules on location of insurance disclosures for closed-end transactions are in § 226.17(a).
4(e) Certain security interest charges.
1. Examples. Examples of charges ex-cludable from the finance charge under § 226.4(e)(1) include:
—Charges for filing or recording security agreements, mortgages, continuation statements, termination statements, and similar documents.
—Stamps evidencing payment of taxes on property if the stamps are required to file a security agreement on the property.
Only sums actually paid to public officials are excludable under § 226.4(e)(1).
2. Itemization. The various charges described in § 226.4(e)(1) may be totaled and disclosed as an aggregate sum, or they may be itemized by the specific fees and taxes imposed. If an aggregate sum is disclosed, a general term such as security interest fees or “filing fees” may be used.
3. Notary fees. In order for a notary fee to be excluded under § 226.4(e)(1), all of the following conditions must be met:

The provisions above reveal the paradox of truth-in-lending law: how to provide a simple, clear disclosure to the consumer is a matter of forbidding complexity.

Generally, all federally required disclosures must be grouped together inside what is commonly referred to as the “federal box,” and kept segregated from disclosures which may otherwise be required or permitted, e.g., by state law. See Commentary ¶ 17(a)(1). There are four exceptions to the rule that required disclosures appear in the federal box. These exceptions and the interplay among them are the predicate for plaintiffs’ claims that the contract violates the format rules of Reg. Z.

A. The first exception is that the computation or “itemization” of the amount financed, required by Commentary It 18(c)(1), must appear outside the federal box.
B. Second, at the discretion of the creditor, certain information which is “directly related” to required disclosures may appear inside the federal box. Examples of such “directly related” information, listed in Commentary 1117(a)(l)(5), include a description of the grace period for late payments, brief captions, and other explanatory material.
C. Third, footnote 37 permits certain routine information not required to be disclosed, such as the consumer’s name, address and account number, to appear in the federal box.
D. Finally, footnote 38 permits certain required disclosures, including security interest filing charges and credit insurance information to be made either “together or separately from other required disclosures,” i.e., inside or outside the federal box.

Thus, the regulation sets forth what must be disclosed and separately provides for the place of disclosure.

I.

Against this backdrop, plaintiffs first claim that GMAC’s disclosure of a $1.00 lien listing fee solely in the itemization of the loan amount financed fails to comply with Reg. Z. Plaintiffs claim that a creditor who opts, under footnote 38, to disclose the lien listing fee outside the federal box may not make the disclosure solely in the itemization of the amount financed, as GMAC has done. See Exhibit A, Line 4D, Itemization of Amount Financed, listing “Lien Fee $1.00” under the subcaption “Official Fees Paid to Government Agencies,” and the principal caption “Other Charges Including Amounts Paid to Others on Your Behalf.” Instead, because Commentary 1117(a)(1) provides that the itemization, as an entirety, must be “separate from the other disclosures under [1Í18],” plaintiffs argue that this fee must be disclosed separately from the entire itemization and, if the creditor opts to disclose it in the itemization of the amount financed, another, separate disclosure must be made elsewhere in the loan documents.

Faced with the identical issue in Lewis v. Award Dodge, Inc., 620 F.Supp. 135 (D.Conn.1985), this court, Eginton, J., held that the controlling law does require two separate disclosures of the lien fee, and that the disclosure of the lien fee solely in the itemization of the amount financed rendered the credit corporation liable to the consumer for statutory damages and attorney’s fees under 15 U.S.C. § 1640. See, to the same effect, a Proposed Ruling Granting Plaintiffs’ Motions for Partial Summary Judgment against Chrysler Credit Corp. in the consolidated matters of Iulo v. B.A. Center, Civil No. N-83-625 (EEB), and Alzo v. Brennan Dodge, Civil No. N-84-223 (EEB) (7/11/85). See also Jiminez v. McDermott Chevrolet, Civil No. N-84-20 (TFGD) (2/22/85), and Russo v. Wallingford Auto Co., Civil No. N-83-642 (WWE) (3/5/85) (recommended granting of summary judgment motions similar to plaintiffs here on their merits but in the absence of opposing memoranda, citing Rule 9(a), Local Rules of Civil Procedure, District of Connecticut; both cases vacated by agreement as settled).

After reviewing Reg. Z and the Commentary, the undersigned respectfully differs, finding that, while two different provisions pertain to the disclosure of the lien fee in question, double disclosure is not required.

Plaintiffs’ claim is that Commentary If 17(a)(1) (requiring that the itemization, as an entity, be “separate from the other disclosures under” 1Í18) requires the itemization, as an entity, to be physically separate from all other required closed-end credit disclosures. The parallel and more pointed provisions of the statute itself, at 15 U.S.C. § 1638(a)(2)(A) (the itemization or computation “shall not be disclosed with the disclosures conspicuously segregated in accordance with subsection (b)(1) of this section”) (emphasis added), and the Commentary II 17(a)(l)(4) (the itemization must be “separate from the other segregated disclosures under” 1118) (emphasis added), make clear that the critical language relied on by plaintiffs requires merely that the entire itemization be physically separate from the federal box disclosures. Inasmuch as footnote 38, noted above, grants creditors the option to disclose security interest charges outside the federal box, the language relied on by plaintiff — that the entire itemization be separate from the federal box — neither supports nor even suggests that double disclosure of the lien fee is required. Nor does any other provision of the statute, Reg. Z, or the Commentary, preclude the footnote 38 disclosure from being listed in the itemization of the amount financed.

Indeed, commentators have uniformly agreed that footnote 38 disclosures are not precluded from appearing with or in the itemization. See, e.g., D. Replansky, Truth-in-Lending and Regulation Z: A Practice Guide to Closed-End Credit 76 (1984) (If the creditor chooses to exclude the footnote 38 material from the federal box, it “may appear with any other information, including the itemization of the amount financed. ... ”); R. Rohner, The Law of Truth-in-Lending 113.05[2][a] at 3-45, n. 252 (1984) (advising creditor caution in “designing systems to disclose security interest charges as a part of the itemization of the amount financed,” not because of a necessity for a double disclosure, but because itemization need not be provided if the creditor discloses in the federal box that the consumer has a right to request an itemization and the consumer fails to do so.); and R. Clontz, Jr., Truth-in-Lending Manual ¶ 5.02[15] (Supp. I 1984) (Furnishing security interest related charge disclosures solely as a part of the itemization of amount financed “with no like disclosure blanks provided inside the [fjederal ... [b]ox ... will work fine____”)

Accordingly, it is the considered view of the undersigned that “double disclosure” of the lien fee is not mandated by law. Rather, the truth-in-lending laws pursuant to footnote 38 permit the disclosure of security interest charges in the itemization of the amount financed, so long as the entire itemization is separate from (outside) the federal box. Of course, the content of the footnote 38 disclosure must satisfy other provisions of Reg. Z. Plaintiffs’ first claim is, therefore, unavailing.

II.

Plaintiffs’ second claim is that defendant’s footnote 38 credit insurance disclosure is also deficient. Originally, their argument on this point closely tracked their objection to defendant’s footnote 38 security interest disclosure, as discussed above. Recognizing, however, that Commentary ¶ 18(n) specifically permits the insurance disclosure to “appear with any other information, including the amount financed itemization,” plaintiffs now claim merely that it is wrong to “split” the disclosure of the premium amount (now listed on Line 4C of the itemization of amount financed) from the other required insurance disclosures (now located in the “insurance box”). See Exhibit A. The court, however, adopts a contrary view of both the facts and the law.

The Optional Credit Insurance provision, after disclosing that credit life and disability insurance “are not required to obtain credit and will not be provided unless you sign for them and agree to pay the additional cost,” then goes on to inform the consumer that if option insurance is requested “the cost is shown ... [on Line] 4C of the itemization above.” It is inappropriate to characterize as “split” a disclosure in which the insurance box, which contains two of the three required disclosures, incorporates by cross-reference the third requirement, the premium cost, disclosed four inches above that box in the itemization of amount financed. So long as the insurance disclosure includes all the required items in close proximity so that the consumer can readily understand his/her rights and the cost of insurance, such a disclosure, even though nominally split, complies with the law. See, e.g., D. Replansky, Truth-in-Lending and Regulation Z 175:

[Although the better practice is to place the cost of the insurance in close proximity to the rest of the disclosures, it is not required. Thus the cost or premium could be included in the itemization of the amount financed, whereas the other disclosures and affirmative request appear elsewhere. If the separation is too great or confusing, however, the creditor may not meet the requirement that the disclosures be clear and conspicuous.

As defendant’s insurance disclosure is neither unclear nor inconspicuous, the disclosure complies with the law.

III.

Plaintiffs’ final claim pertains to the phrasing of the following provisions in defendant’s “federal box” disclosure:

Prepayment. If you pay off all your debt early, you will not have to pay a penalty and you may be entitled to a refund of part of the finance charge.

(Emphasis added). Plaintiffs assert that because the underscored phrase is gratuitous vis-a-vis their loan, and not, therefore, “directly related” to required disclosures, it is not permitted to be placed with the required disclosures in the “federal box.” Reg. Z, § 226.17(a).

Because the consequences of prepayment depend upon the manner of computing interest on the loan, disclosure obligations differ depending upon the type of loan involved. In a simple interest (self-amortizing) transaction, where all or part of the finance charge is computed by applying a rate to an unpaid principal balance, the creditor must disclose, within the federal box, whether or not a penalty may be imposed in the event of prepayment. Reg. Z, § 226.18(k)(l). When the finance charge is calculated in any other way, including by a precomputed finance charge as was concededly used here, the creditor must disclose whether or not any part of the finance charge may be rebated upon prepayment. Reg. Z, § 226.18(k)(2). Where the finance charge includes both simple and non-simple interest, both penalty and rebate disclosures are required. See generally R. Rohner, The Law of Truth-in-Lending ¶ 5.05[11].

Defendant’s statement “you will not have to pay a penalty” is a permissible disclosure “directly related” to the required (segregated) disclosures, and not improperly placed in the federal box. This is particularly so in light of the requirement that the creditor “give a definitive statement of whether or not a penalty will be imposed or a rebate given.” Reg. Z, § 226.18(k). It is not without significance to a debtor to know that he/she will not have to pay a prepayment penalty.

Accordingly, summary judgment shall enter for defendant, General Motors Acceptance Corp., as to all claims raised by plaintiffs.

SO ORDERED.

EXHIBIT A

       The disclosures may include an acknowledgment of receipt, the date .of the transaction, and the consumer's name, address, and account number.

       The following disclosures may be made together or separately from other required disclosures: the creditor’s identity under § 226.-18(a), the variable rate example under § 226.-18(f)(4), insurance under § 226.18(n), and certain security interest charges under § 226.18(o).


author: ORINDA D. EVANS, District Judge.

text:
    PACIFIC AND SOUTHERN COMPANY, INC., d/b/a WXIA-TV v. Carol DUNCAN, d/b/a TV News Clips.
    Civ. No. C81-1106.
    United States District Court, N.D. Georgia, Atlanta Division.
    Oct. 7, 1985.

      James C. Rawls, V. Robert Denham, Jr., Powell, Goldstein, Frazer & Murphy, Atlanta, Ga., for plaintiff.
    L. Ray Patterson, Emory Law School, Atlanta, Ga., Lynwood A. Maddox, Decatur, Ga., for defendant.
   ORDER

ORINDA D. EVANS, District Judge.

This case is before the court for entry of a permanent injunction following a partial reversal and remand with directions issued by the United States Court of Appeals for the Eleventh Circuit. Pacific and Southern Co., Inc. v. Duncan, 744 F.2d 1490 (11th Cir.1984).

Following receipt of the remittitur, the court met with counsel for the parties. The parties attempted to prepare a consent order for entry by the court, but were unable to agree on the form of an order. The parties have submitted for the court’s consideration two widely differing proposed injunctive orders.

In fashioning an injunction in this case, the court must be guided by two considerations. First, any injunction must strictly comply with the direction of the Court of Appeals. Secondly, any injunctive order must give specific, clear instructions to the Defendant. Fed.R.Civ.P. 65(d). It would be inappropriate to generally enjoin “any infringement” of WXIA’s copyright, and similarly inappropriate to generally exempt from the injunction copying of any “uncopyrightable material.”

As stated in the Court of Appeals’ opinion, WXIA erases its program videotapes 7 days after the broadcast. However, it retains a written transcript of the program for a year, an audiotape of the program for an indefinite period of time, and videotape copies of all news stories taped before broadcasts and stories originating live from a location outside the studio. 744 F.2d at 1493. Therefore, even after the videotape of the entire program is erased, WXIA is in a position to reconstitute its newscast except for any visual elements which were broadcast live from within the studio during the newscast. It is apparent that these visual elements would vary from one newscast to the next, both in quantitative and qualitative terms. For example, some newscasts would have more time dedicated to the live presentation of news by the news desk “anchor person” than would others.

WXIA has suggested, in its proposed injunctive order, that the court treat as abandoned the visual aspect of the news desk part of each newscast. In other words, it stipulates that News Clips could photograph the anchorperson seated at the news desk (because that film footage is discarded by WXIA after a week), but not make any tape recording of the words spoken by the anchor person or reporter (because an audiotape is retained indefinitely). Such right to photograph, however, would be of no utility to News Clips, which is seeking to sell the informational aspect of the newscast which applies to a particular customer. Similarly, the court determines that other live visual aspects of the newscast which are not retained by the station beyond 7 days (primarily the printed captions) are of such an insubstantial nature standing alone they would be of no real interest to News Clips’ customers. Accordingly, the court will not exempt from the injunctive order issued herein any abandoned portions of WXIA’s broadcasts.

The court has discussed with counsel the question whether the injunctive order should exempt any portion of the newscast on the basis of subject/format considerations. As stated in this court’s original order, newscasts frequently include film footage of public events, for example, a news conference held by President Reagan. The taping of such an event by a news crew involves limited creative judgments and the value of such information to the public is presumptively high. However, it would be difficult to identify exactly which such events would be protected and to describe them with the required specificity. For example, would a station reporter’s interview of the president of a large public utility be entitled to such protection?

The court finds, however, that it need not deal with this issue. The Court of Appeals affirmed this court’s ruling that News Clips’ copying and selling WXIA’s newscasts violated WXIA’s copyright. In reversing the determination that injunctive relief was inappropriate, the Court of Appeals expressly held that this court had abused its discretion in applying First Amendment considerations differently as between the liability and relief aspects of the case. The Court of Appeals stated in part:

The scope of liability affects First Amendment interests, but the choice of the form of relief in this case does not.

744 F.2d at 1500. This holding is the law of the case, and the court concludes that it is not free to exempt portions of broadcasts on a subject/format basis.

Finally, News Clips asserts that the court should enjoin it not from copying the newscasts, but only from selling them. News Clips points out that in Sony Corp. v. Universal City Studios, 464 U.S. 417, 104 S.Ct. 774, 78 L.Ed.2d 574 (1984), the Supreme Court held that copying for personal use is not a violation of the copyright laws. According to News Clips’ letter brief, it now desires to videotape WXIA’s newscasts, and use the videotape only to prepare a written summary which can be sold to clients.

The court rejects News Clips’ argument. First, it finds that the Supreme Court did not rule so broadly in Sony as News Clips suggests. Rather, the Supreme Court focused on the non-commercial nature of videotaping for personal home use. The Court specifically stated that if a videorecorder “were used to make copies for a commercial or profit making purpose, such use would presumptively be unfair.” 104 S.Ct. at 792. Furthermore, the Court of Appeals, applying Sony, expressly held that the Defendant’s videotaping violated WXIA’s copyright. The Court of Appeals’ ruling was not limited merely to sales of copyrighted material.

Accordingly, the court hereby issues the following injunction: TV News Clips, Carol Duncan, and all persons acting in concert with them, or either of them, are hereby permanently RESTRAINED AND ENJOINED from copying or selling copies of WXIA-TV’s broadcast news programs, in whole or in part.

      . News Clips' proposed injunctive order does not request that the court exempt from any injunction the abandoned aspects described.

      . "TV News Clips” expressly includes TV News Clips of Atlanta, Inc., which the court has been informed is the corporate successor in interest to Carol Duncan, d/b/a TV News Clips.