author: WINDER, District Judge.

text:
    IDEAL WASTE SYSTEMS, INC., Plaintiff, v. PROVO CITY CORPORATION, Defendant.
    Civ. No. C-83-0828W.
    United States District Court, D. Utah, C.D.
    March 11, 1985.

      William B. Bohling, D. Miles Holman, Brent A. Bohman, Salt Lake City, Utah, for plaintiff.
    Richard S. Dalebout, Provo, Utah, for defendant.
   MEMORANDUM DECISION AND ORDER

WINDER, District Judge.

This matter involving the application of the state action exemption to Provo City’s Solid Waste Management Ordinance comes before the court on cross motions for summary judgment. Oral argument was heard before the court on February 8, 1985. Plaintiff Ideal Waste Systems, Inc. (“Ideal Waste”) was represented by William B. Bohling, Brent Bohman, and D. Miles Holman. Defendant Provo City Corporation (“Provo”) was represented by Glen G. Ellis and Richard S. Daleabout. The court has considered carefully the oral arguments made, the written memoranda submitted and various authorities cited therein and now being fully advised renders the following memorandum decision and order.

I.

The narrow issue before the court is whether Provo City’s Solid Waste Management Ordinance is exempted from the application of section 2 of the Sherman Act because it falls within the state action exemption.

II. Factual Background

Plaintiff Ideal Waste is a Utah corporation engaged in the business of solid waste collection, transportation and disposal. Defendant Provo City is a Utah municipal corporation similarly engaged in solid waste disposal. The cross motions for summary judgment contest the applicability of the state action exemption to Provo’s Municipal Solid Waste Ordinance.

Plaintiff Ideal Waste and its predecessor, Parker, have been in the business of collecting and hauling garbage from within Provo City for several years. Provo’s attempts to limit commercial waste collection business within its boundaries have been the source of previous litigation between Provo and Parker, Ideal Waste’s predecessor. Parker v. Provo City Corporation, 543 P.2d 769 (Utah 1975). In that case, the Utah Supreme Court held that Provo did not have the power under its statutory authority to prohibit the collection of garbage by commercial haulers as the ordinance did not bear a reasonable relation to public health. In 1981, the Utah legislature enacted the Utah Solid Waste Management Act, Utah Code Ann. §§ 26-32-1 to 26-32-5. In 1982, Provo City amended its ordinance to prohibit the collection, removal or disposal of garbage or waste matter on a commercial basis but allowed for the collection and disposition of waste paper and paper products by a “licensed scavenger.” During this time, plaintiff Ideal Waste began serving commercial firms (including an auto repair business, retail tire sales business and auto repair business) which generated only a minimal amount of “garbage” or waste. Provo City contacted Ideal Waste’s customers and informed them that by doing business with Ideal Waste, they were in violation of Provo’s ordinance and that they would be charged by Provo City for waste collection services. In March, 1983, Provo’s attorney informed Ideal’s general manager that Ideal was violating the ordinance as it was collecting garbage and waste in addition to the waste paper and paper products it was licensed to haul as a licensed scavenger. Provo did not make a determination that Ideal’s collection activities presented any health danger. In June 1983, plaintiff Ideal filed suit against Provo.

In July, 1984, Provo repealed its existing waste collection ordinance and enacted Ordinance No. 0-84-042, entitled “Provo City Solid Waste Management Ordinance” (hereinafter referred to as “the Ordinance”) which is the subject of these motions for summary judgment. The ordinance grants Provo the exclusive right to collect, transport and dispose of putrescible solid waste. Commercial haulers, such as the plaintiff, may only collect, transport and dispose of non-putrescible solid waste. A private hauler may collect, transport and dispose of all solid wastes, whether putrescible or non-putrescible, generated at its own structure. Brigham Young University, located within Provo, is a private hauler and collects both putrescible and non-putrescible waste which it does not separate but collects and hauls together. All solid waste generated within Provo must be deposited in a solid waste facility managed by Provo. Although a commercial hauler may charge any rate it chooses for its services, the ordinance requires that a written description of services and charges be filed with Provo ten days before the charges take effect and may not be amended more often than once each thirty days. Moreover, charges are to be the same for all customers receiving the same service (regardless of cost differentials in transporting the waste to the disposal site) and charges for any class of service shall not be less than the actual cost of providing those services. Under the ordinance, Provo may lower its charges to meet competition from commercial haulers but may not charge less than the lowest rate charged by a commercial hauler. A commercial hauler may not enter into a contract with a customer that lasts longer than 90 days.

III. Discussion

A. The narrow issue presented by these motions is whether Provo City’s waste disposal ordinance is exempt from attack under section 2 of the Sherman Act because it falls within the state action exemption.

The question of whether a state exercising its sovereign powers is prohibited under the federal antitrust laws from imposing certain anticompetitive restraints was first addressed in Parker v. Brown, 317 U.S. 341, 63 S.Ct. 307, 87 L.Ed. 315 (1943). In Parker, the appellee was prevented from freely marketing his raisin crop by a price maintenance program adopted by the State of California. The Supreme Court held that the program did not violate the Sherman Act, emphasizing that ours is a “dual system of government” and finding nothing in the Sherman Act to suggest the act was meant to restrain a state from acting pursuant to its legislature.

The issue of whether a municipality would also be exempt from the antitrust laws under the Parker reasoning was considered in City of Lafayette v. Louisiana Power and Light Co., 435 U.S. 389, 98 S.Ct. 1123, 55 L.Ed.2d 364 (1978). In that case, the court rejected the claim that “Congress never intended to subject local governments to the antitrust laws,” 435 U.S. at 394, 98 S.Ct. at 1127. The plurality went on to state:

Cities are not themselves sovereign; they do not receive all the federal deference of the States that create them. Parker’s limitation of the exemption to ‘official action directed by a state,’ is consistent with the fact that the States’ subdivisions generally have not been treated as equivalents of' the States themselves. In light of the serious dislocation which could result if cities were free to place their own parochial interests above the nation’s economic goals reflected in the antitrust laws, we are especially unwilling to presume that Congress intended to exclude anticompetitive municipal action from their reach.

435 U.S. at 412-413, 98 S.Ct. at 1136-1137 (footnote and citations omitted).

The Court then established two standards for antitrust immunity under Parker v. Brown. First, the challenged restraint must be “one clearly articulated and affirmatively expressed as state policy;” second, the policy must be “actively supervised” by the state itself. Lafayette, 435 U.S. at 410, 98 S.Ct. at 1135. Those standards have since been adopted by a majority of the Court. New Motor Vehicle Board v. Orrin W. Fox Co., 439 U.S. 96, 109, 99 S.Ct. 403, 411, 58 L.Ed.2d 361 (1978); California Retail Liquor Dealers Assn. v. Midcal Aluminum, Inc., 445 U.S. 97, 105, 100 S.Ct. 937, 943, 63 L.Ed.2d 233 (1980). Recently, the Court applied the Lafayette standards when examining an emergency city ordinance enacted by the City of Boulder, Colorado, which prohibited the petitioner cable television company from expanding its business for three months while the city rewrote its cable television ordinance. In that case, Community Communications Co. v. Boulder, 455 U.S. 40, 102 S.Ct. 835, 70 L.Ed.2d 810 (1982), Boulder contended that it was entitled to the state action exemption because the ordinance was within the city’s authority as a home rule municipality. But the Court found the Home Rule Amendment to the state constitution insufficient, stating that “the requirement of ‘clear articulation and affirmative expression’ is not satisfied when the State’s position is one of mere neutrality respecting the municipal actions challenged as anti-competitive.” Boulder, 455 U.S. at 55, 102 S.Ct. at 843.

The Court in Boulder gave scant attention to the respondents’ arguments that denying the Parker exemption in the Boulder case would have “serious adverse consequences for cities” and would “unduly burden the federal courts.” Boulder, 455 U.S. at 56, 102 S.Ct. at 843. The Court instead pointed to Congress’ longstanding commitment to an economy based on competition in the market place which it had embodied in the antitrust laws and reiterated that:

the ‘[a]ntitrust laws in general, and the Sherman Act in particular, are the Magna Carta of free enterprise. They are as important to the preservation of economic freedom and our free-enterprise system as the Bill of Rights is to the protection of our fundamental personal freedoms.’

Boulder, 455 U.S. at 56, fn. 19, 102 S.Ct. at 843, fn. 19 quoting United States v. Topco Associates, Inc., 405 U.S. 596, 610, 92 S.Ct. 1126, 1134, 31 L.Ed.2d 515 (1972). Boulder left open the issue whether a municipality must also show that its actions were “actively supervised by the State” as had been suggested by the plurality opinion in Lafayette. Lafayette, 435 U.S. at 410, 98 S.Ct. at 1135.

The foregoing cases make clear that in order for a municipal ordinance to be exempted from challenge under the antitrust laws, the municipality must be able to point to a “clearly articulated and affirmatively expressed” state policy to displace competition with regulation or monopoly public service. Lafayette, 435 U.S. at 413, 98 S.Ct. at 1136. Moreover, not only must the city show the existence of affirmative legislative action to exempt its action from the antitrust laws, Pueblo Aircraft Service v. City of Pueblo, 679 F.2d 805, 809 (10th Cir.1982), but also that the legislature contemplated the types of actions alleged to be anticompetitive. Id. See also, Golden State Transit Corp. v. City of Los Angeles, 726 F.2d 1430, 1433 (9th Cir.1984). This circuit has recently stated that “it is not necessary to point to express statutory mandate for each act that is alleged to violate the antitrust laws,” but rather it will be sufficient “if the activity in issue is found to be clearly within legislative intent.” Pueblo Aircraft, 679 F.2d at 809.

B. In the present case, plaintiff Ideal Waste challenges Provo’s ordinance as violating Section 2 of the Sherman Act because of its “price fixing, horizontal market division and predatory reprisal” characteristics. Specifically, Ideal contends that the ordinance’s distinction between those allowed to carry putrescible and non-putrescible waste and those who can collect and dispose only of putrescible waste is not premised on public health concerns but rather on economic concerns. Because it is precluded from serving customers generating any putrescible waste, the plaintiff contends that it cannot compete against the defendant for customers generating only non-putrescible waste. In addition, the plaintiff challenges the ordinance’s provisions requiring that a commercial hauler’s prices be posted with the city, the 90 day limit on contracts and the provision requiring that all services be charged at the same rates irrespective of cost differentials.

The Utah statutory scheme that addresses municipal authority in solid waste management is comprised of two statutes: Utah Code Ann. § 10-8-61 (1953), and Utah Code Ann. §§ 26-32-3 to 26-32-5 (1984). Provo relies on the language of Utah Code Ann. §§ 26-32-3 to 26-32-5 (1984), the Utah Solid Waste Management Act, (hereinafter referred to as the “Waste Management Act”) to demonstrate the state’s policy to displace competition. The language of the following subsections of § 26-32-3 of that Act is of particular relevance.

Subject to the powers and rules of the department, the governing body of each public entity may:
(1) supervise and regulate the collection, transportation, and disposition of all solid waste generated within its jurisdiction;
(5) levy and collect taxes, fees, and charges and require licenses as may be appropriate to discharge its responsibility for the acquisition, construction, operation, maintenance, and improvement of solid waste management facilities or any portion, thereof, including licensing private collectors operating within its jurisdiction;
(7) control the right to collect, transport, and dispose of all solid waste generated within its jurisdiction;
(8) agree that the sole and exclusive right to collect, transport, and dispose of solid waste within its jurisdiction shall be assumed by any other public entity or entities, any private persons or entities, or any combination thereof, pursuant to Section 26-32-4;

Based on the foregoing statutory provisions, a city may “supervise,” “regulate,” “license” and “control the right” to collect, transport and dispose of all solid waste generated within its jurisdiction. Although the language of subsection 8 is ambiguous due to confusion over what is modified by the phrase, “pursuant to Section 26-32-4”, the section can be read as permitting a city to limit the right to collect, transport and dispose of solid waste. When considered as a whole, the statutory language supports the contention that the legislature acted affirmatively to give municipalities a variety of powers in the waste disposal arena. In so doing, the legislature could also have contemplated that anticompetitive actions might result or be the natural consequence of that statutory grant of authority. See Gold Cross Ambulance & Transfer v. City of Kansas, 705 F.2d 1005, 1012-13 (8th Cir.1983). This court does not need to decide, however, whether the provisions of the Waste Management Act satisfy the requirement of a “clearly articulated and affirmatively expressed” state policy to displace competition because the second part of the state action exemption test is not met here; namely, there is no showing that the legislature contemplated the types of actions alleged to be anticompetitive here. See Pueblo Aircraft Service, 679 F.2d at 809. The Court bases that conclusion on two alternate prongs: (1) an analysis of Utah’s statutory scheme demonstrates that a municipality’s control over waste disposal must be done pursuant to public health goals and; (2) the means chosen by Provo to maintain its monopoly power cannot be sanctioned.

One cannot read the Solid Waste Act without referring as well to the Utah Code Ann. § 10-8-61 (1953) (“Section 10-8-6i”) The Utah Supreme Court has interpreted that section as requiring that a city’s regulation of garbage disposal must bear a reasonable relation to the public health. Rules of statutory construction mandate that statutes be construed consistently with one another when possible and that a subsequent inconsistent specific provision should be construed as an exception to an earlier general provision.

Section 10-8-61 was in effect at the time the Solid Waste Act was enacted and has not been repealed. Section 10-8-61 addresses a municipality’s general powers to regulate commercial waste haulers and to collect and dispose of waste generated within its area. It does not demonstrate any clearly articulated and affirmatively expressed state policy to displace competition. The Solid Waste Act encompasses both a municipality’s power to cooperate with other municipalities in waste management responsibilities as well as its solitary powers to regulate, supervise, license and control waste disposal. When the two statutory provisions are considered together, it is clear that a municipality must act pursuant to public health reasons when “regulating,” “supervising,” “licensing” and “controlling” the collection, transportation and disposal of solid waste. Accordingly, in order to demonstrate that the legislature “contemplated” the types of actions alleged to be anticompetitive in Provo’s ordinance, Provo must show that they bear a rational relationship to public health concerns. Provo has not made this showing.

The court does not find that the distinction between putrescible and non-putrescible waste which is the basis for the classification between Provo City and commercial haulers is based on public health reasons. Provo City collects and disposes of both putrescible and non-putrescible waste in much the same manner as Ideal Waste. There has been no contention that Ideal’s equipment or services are sub-standard nor that Ideal Waste is incapable of hauling putrescible waste. Private haulers such as Brigham Young University are not required to separate putrescible and non-putrescible waste. Nonetheless, under the ordinance, a commercial hauler is banned from collecting even minimal amounts of putrescible waste such as may be found in a discarded lunch sack. The court can find no public health reasons that justify that distinction.

It is clear that several provisions in Provo’s ordinance are concerned with economic profitability and are not prompted by public health reasons. The requirement that prices be posted with the city before they go into effect, the 90 day limits on contract lengths, and the provision authorizing Provo to lower prices to meet competition are examples of those profitability concerns. Provo states that these provisions were adopted to prevent what it considered to be predatory pricing and unfair and discriminatory forms of competition on the part of Ideal Waste. But Provo also justifies its actions as being necessary to maintain its own profitability. Provo contends that its profits from its commercial customers are necessary to subsidize its residential customers and states that if it does not operate profitably, it will not be able to maintain the level of readiness necessary to fulfill its public health obligations. The Supreme Court, however, has previously rejected attempts to distinguish between profit seeking aims of private entities and public welfare objectives of public institutions. The Court in Lafayette, 435 U.S. at 403, 98 S.Ct. at 1131 stated ... “the economic choices made by public corporations in the conduct of their business affairs, designed as they are to assure maximum benefits for the community constituency, are not inherently more likely to comport with the broader interests of national economic well-being than are those of private corporations acting in furtherance of the interests of the organization and its shareholders.” Furthermore, there are other options available to Provo to assure that competitors operate fairly.

It could perhaps be argued that this court could develop a special “rule of reason” for local governments which would require weighing the public interest in displacing competition in a particular situation against the general policy favoring competition. But the nature of the anticompetitive restraints in question here cannot have been contemplated by the legislature even if it authorized the displacement of competition without regard for public health considerations. The sanctioning of anticompetitive results does not justify all means to achieve those results. See Corey v. Look, 641 F.2d 32, 37 (1st Cir.1981).

In summary, the state action exemption is inapplicable to Provo City’s Solid Waste Management Ordinance as the court finds that the Utah legislature did not contemplate the kinds of restraints sanctioned by Provo’s ordinance.

Accordingly,

IT IS HEREBY ORDERED that:

1. The plaintiff’s cross motion for summary judgment denying the applicability of the state action exemption is granted.

2. The defendant’s motion for summary judgment is denied.

      . Provo had claimed its powers were based on the provisions of Utah Code Ann. § 10-8-61 (1953). The text of that statute is printed infra at footnote 5.

      . Ideal Waste does not dispute the requirement that it deposit its waste at the Provo-managed facility.

      . The Supreme Court has recently granted certiorari in a Seventh Circuit case which held that municipalities need make no showing of supervision by the state in suits challenging "traditional municipal functions.” Town of Hallie v. City of Eau Claire, 700 F.2d 376, 383-84 (7th Cir.1983), cert. granted, — U.S.-, 104 S.Ct. 3508, 82 L.Ed.2d 818 (1984).

      . Section 26-32-4 provides for long-term agreements for joint action between two or more public entities to construct, acquire, own, etc. solid waste management facilities.

      . “Solid waste” is defined in Utah Code Ann. § 26-32-2(1) as meaning "all putrescible and nonputrescible materials or substances discarded or rejected as being spent, useless, worthless, or in excess to the owners’ needs at the time of discard or rejection, including but not limited to garbage, refuse, industrial and commercial waste ..."

      . Utah Code Ann. § 10-8-61 (1953) states:
      Regulations to prevent contagious diseases—Quarantine—Garbage disposal. They may make regulations to secure the general health of the city, prevent the introduction of contagious, infectious or malignant diseases into the city, and make quarantine laws and enforce the same within the corporate limits and within twelve miles thereof. They may create a board of health and prescribe the powers and duties of the same. They shall not, however, by any ordinance, contract, rule or regulation, prevent or seek to prevent any person from transporting thoroughfares garbage, kitchen refuse or the by-products of the business of such person or from selling or otherwise disposing of the same, except under such uniform and reasonable regulations as the board of commissioners or city council may by ordinance prescribe for the removal, hauling and disposal of the same, and they shall not grant to any person the exclusive right to collect or transport through the streets or public thoroughfares any garbage, kitchen refuse or by-products, but they may prescribe, by ordinance, that any garbage, kitchen refuse or by-product which may be deemed deleterious to the public health may be taken by the city and burned or otherwise destroyed by it.

      . Parker v. Provo City Corp., 543 P.2d 769, 771 (Utah 1975).

      . That analysis might conceivably be based on a statement by the Court in Boulder, 455 U.S. at 56 n. 20, 102 S.Ct. at 843 n. 20, that reserved the question whether "certain activities, which might appear anticompetitive when engaged in by private parties, take on a different complexion when adopted by a local government."


source: Caselaw Access Project

author: HATFIELD, District Judge.

license: Public Domain

text:
    James R. CONNER; the Montana Wildlife Federation; the Madison-Gallatin Alliance, Plaintiffs, v. Robert BURFORD, in his official capacity as Director of the Bureau of Land Management; R. Max Peterson, in his official capacity as Chief Forester, United States Forest Service, Department of Agriculture; Erwin Steuke, in his official capacity as Area Manager, United States Fish and Wildlife Service, United States Department of the Interior; John R. Block, in his official capacity as Secretary of Agriculture, Department of Agriculture; Michael J. Penfold, in his official capacity as State Director of the United States Bureau of Land Management, State of Montana, Defendants.
    No. CV-82-42-BU.
    United States District Court, D. Montana, Great Falls Division.
    March 12, 1985.
    Thomas France, Missoula, Mont., Robert A. Nelson, Helena, Mont., for plaintiffs.
    Perry E. Wallace, Jr., Dept. of Justice, Land & Natural Resources Division, Washington, D.C., Robert J. Brooks, Asst. U.S. Atty., Dist. of Mont., Butte, Mont., for defendants.
   MEMORANDUM AND ORDER

HATFIELD, District Judge.

Before this court are motions for summary judgment by plaintiffs James R. Conner and the Montana Wildlife Federation and by defendants The Bureau of Land Management, the Forest Service, and others, involving the issuance of oil and gas leases of vast areas of the Flathead and Gallatin National Forests. Jurisdiction over this action is based on 28 U.S.C. § 1331.

Plaintiffs ask the court to declare unlawful the decisions by the Chief of the Forest Service, the Director of the Bureau of Land Management and the Secretary of the Interior to deny plaintiffs’ protests and appeals against the issuance of oil and gas leases in the Flathead and the Gallatin National Forests. Plaintiffs contend that defendants violated the National Environmental Policy Act (“NEPA”), 42 U.S.C. §§ 4321 et seq., by failing to prepare and consider environmental impact statements (“EIS”) prior to making decisions which will significantly affect the environments of the forests in question. Further, plaintiffs claim violations of the Endangered Species Act (“ESA”), 16 U.S.C. §§ 1531 et seq., by defendants in failing to sufficiently consult with the United States Fish and Wildlife Service before taking such action. The court is asked to set aside the agency actions as being not in accordance with the above cited law under authority of the Administrative Procedure Act, 5 U.S.C. § 706(2)(A). Additionally, plaintiffs ask the court to enjoin the issuance of any more leases until the agencies comply with NEPA and ESA.

The federal defendants assert they complied with NEPA and ESA by conducting environmental assessments (“EA’s”), obtaining biological opinions, and establishing variously applied stipulations, including a No Surface Occupancy Stipulation (“NSO”), in the leases which render the environmental impact and the danger to threatened and endangered species at the leasing stage insignificant. Defendants assert that subsequent analysis and decision-making, based on individual proposals for further activity on the leases, will continue to uphold the mandates of NEPA and ESA.

I. THE NATIONAL ENVIRONMENTAL POLICY ACT

The NEPA challenge requires the court to determine whether the federal defendants initiated a “major federal action significantly affecting the quality of the human environment....” 42 U.S.C. § 4332(2)(C). If the defendants did initiate such an action, they are required to prepare and analyze an environmental impact statement before deciding what action should occur. Id. The standard of review of the decision to forego an EIS at the leasing stage is that of reasonableness. Foundation for North American Wild Sheep v. U.S., 681 F.2d 1172 (9th Cir.1982). This court finds that the decision to forego an EIS was unreasonable. The EIS should serve to assist agencies in making decisions before any significant steps are taken which may damage the environment.

A central purpose of an EIS is to force the consideration of environmental impacts in the decision making process, (citations omitted.) That purpose requires that the NEPA process be integrated with agency planning at the ‘earliest possible time,’ 40 C.F.R. § 1501.2, and the purpose cannot be fully served if consideration of cumulative effects of successive, interdependent steps is delayed until the first step has already been taken.

Thomas v. Peterson, 753 F.2d 754, 757 (9th Cir.1985).

In this case, the leasing stage is the first stage of a number of successive steps which clearly meet the “significant effect” criterion to trigger an EIS.

Leases without NSO stipulations have been set aside for lack of NEPA compliance because they fail to ensure that environmentally damaging activity can be precluded by the federal agency. Sierra Club v. Peterson, 717 F.2d 1409 (D.C.Cir.1983). This ruling clearly extends to leases which allow surface occupancy on any part of the leased acreage.

This court must therefore consider the reasonableness of leasing lands which have an NSO stipulation covering the entire area of the lease. To use the NSO stipulation as a mechanism to avoid .an EIS when issuing numerous leases on potential wilderness areas circumvents the spirit of NEPA. Subsequent site-specific analysis, prompted by a proposal from a lessee of one tract, may result in a finding of no significant environmental impact. Obviously, a comprehensive analysis of cumulative impacts of several oil and gas development activities must be done before any single activity can proceed. Otherwise, a piecemeal invasion of the forests would occur, followed by the realization of a significant and irreversible impact. See e.g., Cady v. Morton, 527 F.2d 786 (9th Cir.1975); Trout Unlimited v. Morton, 509 F.2d 1276 (9th Cir.1974); 40 C.F.R. § 1508.27(b)(7).

The issuance of a lease with an NSO stipulation does not guarantee an EIS before any development would occur. In fact, NSO stipulations can be modified or removed without an EIS. Gallatin Environmental Analysis, page 3 (discussing reevaluation of NSO stipulations in the Crazy Mountains roadless area). This court is compelled to set aside the decisions of defendants to lease without preparation of an EIS. The idea of possible site specific assessments in the future does not comply with the objective of protecting the area for possible wilderness designation.

... the promise of a site specific EIS in the future is meaningless if later analysis cannot consider wilderness preservation as an alternative to development.

California v. Block, 690 F.2d 753 at 762-763 (9th Cir.1982).

II. ENDANGERED SPECIES ACT

The second issue before the court involves federal agency compliance with the provisions of the Endangered Species Act (“ESA”). 16 U.S.C. §§ 1531 et seq. (1976).

Plaintiffs challenge the sufficiency of the biological opinions, prepared by the Fish and Wildlife Service as mandated by Section 1536(b) of ESA. The court finds federal defendants’ compliance with ESA to be analogous to their compliance with NEPA. The biological opinions examine the effects of oil and gas activity only so far as the leasing stage, asserting lack of information to project consequences of further development. Here again, the defendants rely on stipulations to protect the threatened and endangered species when subsequent intrusion into the critical habitats occurs. The potential for a piecemeal invasion of habitat is present when the agency is allowed to lease without a comprehensive analysis of all stages of oil and gas development. See, North Slope Borough v. Andrus, 642 F.2d 589 (D.C.Cir.1980). The environmental assessments of both the Flathead and the Gallatin warn that this piecemeal approach could lead to “... a chipping away and deterioration of important habitat____” Flathead EA p. 109-6, Gallatin EA App. D p. 7.

The mandate of the Endangered Species Act is to obtain a comprehensive Biological Opinion designed to conserve endangered life and threatened species and their ecosystems. 16 U.S.C. § 1531. Essentially, the defendants’ purpose here was to expeditiously issue oil and gas leases.

III. CONCLUSION

The federal agencies violated the procedural requirements of NEPA by failing to prepare an EIS on the effects of oil and gas activity on the Flathead and Gallatin National Forests. Additionally, they violated ESA by failing to analyze the consequences of all stages of oil and gas activity on the forests.

Therefore, under the provisions of 5 U.S.C. § 706, the agency actions allowing the issuance of the oil and gas leases on the Flathead and Gallatin National' Forests are HEREBY SET ASIDE. The defendants are enjoined from further recommendations to lease and issuance of leases pending compliance with NEPA and ESA.

Plaintiffs’ motion for summary judgment is GRANTED.

Defendants’ motion for summary judgment is DENIED.

Parties shall bear their own costs.


author: NORDBERG, District Judge.

text:
    BALLY MANUFACTURING CORP., Plaintiff, v. INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS, LOCAL UNION NO. 713, Now known as Local Union No. 134, Defendant.
    Nos. 83 C 8863, 83 C 8905.
    United States District Court, N.D. Illinois, E.D.
    March 12, 1985.
    Ralph A. Morris, Janice K. Hartwell, Seyfarth, Shaw, Fairweather & Geraldson, Chicago, Ill., for plaintiff.
    Joel A. D’Alba, Asher, Pavalon, Gittler & Greenfield, Ltd., Chicago, Ill., for defendant.
   Memorandum Opinion and Order

NORDBERG, District Judge.

This matter is before the court on cross-motions for summary judgment. For the reasons hereinafter stated, the employer’s motion for summary judgment is granted and the union’s motion for summary judgment is denied. The sole issue is whether a particular dispute is arbitrable under the provisions of a collective bargaining agreement (“Agreement”) between Bally Manufacturing Company (“Company”) and the International Brotherhood of Electrical Workers (“Union”). The pertinent provisions of the Agreement provide:

ARTICLE XIV—METHOD OF NEGOTIATION

SECTION 14.1.: The COMPANY and the UNION agree to meet and deal with each other through their duly accredited officers and committees on matters relating to hours, wages and other definite conditions of employment of the employees of the COMPANY covered in this Agreement.
Should any differences arise between the parties hereto concerning the interpretation or application of this Agreement, the COMPANY’S representative and the Business Manager of the UNION, (or someone appointed by the Business Manager to represent him), shall meet and endeavor to settle such differences. Either of the parties hereto may request arbitration with respect to matters of mutual concern and interest, regarding proposed changes in or amendment to this agreement.
In ease of failure to agree, the matter in dispute shall be submitted at the request of either party to an Arbitration Board to be selected in a manner as specified in Article V, beginning with Step 4.
* * * * * *

ARTICLE XV—TERM OF AGREEMENT

This Agreement and the provisions thereof, when signed by the authorized representatives of the COMPANY and the UNION, shall become effective on the first day of December, 1981, and remain in effect through the last day of November, 1983, and shall continue in full force and effect from year to year thereafter unless written notice is given by either party to the other on or before sixty (60) days prior to the annual termination date requesting that the Agreement be amended or cancelled.

Against the background of these contractual provisions, the following chronology of events ensued.

On September 22, 1983, the Union notified the Company that it desired to open the Agreement for amendment. (See Attachment B to Company’s Complaint). On September 30, 1983, the Company notified the Union of its decision to terminate the Agreement as of November 30, 1983, pursuant to the 60 day cancellation provision of Article XV. Negotiations continued over a period of several months. However, a new agreement was not reached as of November 30, 1983, the expiration date of the Agreement. The Union then sent a letter to the Company, dated November 30, 1983, demanding arbitration of the terms and conditions of a new agreement, invoking Article XIV of the old Agreement. (See Attachment D to Company’s Complaint). On December 2, 1983, the Company informed the Union that the Agreement had expired on November 30, 1983 and that it was under no contractual obligation to proceed to arbitration. (See Attachment E to Company’s Complaint).

On December 2, 1983, the Company filed suit in this court, under Section 301(a) of the Labor Management Relations Act of 1947, 29 U.S.C. § 185(a). The Company sought a declaratory judgment and an order staying arbitration of the terms and conditions of a new agreement. (Case No. 83 C 8863). On December 6, 1983, the Union brought a separate action seeking an order compelling the Company to proceed to arbitration. (Case No. 8905). Since the two cases involve the same legal issues and parties, this court found them to be related and now addresses motions for summary judgment filed in each case, which will be treated as cross-motions for summary judgment.

After examining the language of the Agreement, the cases cited by the parties and other applicable law, this court concludes that effect must be given to all provisions of the Agreement and therefore neither the Company nor the Union can be compelled to arbitrate over the terms and conditions of a new collective bargaining agreement. A similar situation was faced by the court in M.K.O. Transit Lines, Inc. v. Division Number 892, Amalgamated Association of Street, Electric Railway and Motor Coach Employees of America, 319 F.2d 488 (10th Cir.), cert. denied, 375 U.S. 944, 84 S.Ct. 350, 11 L.Ed.2d 274 (1963). In M.K.O., the contract at issue contained a termination clause, giving either party the right to cancel the contract upon notice given not less than 60 days prior to the expiration of the contract or any renewal of the contract. The contract also provided that all grievances, disputes and differences between the union and the company, including changes, additions, and modifications which could not be resolved by the parties, should be determined by arbitration as therein provided. The union called upon the company to negotiate a new contract, stating:

In the event that no agreement has been reached by midnight of June 30, 1962, and if arbitration has not been agreed upon this will also serve due notice that the entire contract now if effect is to be terminated as of midnight June 30, 1962.

Id. at 489. No agreement was reached. Although the union had previously stated that in such circumstances the agreement would be terminated, the union suddenly demanded arbitration.

The Tenth Circuit found that, although the contract contemplated arbitration of a changed or new agreement during the renewed term, such an option was foreclosed by either party’s notice of termination. The court further found that those cases upholding arbitration after notice of termination involved accrued continuing rights under the terminated agreement. The court also supported its decision by looking to elementary contract principles. The court stated:

It is elementary that in construing a contract effect, if possible, should be given to all its terms. A consideration of the entire collective bargaining contract before us lends support to our interpretation of the provisions directly involved. If each part is given effect, the agreement between the parties is reasonable and unified. Within the ninety day period specified either party could give notice of termination, for it was neither agreed nor required that they should be bound to each other in perpetuity or indefinitely solely at the will of future arbitrators. Since there was such notice of termination the contract had come to an end upon the expiration of the old term. To say that the obligation to arbitrate new terms and conditions would continue with the same result as if the contract were not so terminated would be to deny any effect whatever to the right of termination which each party reserved.

Id. at 492. The court refused to compel arbitration.

The clear and unambiguous language of the contract in the instant case calls for a similar conclusion. Article XIV describes the “Method of Negotiation,” and Article XV, the “Term of Agreement.” Neither Article, nor any clause of the Agreement, indicates that the termination clause of Article XV is subsumed or rendered void by the negotiation clause of Article XIV. Thus, as in M.K.O., once the termination provision of Article XV is invoked, any interest arbitration clause of Article XIV is ineffective. Even assuming, as the Union maintains, that the subject of a new agreement may be arbitrable under Article XIV, such a provision was rendered ineffective once the termination provision of Article XV was invoked by the Company in its letter of September 30, 1983.

Such a result is not only mandated by M.K.O., it is also consistent with the holdings of numerous labor cases addressing “interest arbitration” clauses, which the Union claims is at issue here. Under a traditional “interest arbitration” clause, a party contractually foregoes the right to invoke future use of traditional economic weapons following termination of a contract. Although a party may agree to “interest arbitration,” such clauses are permissive and not mandatory subjects of bargaining. N.L.R.B. v. Greensboro Printing Pressmen, 549 F.2d 308 (4th Cir.1977); see generally, Morris, The Role of Interest Arbitration in a Collective Bargaining System, 1 Ind.Rel.L.J. 427 (1976). As a permissive bargaining subject, courts have refused to allow a party to a contract to invoke an “interest arbitration” clause to perpetuate the same clause in a successive contract. E.g., N.L.R.B. v. Columbus Printing Pressmen, 543 F.2d 1161, 1169—70 (5th Cir.1976). Courts have reasoned that to allow such a result would bind the parties in perpetuity to forego the use of economic weapons in support of bargaining positions, depriving parties of the opportunity to readjust their relationship in response to changed economic circumstances. Id.

Similarly, in the instant case, to allow an “interest arbitration” clause to override the proper invocation of the termination clause would deprive the termination clause of all meaning, perpetuating the interest arbitration clause at the expense of an equally binding termination clause. See Chattanooga Mailers v. Chattanooga News-Free Press, 524 F.2d 1305 (6th Cir.1975) (noting that if a contract was properly terminated, an interest arbitration clause would not be properly enforceable).

Moreover, non-enforcement of any “interest arbitration” clause in the instant ease fully accords with the Supreme Court’s decision in Nolde Bros., Inc. v. Local No. 358, Bakery & Confectionary Workers Union, 430 U.S. 243, 97 S.Ct. 1067, 51 L.Ed.2d 300 (1977). In Nolde the Court held that an employees’ claim for severance pay which arose under the collective bargaining agreement was subject to the agreement’s arbitration terms even though the claim arose after the contract was terminated. In Nolde the Court found that, absent a contrary indication in the contract, the parties did not intend for their arbitration duty to terminate automatically with the contract. To hold otherwise would have allowed the employer to cut off arbitration of severance pay claims by terminating the existing contract simultaneously with closing business operations.

Unlike Nolde, no such rationale is operative in the instant case where the dispute revolves around whether effect will be given to two clear and unambiguous provisions of a collective bargaining agreement.

Conclusion

Therefore, the Company’s right to terminate the contract was unfettered by the arbitration clause. In accordance with the foregoing opinion, the Company’s motion for summary judgment is granted and the Union’s Motion for summary judgment is denied.

      . The unequivocal language of Article XIV and Article XV distinguishes this case from the recent case of Hotel & Restaurant Employees and Bartenders Union, Local 703 v. Williams, 752 F.2d 1476 (9th Cir.1985). In that case the “clear and unambiguous” language of the arbitration article made clear that the arbitration clause remained in effect even after the expiration of the agreement. Id. at 1479. In such circumstances the court found that the post-contract arbitration of wage and fringe benefit provisions of a new agreement was proper. See also Communications Workers, Local 5090 v. Western Electric Co., Inc., 751 F.2d 203, 102 Lab.Cas. (CCH) ¶ 11,319 (7th Cir.1984) (interpretations of "less than clear substantive provisions" should be arbitrated).

      . There are generally two types or categories of labor arbitration. The more common type is grievance arbitration, which relates to disagreement over the interpretation of the terms of an existing contract. The other type, variously styled “interest arbitration” and “new contract arbitration," is usually resorted to when the parties are unable to agree on the provisions of a new, renewed or reopened contract. N.L.R.B. v. Columbus Printing Pressmen, 543 F.2d 1161 n. 4 (5th Cir.1976).


author: LASKER, District Judge.

text:
    UNITED STATES of America, v. Harold BARR, et al., Defendants.
    No. SSSS 84 Cr. 82 (MEL).
    United States District Court, S.D. New York.
    March 14, 1985.

      Rudolph W. Giuliani, U.S. Atty., S.D. N.Y., New York City, for U.S.; Michael R. Bromwich, Asst. U.S. Atty., New York City, of counsel.
    Michael Kennedy, New York City, for defendant Harold Barr.
   LASKER, District Judge.

Harold Barr moves to suppress evidence obtained from the Affiliated Answering Service (“Affiliated”). The issue presented is whether the circumstances surrounding the government’s acquisition of mail through the use of a grand jury subpoena were such that they constituted a warrant-less seizure in violation of the fourth amendment. We hold Barr’s fourth amendment rights were not violated.

On June 1, 1984 Harold Barr was arrested for, among other things, conspiracy to violate federal narcotics laws. After his arrest he was incarcerated in the Metropolitan Correctional Center (“MCC”) where he remains pending the outcome of his trial.

During the course of an investigation into the suspected narcotics and narcotics-related activities of Barr the government learned that Barr employed Affiliated to receive mail and telephone messages for him. On June 4, 1984 a grand jury subpoena duces tecum was served on Affiliated. The subpoena requested production on June 12, 1984 of mail addressed to “Larry Freeman”, an alleged alias for Harold Barr. Rather than bring the mail to the grand jury on that date, Affiliated complied with the subpoena immediately, that is, on June 4th. On June 11, 1984 the government secured a search warrant and opened the mail which had been delivered by Affiliated pursuant to the subpoena.

Barr argues that the mail should be suppressed because the government impermissibly used a subpoena duces tecum to obtain his mail in the first place, in circumvention of the warrant requirement. The government answers that “the subpoena duces tecum issued to Affiliated on June 1, 1984 was a wholly proper use of the subpoena process.”

Although the fourth amendment prohibits the issuance of subpoenas duces tecum which are overbroad, Hale v. Henkel, 201 U.S. 43, 26 S.Ct. 370, 50 L.Ed. 652 (1906), a subpoena which compels production of evidence is generally not considered to be a “seizure” within the meaning of the Constitution, that is, a taking which cannot be undertaken without the authority of a warrant. United States v. Dionisio, 410 U.S. 1, 93 S.Ct. 764, 35 L.Ed.2d 67 (1973); accord United States v. Mara, 410 U.S. 19, 93 S.Ct. 774, 35 L.Ed.2d 99 (1973). In comparing the grand jury subpoena process with fourth amendment seizures the Dionisio Court relied upon the diminished compulsion attendant in grand jury subpoenas as the critical distinguishing factor. United States v. Dionisio, 410 U.S. at 9-10, 93 S.Ct. at 769.

The grand jury, as the sole instrument through which felony charges are constitutionally brought, has broad investigative powers. See, e.g., Costello v. United States, 350 U.S. 359, 362, 76 S.Ct. 406, 408, 100 L.Ed. 397 (1956). The power to subpoena witnesses to testify and to compel the production of documents is accepted as indispensable to the grand jury’s exercise of its authority. Although “personal sacrifice” is incumbent in the duty to appear before the grand jury, United States v. Dionisio, 410 U.S. at 10, 93 S.Ct. at 769 (citations omitted), the obligation to furnish evidence is essential to the administration of justice. Id. Accordingly, the benefits which an individual receives from performing his or her “civic obligation”, i.e., a safer society, operate to lessen the compulsory nature of a subpoena. See id. at 9-10, 93 S.Ct. at 769.

The second distinction between the compulsion exerted by a subpoena and a seizure lies in the different nature of the two legal processes. Quoting with approval a decision of Judge Friendly, the Dionisio court stated:

[A seizure] is abrupt, is effected with force or the threat of it and often in demeaning circumstances, and, in the case of arrest, results in a record involving stigma. A subpoena is served in the same manner as other legal process; it involves no stigma whatever; if the time for appearance is inconvenient, this can generally be altered; and it remains at all times under the control and supervision of a court. Id. quoting United States v. Doe (Schwartz), 457 F.2d 895, 898 (2d Cir.1972), [cert. denied, 410 U.S. 941, 93 S.Ct. 1376, 35 L.Ed.2d 608 (1973) ].

Despite the diminished compulsion of the subpoena process, however, a grand jury subpoena is not a “talisman that dissolves all constitutional protections”. Id. at 11, 93 S.Ct. at 770. Further, “the rule has long been established that a subpoena duces tecum may not be used in such a way as to impinge upon Fourth Amendment rights”. United States v. Re, 313 F.Supp. 442, 448 (S.D.N.Y.1970). The government devotes a substantial part of its brief to the argument that the subpoena duces tecum at issue in this case was not overly broad, an issue Barr does not seriously contest. However, even a subpoena duces tecum which is validly drawn and issued does not give the process server the right to seize the subpoenaed items. Id. citing Mancusi v. De Forte, 392 U.S. 364, 88 S.Ct. 2120, 20 L.Ed.2d 1154 (1968); accord In Re Nwamu, 421 F.Supp. 1361, 1366 (S.D.N.Y.1976). Accordingly, the question before us is whether the agents who obtained Barr’s mail from Affiliated overstepped the subpoena’s legal boundaries.

As a threshold showing, to invoke the fourth amendment successfully a defendant must demonstrate a reasonable expectation of privacy in the papers subpoenaed. Katz v. United States, 389 U.S. 347, 361, 88 S.Ct. 507, 516, 19 L.Ed.2d 576 (Harlan, J., concurring) (1967); cf. United States v. Miller, 425 U.S. 435, 442, 96 S.Ct. 1619, 1623, 48 L.Ed.2d 71 (1976) (“[w]e must examine the nature of the particular documents sought to be protected in order to determine whether there is a legitimate ‘expectation of privacy’ concerning their contents”). For example, a defendant’s fourth amendment rights may be implicated where the items obtained are personal documents. Cf. In Re Horowitz, 482 F.2d 72 (2d Cir.), cert. denied, 414 U.S. 867, 94 S.Ct. 64, 38 L.Ed.2d 86 (1973) (three filing cabinets were subpoenaed by the grand jury investigating business fraud and the trial court quashed the subpoena to the extent that it required production of wills, trust agreements and other personal records). On the other hand, an individual has no expectation of privacy in papers which are corporate records, United States v. Lartey, 716 F.2d 955, 961 (2d Cir.1983), or records required to be kept by law, id., or, of course, papers in which the person has no possessory or proprietary interest, cf. United States v. Re, 313 F.Supp. at 447 (the Res could not challenge the taking of workpapers which were the property of their accountant).

The government asserts that the mail it obtained from Affiliated was “business and financial correspondence” and “junk mail” and not “personal correspondence.” Government’s Supplemental Memorandum of Law in Opposition to Harold Barr’s Motion to Suppress Mail Addressed to “Larry Freeman”, at p. 2 n. * (filed Jan. 3, 1985). However, we do not interpret the decisions which hold that there is no reasonable expectation of privacy in corporate or other public records as precluding an individual’s privacy interest in mail which relates to, for instance, his personal financial matters. Barr’s personal mail is a type of property in which Barr ordinarily could have had a legitimate privacy expectation.

Beyond the determination of the simple proposition whether the property seized is of a nature which the fourth amendment generally protects, no bright line rule determines when a subpoena infringes upon fourth amendment rights. The evaluation must be made from the facts of each particular case. United States v. Lartey, 716 F.2d at 961. A review of the few relevant cases in this circuit demonstrates that, as in Dionisio, the focus of the inquiry relates to the level of compulsion present when the subpoena duces tecum is served.

In United States v. Lartey, 716 F.2d 955 (2d Cir.1983), the defendant, a pharmacist, was suspected of unlawfully distributing certain prescription drugs. Forthwith subpoenas requiring production of records from the pharmacies out of which the defendant allegedly operated were served after the defendant had been arrested in connection with the crime. Acknowledging that forthwith subpoenas may “hamper the ability of one to contest its validity before a judicial officer” the court nevertheless declined to hold that such subpoenas were per se illegal, Id. at 962, and upheld the subpoena in the ease before it. Factors the court considered included the exigent circumstances presented by the substantiated belief that Lartey would attempt to tamper with the documents if warned of the imminent subpoena, the lack of fourth or fifth amendment grounds upon which the defendant could have successfully moved to quash the subpoena and the lack of evidence that the agents coerced compliance with the subpoena, including the fact that the pharmacists upon which the subpoenas were served were allowed to communicate with an attorney as to how to respond to the subpoenas.

In United States v. Re, supra, the Res’ accountant was served with a forthwith subpoena to hand over documents which Re had left in his possession. Despite the accountant’s release of the records without challenging the subpoena and without first notifying the Res so that they could do so, the court held there was no seizure.

In contrast to the facts of Lartey and Re, the court in In Re Nwamu, 421 F.Supp. 1361, 1365-66 (S.D.N.Y.1976), found the methods used in the subpoena process included “compelling instant surrender of the subpoenaed items to the agents, without court order, by threats of contempt and claim, or color, or authority.” After evaluating the totality of the circumstances the court held “that compliance with the subpoenas would be unreasonable and oppressive; that neither movants nor their employees had voluntarily consented to surrender of the subpoenaed items; and that the government agents’ taking of the subpoenaed items constitute^] an unreasonable and unlawful search and seizure.” Id. at 1367. In so holding, the Nwamu court emphasized that the manner of service stripped the court of its authority to oversee the subpoena process and denied the defendant the opportunity to challenge its validity.

Although, as the decisions illustrate, the line between a permissible and an impermissible level of compulsion is not bright, guiding principles have evolved which aid in determining when a fourth amendment violation has occurred. Whether, and under what circumstances the person on whom process is served consents to the release of the items is a factor in evaluating the existence of a fourth amendment infraction. Clearly, a subpoena does not authorize the seizure of materials by the use of force or threats of violence, regardless of who has possession of the items or is charged with compliance. Id. at 1366.

A subpoena duces tecum may violate the fourth amendment if government agents improperly impinge on the defendant’s right to contest the subpoena’s validity or a court’s authority to quash, alter or enforce it. Id. at 1365. Whether the defendant has notice of the subpoena is related to the opportunity to challenge the subpoena and is also a factor to be considered. Nonetheless, a mere lack of notice, standing alone, does not establish a violation. Indeed, the decisions indicate that the importance of notice as a factor diminishes when the defendant demonstrates an intent to tamper with or destroy documents, United States v. Lartey, 716 F.2d at 961-62; United States v. Re, 313 F.Supp. at 449, or when there are no grounds upon which to assert a successful motion to quash. United States v. Lartey, 716 F.2d at 961; United States v. Re, 313 F.Supp. at 450.

Further, as we interpret United States v. Re, supra, a decision we find persuasive, a defendant may be deemed to have constructive notice of the subpoena when he chooses to relinquish control of his property to another person if, when served with a subpoena, the person who has custody of the items can notify the defendant, consult an attorney or move to quash the subpoena.

Applying these principles to the case at hand we find Barr’s fourth amendment rights not to have been violated. Barr does not argue, nor has he produced any' evidence which indicates that Affiliated’s compliance with the subpoena duces tecum was by other than voluntary consent. The agents who served the subpoena did not coerce compliance by force or threats or overstep their legal authority. Indeed, Affiliated chose to comply with the subpoena immediately although compliance was not called for until eight days after the date of service.

Although, because he was incarcerated when it was served, Barr did not have notice of the subpoena duces tecum, a motion to quash the subpoena on fourth amendment grounds would not have been successful in any event. The subpoena was not overly broad nor, as we have concluded, did the subpoena process in this case constitute an illegal seizure. Further, irrespective of any lack of notice at the time the subpoena was served, Barr has now had ample opportunity, which he is by this motion utilizing, to raise any alleged infirmities in the subpoena process which he would have challenged in a motion to quash. Moreover, Affiliated was free to consult counsel or move to quash the subpoena in Barr’s absence.

Finally, we do not accept Barr’s argument that Affiliated, as a “bailee” (of Barr’s mail), “could not legally permit the government to inspect or take the ... mail without incurring liability for conversion....” Reply Brief of Defendant Harold Barr (filed Nov. 21, 1984), at p. 3. Whatever were the contractual terms between Barr and Affiliated vis-a-vis the handling of Barr’s mail, the government was not bound by them.

The motion is denied.

It is so ordered.

      . The government argues in the alternative that Barr had abandoned his mail, (which impacts on any former expectation of privacy he may have possessed in the property). The fact that some of the mail was postmarked six weeks before the date of the subpoena, by itself, does not establish that Barr intended to abandon his mail. Indeed, at least part of the time prior to service of the subpoena Barr was incarcerated in the MCC.

      . In motion papers submitted by Raymond Sussman, Esq., one of Barr’s former attorneys in this case, Barr asserts that "[i]n proceeding [to obtain Barr’s mail] in this overzealous fashion the government ... violated the defendant’s right to privacy and his 4th, 5th and 14th amendment rights....” Affidavit and Memorandum of Law at page 8 (filed September 26, 1984). In Barr’s fourth set of papers on this heavily-briefed motion Barr asserts in a footnote that "Mr. Barr contends that production of the mail violated his fifth amendment right against self incrimination” because "the mere existence ... of the items ... furnish[ed] a link in the chain of evidence needed to prosecute.” We do not comment on the merit of this fifth amendment issue because the two general assertions, unsupported by an affidavit from anyone with personal knowledge of the underlying facts, are insufficient to effectively raise a fifth amendment claim. Cf., United States v. Gillette, 383 F.2d 843, 848 (2d Cir.1967) (absence of affidavit alleging personal knowledge insufficient to trigger a hearing).

      . Barr submitted four sets of papers on the mail issue and was given the opportunity to argue the motion on two separate occasions.


author: CROW, District Judge.

text:
    UNITED STATES of America, Plaintiff, v. Austin L. JAMIESON.
    No. 84-10023-01.
    United States District Court, D. Kansas.
    March 15, 1985.

      Benjamin L. Burgess, U.S. Atty., Wichita, Kan., for plaintiff.
    Kiehl Rathbun, Wichita, Kan., for defendant.
   MEMORANDUM AND ORDER

CROW, District Judge.

The matter is now before the court on the government’s motion for reconsideration of a previous ruling granting defendant’s motion in limine and excluding certain prescription evidence at trial. The supersedeas indictment, returned on July 25, 1984, charges defendant with 53 counts of knowingly and intentionally prescribing certain controlled substances without a legitimate medical purpose, all in violation of 21 U.S.C. § 841(a)(1). Dk. # 23. Defendant’s motion (Dk. #39) sought to prevent the introduction into evidence, under Federal Rule of Evidence 404(b), of prescriptions other than those involved in the 53 counts of the superseding indictment.

On the morning trial was to commence, and after hearing the testimony of Kathy Christopher and William Becker, the court granted defendant’s motion, finding the government’s evidentiary foundation for introduction of other prescriptions under Rule 404(b) inadequate. There followed an appeal of that issue, which was dismissed December 19, 1984 on motion of the government. Dk. #59. On January 2, 1985, the United States filed the motion to reconsider, and further requested the court either reserve a ruling until trial or allow the introduction of additional pretrial evidence. Dk. # 60. Defendant did not object to a rehearing of the motion. Dk. # 62.

In addition to the testimony of Christopher and Becker, the government has elicited the testimony of Thomas Stephenson on January 23, 1985, Dr. Douglas L. Young on February 19, 1985, and Richard Lili, by way of deposition taken March 4, 1985. Forty of the 53 counts of the supersedeas indictment involve specific prescriptions issued to either Christopher, Stephenson or Lili. The general body of extrinsic prescription evidence the government seeks to introduce to aid in proof of these counts is comprised of 52 other prescriptions issued to Christopher, 33 to Stephenson, 67 to Lili, and 14 to Becker.

An issue that has resurfaced throughout these proceedings is whether extrinsic acts, in this case the issuance of specific prescriptions, need be wrongful acts. Rule 404(b) speaks only of “other crimes, wrongs, or acts....” On the one hand, the government has maintained that it need not show that the other acts are necessarily wrongful. It is sufficient, it is argued, that they are similar acts in the sense that they were prescriptions issued by defendant, were close in time to the crime charged, and tend to establish a material issue in the case. On the other hand, the government has attempted to establish the wrongful nature of these acts through testimony of both a general and specific nature.

Defendant responds that there has not yet been an identification, with any precision, of the factual issues to which other prescription evidence is relevant. He further argues that since the offered evidence under 404(b) is identical to the charged counts in that they involve the issuance of prescriptions, they must be wrongful by some measure of proof or they are not relevant. Without proof of wrongfulness, he argues, the introduction of such evidence is prejudicial without having any evidentiary value.

The question of proof of wrongfulness is important in this case because of the nature of the extrinsic evidence and the purpose for which it is offered. The government’s position has been clearly established: "... rather than charge each prescription as a separate criminal act, only a representative number of prescriptions were charged as criminal acts representative of the overall pattern of conduct.” Hearing Transcript, p. 7, Dk. # 66. The government is not offering this extrinsic evidence simply to show the defendant wrote other prescriptions than those charged, but rather to show the defendant wrote other prescriptions than those charged without legitimate medical reasons.

The appropriate inquiry under Rule 404(b) focuses not on whether an extrinsic act is wrongful, but whether it is relevant for a purpose other than showing bad character and, if so, whether its probative value substantially outweighs the danger of unfair prejudice. See United States v. Barbieri, 614 F.2d 715 (10th Cir.1980). The first step of the inquiry is to determine whether the extrinsic offense or act is relevant to an issue in the case other than propensity. The government should be prepared to “articulate precisely the evidential hypothesis by which a fact of consequence may be inferred from the other acts evidence.” United States v. Biswell, 700 F.2d 1310, 1317 (10th Cir.1983). The government must further offer proof that the defendant in fact committed the extrinsic offense or act. Once extrinsic evidence is thereby determined relevant to an issue other than propensity, the court must then weigh the probative value of the evidence against its prejudicial effect. Applying these guidelines to the facts of this case, it becomes apparent to this court that much of the prescription evidence should not be admitted under 404(b). The court, however, has reconsidered its previous ruling, as set forth in the Memorandum filed September 5, 1984 (Dk. 46), and concludes the government has laid an adequate foundation for the introduction of prescriptions issued the witnesses in names other than their own.

Relevancy to Proper Issues

Under Rule 404(b), evidence of other crimes, wrongs, or acts may be admissible to prove such facts as “motive, opportunity, intent, preparation, plan, knowledge, identity, or absence of mistake or accident.” On several occasions where the government has recited issues to which the extrinsic prescription evidence is relevant, the litany has changed. Most recently, during oral argument on March 8, 1985, the consequential facts identified were intent, knowledge, opportunity, plan, lack of mistake and lack of good faith.

It is, of course, important to appropriately identify the consequential facts in issue, and how they may be inferred from extrinsic evidence, to determine relevancy of that evidence and, ultimately, to frame appropriate limiting instructions for the jury. “There must be a clear and logical connection between the alleged earlier offense or misconduct and the ease being tried.” United States v. Biswell, 700 F.2d at 1317-18. See also United States v. Thomas, 632 F.2d 837, 844 (10th Cir.), cert. denied 449 U.S. 960, 101 S.Ct. 373, 66 L.Ed.2d 227 (1980). It is clear from the evidence presented thus far that intent will be a crucial issue in this case. The government must prove that defendant entertained the requisite specific intent; that he knowingly and intentionally dispensed controlled substances for other than legitimate medical purposes and outside the usual course of professional practice. See United States v. Varma, 691 F.2d 460, 462 (10th Cir.1982); United States v. Guerrero, 650 F.2d 728, 730 (5th Cir.1981). See also 21 C.F.R. § 1306.04(a).

Evidence of other prescriptions would be of relevance and admissible on the issue of intent, “if it properly meets the requirements of involving the same state of mind in the perpetration of both the extrinsic and the charged offense, and if it was not too remote or substantially outweighed in value by its prejudicial effect.” United States v. Dysart, 705 F.2d 1247, 1258 (10th Cir.) cert. denied, — U.S. -, 104 S.Ct. 339, 78 L.Ed.2d 307 (1983). See also United States v. Guerrero, supra at 733-34, 737.

As previously indicated, the government’s tactic has been to charge a representative number of acts of writing prescriptions. “[T]he other prescriptions that are not charged in the indictment blend with and are connected with the ones that are charged ... they help to explain the circumstances of the ones that are charged in the indictment and they tend logically to prove elements in the case.” Hearing Transcript, page 133, Dk. # 57. The court agrees the other prescriptions would tend to logically prove elements in the case, such as intent or knowledge, to the extent they in fact constitute similar acts to those charged. See United States v. Beechum, 582 F.2d 898, 911 (5th Cir.1978) (en banc), cert. denied, 440 U.S. 920, 99 S.Ct. 1244, 59 L.Ed.2d 472 (1979).

The court also agrees that such extrinsic evidence would be relevant to proof of a common plan or scheme involving continuing conduct outside the scope of legitimate practice. See United States v. Stump, 735 F.2d 273, 275 (7th Cir.) cert. denied, — U.S. -, 105 S.Ct. 203, 83 L.Ed.2d 134 (1984); United States v. Guerrero, supra at 737; United States v. Barbieri, 614 F.2d at 719. On the other hand, the government has not demonstrated to the court’s satisfaction how opportunity is a fact of consequence in this case or, for that matter, how the extrinsic evidence would tend to prove such an element. Similarly, under the circumstances of this case, it is unnecessary to treat lack of mistake or lack of good faith as issues distinct from intent or knowledge. To the extent the extrinsic evidence is determined admissible, it is unnecessary and potentially confusing to subject the jury to a limiting instruction identifying numerous issues which essentially overlap.

Sufficiency of the Evidence

A second necessary step of the relevancy determination requires proof that the defendant committed the other prescription acts. It is here the court believes the issue of wrongfulness has unnecessarily obscured the question whether an adequate foundation of proof has been laid. Where the government has been most adamant in its contention that proof of wrongfulness is unnecessary is where the proof has been most non-specific or lacking. Since the other prescription acts are in fact deemed by the government wrongful, and part of a wrongful scheme or plan, there should be sufficient proof that they were issued with the same intent or knowledge as the prescriptions charged. See United States v. Guerrero, supra at 734. The quantum of proof required of the government is clear and convincing evidence. See Wegerer v. First Commodity Corp. of Boston, 744 F.2d 719, 724 (10th Cir.1984); United States v. Biswell, supra at 1318; United States v. Barbieri, 614 F.2d at 719. See also United States v. Wormick, 709 F.2d 454 (7th Cir.1983); United States v. Evans, 697 F.2d 240, 249 (8th Cir.), cert. denied, 460 U.S. 1086, 103 S.Ct. 1779, 76 L.Ed.2d 350 (1983). The government must show by clear and convincing evidence that each one of the extrinsic prescriptions involved the dispensing of controlled substances outside the usual course of professional practice and for other than legitimate medical reasons.

The problem posed by the course the United States has chosen is determining which prescriptions the government has sufficiently proven were issued without a legitimate medical purpose. It would be improper to give the jury all of the prescriptions and let them speculate from general, non-specific testimony that each issued without a valid medical reason. The court would then have to instruct the jury to consider the body of extrinsic prescription evidence as it relates to defendant’s intent or knowledge in issuing the charged prescriptions, or as it relates to a common scheme or plan to issue prescriptions outside the usual course of practice. There is insufficient evidence to place each of these prescriptions before the jury in this manner.

For instance, in the case of Kathy Christopher, the court in its earlier Memorandum observed: “The government elicited testimony that she was a drug addict and on many, but not all, occasions she feigned .a medical problem. On many, but not all, occasions she engaged in sexual activities. Some visits occurred in defendant’s office, others did not. On occasion she obtained prescriptions in other names, and the frequency of prescriptions varied over time. Other than as to the events of January 20, 1981, it was impossible for her to correlate her own testimony with the actual prescriptions.” Dk. # 46. In focusing on the prescriptions themselves, the problem with this, and other general, non-specific testimony, is we don’t know which prescriptions involve misconduct or bad acts. It is clear that in certain instances she received treatment for real as well as feigned problems. The prescriptions themselves simply cannot be sorted out. This is the type of approach which does not permit any effort by defendant to meet charges of specific misconduct at a particular time. United States v. Biswell, 700 F.2d at 1318.

Upon reconsideration, the court has reached a different conclusion regarding prescriptions written to persons other than the recipients of the drugs. Where, as with Christopher, there is evidence that defendant never treated or examined individuals to whom prescriptions were written, where defendant had every reason to know the substances were actually for Christopher, and where there is evidence defendant suggested that other names be used, the government has borne its burden of proving defendant committed extrinsic acts relevant to the charged offenses. These prescriptions, Government Exhibits 99 through and including 107, constitute evidence of a specific nature and are relevant to issues raised by the charged prescriptions. See, e.g., United States v. Stump, 735 F.2d at 275 n. 4.

In the case of William Becker, except for the prescriptions written in his mother’s name (Government Exhibits 33 and 36) we confront the same problems of general, non-specific proof. The circumstances of the two alias prescriptions, requesting and receiving prescriptions in his mother’s name when she had never been treated or examined by defendant, in order to obtain two prescriptions at the same time, persuade the court that they are relevant extrinsic acts. It is implausible to characterize the prescriptions written in other names as merely constituting effective deception of the defendant.

As to the witness Thomas Stephenson, much of the government’s proof is again either insufficient, where specific events are concerned, or general and not prescription specific. Stephenson obtained prescriptions from defendant on numerous occasions between January, 1981, and approximately July, 1982. During, and before, that time he was a drug addict. During the initial visit, on January 23, 1981, blood pressure and temperature were taken and Stephenson related to defendant the nature of a specific disk problem diagnosed by a doctor in Kansas City. He also told defendant both percodan and librium had been prescribed for the problem. Stephenson testified that after examining him, defendant prescribed both drugs and indicated he didn’t think there were any real back problems. Stephenson had access to a Physician’s Desk Reference and had researched literature to concoct a medical excuse for obtaining drugs.

The court does not find this evidence clear and convincing proof that defendant prescribed controlled substances outside the usual course of practice, either on January 23, 1981, or thereafter. The offered extrinsic prescription issued January 23 for librium (Government Exhibit 113) is therefore not relevant. Beyond this date, the evidence is largely non-specific, not correlated to the actual prescriptions, and hence not relevant. There is general testimony as to Stephenson’s experiences in defendant’s office. On occasion the nurse would ask questions concerning the reason for his being there. Some visits were for legitimate reasons, and during some visits he feigned a problem. He requested, but did not always receive, the prescriptions he wanted. In addition, many visits occurred at defendant’s home or at the Osteopathic Hospital.

Certain of the alias prescriptions are again an exception and are relevant. Stephenson testified that on March 24, 1981, a day after he was prescribed percodan, he again approached defendant and asked for more. He further testified defendant did not appear happy with the situation and indicated he would not be able to use the name used the previous day. Stephenson suggested the name of his younger brother. This prescription (Government Exhibit 124), and the other prescriptions written in his brothers’ names, Government Exhibits 136, 139, 148, 152 and 154, are relevant. The government also offers 17 other prescriptions on the sole basis that Stephenson’s name is spelled Stevenson. There is nothing in the record to indicate that this is other than a spelling error, and the court does not find these acts satisfactorily proven.

The court reaches the same conclusion with regard to Richard Lill that only prescriptions issued him in other names are clearly proven extrinsic acts committed by defendant. Lill had seen defendant for various health problems, accidents and illnesses, for several years. When he did not have a legitimate problem he would feign a symptom to receive percodan or tussionex. On a few occasions he bartered goods for office calls. Some of the visits were at the office, where there was, at times, some sort of examination; some of the visits were at the hospital and usually involved no examination. Some of the prescriptions were written at defendant’s home after weekly meetings. Again, the testimony is insufficient and not correlated to specific prescriptions.

Considering the prescriptions written in other names, the court does not attach particular significance to Lill’s testimony that he told defendant (and assumed defendant believed him) that he was having trouble getting prescriptions filled in his own name and that pharmacies knew him by a different name. Even were this the reason for the prescriptions written in his father’s name, it does not explain the prescriptions written in his mother's name. Of greater significance is the nature of Lill’s requests and the number and frequency of these prescriptions. Under the circumstances, the court believes that the evidence is sufficient that a jury could infer the defendant acted with unlawful intent or knowledge in writing these prescriptions, and clear enough to support a reasonable inference that they issued as part of a plan or scheme of deception in which defendant was an active participant. See United States v. Guerrero, 650 F.2d at 737.

Finally, the court finds that the testimony of Dr. Young provides little in the way of an additional evidentiary basis for the introduction of the extrinsic prescriptions. Unable to review the patient records, he could not render an opinion as to whether defendant’s treatment of any of the witnesses was appropriate or not. Nor could he render an opinion, in specific instances, as to whether a prescription frequency was outside the usual course of practice. The court has no other evidentiary basis for determining prescriptions relevant due to the rate of frequency or overall amounts. In this regard, those cases relied upon by the government which address prescriptions in the aggregate and admit them on the basis of their inordinate number are distinguishable from this case. See United States v. Jackson, 576 F.2d 46 (5th Cir.1978); United States v. Ellzey, 527 F.2d 1306 (6th Cir.1976).

Rule 403 Balancing Test

Once the relevance of the evidence is established, by determination of its probativeness of an issue other than propensity and by proof that defendant committed the extrinsic act, the court must then balance the probative value against the potential for undue prejudice. Federal Rule of Evidence 403. While this calls for a common sense assessment of the circumstances surrounding the extrinsic evidence, United States v. Beechum, 582 F.2d at 914, several recognized factors aid in determining the probative value of the evidence. The court may consider the prosecution’s need for the evidence, Id. at 914-15, and should consider the temporal remoteness of the extrinsic act evidence to the charged offense, see, e.g., United States v. Dysart, 705 F.2d at 1258, as well as the overall similarity of the evidence and the charged offense, see, e.g., United States v. Guerrero, 650 F.2d at 737. As to the latter consideration, the probative value of the evidence tends to correlate positively with its overall similarity to the charged offense. United States v. Beechum, 582 F.2d at 915.

In this context, and as to the alias prescriptions, the court concludes that the balance tips in favor of probativeness, and that this evidence is not substantially outweighed by its potential for unfair prejudice. After hearing a considerable amount of the evidence in this case, it is clear the questions of intent and knowledge will play a pivotal role, and that the issue of a continuing plan or scheme of deception is also of consequence. There is no problem of remoteness, and there is a substantial similarity in many respects between the extrinsic acts and the charged offenses. Moreover, the other considerations of Rule 403 do not warrant exclusion of the evidence.

Further, the court notes that even if, discounting problems of specificity, the collective nature of the evidence as to the other prescriptions were sufficient for the jury to find that defendant issued them outside the usual course of practice, the court would nevertheless find their value substantially outweighed by the danger of unfair prejudice. In view of the nature of the testimony, any inference that might be drawn from these prescriptions would be too attenuated to be of much probative value. See United States v. Biswell, 700 F.2d at 1319. Furthermore, given the approach of the government in this case, at some point other considerations of Rule 403, such as confusion of the issues, waste of time, and needless presentation of cumulative evidence, would also warrant the exclusion of other prescription evidence. It is well to bear in mind the observation of Weinstein in his treatise on Evidence:

The legislative history of Rule 404 suggests that the policy of protecting the accused should be embraced in good faith by prosecutor and judge. Accordingly, the onus of showing that prejudice is over-balanced by need and good faith should rest on the Government. This may call for prosecutorial restraint. In United States v. Williams, [596 F.2d 44, 51 (2d Cir.), cert. denied 442 U.S. 946, 99 S.Ct. 2893, 61 L.Ed.2d 317 (1979)], the Second Circuit expressed concern “over the government’s readiness to jeopardize a conviction by use of other crimes evidence when the question of admissibility, as here, is a close one.”

2 Weinstein’s Evidence, 404-112 (1981). See also United States v. Biswell, 700 F.2d at 1317-18 n. 5.

IT IS THEREFORE ORDERED that defendant’s motion in limine to exclude prescription evidence is granted in part, and denied, in accordance with this opinion, as to prescriptions written in the names of individuals other than the recipients.