author: HIGGINS, District Judge.

text:
    Betty A. BAKER and husband, Claude L. Baker v. VANDERBILT UNIVERSITY, John Flexner, M.D., and Richard Stein, M.D.
    No. 3-84-0734.
    United States District Court, M.D. Tennessee, Nashville Division.
    July 23, 1985.

      Norman D. Lane, Hildebrand, Nolan, Lane, Underhill, Mondelli & Porter, Nashville, Tenn., Marvin P. Nunley, Owensboro, Ky., for plaintiff.
    John S. Bryant, Nancy-Ann E. Min, Bass, Berry & Sims, Nashville, Tenn., for defendant.
   MEMORANDUM

HIGGINS, District Judge.

The plaintiffs, Betty A. Baker and Claude L. Baker, have moved this Court for an order declaring the provisions of Tenn. Code Ann. § 29-26-119, abrogating the collateral source rule in medical malpractice cases, to be unconstitutional under both the United States Constitution and the Tennessee Constitution. For the reasons set forth in this memorandum, this Court declines to issue such an order.

I.

United States Constitution

The plaintiffs’ challenge to Tenn. Code Ann. § 29-26-119 under the United States Constitution is grounded on the equal protection clause of the Fourteenth Amendment. The plaintiffs assert that victims of medical malpractice are denied equal protection as compared with victims of other torts and that the classification between physicians guilty of malpractice and other tortfeasors is totally unreasonable.

The initial inquiry is the level of scrutiny to be applied to the statutory classification under attack. Generally, a classification is subject to strict scrutiny when it impermissibly interferes with the exercise of a fundamental right explicitly or implicitly protected by the Constitution (e.g., voting, travel, privacy) or operates to the particular disadvantage of a “suspect” class (e.g., race). San Antonio Independent School District v. Rodriguez, 411 U.S. 1, 17, 93 S.Ct. 1278, 1288, 36 L.Ed.2d 16, 33 (1973). Under the strict scrutiny test, the government must demonstrate that its “classification has been precisely tailored to serve a compelling governmental interest.” Plyler v. Doe, 457 U.S. 202, 217, 102 S.Ct. 2382, 2395, 72 L.Ed.2d 786, 799 (1982). Under the rational basis test, which is applicable to economic and social legislation not involving “suspect” classes or impinging upon fundamental rights, “[a] statutory discrimination will not be set aside if any state of facts reasonably may be conceived to justify it.” McGowan v. Maryland, 366 U.S. 420, 426, 81 S.Ct. 1101, 1105, 6 L.Ed.2d 393, 399 (1961). Under an intermediate level of scrutiny, which has been recognized in gender discrimination cases, a classification will be upheld only when it serves important government objectives and is substantially related to achievement of those objectives. Craig v. Boren, 429 U.S. 190, 197, 97 S.Ct. 451, 457, 50 L.Ed.2d 397, 407 (1976).

The plaintiffs, asserting that an “important” interest is implicated by the abrogation of the collateral source rule, contend that the appropriate standard of scrutiny is the intermediate level. Although the Supreme Court has indicated a willingness to go beyond the traditional very relaxed “rational basis” test in areas besides gender discrimination, see, e.g., Plyler v. Doe, 457 U.S. 202, 102 S.Ct. 2382, 72 L.Ed.2d 786 (1982) (education); Trimble v. Gordon, 430 U.S. 762, 97 S.Ct. 1459, 52 L.Ed.2d 31 (1977) (illegitimacy), and although the plaintiffs’ view has been accepted by some Courts, see, Carson v. Maurer, 120 N.H. 925, 424 A.2d 825 (1980); Arneson v. Olson, 270 N.W.2d 125 (N.D.1978); Doran v. Priddy, 534 F.Supp. 30 (D.Kan. 1981), this Court agrees with the decisions of courts in Iowa, Arizona, California, and Nebraska, which employ the rational basis test. See, Rudolph v. Iowa Methodist Medical Center, 293 N.W.2d 550 (Iowa 1980); Eastin v. Broomfield, 116 Ariz. 576, 570 P.2d 744 (1977); Barme v. Wood, 37 Cal.3d 174, 689 P.2d 446, 207 Cal.Rptr. 816 (1984); Prendergrast v. Nelson, 199 Neb. 97, 256 N.W.2d 657 (1977). The Court also finds persuasive the recent decision of the Tennessee Supreme Court in Harrison v. Schrader, 569 S.W.2d 822 (Tenn,1978), which used a rational basis test in assessing the constitutionality of the three-year statute of limitations provided by the Tennessee Medical Malpractice Act. In reaching its conclusion, the Court believes that, although the judicial process is involved, Tenn.Code Ann. § 29-26-119 is primarily “economic and social legislation” regulating the relationship between physicians, patients, and insurance carriers, which, absent suspect classifications or impingement on fundamental rights, is governed by the rational basis test. See, Hodel v. Indiana, 452 U.S. 314, 331, 101 S.Ct. 2376, 2386-87, 69 L.Ed.2d 40, 55 (1981); see also, Williamson v. Lee Optical of Oklahoma, 348 U.S. 483, 75 S.Ct. 461, 99 L.Ed. 563 (1955). In addition, the Court simply does not believe that a medical malpractice litigant’s right to receive payment for the same economic injuries from an insurance carrier as compared with litigants in other types of tort claims rises to the level of an “important” interest of constitutional magnitude.

Applying the rational basis test to Tenn.Code Ann. § 29-26-119, the Court has little trouble in upholding the statute. The statute is rationally related to the legitimate governmental objective of reducing malpractice insurance premiums and health care costs, and the classification between medical malpractice litigants and other litigants is in furtherance of that objective. Thus, it is constitutional. See, Western & Southern Life Insurance Co. v. State Board of of Equalization of California, 451 U.S. 648, 668, 101 S.Ct. 2070, 2083, 68 L.Ed.2d 514, 530-31 (1981). Although the plaintiffs may or may not be correct that the "malpractice crisis” has ended, this determination is more properly made by the Tennessee Legislature than by this Court. Certainly this Court is not convinced that the “legislative facts on which the classification is apparently based could not reasonably be conceived to be true by the governmental decisionmaker.” Vance v. Bradley, 440 U.S. 93, 111, 99 S.Ct. 939, 949, 59 L.Ed.2d 171, 184 (1979).

II.

Tennessee Constitution

The plaintiffs also attack Tenn.Code Ann. § 29-26-119 under Article 11, Section 8, of the Tennessee Constitution. The Court regards the decision of the Tennessee Supreme Court in Harrison v. Schrader, 569 S.W.2d 822 (Tenn.1978), which upheld another section of the Medical Malpractice Act against a similar challenge, as controlling on this issue. Even if the Court believed otherwise, in light of the delicate federal-state balance, the Court would be extremely hesitant to invalidate a State statute on State constitutional grounds, absent clear guidance from the Tennessee Courts.

III.

Accordingly, the plaintiffs’ constitutional challenge to Tenn.Code Ann. § 29-26-119 is rejected. An appropriate order will be entered denying the plaintiffs’ motion to declare this statute unconstitutional.

      . Tenn.Code Ann. § 29-26-119 provides as follows:
      In a malpractice action in which liability is admitted or established, the damages awarded may include (in addition to other elements of damages authorized by law) actual economic losses suffered by the claimant by reason of the personal injury, including, but not limited to cost of reasonable and necessary medical care, rehabilitation services, and custodial care, loss of services and loss of earned income, but only to the extent that such costs are not paid or payable and such losses are not replaced, or indemnified in whole or in part, by insurance provided by an employer either governmental or private, by social security benefits, service benefit programs, unemployment benefits, or any other source except the assets of the claimants or of the members of the claimants’ immediate family and insurance purchased in whole or in part, privately and individually.

      . The equal protection clause of the Fourteenth Amendment provides that: "No State shall ... deny to any person within its jurisdiction the equal protection of the laws.”

      . The essence of plaintiffs’ insistence is an asserted constitutional right to be paid twice for the same economic injuries.

      . The concept that it is the Court’s function to pass on the wisdom of legislative policy is disclaimed.

      . Article 11, Section 8, of the Tennessee Constitution provides in relevant part as follows:
      The Legislature shall have no power to suspend any general law for the benefit of any particular individual, nor to pass any law for the benefit of individuals inconsistent with the general laws of the land; nor to pass any law granting to any individual or individuals, rights, privileges, immunitie, [immunities] or exemptions other than such as may be, by the same law extended to any member of the community, who may be able to bring himself within the provisions of such law.


source: Caselaw Access Project

author: MYRON L. GORDON, Senior District Judge.

license: Public Domain

text:
    Sheila BAST and Ronald Bast, Plaintiffs, v. A.H. ROBINS COMPANY, INC., et al., Defendants. Mary K. FULLERTON and James Fullerton, Plaintiffs, v. A.H. ROBINS COMPANY, INC., et al., Defendants. Kathleen C. GRAVES and Marvin Graves, Plaintiffs, v. A.H. ROBINS COMPANY, INC., et al., Defendants.
    Nos. 85-C-323, 85-C-329 and 85-C-330.
    United States District Court, E.D. Wisconsin.
    July 23, 1985.

      Gilda B. Shellow, Shellow, Shellow & Glynn, Milwaukee, Wis., John A. Cochrane, Cochrane & Bresnahan, St. Paul, Minn., for plaintiffs.
    Stuart Parsons, Mark E. Sanders, and Angela L. Johnson, of Quarles & Brady, Milwaukee, Wis., for Aetna.
    Edmund Powell of Borgelt, Powell, Peterson & Frauen, Milwaukee, Wis., for A.H. Robins Co.
   DECISION and ORDER

MYRON L. GORDON, Senior District Judge.

In each of these Daikon Shield device actions, the plaintiffs seek to impose direct liability for their injuries upon Aetna Casualty and Surety Company, the A.H. Robins Company’s insurance carrier. The plaintiffs allege seven substantive theories of recovery, including one arising under 18 U.S.C. § 1961, et seq., the Racketeer Influenced and Corrupt Organizations Act. (RICO). Aetna moves to dismiss all claims against it pursuant to Rules 8(a), 9(b), and 12(b)(6) of the Federal Rules of Civil Procedure. Its motion will be granted.

The complaints in these cases are virtually identical and assert allegations of negligence (count 1), strict liability (count 2), breach of implied (count 3) and express (count 4) warranties, misrepresentation (count 5), and fraud (count 6). Count 7 alleges a “civil RICO” violation. In addition, count 8 purports to state a claim for loss of society and companionship on behalf of the plaintiffs’ spouses.

Counts 1 and 4 fail to allege the basic facts demonstrating the plaintiffs’ entitlement to relief from Aetna. As to count 1, which charges negligence, the plaintiffs’ complaints are “fatally flawed by an omission to set forth all of the essential elements of the claim.” Johnson v. United States, 547 F.2d 688, 695 (D.C.Cir.1976); the complaints do not aver the existence of a duty of care owed the plaintiffs by Aetna, its breach by Aetna, and resultant injuries proximately caused by such breach. Paragraph 18 of count 4, charging Aetna with aiding Robins in the making of “false express warranties,” is wholly conclusory and so devoid of factual averments as to prevent Aetna from adequately forming a responsive pleading.

Counts 2, 3, 5, and 6 name and refer only to Robins; they do not name or otherwise refer to defendant Aetna in any manner whatsoever. As such, these four counts are devoid of any substantive allegation against Aetna and thus, to paraphrase the court in Murphy v. White Hen Pantry Co., 691 F.2d 350, 353 (7th Cir. 1982), leave one without a clue as to what the case against Aetna is about. Likewise, count 6, the fraud count, completely ignores Aetna and as such does not satisfy Rule 9(b). See Haroco, Inc. v. American National Bank and Trust Co., 747 F.2d 384, 405 (7th Cir.1984), where the court reiterated that Rule 9(b) requires allegations of fraud to specify “with particularity” the circumstances of the alleged fraud.

Count 7, sounding in “civil RICO,” charges Aetna with participating in an enterprise comprised of all the defendants which engaged in a pattern of racketeering activity in violation of 18 U.S.C. § 1962(c). That section prohibits any person associated with any enterprise engaged in interstate commerce from participating “in the conduct of such enterprise’s affairs through a pattern of racketeering activity.” 18 U.S.C. § 1962(c). Section 1964(c), in turn, provides a private right of action for treble damages to “[a]ny person injured in his business or property by reason of a violation of section 1962 of this chapter____” See Sedima, S.P.R.L. v. Imrex Co., Inc., — U.S. —, 105 S.Ct. 3275, 87 L.Ed.2d 346 (1985).

The plaintiffs’ RICO claims against Aetna must be dismissed pursuant to Rule 12(b)(6), Federal Rules of Civil Procedure, for failure to state a claim upon which relief can be granted. These are essentially product liability cases involving claims that the plaintiffs suffered illness and injuries secondary to their contraceptive use of the Daikon Shield IUD, as manufactured and marketed by the A.H. Robins Company, including unplanned pregnancies, spontaneous incomplete septic abortions, migration of the IUD, hysterectomies, pelvic inflammatory disease, and pelvic adhesion.

In Bankers Trust Co. v. Rhoades, 741 F.2d 511, 515 (2d Cir.1984), the court held that “a person physically injured ... is not given a right to recover for his personal injuries” under § 1964(c). That section, the court held, permits suit for injuries to one’s business or some other proprietary interest. Bankers Trust, supra, 741 F.2d at 515. The complaints in the cases at bar, however, contain absolutely no allegations relating to the “proprietary type of damage” which the plaintiffs must show in order to satisfy the “business or property” injury requirement in a § 1964(c) RICO action. Bankers Trust, supra, 741 F.2d at 515.

Count 8, claiming loss of society and companionship on behalf of the plaintiffs’ spouses, does not allege any facts demonstrating their entitlement to relief from Aetna. Rule 8(a)(2). Despite the liberal pleading policy in the Federal Rules, the plaintiffs have failed to meet their pleading burden, Murphy, supra, 691 F.2d at 353, and count 8 must be dismissed so far as it purports to allege direct liability against Aetna.

Therefore, IT IS ORDERED that Aetna’s motion to dismiss all claims asserted against it in these actions be and hereby is granted.


author: MURRAY M. SCHWARTZ, Chief Judge.

text:
    PHILLIPS PETROLEUM COMPANY, Shell Oil Company, Northern Petrochemical Company, and El Paso Products Company, and Himont, U.S.A., Inc., Plaintiffs, v. UNITED STATES STEEL CORP., Hercules Incorporated and Phillips Petroleum Company, Defendants.
    Civ. A. Nos. 83-143, 83-148, 83-547, 83-801, 84-79 and 85-255 MMS.
    United States District Court, D. Delaware.
    July 24, 1985.

      C. Waggaman Berl, Jr., Wilmington, Del. (Harry J. Roper, Sidney Neuman, George S. Bosy, Nicholas A. Poulos, and William P. Oberhardt, Neuman, Williams, Anderson & Olson, Chicago, Ill., of counsel), for Phillips Petroleum Co. and Shell Oil Co.
    Charles S. Crompton, Jr., Potter, Anderson & Corroon, Wilmington, Del. (Francis T. Carr, Kenneth E. Madsen, and James Galbraith, Kenyon & Kenyon, New York City, of counsel), for Northern Petrochemical Co., U.S. Steel Corp., Hercules Inc. and Himont, U.S.A., Inc.
    Arthur G. Connolly, Jr., Connolly, Bove, Lodge & Hutz, Wilmington, Del. (Thomas F. Reddy, Jr., and Stanton T. Lawrence, III, Pennie & Edmonds, New York City, of counsel), for El Paso Products Co.
   OPINION

MURRAY M. SCHWARTZ, Chief Judge.

With the October, 1985 trial date in the Phillips Petroleum Company (“Phillips”) polypropylene litigation looming ahead, a new actor has appeared on the already crowded stage to play out the remaining scenes of the lawsuit. On April 30, 1985, Himont U. S.A., Inc. (“Himont”) filed an action for declaratory judgment, averring that Phillips’ U.S. Patent No. 4,376,851 (“the ‘851 patent”) is invalid, unenforceable, and not infringed by Himont’s activities. By order of this Court dated May 29, 1985, Himont’s suit was consolidated for pre-trial purposes with five previously consolidated actions arising from the same patent. Himont, the holder of a non-exclusive license under the patent, now appears before the Court requesting a preliminary injunction to prevent Phillips from terminating its license.

The license agreement, executed between Phillips and Hercules Incorporated and subsequently assigned by Hercules to Himont, permits the production of any product which is covered by the ‘851 patent in exchange for royalty payments to Phillips. The scope of the license is coextensive with the patent's single claim to “normally solid polypropylene, consisting essentially of recurring polypropylene units, having a substantial crystalline polypropylene content.” The license is to remain in effect for the life of the patent, absent default by the licensee or failure to comply with any of the license terms.

Himont contends it has been paying royalties assiduously for its manufacture of the basic polypropylene homopolymer, but has withheld royalties on certain, copolymers because of what it terms a “bona fide dispute” with Phillips over whether these products are within the scope of the claim of the ’851 patent. Himont’s refusal to pay on the disputed products has prompted Phillips to issue a notice of default on the license. According to the terms of the license agreement, if Himont fails to cure the “default” within a prescribed period, Phillips may, at its own option, terminate the entire agreement. (Dkt. 3, Exh. B, ¶[ 12.2). Himont therefore seeks preliminary relief to prevent Phillips from terminating the license while the dispute on the scope of the ‘851 patent is litigated.

The standard governing the grant of a preliminary injunction is well known. To obtain such equitable relief, the moving party must show both a strong probability of success on the merits of the litigation and that irreparable harm will result if the injunction is not granted. In addition, the Court should consider the possibility of harm to other interested persons from the grant or denial of relief as well as the public interest. Smith International, Inc. v. Hughes Tool Co., 718 F.2d 1573, 1578-79 (Fed.Cir.), cert. denied, 464 U.S. 996, 104 S.Ct. 493, 78 L.Ed.2d 687 (1983); Eli Lilly & Co. v. Premo Pharmaceutical Laboratories, Inc., 630 F.2d 120, 136 (3d Cir.), cert. denied, 449 U.S. 1014, 101 S.Ct. 573, 66 L.Ed.2d 473 (1980).

In this case, whatever the likelihood of Himont’s ultimate success on the merits of its claim, its inability to establish irreparable injury is fatal to its motion. Himont’s claim of irreparable injury is essentially premised upon the Hobson’s choice that now confronts it. Himont may ensure continuation of its license only by paying royalties on products arguably outside the scope of its license agreement. Should Himont prove correct in its interpretation of the patent, Phillips might enjoy a windfall at Himont’s expense. If, on the other hand, Himont refuses to pay on the disputed products, it risks loss of the license as a whole, including its right to manufacture homopolymers of propylene at the license’s favorable royalty rate. Because of the magnitude of this risk, Himont argues, it is in effect coerced into paying Phillips “protection money” to safeguard its interests. Thus, it is the threatened loss of the license as a whole, despite substantial compliance with its terms, that Himont posits constitutes irreparable injury.

While Himont’s argument has superficial appeal, I am not convinced that the risk of termination of its license constitutes irreparable harm. Undeniably, that risk exerts a powerful force over Himont’s future actions. The Court’s concern in granting equitable relief is not, however, with the influence that the risk of an erroneous decision exerts over Himont’s conduct, but with the actual irreparable injury which would befall Himont pendente lite, even if it ultimately prevails in this litigation.

Analyzing the facts from this perspective, the Court need consider only two possible scenarios, both of which result in denial of Himont’s motion. If Himont continues to withhold royalties on the disputed products and succeeds in its assertion that the products are not covered by Phillips’ patent, there would be no breach of the license agreement and any termination of that agreement would be deemed ineffective. Indeed, Phillips has conceded as much in its brief and at oral argument. Thus, under this scenario, Himont would suffer no harm whatsoever. If, on the other hand, Himont yields to Phillips’ demands and pays the contested royalties, its vindication on the merits may be less complete, for its ability to recoup the erroneously paid royalties is, under the current state of the law, uncertain. Nevertheless, even an irrevocable monetary loss, barring some special or onerous hardship, presents insufficient justification for a preliminary injunction. Coca-Cola Bottling Co. v. Coca-Cola, 563 F.Supp. 1122, 1141 (D.Del. 1983). Himont has made no suggestion that its pecuniary loss would, for example, jeopardize its solvency or require substantial changes in company operations. Absent such specialized harm, Himont cannot succeed in establishing irreparable injury and accordingly does not satisfy the grounds for preliminary injunction. See Id. at 1141; see also A.O. Smith Corp. v. Federal Trade Commission, 530 F.2d 515, 527-28 (3d Cir.1976); Northern Natural Gas v. Department of Energy, 464 F.Supp. 1145, 1158 (D.Del.1979).

Himont’s motion does, however, raise a matter of some concern to the Court. A licensor may always attempt to exact royalties for that which lies at the fringes of the scope of its patent, safe in the knowledge it has nothing to lose and indeed has the promise of substantial gain. Where it is clear that the licensor has overstepped the limits of its patent, the licensee may refuse payment and secure reinstatement of the license upon successful litigation of the patent's scope. But where even a remote possibility exists that the scope of the patent claim is as expansive as the licensor asserts, a prudent licensee will often meet the licensor’s demands rather than risk termination of an otherwise favorable agreement. The inherent potential for abuse of a license agreement is apparent. A judicially created remedy for this type of abuse, if it should occur, must await the proper case.

An order will be entered denying Himont’s motion for preliminary injunction.

      . Himont's motion, filed with the complaint, was styled as an "Application for a Temporary Restraining Order and An Order to Show Cause re Preliminary Injunction.” (Dkt. 2). Argument was deferred to permit the parties to file briefs and affidavits. On May 29, 1985, a hearing was held and the parties were given ample time to fully present their views. The motion will be treated as a motion for preliminary injunction.

      . A homopolymer is a polymer derived from a single monomer, in this case propylene. See The Condensed Chemical Dictionary 535 (10th ed. 1981).

      . Himont manufactures two groups of products which are in dispute under the license agreement. The first is a random copolymer formed from propylene and ethylene. The ethylene content of these particular copolymers is less than five percent. The second group of products is what Himont calls impact grade polypropylene. This product, as Himont describes it, is a mixture of a polypropylene homopolymer, admittedly covered under the '851 patent and subject to royalties under the license agreement, and a propylene/ethylene copolymer containing from 50 to 70 percent ethylene. Phillips contends that the product is actually a “block copolymer” and not an impact grade polymer. A block copolymer as it relates to this case is a product formed by first polymerizing propylene for a period of time, and then adding a given amount of ethylene to the reactor while continuing the polymerization process. The resulting compound contains a long sequence of a propylene polymer which is chemically bonded to a propylene/ethylene copolymer. Phillips seeks royalties for this product under both the ‘851 patent and U.S. Patent No. 3,970,719, which it also owns.

      . Himont initially had 60 days from the date of Phillips’ March 7, 1985 notice to cure the purported default. That deadline was extended by stipulation of the parties to June 7, 1985. At oral argument, Phillips agreed it would not exercise its right to terminate the license pending this Court's decision on the preliminary injunction.

      . Himont contends that the negotiated market royalty rate is now six times the rate Himont is paying under its license. Dkt. 3 at 9.

      . In this district, it is settled that a licensee may not, absent special circumstances, recover royalties paid during the pendency of a successful attack on a patent's validity. In re Cole Patent Litigation, 558 F.Supp. 937, 961 (D.Del.1983), aff’d in part and rev'd in part, RCA Corp. v. Applied Digital Data Systems Inc., 730 F.2d 1440 (Fed.Cir.), cert. dismissed, Hazeltine Corp. v. RCA Corp., — U.S. —, 105 S.Ct. 32, 82 L.Ed.2d 923 (1984). Other jurisdictions have, however, expressly or impliedly approved of payment of royalties into an escrow account pending litigation. See, e.g., Precision Shooting Equipment Co. v. Allen, 646 F.2d 313, 321 (7th Cir.), cert. denied, 454 U.S. 964, 102 S.Ct. 503, 70 L.Ed.2d 379 (1981); Atlas Chemical Industries, Inc. v. Moraine Products, 509 F.2d 1 (6th Cir. 1974). Whether a licensee would be entitled to recovery of royalties where a patent is held valid but not infringed remains to be determined at such time as that issue is squarely before the Court.

      . There is, of course, a third scenario. Should Phillips terminate the license because of Himont's continued refusal to pay the disputed royalties, and should Himont be proven wrong on the merits of its dispute, it will be forced to negotiate a new license, presumably at a substantially higher rate. Such harm would, however, be occasioned by Himont's own mistaken business judgment, which cannot be a basis for a preliminary injunction.


author: TOM S. LEE, District Judge.

text:
    MARTIN & MARTIN, Attorneys At Law, a Partnership Composed of George Dan Martin and Marcus E. Martin, Plaintiff, v. Evelyn Dean JONES, Lawanda Ann Jones Blakeney, Henry Jowett Jones, Jr., William Harries Jones and Douglas Oil Purchasing Company, Inc., Defendants.
    Civ.A. No. J85-0310(L).
    United States District Court, S.D. Mississippi, Jackson Division.
    July 24, 1985.

      Gee Ogletree, Brandon, Miss., Paul Stephens, Jackson, Miss., G. Sage Lyons, Mobile, Ala., for plaintiff.
    Thomas E. Bryant, Jr., Mark R. Ulmer, Mobile, Ala., James R. Mozingo, Stennett, Wilkinson & Ward, Jackson, Miss., for defendants.
   MEMORANDUM OPINION

TOM S. LEE, District Judge.

This cause is before the court on the motion of the individual defendants, Evelyn Dean Jones, Lawanda Ann Jones Blakeney, Henry Jowett Jones, Jr. and William Harries Jones, and the separate motion of the corporate defendant, Douglas Oil Purchasing Company, Inc. (Douglas Oil), to dismiss for lack of personal jurisdiction pursuant to Rule 12(b)(2) of the Federal Rules of Civil Procedure. Based on consideration of the briefs with attachments submitted by the parties, the court is of the opinion that the defendants’ motions to dismiss should be granted.

Martin & Martin, a Mississippi law firm, filed suit in this court alleging that the individual defendahts breached their contracts with the plaintiff by failing to pay or transfer a 25% contingency fee on money or property paid, received or collected by the attorneys in return for their representation of said defendants’ interests with reference to the estates of Ben Oscar Jones, Esther Ann Morgan Jones and Henry Jowett Jones, deceaseds. Administrations of these estates were pending in Baldwin County, Alabama and Mobile County, Alabama. The employment contracts and the powers of attorney executed by the individual defendants were signed in Citronelle, Alabama. The defendants, all of whom reside either in Alabama or Louisiana, have each executed affidavits stating that they have not conducted business with Martin & Martin in Mississippi and that all of the services were to be rendered by the plaintiff in the Circuit Court of Baldwin County, Alabama. The plaintiff was retained by Evelyn Jones Tanner, a Mississippi resident and one of the heirs of the estates. Since she has fulfilled her obligations under the employment contract according to the plaintiff, she is not a defendant in this cause.

The plaintiff has also filed suit against Douglas Oil, an Alabama corporation not qualified to do business in Mississippi, but which is, according to the plaintiffs, “doing business” in Mississippi within the purview of Mississippi Code Annotated § 13-3-57 (Supp.1984). Douglas Oil operates some of the properties in which the defendants asserted interests as heirs at law in the estates and has placed the disputed 25% of revenues in a suspense account pending resolution of the conflict between plaintiff and the individual defendants regarding execution of mineral right and royalty transfers.

Both the individual defendants and the corporate defendant assert that in personam jurisdiction is lacking. The burden of establishing jurisdiction over the defendants rests with the plaintiff. Thompson v. Chrysler Motors Corp., 755 F.2d 1162 (5th Cir.1985). In Smith v. DeWalt Products Corp., 743 F.2d 277, 278 (5th Cir.1984), the Fifth Circuit set forth a two step inquiry to determine a district court’s jurisdiction over nonresident defendants. The law of the forum state must first provide for the assertion of jurisdiction and, second, the exercise of jurisdiction by the state must comport with the due process requirements of the Fourteenth Amendment. Id.

Mississippi’s long arm statute provides in pertinent part:

Any nonresident person, firm, general or limited partnership, or any foreign or other corporation not qualified under the constitution and laws of this state as to doing business herein, who shall make a contract with a resident of this state to be performed in whole or in part by any party in this state... or who shall do any business or perform any character of work or service in this state, shall by such act or acts be deemed to be doing business in Mississippi.

Miss.Code Ann. § 13-3-57 (Supp.1984). The employment contracts and the powers of attorney were all executed by the individual defendants in Alabama. The administration of the estates in question concern rights to real property located in Alabama, and the individual defendants therefore assert that Mississippi’s long arm statute does not apply since the employment contracts were not to be performed in whole or in part in Mississippi. The plaintiff contends that the long arm statute does apply since Marcus E. Martin, one of the attorneys, frequently met with Evelyn Jones Tanner and her husband, Barney Tanner, in Mississippi concerning estate matters, corresponded and communicated with the individual defendants from their office in Mississippi and searched land records in Pearl River County, Mississippi. In its consideration of these facts, the court’s analysis depends upon whether the plaintiff seeks the exercise of personal jurisdiction in a suit arising out of or related to the defendants’ contacts with the forum state or in a suit not arising out of or related to the defendants’ contacts with the forum. Thompson, 755 F.2d at 1170-71 (5th Cir. 1985) (citing Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 104 S.Ct. 1868, 80 L.Ed.2d 404 (1984)). The exercise of the former is referred to as involving “specific jurisdiction” whereas the exercise of the latter is described as “general jurisdiction”. 755 F.2d at 1170-71. When a claim involves an exercise of general jurisdiction, a defendant’s contacts with the forum state must be so “systematic and continuous” as to reasonably support exercise of jurisdiction. 755 F.2d at 1171. When the jurisdiction sought to be asserted is “specific,” a court must then examine the relationship among the defendant, the forum and the litigation. Id. Assuming that the plaintiff in this case seeks to assert general jurisdiction, it is clear that the individual defendants’ contacts with the State of Mississippi cannot reasonably be characterized as “systematic and continuous.” Therefore, the court will examine the relationship among the individual defendants, the forum and the litigation as though the issue is one of specific jurisdiction.

In conducting this examination, the court is guided by a case involving similar facts wherein the Fifth Circuit affirmed the district court’s adoption of the magistrate’s recommendation of dismissal for lack of in personam jurisdiction. Barnstone v. Congregation AM Echad, 574 F.2d 286 (5th Cir.1978). In Barnstone, the plaintiff was an architect who resided in Texas but was licensed in both Texas and Maine. The defendant, a non-profit religious corporation registered under the laws of Maine, had neither assets nor a designated agent for service of process in Texas. After a donation to the corporation by Barnstone’s aunt, the defendant invited him to travel to Maine to make a presentation and be considered for the awarding of an architectural commission. The plaintiff made the trip and the presentation and was awarded the commission. He did all drawings, sketchings and other work in his Texas office but all of the negotiations occurred in Maine either by telephone or through the mail and the plaintiff was to supervise construction in Maine. Construction cost estimates were solicited by Barnstone in Maine from Maine contractors. The defendant subsequently terminated the parties’ agreement and the plaintiff filed suit in Texas to collect the fees allegedly owed by defendant. The Texas long arm statute, similar to Mississippi’s long arm statute, states that a person is considered to be “doing business” in Texas if he enters into a contract by mail with a Texas resident and the contract is to be performed in part in Texas. Art. 2031b(4), Tex.Rev.Civ.Stat. The plaintiff argued that, since all of the drawings, models, plans and sketches were made in Texas and the correspondence between the parties, including the parties’ contract, was sent to his Houston office, personal jurisdiction over the nonresident defendant was proper. The defendant contended that, since the contract was entered into in Maine and all of the work performed by Barnstone related to the construction of a synagogue in Maine, the “traditional notions of fair play and substantial justice” concept of International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed.2d 95 (1945), would be offended by Texas’ assertion of jurisdiction over the defendant. The Fifth Circuit found that the defendant’s contacts with Texas failed to satisfy the tests set forth in Hanson v. Denckla, 357 U.S. 235, 78 S.Ct. 1228, 2 L.Ed.2d 1283 (1958), which held that a nonresident defendant must purposefully avail itself of the privilege of conducting activities within a forum state, thereby invoking the benefits and protection of its laws, before the particular forum state can legitimately assert in personam jurisdiction over the nonresident defendant. 574 F.2d at 289. In his recommendation, the magistrate had stated that the plaintiff’s activity in preparing the models and plans in Texas appeared to constitute only unilateral partial performance by him and that this was expressly held insufficient in Hanson v. Denckla, 574 F.2d at 289. Finally, the magistrate ruled that the negotiations which took place through the mails were insufficient to confer personal jurisdiction unless the nonresident defendant or its agent was physically present within the forum state at the time of the negotiations. 574 F.2d at 289 (citing Arthur, Ross & Peters v. Housing, Inc., 508 F.2d 562, 564-65 (5th Cir.1975)).

Therefore, the plaintiff’s allegations with reference to searching land records in Mississippi, corresponding and communicating with the defendants from their office in Mississippi and frequently meeting with Evelyn Jones Tanner and her husband in this state do not justify an assertion of personal jurisdiction over the individual defendants in accordance with the requirements of due process. The meetings between the plaintiff and Evelyn Jones Tanner and Barney Tanner in Mississippi do not confer personal jurisdiction over the other heirs at law since the Tanners are not parties to the suit. The search of land records in Mississippi does not operate to confer jurisdiction since the material portion of the plaintiffs performance with respect to search of land records occurred in Alabama. See Patterson v. Dietze, Inc., 764 F.2d 1145 (5th Cir.1985) (distinguishing Mississippi Interstate Express, Inc. v. Transpo, Inc., 681 F.2d 1003, 1010 (5th Cir.1982), which upheld exercise of personal jurisdiction over nonresident defendant since “Mississippi was clearly the hub of the parties’ activities”.)

Similarly, the court is of the opinion that it lacks personal jurisdiction over Douglas Oil under either an exercise of “specific” or “general” jurisdiction. Douglas Oil has not signed a contract with the plaintiffs and the only other contract allegedly involved is a division order executed by Evelyn Jones authorizing the plaintiffs to receive a 25% interest in certain oil and gas revenues. At most, Martin & Martin may be considered a third party beneficiary of the contract between Douglas Oil and Jones. Under Mississippi law, however, a third party beneficiary may not obtain in personam jurisdiction over a nonresident defendant by utilizing the contract prong of the long arm statute. Johnson v. Warnaco, Inc., 426 F.Supp. 44, 47 (S.D.Miss. 1976).

The court also concludes that the plaintiff cannot assert personal jurisdiction over Douglas Oil under the “doing business” provision of Mississippi’s long arm statute. The case of Mladinich v. Kohn, 250 Miss. 138, 164 So.2d 785 (1964), set forth the test for determining whether a foreign corporation is “doing business” within Mississippi. ' The nonresident defendant must purposefully commit an act or consummate a transaction in Mississippi, with the plaintiff’s cause of action arising from or being connected with such acts or transactions, and the assumption of personal jurisdiction by the state must not offend traditional notions of fair play and substantial justice. 164 So.2d at 790. The record before the court reflects that Douglas Oil leases no offices in Mississippi; has no officers, directors, employees, property or assets within this state; does not maintain any bank accounts, books or records in Mississippi; and has not negotiated or executed any contracts in this state. The only alleged contact with Mississippi, according to Douglas Oil, is the mailing of royalty checks to Mississippi residents for oil and gas production of Alabama properties. The plaintiff asserts that the correspondence with Douglas Oil and its action in paying the partnership for one year a 25% attorney fee, pursuant to an agreement with Evelyn Jones, constitutes a contract between Douglas Oil and Martin & Martin which was performed in whole or in part in Mississippi. Considering the entire record, the court concludes that the Mississippi long arm statute does not provide for the assertion of personal jurisdiction over Douglas Oil since there is no showing of any purposeful activity of the corporate defendant in Mississippi. As stated previously, correspondence between a plaintiff and a nonresident defendant is insufficient to confer jurisdiction unless it is shown that the nonresident party or its agent was physically present within the forum state. Arthur Ross & Peters v. Housing, Inc., 508 F.2d at 564-65. Also as explained above, the division order entered into between Evelyn Jones and Douglas Oil authorizing Martin & Martin to receive a 25% interest in oil and gas revenues generated by certain properties can only be characterized as an agreement between Jones and Douglas Oil with the plaintiff as a third party beneficiary. For the reasons expressed in Johnson v. Warnaco, Inc., 426 F.Supp. at 47, the plaintiff, in this status, cannot obtain personal jurisdiction over a nonresident defendant.

Accordingly, the motion of Evelyn Dean Jones, Lawanda Jones Blakeney, Henry Jowett Jones, Jr. and William Harries Jones and the motion of Douglas Oil Purchasing Company, Inc. to dismiss for lack of personal jurisdiction should be granted. A separate judgment shall be submitted in accordance with the local rules.

      . The court further concludes that the Tanners cannot be characterized as agents acting for the other heirs since the plaintiff has failed to allege the existence of an agency relationship. Evelyn Jones Tanner and the other heirs at law entered into separate contingency contracts with the plaintiff, leading to the conclusion that each of the heirs acted in his or her own interest with there being no obligation on the part of any one heir to act for another.

      . A further factor supporting dismissal of the plaintiff s action in this court is that the employment contracts were executed in Alabama and thus governed by Alabama law. This was considered significant in Patterson v. Dietze, Inc., 764 F.2d at 1146, wherein the Fifth Circuit affirmed the district court’s dismissal for lack of personal jurisdiction.

      . The court stated that the long arm statute is to be construed liberally but is to be applied without enlargement of its provisions. 426 F.Supp. at 47 (citing Mississippi Chemical Corp. v. Vulcan-Cincinnati, Inc., 224 F.Supp. 11 (S.D.Miss. 1963), aff’d 338 F.2d 662 (5th Cir.1964)). The district court held that the plaintiffs argument that he should be able to obtain personal jurisdiction as a third party beneficiary of a contract between nonresident parties would require the court to conclude that the long arm statute applies to a nonresident who not only makes a contract with a resident of this state but who also makes a contract for the benefit of a Mississippi resident. 426 F.Supp. at 47. This construction of the statute, the court held, would be an unwarranted enlargement. not sanctionable according to Mississippi Chemical Corp. v. Vulcan-Cincinnati, Inc.


author: KERR, District Judge.

text:
    Albert O. HUSMAN, Hazel M. Husman, John M. Husman, Larry D. Baccari, Franklynne L. Baccari, Daryle O. Husman, Earleen I. Husman, and H.W. Rasmussen, Plaintiffs, v. UNITED STATES of America, Defendant.
    No. C84-404-K.
    United States District Court, D. Wyoming.
    July 25, 1985.

      H.W. Rasmussen and Clay B. Jenkins, Sheridan, Wyo., for plaintiffs.
    Toshiro Suyematsu, Asst. U.S. Atty. for the Dist. of Wyo., Cheyenne, Wyo., and Charles B. Lennahan, U.S. Dept. of Agriculture, Denver, Colo., for defendant.
   ORDER AFFIRMING DECISION OF THE INTERIOR BOARD OF LAND APPEALS (WITH FINDINGS)

KERR, District Judge.

The above-entitled matter having come on regularly for hearing before the Court upon appeal from a decision of the Interior Board of Land Appeals; plaintiffs appearing by and through their attorneys, H.W. Rasmussen and Clay B. Jenkins, and defendant appearing by and through its attorneys, Toshiro Suyematsu, Assistant United States Attorney for the District of Wyoming, and Charles B. Lennahan, United States Department of Agriculture, and the Court having heard the arguments of counsel and having carefully reviewed the administrative record and the memoranda submitted by counsel, and being fully advised in the premises, FINDS:

That plaintiffs filed this action seeking review of the decision of the Interior Board of Land Appeals, United States v. Husman, et al., 81 IBLA 271 (June 8, 1984), affirming the decision of the Administrative Law Judge. These decisions declared invalid the Husman No. 1 placer mining claim located at the NE¼ of Sec. 14, T. 53 N., R. 84 W., sixth principal meridian, Sheridan County, Wyoming.

This 160 acre parcel of land, along with other adjacent lands, were withdrawn from mineral entry pursuant to Public Land Order No. 5600, 41 F.R. 35067 (Aug. 19,1976). The withdrawal application was filed January 3, 1975, on which date the proper notations were made on the public land records of the Bureau of Land Management office, making the withdrawal temporarily effective. 43 C.F.R. 2351.3, 2091.2-5 (1975). The application was published January 23, 1975. 40 F.R. § 3614.

The plaintiffs filed their placer mining claim on January 2, 1973 for the discovery of a limestone and dolomite deposit. The BLM, at the request of the United States Forest Service, thereafter began proceedings to contest said claim. The contest claim was filed May 2, 1975 and hearings were held before Administrative Law Judge, Sweitzer, in June of 1981.

In an extensive 27 page decision, the Administrative Law Judge determined that:

1. the 160 acres constituting the claim was segregated from mineral entry on January 3, 1975 and that an environmental impact statement (EIS) was unnecessary;
2. the limestone was of a high-grade chemical quality and not a common variety within the limits of the Common Varieties Act of 1955. Therefore, the mineral was locatable;
3. even though the mineral itself was locatable, the plaintiffs had not discovered a “valuable mineral deposit” within the bounds of the claim; and,
4. finally, the Administrative Law Judge found it unnecessary to determine if the land was mineral in character, since plaintiffs had not made a discovery of a “valuable mineral deposit.”

The Interior Board of Land Appeals (IBLA) affirmed the Administrative Law Judge’s decision, concluding that the government had made out a prima facie case that the limestone could not be “mined, removed, and marketed at a profit.”

On appeal, the plaintiffs urge this Court to reverse the decision of the IBLA for the reasons that: (1) the withdrawal of the land from mineral entry was improper since no environmental impact statement had been prepared; and, (2) that the determination that no valuable mineral deposit had been discovered was an error of law, arbitrary, capricious, and not supported by substantial evidence.

This Court, in reviewing the ruling of the IBLA, is mindful of the limited scope of review whieh must be applied. The decision of the agency may only be overturned where it is contrary to law; outside the scope of the agency’s jurisdiction; unsupported by substantial evidence; or arbitrary, capricious, or an abuse of discretion. 5 U.S.C. § 706(2); Roberts v. Morton, 549 F.2d 158, 160 (10th Cir.1977).

I. Withdrawal—Environmental Impact Statement

Plaintiffs urge that the withdrawal was improper because the forest service violated § 102 of the National Environmental Protection Act, 42 U.S.C. § 4332 (1976), by failing to file an environmental impact statement.

The forest service prepared an environmental analysis report to determine the necessity of an EIS. The report considered various alternatives to the proposed withdrawal, including the option of not withdrawing the land from public entry with the possibility of mining, and the effect that each alternative could have on the environment. The conclusion reached was that the withdrawal did not constitute a major federal action significantly affecting the quality of the human environment and that an EIS was unnecessary. The Administrative Law Judge and the IBLA determined that the agency had identified the relevant environmental factors and concerns and concluded that the impact would not be significant.

This Court, too, finds that the agency followed the necessary procedures of (1) “looking hard" at the problem; (2) “identifying the relevant areas of environmental concern;” and, (3) making a convincing case that the impact was insignificant as evidenced by the environmental analysis report. Cabinet Mountains Wilderness v. Peterson, 685 F.2d 678, 682 (D.C.Cir.1982). The plaintiffs likewise have not carried the burden of raising a substantial environmental issue. See Winnebago Tribe of Nebraska v. Ray, 621 F.2d 269, 271 (8th Cir.1980), and this Court, therefore, agrees with the conclusion that an EIS was unnecessary and the decision of the IBLA should not be overturned on that matter.

II. “Valuable Mineral Discovery”

The Mining Act of 1872, 30 U.S.C. § 22, allows an individual to establish a mining claim on lands subject to public entry upon making a discovery of a “valuable mineral deposit.” What is a “valuable mineral deposit” is determined by the application of the “prudent person test.” That is, the mineral deposit must be of such quality and quantity that a “person of ordinary prudence would be justified in the further expenditure of his labor and means, with a reasonable prospect of success in developing a valuable mine.” Castle v. Womble, 19 L.D. 455 (1894); Chrisman v. Miller, 197 U.S. 313, 25 S.Ct. 468, 49 L.Ed. 770 (1904). As a further refinement and compliment to this test, the United States Supreme Court in the case of United States v. Coleman, 390 U.S. 599, 88 S.Ct. 1327, 20 L.Ed.2d 170 (1968), adopted the rule of “marketability.” Under this rule, a mineral deposit is marketable (and, therefore, valuable) if it can be “extracted, removed, and marketed at a profit.” Id.

The limestone in plaintiffs’ claim was found to be of a high chemical grade, therefore outside the scope of the Common Varieties Act and thus loeatable. However, in the application of the marketability test, it was found that the minerals in plaintiffs’ claim could not be mined and marketed at a profit. Extensive evidence was presented by both sides on the proposed mining operations, production, and the proposed markets.

The Administrative Law Judge thoroughly examined said evidence making extensive findings thereon. The IBLA agreed that the government had established a prima facie case that the discovery was not of a “valuable mineral deposit” and that the plaintiffs had not overcome this showing by a preponderance of the evidence. 81 IBLA at 275.

Without reiterating much of the factual basis on which the agency relied in making its decision, this Court finds that there was substantial evidence to show that the limestone could not be mined and marketed at a profit. Much of the evidence indicated that certain market uses and demand would be speculative and, therefore, the profitability of the mine is questionable. We, therefore, agree with the decision of the IBLA and find it was supported by substantial evidence—that being “[sjuch relevant evidence as a reasonable mind might accept as adequate to support a conclusion.” Richardson v. Perales, 402 U.S. 389, 401, 91 S.Ct. 1420, 1427, 28 L.Ed.2d 842 (1971).

Further, we cannot agree that the reliance by the agency on the “economies of scale” theory was in error.

In addition, the Court finds plaintiffs argument that the IBLA erred in using a “presently marketable” standard, is unmerited. “Locations based on speculation that there may at some future date be a market for the discovered material cannot be sustained.” Barrows v. Hickel, 447 F.2d 80, 83 (9th Cir.1971). A claimant must prove that a “valuable mineral deposit” exists at the time of discovery, Id.; at the time of the withdrawal of the land subject to the claim; and maintain said discovery throughout administrative hearings for contest or patent. Cameron v. United States, 252 U.S. 450, 456, 40 S.Ct. 410, 411, 64 L.Ed. 659 (1920); Clear Gravel Enterprises, Inc. v. Keil, 505 F.2d 180 (9th Cir. 1974); Barrows v. Hickel, 447 F.2d 80.

Therefore, this Court finds that the decision of the IBLA is neither arbitrary nor capricious, is not contrary to law, and is supported by substantial evidence.

NOW, THEREFORE, IT IS ORDERED that the decision of the Interior Board of Land Appeals, 81 IBLA 271 (1984) declaring plaintiffs’ mining claim invalid, be, and the same is, hereby affirmed.


author: EDWARD C. REED, Jr., District Judge.

text:
    Bernard Anthony YBARRA, Petitioner, v. Charles L. WOLFF, Jr., Director of the Department of Prisons, and the Attorney General of the State of Nevada, Respondents.
    No. CV-R-78-126-ECR.
    United States District Court, D. Nevada.
    July 30, 1985.

      Bernard Anthony Ybarra, in pro. per.
    Mills B. Lane, Washoe County Dist. Atty. by Jerry Mowbray, Deputy Dist. Atty., Reno, Nev., for respondents.
   MEMORANDUM DECISION

EDWARD C. REED, Jr., District Judge.

This matter is before the Court on Petitioner’s petition for a writ of habeas corpus pursuant to 28 U.S.C. § 2254. He was sentenced to a life term with possibility of parole after conviction by a Nevada district court jury of first-degree murder. The conviction was on April 15, 1975. He was released on parole in 1984, so that his petition now is aimed at release from the restraints of the conditions of his parole.

Two days of evidentiary hearings had been conducted and extensive memoranda of points and authorities had been filed when this Court took judicial notice that the Nevada Supreme Court had remanded Petitioner’s case to a State district court for reconsideration of his motion for a new trial based on newly discovered evidence.' By Order filed June 14, 1982, this Court stayed the habeas corpus proceedings until final resolution by the State court of the motion for a new trial. That motion was denied on January 3, 1985. The Nevada court found that the assertedly new evidence could have been discovered in time for the trial in 1975, had reasonable diligence been exercised. Also, the new evidence was found to be cumulative to that introduced at the trial. Finally, the State court held that it could not consider the invalidity of the self-defense instruction given to the trial jury, because no objection had been made at the time. Review on the merits was held to be precluded by the contemporaneous objection rule.

Upon Petitioner’s motion, this Court’s stay order is now lifted and his petition for a writ of habeas corpus shall be decided herein on the merits. Because the self-defense instruction is dispositive, only it will be discussed. It was given to the jury, without objection, as Instruction No. 28. The wording was as follows:

The burden of proving circumstances which might justify or excuse the killing of another is upon the defendant, but the defendant need not prove such circumstances beyond a reasonable doubt.

This particular instruction was considered by Nevada courts to be proper at the time of petitioner’s trial in 1975. St. Pierre v. State, 92 Nev. 546, 554 P.2d 1126, 1126 (1976), overruled in Kelso v. State, 95 Nev. 37, 588 P.2d 1035, 1040 (1979); St. Pierre v. State, 96 Nev. 887, 620 P.2d 1240, 1242 (1980). It was three years and nine months later that the Nevada Supreme Court, in Kelso, declared it to be improper.

Murder, under Nevada law, was defined in 1975 as “the unlawful killing of a human being, with malice aforethought----” NRS 200.010 (emphasis added). A killing done in self-defense, although deliberate, is neither unlawful nor activated by malice. Kelso, at 588 P.2d 1039. Thus, self-defense negates essential elements of the crime of murder. In such case, the burden of proving self-defense may not be shifted to the defendant, “since doing so dilutes the State’s own due process burden of proving, beyond a reasonable doubt, every element of the crime charged.” Id. at 1038. Accord, Reed v. Ross, — U.S. —, 104 S.Ct. 2901, 2904, 82 L.Ed.2d 1 (1984). Reed emphasizes that the Due Process Clause protects an accused against conviction except after the prosecution has proved beyond a reasonable doubt every fact (element) necessary to constitute the offense charged. Id. This rule of law has retroactive application. Id.; Hankerson v. North Carolina, 432 U.S. 233, 243-44, 97 S.Ct. 2339, 2345-46, 53 L.Ed.2d 306 (1977). Thus, it applies to Petitioner’s 1975 conviction.

Petitioner, understandably, did not object to the giving of Instruction No. 28 for, at the time, it was considered proper. Former NRS 175.515 specified that all jury instructions were deemed excepted to, so that they could serve as bases for appeal even though not objected to at the time of trial. However, that statute was repealed in 1967. 1967 Statutes of Nevada 1472. The contemporaneous objection rule appears to have been recognized ever since, as indicated by the Nevada district court which denied Petitioner’s motion for a new trial.

When a procedural default, e.g., failure to make a contemporaneous objection, bars pursuit of a constitutional claim in state court, a state prisoner may not obtain federal habeas corpus relief without showing cause for and actual prejudice from the default. Engle v. Isaac, 456 U.S. 107, 110, 129, 102 S.Ct. 1558, 1562, 1572, 71 L.Ed.2d 783 (1982); Reed v. Ross, supra 104 S.Ct. at 2908. Where the state of the law at the time of trial and appeal was such that there was no reasonable basis to challenge a jury instruction, “cause for” the failure to object is established. Id. at 2911. A defendant should not be penalized for his attorney’s failure to demand a jury instruction that would have been inconsistent with the law as it then existed. St. Pierre v. State, 96 Nev. 887, 620 P.2d 1240, 1243 (1980); see also Myers v. State of Wash., 702 F.2d 766, 768 n. 5 (9th Cir.1983). Likewise, the trial court’s imposition on a defendant of the burden of proving self-defense constitutes the “actual prejudice” that will overcome the contemporaneous objection rule. Reed v. Ross, supra 104 S.Ct. at 2908. This is particularly true where, as here, evidence was introduced at trial to indicate that the defendant might have acted reflexively in self-defense. Id. at 2906. Petitioner herein has standing to pursue this federal habeas corpus litigation despite his failure to object to Instruction No. 28 at the time of trial.

The standard for determining whether an instructional error was harmless, i.e., whether the verdict came after a fair trial, is not completely settled in the Ninth Circuit. United States v. Cusino, 694 F.2d 185, 187 (9th Cir.1982); United States v. Valle-Valdez, 554 F.2d 911, 914-15 (9th Cir. 1977). Reversals have been ordered unless: (1) it is more probable than not that the error did not materially affect the verdict, or (2) it is highly probable that the error did not materially affect the verdict, or (3) the error was harmless beyond a reasonable doubt. The United States Supreme Court, in Chapman v. California, 386 U.S. 18, 24, 87 S.Ct. 824, 828, 17 L.Ed.2d 705 (1967) held “that before a federal constitutional error can be held harmless, the court must be able to declare a belief that it was harmless beyond a reasonable doubt.” The case involved the prosecutor's comments on the defendants’ failure to testify and a jury instruction that allowed the jury to draw adverse inferences from that failure. Valle-Valdez, at 554 F.2d 915, interpreted Chapman to say that reversal is not required unless there is a reasonable possibility that the error materially affected the verdict. The Valle-Valdez opinion, at 916, then suggests that the “more probable than not” standard might be more appropriate. An erroneous instruction pertaining to the defendant’s conscious purpose to avoid learning the truth about the presence of contraband was there involved. The appellate court concluded that it was probable that the erroneous instruction materially affected the jury’s deliberations and verdict, so that a new trial was called for no matter whether the “more probable than not” or the “reasonable possibility” standard was applied. Id. at 917. Later Ninth Circuit opinions seem to favor the “reasonable possibility that the error materially affected the verdict” test. United States v. Herbert, 698 F.2d 981, 986 (9th Cir.1983); United States v. Reed, 726 F.2d 570, 575 (9th Cir.1984); People of Territory of Guam v. Garrido, 752 F.2d 1378, 1380 (9th Cir.1985).

Nevada Supreme Court opinions are instructive where the erroneous jury instruction shifted to the defendant the burden of proof as to self-defense, as was the case of Petitioner herein. A new trial was ordered in Robertson v. State, 97 Nev. 138, 625 P.2d 565, 566 (1981), where “the appellant’s claim of self-defense did not lack all plausibility.” The conviction was reversed in St. Pierre v. State, 96 Nev. 887, 620 P.2d 1240, 1244 (1980) where: “The state and the defense each presented a reasonable interpretation of the occurrence for jury consideration.” In contrast, the erroneous instruction was held not to mandate reversal in Kelso v. State, 95 Nev. 37, 588 P.2d 1035, 1040 (1979), where the jury could not reasonably have believed the appellant’s claim of self-defense because the evidence was “consistent only with a vengeful rampage.”

Petitioner’s version of the facts, as they related to his claim of self-defense, was focused on his attempt to eject the deceased, Robert Luevano, from Petitioner’s mobile home. The two of them had gone there, in the company of a Mr. Phenegar, after a night of drinking. Once in the mobile home, Petitioner obtained a gun. He showed it to Phenegar, expressed outrage over Luevano’s homosexual advances, and asked if Phenegar had observed those advances. After being told that Phenegar had, Petitioner approached Luevano and ordered him out of the mobile home. Petitioner said that he displayed the gun because he felt that Luevano would leave at the sight of the weapon. Instead, Luevano swore at Petitioner and approached him in a threatening manner. When ordered by Petitioner once again to leave, Luevano lunged at Petitioner. The latter took one step backward and fired three times. Both testimony (Petitioner’s and other witnesses’) and physical evidence supplied some support to this version.

Where the trial evidence supports a construction of events that supports a guilty verdict, but does not compel such a construction, an erroneous jury instruction is less likely to be deemed harmless error. United States v. Beckett, 724 F.2d 855, 856 (9th Cir.1984). Where the evidence supports either construction, the shifting of the burden of proving self-defense may be all that is needed for a jury to convict a defendant of first-degree murder. Reed v. Ross, — U.S. —, 104 S.Ct. 2901, 2908, 82 L.Ed.2d 1 (1984).

Since Petitioner’s claim of self-defense is not completely inconsistent with the evidence adduced at his trial, and could reasonably have been believed by a properly instructed jury, his conviction was in violation of due process. The central question before this Court isn’t whether substantial evidence of his guilt can be found in the record but, rather, whether his guilt was found by a jury according to the procedure and standards appropriate for a criminal trial in a capital case. See Bollenbach v. United States, 326 U.S. 607, 614, 66 S.Ct. 402, 406, 90 L.Ed. 350 (1946); Connecticut v. Johnson, 460 U.S. 73, 83, 103 S.Ct. 969, 976, 74 L.Ed.2d 823 (1983). Petitioner’s conviction was invalid by reason of erroneous Instruction No. 28.

An order shall be entered in accordance with the foregoing.