author: HENRY WOODS, District Judge.

text:
    Roosevelt HAYES, Plaintiff, v. Sgt. WIMBERLY, Sgt. Densmore, Officer Conner and Officer Moncrief as Individuals and in their Individual Capacities, Defendants.
    No. LR-C-85-116.
    United States District Court, E.D. Arkansas, Pine Bluff Division.
    Jan. 15, 1986.

      Richard Quiggle, Little Rock, Ark., for plaintiff.
    Sandra Johnson Buchanan, Asst. Atty. Gen., Little Rock, Ark., for defendants.
   MEMORANDUM OPINION

HENRY WOODS, District Judge.

Background

This case is not the last of a long series of cases filed by the plaintiff in the United States District Court for the Eastern District of Arkansas. It is a safe prediction that many more will be filed. Part of plaintiff’s life sentence begun in 1977 has been served in Florida under the terms of the Interstate Compact. Although Hayes in his numerous complaints has leveled many broadsides against the Arkansas prison system, it is significant that “Hayes requested to be returned to Arkansas, and this request was granted.” Hayes v. Lockhart, et al, 754 F.2d 281, 282 (8th Cir.1985). Hayes has been a serious and ongoing disciplinary problem at the Arkansas penitentiary. After he returned from Florida, he was placed in administrative segregation.

“Initially Hayes was assigned to administrative segregation because he was a threat to security and because he was a danger to the other inmates and therefore it appears that the prison officials acted reasonably in placing him in administrative segregation immediately upon his return to Arkansas.” Id. at 283. The list of the Hayes cases in chronological order is as follows:

1. Hayes v. Amt (PC-C-80-248). Dismissed by Judge Roy on recommendation of Magistrate Henry Jones.
2. Hayes v. Housewright (PB-C-81-33). Dismissed by Judge Woods and affirmed by Court of Appeals on June 4, 1982. 685 F.2d 438 (8th Cir.1982).
3. Hayes v. Lockhart, et al (PB-C-82-81). Dismissed by Judge Woods, affirmed by Court of Appeals on July 9, 1985, 766 F.2d 1247 (1985).
4. Hayes v. Lockhart (PB-C-82-319). Dismissed with prejudice by Judge Roy. Affirmed except as to one issue, on which plaintiff should be permitted to exhaust state remedies, Hayes v. Lockhart, 754 F.2d 281 (8th Cir.1985). Remand issue dismissed by Judge Roy on March 14, 1985.
5. Hayes v. Laveaux (PB-C-83-250). Dismissed by Judge Woods on August 10, 1983.
6. Hayes v. Morgan, et al (PB-C-84-190). Dismissed after trial by Judge Woods on December 14, 1984.
7. Hayes v. Wimberly, et al (PB-C-85-116). Tried by Judge Woods on January 6, 1986 (instant case). Judgment of dismissal herewith.
8. Hayes v. Lockhart, et al (PB-C-85-164). Dismissed by Judge Overton. Attempted appeal to Court of Apppeals dismissed on June 27, 1985 by Court of Appeals for lack of probable cause.
9. Arbaugh and Hayes, et al v. Lockhart, et al (PB-C-85-404). Co-plaintiff with others; pending before Woods.
10. In addition to these cases, there is another of plaintiff’s cases that I have not located because it has been shipped to storage at Fort Worth. I do not know the Judge in this case and have not reviewed the file. It is PB-C-80-170, closed on November 24, 1981.

Plaintiff has conducted all of this litigation in forma pauperis. He has succeeded in none of these cases. The cost in court time and expense has been considerable both for the judges and their staffs in the Eastern District of Arkansas, as well as for the judges of the Court of Appeals. In the present case brought pursuant to 42 U.S.C. § 1983, the plaintiff claims that he was subjected to cruel and unusual punishment and to unlawful violence contrary to the Eighth and Fourteenth Amendments of the United States Constitution. The Court makes the following findings of fact and conclusions of law.

Findings of Fact

1. Serving a life sentence for murder, plaintiff on September 15, 1984 was an inmate at the Cummins Unit of the Arkansas Department of Correction. The details of the murder are set forth in Hayes v. Lockhart, 766 F.2d 1247 (8th Cir.1985), a habeas appeal from my court. At the time of the incidents about which he now complains, Hayes was confined in Barracks # 16 in administrative segregation.

2. Sometime prior to midnight on September 15, 1984 another inmate, Pierce Johnson, was brought to Building 16 as a result of an altercation with a prisoner in another barracks. It was first planned to cell him with an inmate Rogers, but a check of the “enemy alert list” showed that there had been previous trouble between them, so it was determined to place him in the cell with an inmate named Walker.

3. Approximately five minutes after Johnson was placed in Walker’s cell, a fight broke out between them. Johnson was then removed from Walker’s cell and taken to plaintiff’s cell, which was the only remaining cell in Building 16 with room for another occupant. Johnson was being escorted by the defendant at this time. When they reached plaintiff’s cell, Johnson suggested to plaintiff if he would not take him as a cellmate it would be necessary to return Johnson to his former barracks.

4. Although plaintiff tried to make it appear that his acquaintance with Johnson was slight and casual, I am convinced they were friends. Neither was on the other’s “enemy alert list” and the prison officials had no indication there was any bad blood between them. In fact, the prison officials had every reason to believe the contrary. In two of plaintiff’s previous cases Johnson had been a principal witness on behalf of Hayes. In Hayes v. Cowan, PB-C-80-248, assigned to Judge Roy, plaintiff filed a pleading on March 3, 1983 listing Pierce Johnson as a witness. He would give testimony “as personally witnessing the confiscation of plaintiff’s personal property on June 4, 1980 prior to placement on the punitive wing and that his (plaintiff’s) property upon release from punitive on June 6, 1980 was not returned.” In the same case file there is a long statement by Johnson substantiating the claim of Hayes that he had lost personal property through the fault of prison officials. Not only did Pierce Johnson appear on behalf of Hayes in Judge Roy’s case, but he also testified for him in one of the cases heard by me, as he admitted on the stand. These are hardly the actions of an enemy and could scarcely put the defendants on notice that a fight might ensue between Hayes and Johnson.

5. The reticence of Hayes to acknowledge an acquaintanceship with Johnson in the face of their past close relationship lends considerable credence to the state’s theory that the opposition to accepting Johnson as a cellmate and their later fracas was an “act” to assist Johnson in returning to the general population barracks. It could well have been repayment for past favors.

6. After Johnson’s suggestion, and only thereafter, Hayes took great exception to receiving Johnson as a cellmate. He refused an order to accept handcuffs' and moved to the back of the cell. Hayes then unscrewed and broke a light bulb which he brandished as a weapon. One of the defendants sprayed a short burst of c/s gas into the cell, after which the defendants entered the cell to subdue the plaintiff. Sgt. Wimberly took the lead in this effort and in the process used his baton. I accept Wimberly’s testimony that he was mainly striking at plaintiff’s arm in order to disarm him. Plaintiff was knocked to the floor by defendant Wimberly and handcuffed by one of the other defendants. The injuries received by plaintiff were minor. He had a cut over his eye and a bruised knee and elbow. The cut over his eye did not require stitches. Plaintiff claimed he was extensively beaten by defendants, but his injuries belie this claim. Sgt. Wimberly in particular is a powerfully built man and in all probability could have inflicted a severe beating on plaintiff if he had so desired. I find that defendants used no more force than was necessary to subdue plaintiff and secure the weapon he had fashioned from the broken light bulb. Such an object was capable of inflicting severe injury on the officers, and Hayes had a well-deserved reputation as one of the worst disciplinary problems in the institution.

7. Plaintiff was taken to the infirmary at 12:45 p.m. on September 16, 1985 and was treated with Tylenol and a prescription for Motrin. He was then returned to his cell.

8. Plaintiff claims that he was attacked by Johnson approximately forty-five minutes after he was returned to his cell. Responding to noise from the cell, the officer found plaintiff on the cell floor. He claimed that he was unable to walk. The only significant additional injuries, however, were some scratches on plaintiff’s abdomen. As previously indicated, there is considerable doubt as to whether the fight between Hayes and Johnson was a genuine altercation. If there was an actual fight, I find that plaintiff sustained no significant injuries therein. I further find that in view of the past relationship between these men, the defendants did not act unreasonably in placing both of them in the same cell.

Conclusions of Law

1. Inmates do not have the right to choose their own cellmates, particularly in the administrative segregation barracks. Cole v. Benson, 760 F.2d 226 (8th Cir.1985).

2. In Putman v. Gerloff, 639 F.2d 415, 420 (8th Cir.1981) the Court of Appeals adopted a widely accepted standard as to the use of force in this type of case, enunciated by Judge Friendly in Johnson v. Glick, 481 F.2d 1028 (2d Cir.1973), cert. denied, 414 U.S. 1033, 94 S.Ct. 462, 38 L.Ed.2d 324 (1973):

In determining whether the constitutional line has been crossed, a court must look at such factors as the need for the application of force, the relationship between the need and the amount of force that was used, the extent of injury inflicted, and whether force was applied in a good faith effort to maintain or restore discipline or maliciously and sadistically for the very purpose of causing harm.

Id. at 1033, 94 S.Ct. at 462. Tested by this standard, the plaintiff has failed to show that defendants used excessive force in disarming and handcuffing him after he refused to obey their lawful order.

3. Defendants had no knowledge nor were they put on notice that Pierce Johnson might attack plaintiff. There was no indication whatsoever of bad blood between these men. To the contrary, all indications were that these men were friends and prison allies. “Liability exists only if the warden or jailer knew of the risk of such injury or should have known of it and with actual or constructive knowledge, failed to prevent such an attack.” Mosby v. Mabry, 697 F.2d 213, 215 (8th Cir.1983). An inmate “must show something more than mere inadvertance or negligence. He must show the defendants were (deliberately indifferent to his constitutional rights, either because they actually intended to deprive him of some right, or because they acted with reckless disregard of his right to be free from violent attacks by fellow inmates.” Branchcomb v. Brewer, 669 F.2d 1297, 1298 (8th Cir.1982).

4. Plaintiff’s complaint should be denied and dismissed.


source: Caselaw Access Project

author: BRITT, Chief Judge.

license: Public Domain

text:
    Carolyn ROSS, Plaintiff, v. Edwin MEESE, et al., Defendants.
    No. 85-679-CIV-5.
    United States District Court, E.D. North Carolina, Raleigh Division.
    Jan. 17, 1986.

      David S. Rudolf, Beskind & Rudolf, Durham, N.C., for plaintiff.
    H. Robert Showers, Asst. U.S. Atty., Raleigh, N.C., for defendants.
   ORDER

BRITT, Chief Judge.

Plaintiff, Carolyn Ross, brought this civil action for injunctive and declaratory relief pursuant to the first, fourth, fifth and sixth amendments to the United States Constitution. She alleges that on 15 March 1985 approximately seventeen federal and state agents entered her home pursuant to an invalid search warrant and conducted an illegal search and seizure. She seeks the following relief:

I. A declaration that the search of plaintiffs home violated her fourth amendment rights;
2. An injunction requiring the destruction of all material obtained during the search;
3. An injunction preventing defendants from using in any manner any information obtained during the search; and
4. An injunction preventing anyone from revealing information obtained as a result of the search and preventing any further investigation of Carolyn Ross.

On 19 August 1985 the defendants filed a motion to dismiss for failure to state a claim and the matter came on for hearing on 13 January 1986. Upon review of the complaint, argument and all of the materials of record the court determines that the proper means by which plaintiff should assert her claim is pursuant to Rule 41(e) of the Federal Rules of Criminal Procedure or pursuant to the equitable or anomalous jurisdiction doctrine. Therefore, the court will consider plaintiffs claim in this manner.

I — FACTS

As the result of the three-year investigation a federal grand jury in the Eastern District of North Carolina returned three indictments against plaintiffs husband, Douglas Freeman Ross. One of these indictments charged plaintiff with three violations of Title 26, United States Code, Section 7206(1). See Nos. 84-54-CR-5, 85-10-CR-5, and 84-49-CR-5, E.D.N.C. Investigative agents sought to arrest Mr. Ross pursuant to these indictments beginning 30 January 1985, but he remains a fugitive at the present time. When efforts to locate Mr. Ross were unsuccessful the charges against Mrs. Ross were dismissed pursuant to Rule 48(a) of the Federal Rules of Criminal Procedure. There are presently no charges pending against the plaintiff.

On 8 March 1985 investigative agents were issued a search warrant for a search of the residence of Mr. and Mrs. Ross. On 12 March 1985 the search was executed by federal and state agents acting under the direction of Special Agent James J. Roche, Jr., of the Federal Bureau of Investigation. Pursuant to the search warrant the agents examined documents located in the residence, but none of these documents were seized and none were photographed. Affidavit of James J. Roche, Jr. Two agents took notes during the search, and these notes are memorialized in a memorandum of interview prepared by the agents and submitted to the court. Before leaving the residence the agents took twelve photographs of the interior and exterior of the residence and the originals were submitted for the court’s inspection. Otherwise, nothing was removed from the Ross’ residence during the search. Affidavit of James J. Roche, Jr. The plaintiff alleges that the search violated her constitutional rights because it was not supported by probable cause and the search warrant was overbroad and invalid on its face.

II — ANALYSIS

An initial inquiry concerns the authority of the court to grant the requested relief. The plaintiff has urged numerous bases for relief, including the first, fourth, fifth and sixth amendments to the United States Constitution. Despite these proposed theories the court is convinced that the plaintiff must bring herself within the confines of Rule 41(e) of the Federal Rules of Criminal Procedure or the equitable or anomalous jurisdiction doctrine. These are the only proper means by which federal courts have power to order the suppression or return of unlawfully seized property when no criminal prosecution is in existence against the plaintiff. Pieper v. United States, 460 F.Supp. 94, 96 (D.Minn.1978), aff'd, 604 F.2d 1131 (8th Cir.1979); Lowrie v. United States, 558 F.Supp. 1029 (D.Colo.1983).

Rule 41(e) provides:

A person aggrieved by an unlawful search and seizure may move the district court for the district in which the property was seized for the return of the property on the ground that he is entitled to lawful possession of the property which was illegally seized. The judge shall receive evidence on any issue of fact necessary to the decision of the motion. If the motion is granted the property shall be restored and it shall not be admissible in evidence at any hearing or trial. If the motion for return of property is made or comes on for hearing in the district of trial after an indictment or information is filed, it shall be treated also as a motion to suppress under Rule 12.

Some federal courts have recognized that a Rule 41(e) motion is the proper vehicle for seeking suppression or return of unlawfully seized property even though there is no criminal prosecution involved. See Lowrie, 558 F.Supp. at 1032; Wright, Federal Practice and Procedure: Crim.2d § 673.

Other courts have determined that when no criminal proceedings are involved against the plaintiff Rule 41(e) cannot be invoked. Pieper, 460 F.Supp. at 96. However, these courts have recognized that the court’s equity jurisdiction can be invoked to determine the question through the inherent disciplinary power of the court over officers of the court. This independent anomalous jurisdiction extends to federal law enforcement officers who fail to observe standards for law enforcement established by the federal rules governing search and seizure. The purposes for which a court may exercise its general equity jurisdiction are (1) to suppress information prior to indictment to control the proper preparation of evidence and (2) to deter unlawful conduct of law enforcement officials through the exclusion of evidence. Pieper, 604 F.2d at 1133, quoting United States v. Rapp, 539 F.2d 1156, 1160-61 (8th Cir.1976); Hunsucker v. Phinney, 497 F.2d 29 (5th Cir.1974). The Fourth Circuit has indicated that it would follow this second approach when presented with this question. See United States v. Regional Consulting Services, 766 F.2d 870, 875 (4th Cir.1985).

Whether this case is decided based on Rule 41(e) or the court’s equity jurisdiction is of no moment. When suppression is the remedy sought the standards applicable pursuant to each method are identical. See Pieper, 460 F.Supp. at 96 n. 1; Wright, Federal Practice and Procedure: Crim.2d § 673. Such actions are treated with caution and restraint, and to prevail the plaintiff must show: (1) she is entitled to lawful possession of the property; (2) she would suffer irreparable injury if the relief is not granted; and (3) there is no adequate remedy at law for redress of her grievance. Mr. Lucky Messenger Service, Inc. v. United States, 587 F.2d 15 (7th Cir.1978); Wright, § 273 at pp. 762-63. An analysis of these factors demonstrates that plaintiff is not entitled to prevail on her claim for she cannot sustain her burden.

First, plaintiff cannot demonstrate that she is entitled to possession of the property. Nothing was taken from the plaintiff’s home. Plaintiff seeks to suppress photographs of the interior and exterior of her home taken by law enforcement agents and notes taken by the officers during the search. However, photographs of the plaintiff's property taken during the search are not the plaintiff’s property any more than are the mental impressions of the officers gained during the search. United States v. Dixon, 117 F.Supp. 925, 927 (N.D.Cal.1949). In United States v. King, King moved pursuant to Rule 41(e) for the return of 600 pages of transcript of intercepted wire communications together with all tapes, logs, notes and copies. In deciding that King was not entitled to lawful possession of the property the United States Court of Appeals for the Ninth Circuit said:

He is no more the owner of the tapes and transcripts of the conversations made by the government than he is the owner of mental impressions and memories of the government agents who intercepted the conversations. A Rule 41(e) motion is therefore not available to compel their return.

528 F.2d 68, 69 (9th Cir.1975). Likewise, Mrs. Ross has no possessory interest in the photographs or the notes taken by the officers during the search.

Second, the plaintiff cannot demonstrate she will suffer irreparable harm if the property is not returned to her or destroyed. The plaintiff cannot show that she has a specific need for the material she seeks to obtain or suppress. However, the government could be irreparably harmed if required to destroy the material in its possession. The indictments against Mr. Ross are still outstanding as he remains a fugitive. If the relief is granted the government’s investigation of and search for Mr. Ross could be jeopardized. Furthermore, plaintiff will suffer no prejudice if compelled to present this motion at a later date, assuming charges are brought against her. Both she and Mr. Ross would be fully protected by a motion to suppress before trial should they be prosecuted. See Donlon v. United States, 331 F.Supp. 979 (D.Del.1971).

In summary, the plaintiff has failed to sustain her burden pursuant to Rule 41(e) of the Federal Rules of Criminal Procedure or the general equity jurisdiction of the court. Therefore, she is not entitled to relief and this action is dismissed.


author: KANE, District Judge.

text:
    Dorothy H. PEAVY, et al., Plaintiffs, v. UNITED STATES of America, Defendant.
    Civ. A. No. 83-K-2448.
    United States District Court, D. Colorado.
    Jan. 17, 1986.
    Sheldon H. Smith, Pryor, Carney & Johnson, Englewood, Colo., for plaintiffs.

      Nancy E. Rice, Asst. U.S. Atty., Denver, Colo., John D. Steffan, Tax Div., Dept, of Justice, Washington, D.C., for defendant.
   ORDER DENYING ATTORNEY FEES

KANE, District Judge.

Plaintiffs filed claims for refund of taxes paid pursuant to a notice of deficiency, and requested an appellate conference with the Internal Revenue Service on May 25, 1983. After no action by the Internal Revenue Service, this case was filed on December 16, 1983. Settlement was reached eventually, and a stipulation of dismissal was signed by plaintiffs’ attorney, on September 19, 1985. Plaintiffs now seek to recover attorney fees pursuant to 26 U.S.C.A. § 7430.

Prevailing parties may be awarded judgment for reasonable litigation costs in tax cases. 26 U.S.C.A. § 7430(a). To be a prevailing party, however, plaintiffs must establish (1) that the position of the United States in the civil proceeding was unreasonable, and (2) that the party has substantially prevailed either with respect to the amount in controversy or on the most significant set of issues present. See 26 U.S. C.A. § 7430(c)(2)(A)(i) and (ii)).

It is clear that plaintiffs have substantially prevailed in the proceeding. See, e.g., the September 11, 1985 letter from the defendant accepting plaintiff’s amended offer of settlement (exhibit No. 2 to plaintiffs’ brief in support of their motion for reasonable litigation costs). Thus, the second element of the “prevailing party” test has been met.

The first element requires more discussion. It is unclear whether the position of the United States was substantially justified.

Defendant argues that the position of the United States refers only to the position of the government in litigation. Although the district courts are not in agreement on whether pre-litigation conduct should be considered in determining the issue of reasonableness, this circuit has spoken on the issue. Borrowing from case law interpreting the words “position of the United States” in the attorney fees provision in the Equal Access to Justice Act, 28 U.S.C.A. § 2412(d), as amended by Act of August 5, 1985, Pub.L. No. 99-80, 99 Stat. 183, the Tenth Circuit has held:

We do not believe that the position of the Government in the underlying civil contempt . proceeding was unreasonable. For this purpose, the position of the United States means the arguments relied upon by the Government in litigation. See United States v. 2,116 Boxes of Boned Beef, 726 F.2d 1481, 1487 (10th Cir.), cert. denied, — U.S. , 105 S.Ct. 105, 83 L.Ed.2d 49 (1984).

United States v. Balanced Financial Management, Inc., 769 F.2d 1440, 1450 (10th Cir.1985). Cf. Kaufman v. Egger, 758 F.2d 1 (1st Cir.1985).

The Tenth Circuit’s opinion in 2,116 Boxes of Boned Beef was issued in 1984, and its opinion in Balanced Financial Management was issued on July 30, 1985. On August 5, 1985, Congress amended the Equal Access to Justice Act (Act of August 5, 1985, Pub.L. No. 99-80, 99 Stat. 183). Section 2(c)(2)(D) of the Act (to be codified at 28 U.S.C. § 2412(d)(2)(D), provides:

“position of the United States” means, in addition to the position taken by the United States in the civil action, the action or failure to act by the agency upon which the civil action is based; except that fees and expenses may not be awarded to a party for any portion of the litigation in which the party has unreasonably protracted the proceedings.

See also Mager v. Heckler, 621 F.Supp. 1009 (D.Colo.1985) (Kane, J.) (discussing at length the legislative history of this change and applying the new standard).

At least one district court has been persuaded that these recent amendments to the EAJA also support a broader construction of the words “civil proceedings” in determining whether the position of the United States was substantially justified in tax cases. See Finney v. Roddy, 617 F.Supp. 997 (E.D.Va.1985). In Finney, the district court held:

The Court believes that “position of the United States” in Section 7430(c)(2)(a)(i) of Title 26 should be read in pari materia with the same phrase in the analogous provision of the EAJA, 28 U.S.C. § 2412(d)(1)(A) (as amended). Both statutes were enacted to govern the award of attorneys’ fees against the federal government. Indeed, Section 7430 can be viewed as an extension of the goals of the EAJA to all types of federal tax cases: it expanded the principle of attorneys’ fee recovery for parties who prevail against the federal government to litigants in tax cases before the United States Tax Court____ The Court has found nothing in the legislative history— or in Section 7430 itself — to suggest that “position of the United States” was intended to vary from one statute to the other. Accordingly, the Court, following the guidance of Congress in its recent amendments to the EAJA, concludes that “position of the United States” in 26 U.S.C. § 7430(C)(2)(A)(i) refers to the position of the IRS in its administrative proceedings as well as to the Government’s position following the filing of a complaint in the federal district court, tax court, or court of claims.

Id., at 1001. The reasoning in that case is thoughtful and persuasive. It does not strengthen, however, plaintiffs’ argument for recovery of fees.

The facts alleged by plaintiffs as grounds for determination that the government’s position was unreasonable are insufficient for such a finding. The fact that the government was fined for failure to appear at an August 29, 1985, settlement conference does not constitute an unreasonable litigation position by the government. It is true that, because plaintiffs did not receive notification that an appeals conference was granted within six months of requesting same, plaintiffs’ administrative remedies within the IRS were exhausted. While that is a condition for an award of fees under § 7430, it is not grounds for such an award.

Further, fourteen months for settlement to be completed (using the July 30, 1984 date as the time in which defendant conceded settlement was likely) is not unreasonable. The issues in this case were extremely complicated. Plaintiffs simply do not convince me that the government was substantially unjustified in its conduct before or during this litigation.

My decision is supported by examining the chronology of events submitted by plaintiffs. The notices of deficiency were issued on August 9, 1982, and paid by plaintiffs by February, 1983. In May, 1983, plaintiffs filed their claims for refund and requested conference with the IRS. In December, 1983, they filed this suit. In July, 1984, at a settlement conference, the United States conceded the suit should be settled, and in September, 1985, final settlement was reached. Further, plaintiffs’ attorneys admit, {see Exhibit No. 1 to plaintiff’s brief in support of their motion at page 7, a confidential settlement memorandum to Magistrate Schauer,) that the incompetent advice the plaintiffs had received over a number of years “has lead to significant misunderstanding and misinterpreation [sic] by the IRS examiners who have looked at the case.” I decline to find the government was unreasonable in its conduct.

It is therefore ORDERED that plaintiffs’ request for reasonable attorney fees is denied. Each party is to bear their/its own costs.


author: CALDWELL, District Judge.

text:
    Ronald C. DENNIS and Donna L. Dennis, his wife, Plaintiffs, v. BOARD OF TRUSTEES OF the FOOD EMPLOYERS LABOR RELATIONS ASSN. and United Food and Commercial Workers Union Pension Fund, Defendants.
    Civ. A. No. 85-0198.
    United States District Court, M.D. Pennsylvania.
    Jan. 21, 1986.

      W. William Anderson, Menges, Dorion & Snyder, York, Pa., for plaintiffs.
    Joseph Semo, Fredrick M. Marx, Seifman, Semo, Slevin & Marcus P.C., Washington D.C., William J. Flannery, Morgan, Lewis & Bockius, Harrisburg, Pa., for defendants.
   MEMORANDUM

CALDWELL, District Judge.

Pursuant to Fed.R.Civ.P. 59(e), defendant Board of Trustees has filed a motion to alter or amend our memorandum and order, dated October 25, 1985. The motion is addressed to our sound discretion. See Quality Prefabrication, Inc. v. Daniel J. Keating Co., 675 F.2d 77 (3d Cir.1982); Florencio Roman, Inc. v. Puerto Rico Maritime Shipping Authority, 454 F.Supp. 521 (D.P.R.1978). Also pending is plaintiffs’ application for clarification of the memorandum. For the reasons set forth below, we grant defendant’s motion and deny plaintiffs’ application.

The pertinent facts have already been set forth in our previous memorandum. Dennis v. Board of Trustees of the Food Employers Labor Relations Ass’n, 620 F.Supp. 572 (M.D.Pa.1985). In that memorandum and order we granted summary judgment in favor of defendant on plaintiffs’ claim that it had suspended plaintiff, Ronald C. Dennis’s, pension benefits in violation of the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. § 1001 et seq. We did not, however, grant defendant judgment on its counterclaim for return of pension benefits paid while Dennis was working elsewhere in violation of the pension plan. We concluded that defendant’s demand for a lump sum award violated 29 C.F.R. § 2530.203-3(b)(3) because this subsection permits recoupment of payments made while the employee was engaged in ineligible service only by way of offset of 25% per month once pension benefits are resumed. We also noted that defendant’s notice of suspension of benefits violated subsection (b)(4) of the same regulation because it did not state the Board’s intention to recoup benefits already paid. In so holding, we rejected defendant’s contention that because Dennis has not yet attained normal retirement age, section 2530.203-3 was inapplicable to its suspension of his pension benefits. Defendant now seeks to have us reverse that determination while apparently abandoning an attempt to reclaim the benefits in a lump sum.

We turn once again to the pertinent provisions of the regulation to determine its applicability to the instant case. Subsection (a), captioned “General,” provides as follows:

Section 203(a)(3)(B) of the Act provides that the right to the employer-derived portion of an accrued pension benefit shall not be treated as forfeitable solely because an employee pension benefit plan provides that the payment of benefits is suspended during certain periods of reemployment which occur subsequent to the commencement of payment of such benefits. This section sets forth the circumstances and conditions under which such benefit payments may be suspended. A plan may provide for the suspension of pension benefits which commence prior to the attainment of normal retirement age, or for the suspension of that portion of pension benefits which exceeds the normal retirement benefit, or both, for any reemployment and without regard to the provisions of section 203(a)(3)(B) and this regulation to the extent (but only to the extent) that suspension of such benefits does not affect a retiree’s entitlement to normal retirement benefits payable after attainment of normal retirement age, or the actuarial equivalent thereof.

29 C.F.R. § 2530.203-3(a) (1985).

Defendant points out that Dennis’s early retirement benefit was $341.50 per month. His normal retirement benefit payable at normal retirement age is also $341.50. The actuarial value of his normal retirement benefit at normal retirement age has therefore not been affected by the suspension of early retirement benefits. Accordingly, the regulation should not have applied.

In discussing a predecessor draft of this regulation the United States Department of Labor commented as follows:

[I]t is the Department’s position that a permanent withholding of benefits payable prior to normal retirement age due to the early retiree’s return to employment, to the extent that such withholding would affect the integrity of the actuarial equivalent of the normal retirement benefit, may be imposed only in a manner consistent with the requirements of section 203(a)(3)(B) and this regulation. A plan may, however, interrupt the payment of early retirement benefits on account of an early retiree’s return to employment during the period prior to attainment of normal retirement age without complying with such requirements if the integrity of the normal retirement benefit would not be affected by such action. As stated in footnote 9 to the preamble to the proposed regulation, this would be the case where the affected employee’s benefit is actuarially recalculated in order to compensate for benefit payments which were withheld and payment of such recalculated benefits begins no later than normal retirement age. This would also be the case, as noted by commentators, where for example the early retirement benefit equals the normal retirement benefit, or where upon attainment of normal retirement age, the participant receives a normal retirement benefit notwithstanding receipt of early retirement benefits. In response to commentators’ suggestions, a provision has been added to the final regulation clarifying the applicability of the regulation in the case of an early retiree.

46 Fed.Reg. 8,895 (1981) (footnote omitted) (brackets added) (emphasis added).

In light of the foregoing, we now agree with defendant’s position. We reverse our earlier conclusions that defendant’s notice of suspension was deficient for failing to comply with subsection (b)(4) of the regulation, and that the offset rules of subsection (b)(3) barred defendant’s counterclaim for a lump sum return of benefits previously paid while Dennis was ineligible for pension benefits. Those provisions were inapplicable to defendant’s suspension of Dennis’s benefits.

ORDER

AND NOW, this 21st day of January, 1986, it is ordered that:

1. Defendant’s motion for reconsideration is hereby granted.
2. Our memorandum, dated October 25, 1985, is modified in accordance with the foregoing memorandum.
3. Plaintiffs’ application for clarification is hereby denied.

      . It follows that plaintiffs’ application for clarification of our memorandum of October 25, 1985 must be rejected because it is based upon a conclusion we now reject — that subsection (b)(4) applied to the defendant’s notice of suspension to Dennis.
      Defendant has not requested that we reverse our summary judgment against it on its counterclaim. Since it now seems content to recoup the payments from future pension benefits until Dennis becomes eligible again, we will not disturb this aspect of our judgment.


author: GONZALEZ, District Judge.

text:
    John J. PRICE and Fred C. Davant, individually and as members of a Florida limited partnership known as Price Davant Limited, Plaintiffs, v. CITY OF FORT PIERCE, FLORIDA, a municipal corporation, organized under the laws of the State of Florida; the Fort Pierce Development Agency, an agency appointed by the City Commission of Fort Pierce, Florida pursuant to Florida Statute; Michael J. Brown, individually and as a member of the Fort Pierce Redevelopment Agency; John C. Bahl, individually and as a member of the Fort Pierce Redevelopment Agency; Richard A. Coke, individually and as a member of the Fort Pierce Redevelopment Agency; Arthur H. Rubin, individually and as a member of the Fort Pierce Redevelopment Agency; James T. Walker, individually and as a member of the Fort Pierce Redevelopment Agency; Alto Adams, Jr., as Chairman of the Board of Harbor Federal Savings and Loan Association; Harbor Federal Savings and Loan Association, a federally chartered savings and loan association; Sun Bank of St. Lucie, Inc., a Florida Corporation; Louis E. Sousa, individually and as president of Sunvest Group of Companies, Inc., The Sanctuary of St. Lucie, Inc., and St. Lucie Intersection, Inc.; Oswald T. Sousa, individually and as an officer of Sunvest Development Corporation; Sunvest Group of Companies, Inc., a group of companies owned and controlled by Louis E. Sousa; Sunvest Development Corporation, a Florida corporation; St. Lucie Intersection, Inc. a Florida corporation; the Sanctuary of St. Lucie, Inc., a Florida corporation.
    No. 85-8002-Civ.
    United States District Court, S.D. Florida, N.D.
    Jan. 23, 1986.

      Guy B. Bailey, Bailey & Dawes, Miami, Fla., for plaintiffs.
    Sylvia H. Walbolt, Tampa, Fla., for defendants Harbor Federal S & L and Michael J. Brown.
    Robert L. Gorman, Fort Pierce, Fla., for defendants City of Fort Pierce, Fort Pierce Redevelopment Agency John Bahl, Richard Coke, Arthur Rubin, and James Walker.
    Charles W. Pittman, Tampa, Fla., for defendant City of Fort Pierce.
    Larry Craig, Miami, Fla., for defendant John Bahl.
    Alan Scott, West Palm Beach, Fla., for defendants Louis Sousa, Oswald Sousa, Sunvest Group Companies, Inc., Sunvest Development Corp. and St. Lucie Intersection, Inc.
    Harold G. Melville, Fort Pierce, Fla., for defendant Sun Bank of St. Lucie.
   ORDER

GONZALEZ, District Judge.

THIS CAUSE has come before the court upon the various motions filed by the defendants.

The plaintiffs filed their multi-count complaint alleging various violations of federal and state antitrust and RICO laws, the Civil Rights Act and Florida’s civil theft statute as well as claims for fraud and misrepresentation, conversion, conspiracy and tortious interference with business expectancy. These claims arose from an award of an exclusive redevelopment contract to the defendant Sunvest by the defendant Fort Pierce Redevelopment Agency-

The parties have filed various motions attacking the sufficiency of the complaint.

A. Defendants’ Harbor Federal Savings and Loan Association and Michael J. Brown’s Motion to Strike Paragraphs 91(a) through 91(c).

These defendants aver that the allegations contained in Paragraphs 91(a) through 91(c) of the complaint fail to allege violations of either federal or state antitrust laws and therefore, they must be stricken.

This court agrees and adopts the arguments set forth in these Motions.

Further, the court finds it necessary to address specifically these defendants’ assertion that the granting of the exclusive redevelopment contract is immune from antitrust attack under the doctrine of state action immunity.

In Parker v. Brown, 317 U.S. 341, 63 S.Ct. 307, 87 L.Ed. 315 (1943), the Court recognized the necessity for states to be free to act, in certain situations, without the fear of incurring antitrust liability. This judicially created state action immunity was ultimately extended to municipalities able to demonstrate their engagement in anticompetitive activities authorized by their state “pursuant to state policy to displace competition with regulation or mono-ply public service.” City of Lafayette v. Louisiana Power & Light Co., 435 U.S. 389, 413, 98 S.Ct. 1123, 1137, 55 L.Ed.2d 364 (1978).

The Supreme Court recently revisited this issue in Hallie v. City of Eau Claire, - U.S. -, 105 S.Ct. 1713, 85 L.Ed.2d 24 (1985). The Court considered an attack on a municipality’s alleged monopoly of its sewage treatment services and determined that neither active state supervision of the anticompetitive activity nor a clear showing that the state compelled the activity is required for state action from liability. Id. 105 S.Ct. at 1719-21.

Further, Congress also recognized the necessity for state action exemption from antitrust liability and codified this exemption in the Local Government Antitrust Act of 1984. 15 U.S.C.A. §§ 34-36 (West.Supp. 1985). This Act proscribes the award of money damages in antitrust actions brought against municipalities, officials acting in their official capacity or private individuals acting under the authority of the local governmental unit.

In the case sub judice, the defendants were acting pursuant to a redevelopment effort initiated by the City of Fort Pierce. The City’s actions were specifically authorized under Florida’s Community Redevelopment Act of 1969. Fla.Stat. Ch. 163.330 et seq. The Act states in part:

It is hereby found and declared that there exist in counties and municipalities of the state slum and blighted areas which constitute a serious and growing menace, injurious to the public health, safety, morals, and welfare of the residents of the state; ... and that the prevention and elimination of slums and blight is a matter of the state policy and state concern in order that the state and its counties and municipalities shall not continue to be endangered by areas which are focal centers of disease, promote juvenile delinquency, and consume an excessive proportion of its revenues because of the extra services required for police, fire, accident hospitalization, and other forms of public protection, services, and facilities. Id. at 163.335(1). Further, “[a]ny county or municipality ... may formulate for the county or municipality a workable program for utilizing appropriate private and public resources to ... encourage needed community rehabilitation, ...” Ibid at 163.350. The Act also provides for the creation of a community redevelopment agency, Ibid at § 163.356; and confers upon the counties, municipalities and community redevelopment agencies power necessary to carry out and effectuate the purposes of the Community Redevelopment Act. Ibid at §§ 163.358 and 163.370(l)(a).

The City of Fort Pierce declared that slum and blighted areas existed in the community and that redevelopment was in its best interests. Resolution 82-25 (June 21, 1982). Thereafter, a community redevelopment agency was created. Fort Pierce, Fla. Ordinance No. H-289 (Dec. 6, 1982).

The court finds that the selection of a single developer by the City of Fort Pierce and its Redevelopment Agency was the type of conduct authorized by, contemplated by and delegated to them by the Community Redevelopment Act. Thus, the state action exemption is applicable to their actions. Hallie v. City of Eau Claire, supra; Scott v. City of Sioux City, Iowa, 736 F.2d 1207 (8th Cir.1984), cert. denied, — U.S. - 105 S.Ct. 1864, 85 L.Ed.2d 158 (1985) (state action immunity shielded city from liability from awarding contract for redevelopment to private developer and from zoning ordinances restricting commercial development of outlying areas); Reasor v. City of Norfolk, 606 F.Supp. 788, 1985-1 Trade Cases ¶¶ 66,368 and 66,369 (E.D.Va.1984) (state action immunity afforded to city and its redevelopment authority which prohibited construction of office building that could compete with one under construction pursuant to a redevelopment plan); Tom Hudson & Associates, Inc. v. City of Chula Vista, 746 F.2d 1370 (9th Cir.1984) (trash collection franchise between municipality and private collector is immune from antitrust scrutiny).

The court concludes, therefore, that the defendants' activities are likewise immune from antitrust scrutiny. Thus, Paragraphs 91(a) through 91(c) shall be stricken.

The court is further compelled to dismiss the federal antitrust claims, Counts I and II for the reasons set forth above.

The defendants further argue that Paragraphs 91(a) through 91(c) fail to state a cause of action under the Florida Antitrust Act. Florida Statute § 542.32 provides that "[i]t is the intent of the Legislature that, in construing [Florida’s antitrust laws], due consideration and great weight be given to the interpretations of the federal courts relating to comparable federal antitrust statutes.” See, Amis v. Gulf Abstract & Title, Inc., 564 F.Supp. 1121 (M.D.Fla.1983), aff'd, 758 F.2d 1486 (11th Cir.1985). Additionally, “[a]ny activity or conduct exempt ... from the provisions of the antitrust laws of the United States is exempt from the provisions of [Florida’s antitrust laws].” Fla.Stat. § 542.20.

Thus, this court is again compelled to adopt these defendants’ position and to strike Paragraphs 91(a) through 91(c).

Any actions taken by these defendants are immune from antitrust attack under Florida’s Antitrust law. Therefore, the Counts VI and VII fail to state a cause of action.

B. Motion of Harbor Federal Savings and Loan Association to Dismiss the First Amended and Supplemental Complaint

The defendant argues that Counts III, V, VIII, IX, X, XI, XII and XIII should be dismissed for failure to state causes of action. The court finds that the above Counts meet the minimum elements necessary to state a cause of action. Accordingly, this Motion will be denied.

C. Motion of Defendant Michael J. Brown to Dismiss the First Amended and Supplemental Complaint

The defendant moves to dismiss the complaint filed against him in his individual capacity. As set forth in Section A, the antitrust counts fail to state a cause of action and must be dismissed. The remaining counts state the requisite elements necessary to defeat a motion to dismiss.

D. Motion of the Defendants Sun Bank of St. Lucie, Inc. and John C. Bahl to Dismiss First Amended and Supplemental Complaint

See, Section C.

E. Motion of Defendants Louis E. Sousa, Oswald T. Sousa, Sunvest Development Corporation and St. Lucie Intersection to DisMiss this Action

See, Section C.

Accordingly, it is hereby

ORDERED AND ADJUDGED as follows:

1. The Motion to Strike Paragraphs 91(a) through 91(c) filed by the defendants Harbor Federal Savings and Loan Association and Michael J. Brown be and the same is GRANTED. It is further ORDERED AND ADJUDGED that Counts I, II, VI and VII of the First Amended and Supplemental Complaint be and the same are DISMISSED for failure to state a cause of action for which relief can be granted.

2. The Motion to Dismiss First Amended and Supplemental Complaint filed by the defendant Harbor Federal Savings and Loan Association be and the same is DENIED.

3. The Motion to Dismiss the First Amended and Supplemental Complaint filed by the defendant Michael J. Brown be and the same is GRANTED, in part, and DENIED, in part. The Motion to Dismiss is GRANTED as to Counts I, II, VI and VII, and those Counts shall stand DISMISSED for failure to state a cause of action for which relief can be granted. The Motion to Dismiss the remaining Counts is DENIED.

4. The Motion to Dismiss First Amended and Supplemental Complaint filed by the defendants Sun Bank of St. Lucie, Inc. and Bohn C. Bahl is GRANTED, in part, and DENIED, in part, as set forth in Paragraph 3.

5. The Motion to Dismiss filed by the defendants Louis E. Sousa, Oswald T. Sousa, Sunvest Development Corporation and St. Lucie Intersection be and the same is a GRANTED, in part, and DENIED, in part, as set forth in Paragraph 3.

6. Within 20 days of the filing of this Order, the defendants shall file their answers to the remaining counts in the First Amended and Supplemental Complaint.

7. This Court’s prior Order staying discovery is hereby VACATED.

Surety was not required to obtain on its own information necessary to identify protestable transaction, to monitor Customs Service bulletin notices of liquidation or require its principal to notify it when entry covered by bond was liquidated so as to be required to file protest within 90 days of mailing of letter which did not identify entry, importer or bond applicable to bill in question. Tariff Act of 1930, § 514(c), 19 U.S.C.A. § 1514(c).

2. Customs Duties @=82

Letter to surety which does not constitute demand for payment cannot be cured upon Customs Service’s provision of supplemental information by alternative means, without impermissibly reducing time in which surety could prepare its protest of customs classification. Tariff Act of 1930, § 514(c), 19 U.S.C.A. § 1514(c).


author: DiCARLO, Judge:

text:
    OLD REPUBLIC INSURANCE COMPANY, Plaintiff, v. UNITED STATES, Defendant.
    Court No. 83-6-00801.
    United States Court of International Trade.
    Jan. 2, 1986.
    Sandler & Travis, Gilbert Lee Sandler, Miami, Fla., for plaintiff.
    Richard K. Willard, Asst. Atty. Gen., Washington, D.C., Joseph I. Liebman, Atty. in Charge, Intern. Trade Field Office, Commercial Litigation Branch, Kenneth N. Wolf, New York City, for defendant.
   MEMORANDUM OPINION AND ORDER

DiCARLO, Judge:

Plaintiff, a surety, brings this action challenging the United States Customs Service’s (Customs) classification of merchandise invoiced as “LPG equipment for cars” under item 711.78, Tariff Schedules of the United States (TSUS). Defendant moves to dismiss the action for lack of jurisdiction claiming that the protest was not timely filed. The motion is denied.

On September 10, 1980, the merchandise entered the United States under a single entry consumption entry bond. The entry was liquidated, and a bill for duties sent to the importer was not paid.

On November 5, 1981, Customs mailed to plaintiff a letter which in part states:

Enclosed herewith is a listing of 484 bills due to the United States Customs Service totaling $1,166,344.81 owed by principals for whom you are surety and which are due and payable immediately. Formal demands were made on the principals involved but the bills remain unpaid. Under the terms of your bond you are an original promisor and debtor with each of your principals.
This is a formal demand upon you for immediate payment of the amounts noted on the enclosures hereto:

Attached to the letter was a computer printout listing 484 bills. The listing for the bill in question set forth the bill number, the billing date, the port of entry and the amount due. No information concerning the bill was set forth in the columns on the printout designated “Delinquent Debt- or Name and Address” and “Entry No.”

On January 29,1982 Customs sent another letter to plaintiff, saying in part:

Attached is a list of 5 bills amounting to $21,777,48 for which we are enclosing copies of the applicable entries and bonds.
Full payment of $21,777.48 must be made within thirty (30) days from the date of this notice. Failure to satisfy this formal demand may result in a recommendation to the Secretary of the Treasury that you no longer be authorized to act as surety on Customs Bonds.

The list attached to the January 29, 1982 letter provided the name of the importer for each of the five listed bills. The enclosed copy of the single entry bond for the transaction in question contained the importer’s name as well as the entry number.

On February 12, 1982, plaintiff filed a protest challenging the classification of the merchandise, and on December 3, 1982, the protest was denied as untimely. On June 1, 1983, plaintiff brought this action contesting the denial of the protest.

Defendant alleges that, under 19 U.S.C. § 1514(c), plaintiff had 90 days from the November 5, 1981 mailing in which to file a protest; the letter of January 29, 1981 was a follow-up demand that did not cause the jurisdictional period to run anew; and the action must be dismissed because the February 12, 1982 protest was filed more than 90 days after November 5, 1981.

Plaintiff argues that the action is timely because the November 5, 1981 letter provided insufficient information to notify it that demand was being made on the applicable bond; a sufficient demand was not mailed until January 29, 1982; and the February 12,1982 protest is timely because it was filed within 90 days of January 29, 1982.

The issue before the Court is whether the November 5, 1981 letter was a sufficient notice of demand for payment against the applicable bond.

A decision by Customs regarding the classification of merchandise and the rate and amount of duty chargeable is final and conclusive unless a protest is timely filed. 19 U.S.C. § 1514(a). The Court does not have jurisdiction over any action where a protest was filed later than the time provided by statute. San Francisco Newspaper Printing Co. v. United States, 9 C.I.T. —, 620 F.Supp. 738 (1985); Texas Mex Brick & Import Co. v. United States, 72 Cust.Ct. 291, C.R.D. 74-2, 371 F.Supp. 579 (1974). Section 1514(c)(1)(A) provides that protests may be filed by “importers or consignees shown on the entry papers, or their sureties.” The section further provides:

A protest by a surety which has an unsatisfied legal claim under its bond may be filed within 90 days from the date of mailing of notice of demand for payment against its bond. If another party has not filed a timely protest, the surety’s protest shall certify that it is not being filed collusively to extend another authorized person’s time to protest as specified in this subsection.

19 U.S.C. § 1514(c)(2). Neither the statute nor the regulations specify what information must be provided to a surety in the notice of demand in order to commence the running of the 90-day period in which a protest may be filed. See 19 U.S.C. § 1514(c)(2); 19 C.F.R. § 174.12(e)(3) (1985).

Plaintiff argues that a notice which does not enable a surety to determine the transaction for which a protest may be filed is deficient. It contends that the printout attached to the November 5, 1981 letter, which listed 484 bills, did not give plaintiff “notice of demand for payment against its bond” under section 1514, because it did not identify the entry, importer or bond applicable to the bill in question. Defendant disagrees, arguing that even though the November 5, 1981 letter and printout did not identify the importer’s name, the entry number or the bond for the bill in question, the notice of demand was nonetheless sufficient.. It contends that section 1514 only requires that the notice set forth a monetary demand.

Defendant states that a surety must obtain on its own the information necessary to identify the protestable transaction, and that if plaintiff requested information from Customs concerning any of the 484 bills listed on the computer printout, Customs would have identified for plaintiff the corresponding importer, entry number or bond. Defendant argues that if Customs did not respond to such an inquiry in a timely manner, “the Government would conceivably agree or the Court could find that a toll may operate during the ‘unavailability’ of the requested information.”

Defendant also argues that a surety could monitor Customs bulletin notices of liquidation or require its principals to notify it when an entry covered by a bond is liquidated. By filing its protests within 90 days of liquidation or reliquidation under section 1514, a surety could protest its interests without waiting to receive notice of demand for payment.

Defendant’s reasoning would deny effect to Congress’ amendment of section 1514 in 1979. To protect the rights of sureties, Congress specifically provided that sureties receive actual notice of a principal’s failure to pay. Congress also recognized that sureties should not have to rely solely upon their defaulting principals for information concerning protestable transactions:

It is also clear under present, law that sureties have had difficulty in fulfilling the prerequisites to suit in the Customs Court due to the frequent failures of the sureties to receive notice of the failure of the importer to pay the duties until after the time for filing a protest has expired. Section 1001(b)(3)(E) would remedy this problem by permitting a surety to file a protest in its own name and by extending the time within which it may file a protest so long as it certifies that it is not filing the protest simply because the importer allowed his time to file a protest to expire without filing a protest.

S.Rep. No. 249, 96th Cong., 1st Sess. 254 (1979), reprinted in 1979 U.S.Code Cong. & Ad.News 381, 640.

Defendant essentially admits that it would be impossible for plaintiff to ascertain without Customs assistance, the entry number, bond or importer’s name applicable to a bill which is identified on a computer printout only by a bill number assigned by Customs. A surety would have less time to prepare its protest than that contemplated by the statute if the bond on which demand is being made could not be ascertained until some time after the demand letter from Customs is received. The statute plainly states that the 90-day limitations period shall run “from the date of mailing notice of demand for payment. ...” 19 U.S.C. § 1514(c) (1982) (emphasis added). A letter to a surety which does not constitute notice of demand for payment cannot be cured upon Customs provision of supplemental information by alternative means, without reducing the time provided for the preparation of a protest by a surety.

Defendant’s contention that the government could agree to toll the limitations period during the unavailability of information requested by a surety is misplaced. Customs does not have the power to enlarge the jurisdiction of the court. San Francisco Newspaper Printing Co. v. United States, 9 C.I.T. —, 620 F.Supp. 738 (1985). “A time limitation that is a jurisdictional prerequisite is not subject to waiver of estoppel.” Id. at —, 620 F.Supp. at 740; see Zipes v. Trans World Airlines, Inc., 455 U.S. 385, 392-93, 102 S.Ct. 1127, 1131-32, 71 L.Ed.2d 234 (1982); United States v. Reliable Chemical Co., 66 CCPA 123, 128, C.A.D. 1232, 605 F.2d 1179, 1184 (1979).

If a demand for payment lacks information available to Customs which would provide a surety sufficient means of ascertaining the bond on which demand for payment is being made, such a demand does not constitute notice of demand for payment against a bond. Since the November 5, 1981 letter and accompanying printout did not contain any information from which plaintiff could ascertain that a demand was being made on the bond in question, it did not constitute notice of demand for payment against plaintiff’s bond.

The Court holds that the mailing of the November 5, 1981 letter did not start the running of the 90 days in which plaintiff was required to file a protest, and that sufficient notice of demand for payment was not mailed until January 29, 1982. The protest filed on February 12, 1982 was timely.

Defendant’s motion is denied. So ordered.

      . The copy of the printout attached as Exhibit C to the Memorandum in Support of Defendant’s Motion to Dismiss contains additional handwritten information. At oral argument, defendant’s counsel advised the Court that such information did not appear on the printout at the time of the November 5, 1981 mailing.

      . Defendant cites several cases in support of its contention that a bald demand for payment is sufficient in the absence of a requirement that a demand be particularized. The cases are inapposite as none deals with a situation where the recipient was potentially liable to the demanding party on numerous bonds or accounts. See, e.g., In re Marin Motor Oil, Inc., 740 F.2d 220 (3d Cir.1984) (timeliness of demand for reclamation under bankruptcy laws); Miller v. Davis, 34 A. 265, 88 Me. 454 (Sup.Jud.Ct.1896) (demand for payment of taxes).

      . Defendant's Supplemental Memorandum in Support of Motion to Dismiss, at 7.

      . Trade Agreements Act of 1979, Pub.L. No. 96-39, § 1001(b)(3)(E), 93 Stat. 144, 305 (1979).


text:
    UNITED STATES, Plaintiff, v. ONE RED LAMBORGHINI (VIN ZA190000ELA12133), and One Black Lamborghini (VIN ZA190000ELA12144), Defendants.
    Court No. 85-10-01393.
    United States Court of International Trade.
    Decided Jan. 6, 1986.

      Richard K. Willard, Asst. Atty. Gen., David M. Cohen, Director, Commercial Litigation Branch, Civil' Div., Dept, of Justice (J. Kevin Horgan), Washington, D.C., for plaintiff.
    Stein Shostak Shostak & O’Hara, Robert Glenn White, Los Angeles, Cal., for amicus curiae Brigitte Kritschker.
   Memorandum Opinion and Order

DiCARLO, Judge:

Plaintiff brings this in rem action under section 592(c)(5) of the Tariff Act of 1930, as amended, 19 U.S.C. § 1592(c)(5) (1982), seeking forfeiture of two vehicles seized by the United States Customs Service (Customs) as improperly entered into the United States. Plaintiff sought a warrant for the arrest of the vehicles pursuant to 28 U.S.C. § 2461(b) (1982). The Court did not sign the arrest warrant and requested, sua sponte, that plaintiff submit a memorandum setting forth the legal basis for its action. The Court holds that section 592 does not provide a cause of action for forfeiture in rem. The action is dismissed.

Background

On September 4 and 7, 1984, Brigitte Kritschker, a citizen of the Federal Republic of Germany, entered one Lamborghini Jalpa automobile at Jacksonville, Florida, and Los Angeles, California, respectively, under item 812.30, Tariff Schedules of the United States (TSUS). According to Ms. Kritschker, she returned to the Federal Republic of Germany on September 11, 1984. On or about September 20, 1984, Customs agents seized both vehicles at Fort Worth, Texas.

On October 16, 1984, Customs issued a pre-penalty notice and notice of seizure to Ms. Kritschker pursuant to section 592(c)(5). On January 9, 1985, Ms. Kritschker responded to the pre-penalty notice, requesting administrative relief from the in personam penalty and from the seizure of the two vehicles. On March 6, 1985, Customs issued a penalty notice to Ms. Kritschker, alleging fraudulent violations of section 592. Ms. Kritschker responded to the penalty notice with a petition for mitigation, pursuant to 19 U.S.C. § 1618 (1982) on April 3, 1985, requesting that if the vehicles were not released by Customs- within 21 days, the seizure be referred to the appropriate government attorneys for commencement of judicial forfeiture proceedings.

On May 10,1985, Ms. Kritschker brought an action requesting that the Court order Customs to release the vehicles or refer the matter to the Department of Justice to “initiate proceedings on the seizure.” Kritschker v. Greenleaf, No. 85-5-00657 (CIT). On June 10, 1985, the United States counterclaimed in Kritschker for civil penalty for fraudulent violation of section 592.

On September 19, 1985, the Court granted plaintiff’s motion in Kritschker to dismiss the counterclaim as untimely. The Court held: (1) the United States may not bring an action under section 592 against an importer who has pending a petition for mitigation or remission under 19 U.S.C. § 1618 before a final determination is provided to the importer pursuant to section 592(b)(2); (2) Ms. Kritschker’s petition had not been denied; and (3) Ms. Kritschker had neither withdrawn her petition nor waived her rights to a determination by bringing her action.

On October 4, 1985, the United States brought this action in rem under section 592 against the vehicles.

Discussion

The question presented by plaintiff’s action is whether Congress has provided for forfeiture actions in rem under section 592.

“In construing a federal statute it is appropriate to assume that the ordinary meaning of the language that Congress employed ‘accurately expresses the legislative purpose.’ ” Mills Music, Inc. v. Snyder, — U.S. -, 105 S.Ct. 638, 645, 83 L.Ed.2d 556 (1985), quoting Park’n Fly v. Dollar Park and Fly, Inc., — U.S.-, 105 S.Ct., 658, 662, 83 L.Ed.2d 582 (1985). Section 592 states in part:

(a) Prohibition
(1) General Rule
Without regard to whether the United States is or may be deprived of all or a portion of any lawful duty thereby, no person, by fraud, gross negligence, or negligence—
(A) may enter, introduce, or attempt to enter or introduce any merchandise into the commerce of the United States by means of—
(i) any document, written or oral statement, or act which is material and false, or
(ii) any omission which is material, or
(B) may aid or abet any person to violate subparagraph (A).
(c) Maximum penalties
(1) Fraud
A fraudulent violation of subsection (a) of this section is punishable by a civil penalty in an amount not to exceed the domestic value of the merchandise.
(5) Seizure
If the Secretary has reasonable cause to believe that a person has violated the provisions of subsection (a) of this section and that such person is insolvent or beyond the jurisdiction of the United States or that seizure is otherwise essential to protect the revenue of the United States or to prevent the introduction of prohibited or restricted merchandise into the customs territory of the United States, then such merchandise may be seized and, upon assessment of a monetary penalty, forfeited unless the monetary penalty is paid within the time specified by law. Within a reasonable time after any such seizure is made, the Secretary shall issue to the person concerned a written statement containing the reasons for the seizure. After seizure of merchandise under this subsection, the Secretary may, in the case of restricted merchandise, and shall, in the ease of any other merchandise (other than prohibited merchandise), return such merchandise upon the deposit of security not to exceed the maximum monetary penalty which may be assessed under subsection (c) of this section.

(Emphasis added.)

Section 592 was extensively revised in 1978. The Senate and the conference report said that

The penalty for violation of section 592 would be changed from an in rem penalty, forfeiture of the merchandise, to an in personam penalty, a monetary liability of the importer. However, seizure of the merchandise would be permitted if the Secretary of the Treasury has “reasonable cause to believe” the importer is insolvent, outside U.S. jurisdiction, or that seizure is “necessary” to protect the revenue or prevent the importation of restricted goods. The seized merchandise would, in genera], be forfeited to the United States only if the monetary penalty is not paid.

S.Rep. No. 95-778, 95th Cong., 2d Sess. 19, reprinted in, 1978 U.S.Code Cong. & Ad. News 2211, 2230; Conf.Rep. No. 95-1517, 95th Cong., 2d Sess. 10, reprinted in, 1978 U.S.Code Cong. & Ad. News 2249, 2252.

Simply stated, the 1978 revisions to section 592 terminated the in rem action under that provision. There is nothing in the language or legislative history of the current section 592 that indicates that Congress intended that provision to provide an in rem cause of action for forfeiture of merchandise.

Plaintiff argues that the statement in the legislative history quoted above that “seized merchandise would, in general, be forfeited to the United States only if the monetary penalty is not paid” (emphasis added) leaves open the possibility that merchandise might be forfeited in some circumstances other than for nonpayment of monetary penalty.

But the question posed by plaintiffs action is whether section 592 provides for in rem actions, not whether forfeiture is only permitted where the monetary penalty is unsatisified. The Court does not find the language cited by plaintiff “a clearly expressed legislative intention to the contrary” of the language of the statute providing only for an in personam action. See Consumer Product Safety Comm’n v. GTE Sylvania, Inc., 447 U.S. 102, 108, 100 S.Ct. 2051, 2056, 64 L.Ed.2d 766 (1980).

Plaintiff says that it is compelled to seek a prompt judicial determination of the propriety of the seizure and detention of the vehicles or risk losing its only security for payment of the penalty on due process grounds or by the depreciation of the vehicles during the pendancy of the administrative proceedings. Plaintiff acknowledges that it is required to seek a post-seizure judicial determination of the legality of the seizure and detention within a reasonable time after seizure, see United States v. $8,850, 461 U.S. 555, 103 S.Ct. 2005, 76 L.Ed.2d 143 (1983), and says that section 592 must be construed to permit some judicial approval of the seizure during the pendancy of the administrative in personam proceedings.

There may be, as the United States argued in Kritschker, a statute under which in rem procedings for forfeiture of merchandise is permitted. See 18 U.S.C. § 545 (1982). However, jurisdiction over such actions is provided in the district courts. 28 U.S.C. § 1355 (1982). Jurisdiction over actions under section 592 is exclusive in this Court. 28 U.S.C. § 1355. See United States v. Gold Mountain Coffee, Ltd., 8 CIT -, 597 F.Supp. 510, 515, reh’g denied, 8 CIT-, 601 F.Supp. 212 (1984); United States v. Tabor, 9 CIT-, 608 F.Supp. 658, 665 (1985).

The Court understands the desirability of adjudicating all claims arising out of an import transaction in one forum. But, “[t]he relevant question is not whether, as an abstract matter, the rule advocated by petitioner accords with good policy. The question we must consider is whether the policy petitioners favor is that which Congress effectuated____ Courts are not authorized to rewrite a statute because they might deem [it] susceptible of improvement.” Badaracco v. Commissioner, 464 U.S. 386, 104 S.Ct. 756, 765, 78 L.Ed.2d 549 (1984).

In rem actions under section 592 may be desirable for the reasons advanced by plaintiff. But section 592 is, on this point, plain and unambiguous; it does not provide for in rem actions.

The action is dismissed. Judgment will be entered accordingly.

      . 28 U.S.C. § 2461(b) provides in part:
      Unless otherwise provided by Act of Congress, whenever a forfeiture of property is prescribed as a penalty for violation of an Act of Congress ... forfeiture may be enforced by a proceeding by libel which shall conform as near as may be possible to proceedings in admiralty.
      Rule C(3) of the Suplemental Rules for Certain Admiralty and Maritime Claims provides that an in rem action by the United States for forfeiture for federal statutory violation proceeds by issuance of an arrest warrant by the clerk for seizure of the property.
      In United States v. Gold Mountain Coffee, Ltd., 8 CIT-, 597 F.Supp. 510, 515, reh'g denied, 8 CIT-, 601 F.Supp. 212 (1984), the Court held that since the clerk of this Court may not make the determinations required by section 592(c)(5), property subject to forfeiture under that provision cannot become subject to the process of the Court by action of the clerk, but only by action of the Court. Thus, in this action, the arrest warrant was forwarded to the Court.

      . The Court requested that plaintiff brief the legal basis for its action since (1) there was no previous judicial determination whether section 592 provides for an in rem action for forfeiture and (2) under Rule C(6) of the Supplemental Rules no claimant would come forward until after publication of notice of the arrest of the vehicles.

      . Item 812.30, TSUS covers:
      articles imported by or for the account of any person arriving in the United States who is not a returning resident thereof:
      Automobiles ... imported in connection with the arrival of such person and to be used in the United States only for the transportation of such person, his family and guests, and such incidental carriage of articles as may be appropriate to his personal use ...

      . The complaint alleged three causes of action. The first claimed violation of 19 U.S.C. §§ 1602-1604 (1982), which require Customs officials to report seizures immediately to appropriate authorities, including the United States Attorney for the district in which the violation occurred, and the United States Attorney General to "forthwith ... cause the proper proceedings to be commenced and prosecuted, without delay," unless such proceedings are not warranted. 19 U.S.C. § 1604. The second cause of action alleged plaintiff was denied use of her property without due process under the Fifth Amendment to the Constitution. The third cause of action sought review of defendants’ actions under the Administrative Procedure Act, 5 U.S.C. § 702 (1982).

      . On October 9, 1985, the Court denied plaintiff's motion for judgment on the pleadings in Kritschker, and offered plaintiff an expedited trial date. Plaintiff in Kritschker then made an oral motion to voluntarily dismiss the action without prejudice. On October 21, 1985, plaintiff indicated that it would not seek action on its motion until disposition of this action.
      On October 17, 1985, Customs issued its determination on Ms. Kritschker’s supplemental petition. Customs said it had reasonable cause to seize the vehicles under section 592, and determined that Ms. Kritschker's false statements to Customs were the result of fraud. Notice of Customs determination was mailed to Ms. Kritschker’s counsel October 30, 1985. Ms. Kritschker had until December 16, 1985 to respond. She did not respond.
      On December 19, 1985, the United States moved to ammend its answer in Kritschker to include a counterclaim for civil penalties for fradulent violation of section 592. That motion is pending.

        . See Customs Procedure Reform and Simplification Act of 1978, Pub.L. No. 95-410, § 110, 92 Stat. 888 (1978). Under prior law, the only penalty that could be assessed in a section 592 action was forfeiture of the merchandise involved or a penalty equal to the domestic value of the merchandise. Under current law, the amount of any penalty is to be determined de novo by the Court. 19 U.S.C. § 1592(e). See United States v. F.A.G. Bearings, Ltd., 8 CIT-, 598 F.Supp. 401 (1984); Note, Anachronism Laid to Rest: Customs Reform Act Accomplishes Long Overdue Reform of Section 592 of the Tariff Act of 1930, 10 Law and PoTy in Int’l Bus. 1305, 1314 (1978).

      . The answer to this question remains unclear. In United States v. Tabor, 9 CIT -, 608 F.Supp. 658, 665 (1985), the Court dismissed a claim for forfeiture in an action also seeking civil penalties. The Court held that in the forfeiture language of section 592(c)(5) "Congress appears to have provided a particular, but nonexclusive, manner for satisfaction of a judgment.” 608 F.Supp. at 666.

      . To afford due process to potential claimants, plaintiff asks the Court to "approve" the detention of the vehicles. Memorandum in Support of the United States’ Claim for Forfeiture, at 7. To avoid depreciation of the vehicles, plaintiff says that it will deposit the proceeds of their sale in an escrow account from which the civil penalty will be satisfied. Id., at 16.

      . 28 U.S.C. § 1355 (1982) provides:
      The district courts shall have original jurisdiction, exclusive of the courts of the States, of any action or proceeding for the recovery or enforcement of any fine, penalty, or forfeiture, pecuniary or otherwise, incurred under any Act of Congress, except matters within the jurisdiction of the Court of International Trade under section 1582 of this title.
      28 U.S.C. § 1582(a) (1982) provides for jurisdiction in this Court of any action brought by the United States under section 592.


author: CORCORAN, District Judge.

text:
    Nellie SKLAGEN, et al., Plaintiffs, v. GREATER SOUTHEAST COMMUNITY HOSPITAL, Defendant.
    Civ. A. No. 83-2967.
    United States District Court, District of Columbia.
    March 20, 1984.
    Charles Kane Schanker, Washington, D.C., for plaintiffs.
    Nicholas S. McConnell, Washington, D.C., for defendant.
   MEMORANDUM AND ORDER

CORCORAN, District Judge.

Defendant Greater Southeast Community Hospital has moved the Court to compel the plaintiff, Nellie Sklagen, to execute an authorization confirming that plaintiff has waived the physician-patient privilege and enabling defendant to obtain from all physicians who have rendered treatment to plaintiff full disclosure of information they may have concerning plaintiff. Plaintiff opposes the motion.

For the reasons given below, defendant’s motion is granted.

BACKGROUND

Plaintiff entered the hospital on August 30, 1982, for diagnostic procedures related to a breathing problem. During her stay, she slipped and fell on the bathroom floor of her hospital room sustaining injuries, including a fracture of her spine. After leaving the hospital on September 22, 1982, plaintiff sought treatment for her back from private physicians. Plaintiff filed this suit against defendant on October 6, 1983, alleging that defendant and its employee-agents were negligent in allowing water to remain on the bathroom floor of plaintiff’s hospital room.

In answers to interrogatories propounded to her, plaintiff stated that she had been treated for a back condition by several physicians and institutions before the alleged incident. Plaintiff indicated in her answers that she would not consent to the release of the medical records maintained by those physicians and hospitals. In response to defendant’s request for production of copies of her medical records, plaintiff provided defendant with only those records pertaining to treatment she received after the alleged incident. Not content with plaintiffs selective production of her medical records, defendant filed the present motion. ‘

ANALYSIS

The physician-patient privilege, codified at D.C.Code § 14-307 (1981), prevents a physician from disclosing any confidential information he may have acquired about a client while attending to the client in a professional capacity. The purposes behind the statutory privilege are two-fold: to prevent the disclosure of information concerning the patient which may tend to embarrass or humiliate him and to promote greater freedom of communication between the physician and patient as to matters concerning the patient’s health. Wilson v. Thornton, 416 A.2d 228, 236 (D.C.1980).

By placing her physical condition in issue through the filing of this lawsuit, plaintiff has waived her privilege against disclosure of relevant medical evidence. Doe v. Eli Lilly & Co., Inc., 99 F.R.D. 126, 127 (D.D.C.1983); In re “Agent Orange” Product Liability Litigation, 91 F.R.D. 616, 618 (E.D.N.Y.1981). Furthermore, plaintiff has provided defendant with portions of her medical records pertaining to treatment she received after the alleged injury. Having waived the medical privilege as to materials favorable to her position it would be manifestly unfair to allow plaintiff to invoke the privilege to shield similar materials which are potentially damaging. See, e.g., Edmund J. Flynn Co. v. LaVay, 431 A.2d 543, 551 (D.C.1981); International Tel. & Tel. Corp. v. United Tel. Co. of Florida, 60 F.R.D. 177, 185 (M.D.Fla.1973).

However, plaintiff does not contend that her medical records are protected from disclosure by the physician-patient privilege. Rather, plaintiff asserts that the medical authorization drafted by defendant is overly broad and encompasses material beyond the scope of discovery allowed under the Federal Rules of Civil Procedure. Plaintiff further argues that defendant’s request for copies of plaintiff’s medical records for the five year period immediately preceding the injury alleged in the complaint fails to properly designate the documents requested, as required by Fed.R.Civ.P. 34(a), and also encompasses matters beyond the scope of discovery. Finally, plaintiff contends that defendant is not unduly hampered in its discovery efforts since it may subpoena relevant documents pursuant to Fed.R. Civ.P. 45(b).

The arguments advanced by plaintiff mask plaintiff’s bald attempt to control and restrict the manner in which the defendant may develop its case. This the plaintiff cannot do. Plaintiff has waived the physician-patient privilege. Therefore, the physicians who have treated the plaintiff should be informed that they may in their discretion disclose to the defendant any medical information about the plaintiff that they may possess. By compélling plaintiff to execute the medical authorization drafted by the defendant, the fact of plaintiff’s waiver may be conveyed to these physicians.

Plaintiff’s assertions that the medical authorization drafted by defendant is overly broad and encompasses material beyond the scope of the federal discovery rules miss the mark. Simply put, the federal discovery rules are not implicated by defendant’s request that plaintiff execute the medical authorization. The medical authorization does not require or order the physicians to disclose to the defendant medical information about the plaintiff; it merely authorizes or permits such disclosure. Thus, it enables defendant to informally interview these physicians, as it might any other potential witness, to ascertain if they possess any information relevant to the issues in dispute. The ex parte interview is an effective discovery procedure which operates outside of and is not precluded by the federal discovery rules. Under substantially similar circumstances, this Court, in Doe v. Eli Lilly & Co., Inc., 99 F.R.D. at 128, stated:

As a general proposition, however, no party to litigation has anything resembling a proprietary right to any witness’s evidence____ Unless impeded by privilege an adversary may inquire, in advance of trial, by any lawful manner to learn what any witness knows if other appropriate conditions the witness alone may impose are satisfied, e.g., compensation for his time and expertise or payment of reasonable expenses involved, and while the Federal Rules of Civil Procedure have provided certain specific formal methods of acquiring evidence from recalcitrant sources by compulsion, they have never been thought to preclude the use of such venerable, if informal, discovery techniques as the ex parte interview of a witness who is willing to speak.

(Footnotes omitted).

Accordingly, it is this 20th day of March, 1984

ORDERED, that within ten (10) days of the date of this Order, the plaintiff Nellie Sklagen shall provide defendant’s counsel with medical authorizations in accordance with the form tendered with defendant’s motion to compel discovery and addressed to the following parties:

Yussef Akbari
3730 Martin Luther King, Jr. Avenue, S.W.
Washington, D.C. 20032
Mahmood Mohamadi, M.D.
6192 Oxon Hill Road, # 306
Oxon Hill, Maryland 20745
Dr. Jeffery Goltz
6188 Oxon Hill Road # 406
Oxon Hill, Maryland 20745
Hadley Memorial Hospital
4601 Martin Luther King Avenue, S.W.
Washington, D.C. 20032
Capitol Hill Hospital
700 Constitution Avenue, N.E.
Washington, D.C. 20002
Sibley Memorial Hospital
5255 Loughboro Road, N.W.
Washington, D.C. 20016


author: LEE R. WEST, District Judge.

text:
    OKLAHOMA BANKERS ASSOCIATION, Plaintiff, v. HOME SAVINGS AND LOAN ASSOCIATION, a/k/a Home Savings and Loan Association, F.A., a/k/a Home Savings Bank, F.A., Defendant, v. Edwin J. GRAY, James Jay Jackson, and Donald I. Hovde, in their official capacities as members of the Federal Home Loan Bank Board of the United States of America, Third Party Defendants.
    No. Civ-83-1729-W.
    United States District Court, W.D. Oklahoma.
    June 27, 1984.

      Laura N. Pringle, Vice President and General Counsel, Oklahoma Bankers Ass’n, Don G. Holladay, Ann M. Threlkeld, Andrews, Davis, Legg, Bixler, Milsten & Murrah, Oklahoma City, Okl., for plaintiff.
    Harvey Simon, Associate Gen. Counsel, Denise Z. Field, Trial Atty., Federal Home Loan Bank Bd., Litigation Div., Washington, D.C., John E. Gunther, Deputy Director, Litigation Div., John Kinslow, Wade, Kinslow & Mackey, Lawton, Okl., for defendant.
   ORDER

LEE R. WEST, District Judge.

The defendant, Home Savings Bank, F.A. (Home Savings), has moved the Court pursuant to Rule 56, Fed.R.Civ.P., to grant summary judgment in its favor and against the plaintiff, Oklahoma Bankers Association, and to declare (1) that federal law and regulations constitute the exclusive law governing the chartering, designating, and advertising practices of federal savings banks in Oklahoma and that such federal law and regulations preempt the application of Oklahoma law to federal savings banks in these three areas and (2) that the charter granted this defendant was validly issued and that said defendant may operate under the name “Home Savings Bank, F.A.,” and use the words “bank”, “banker”, “investment banker”, and “banking”, and any other derivative of the word “bank” in its dealings with the public.

Third party defendants Edwin J. Gray, James Jay Jackson, and Donald I. Hovde, who have assumed the same position on the issues as the defendant Home Savings, have likewise moved the Court pursuant to Rule 56, supra, for summary judgment and seek a declaration that federal law and regulations preempt the application of state law to federal savings banks with regard to chartering, designating, and advertising practices. The plaintiff has opposed the motions and has moved the Court to remand this action to state court.

The Court has reviewed the submissions of the parties, the record herein, and in particular, the two statements advanced by the third party defendants in their Statement of Material Facts as to Which No Genuine Issue Exists which the plaintiff claims render summary judgment inappropriate and the Court finds that the plaintiff has asserted no more than differing legal conclusions as to.the facts and has failed to demonstrate the existence of a genuine issue as to a material fact which would preclude consideration of the motions pending before the Court. Accordingly, the Court makes the following determination with regard to the issues raised therein and in that connection finds the following facts to be undisputed.

1. The plaintiff, a corporation organized under the laws of Oklahoma brought this action in the District Court of Comanche County, Oklahoma, and alleged in its state court petition that the operation of Home Savings as a federally-chartered savings bank violated state law because Oklahoma law does not authorize conversion of a state chartered institution to a federally-chartered institution and because title 6, section 1404 of the Oklahoma Statutes specifically prohibits usage of the term “bank” or any derivative thereof by a business other than a banking business conducted pursuant to state law.

2. Defendant Home Savings counterclaimed against the plaintiff and brought a third party action against Messrs. Gray, Jackson and Hovde. The defendant and the third party defendants joined to remove the primary and the third party action to this Court.

3. The third party defendants are being sued in their official capacities as members of the Federal Home Loan Bank Board (Bank Board). The Bank Board is an independent regulatory agency of the United States and pursuant to the statutory powers conferred on it by Section 5(a) of the Home Owners’ Loan Act of 1933 (HOLA), as amended, Section 311 of the Garn-St. Germain Depository Institutions Act of 1982, 12 U.S.C. § 1464(a), the Bank Board is responsible for the organization, examination, supervision, operation, and regulations of federal savings and loan associations and federal savings banks.

4. Home Savings was formerly Home Savings and Loan Association of Lawton, Oklahoma, a state chartered savings and loan association. Upon application to the Bank Board, it was converted to a federally-chartered savings and loan association, Home Savings and Loan Association, F.A., on June 2, 1983. 12 U.S.C. § 1464(i)(l).

5. Home Savings and Loan Association, F.A., applied for and was issued a charter as a federal savings bank, Home Savings Bank, F.A., by the Bank Board on June 7, 1983. 12 U.S.C. § 1464(i)(2).

This lawsuit focuses on the validity of the conversion of the defendant to a federally-chartered savings bank and whether as such it is subject to federal, rather than state, law and regulation.

The plaintiff has argued that the federal statutes upon which the defendant and third party defendants have relied specifically refer to state law and prohibit a federal savings bank from operating in a state which does not recognize or permit this conversion process. The Court finds that the plaintiff appears to have mistakenly cited that portion of the statutory scheme which relates only to those situations where a federal association desires to convert to a state association. 12 U.S.C. § 1464(i)(3)(A) (“Any Federal association may convert itself into a savings and loan or savings bank type of institution organized pursuant to the laws of the State____”).

In the instant situation, the defendant was a state savings and loan association which desired to convert itself first to a federal savings and loan association and then, as a federal savings and loan association, to convert itself to a federal savings bank. Each step in this conversion process is recognized and authorized by federal statute without reference to or incorporation of state law.

Section 1464(i)(l) provides that

“[a]ny institution which is, or is eligible to become, a member of a Federal home loan bank may convert itself into a Federal savings and loan association or Federal savings bank ...”

and the only limitation placed on the conversion of a state institution to a federal association is that the conversion “be subject to such rules and regulations as the [Bank] Board shall prescribe____” Id. Furthermore, it is noted that the plaintiff has not challenged or controverted the defendants’ unsupported statements that the conversion from a state savings and loan association to a federal savings and loan association was officially approved by the Oklahoma Savings and Loan Board by Order dated June 30,1983; that the Order set forth the state Board’s determination that the defendant had complied with all requirements of state law pertaining to conversion and that the certificate of authority of the state savings and loan association should be revoked; and that on July 14, 1983, the Oklahoma Secretary of State issued a certificate dissolving the Home Savings and Loan Association of Lawton, Oklahoma, by Order of R.Y. Empie, State Bank Commissioner and Chairman of the Oklahoma Savings and Loan Board.

Section 1464(i)(2) provides further that subject to these same rules and regulations prescribed by the Bank Board,

“any Federal association may change its designation from a Federal savings and loan association to a Federal savings bank, or the reverse.”

Thus, the subsequent conversion of the defendant from a federal savings and loan association to a federal savings bank was also permitted by federal law.

The Bank Board is authorized by section 1464(a)

“to provide for the organization, incorporation, examination, operation, and regulation of associations to be known as Federal savings and loan associations, or Federal savings banks, and to issue charters therefor____”

The issuance of the charters by the Bank Board to the defendant first as a federal savings and loan association and then as a federal savings bank was entirely consistent with the Bank Board’s authority and thus, the Court finds that the instant charters were validly issued.

Section 1464(a) also authorizes the Bank Board to prescribe rules and regulations enabling it to carry out the duties imposed by section 1464(a) and one such regulation promulgated by the Bank Board is 12 C.F.R. § 563.27 (1983), which regulates the advertising practices of these federally-chartered institutions. Section 563.-27 requires that no institution “shall use advertising or make any representation which is inaccurate in any particular or which in any way misrepresents its services, contracts, investments, or financial condition.”

As this Court determined in granting summary judgment in favor of the Bank Board in Federal Home Loan Bank Board v. Empie, CIV-83-500-W (W.D.Okla. June 25, 1983), “Congress intended the HOLA to preempt all state regulations over federally-chartered savings and loan institutions and therefore, any state law which falls within this area of exclusive occupation by the HOLA must give way by virtue of the supremacy clause of the United States Constitution.” Slip op. at 6. The Court found because advertising by federal savings and loan associations was regulated by section 563.27, section 1401 upon which the instant plaintiff has also relied and which prohibits the use of certain terms by businesses other than banking businesses conducted pursuant to state law was preempted. Id.

The Court finds that the reasoning set forth in Empie applies with equal force to federally-chartered savings banks since advertising by federal savings banks is also regulated by section 563.27 and thus the Court finds that section 1401 does not control the advertising practices of federal savings banks.

The Court finds further that since federal law allows the use of the terms “bank”, “banker”, “investment banker”, and “banking” by federally chartered institutions, the instant defendant may operate under the name “Home Savings Bank, F.A.,” and use these terms or any appropriately descriptive derivative of the word “bank” in its dealings with the public which accurately reflects the services offered by the defendant. See Empie, slip op. at 7.

The plaintiff has also challenged this Court’s subject matter jurisdiction in an attempt to persuade the Court to remand this action to the District Court of Comanche County, Oklahoma.

The Petition for Removal filed by the third party defendants sought to invoke this Court’s jurisdiction under 28 U.S.C. § 1442(a)(1) which permits removal of civil actions by federal officers who face litigation in state courts as a result of actions taken in the course of their official duties, and under 28 U.S.C. § 1441(b) which permits removal of any civil action of which the district courts have original jurisdiction founded on a claim arising under the Constitution or laws of the United States. The Joinder in Petition for Removal filed by the defendant also alleged section 1441(b) as the basis for subject matter jurisdiction.

Removals premised on section 1441(b) are governed by the “well-pleaded complaint” rule which requires that the federal question be determinable from the plaintiff’s statement of its claim unaided by the answer or the petition for removal since a defendant may not remove a case to federal court unless the plaintiff’s complaint establishes that the case arises under federal law. E.g., Gully v. First National Bank, 299 U.S. 109, 113, 57 S.Ct. 96, 98, 81 L.Ed. 70 (1936).

The plaintiff has alleged in its state court petition that the conversion process in which the defendant engaged was contrary to Oklahoma law and that the use of the term “bank” or a derivative thereof by the defendant is contrary to title 6, section 1401 of the Oklahoma Statutes. It is the defendant in its answer to the state court petition which raised the defense of preemption of state law by federal law.

As the United States Supreme Court stated in Gully, “a suit brought upon a state statute does not arise under an act of Congress or the Constitution of the United States because prohibited thereby.” Id. at 116, 57 S.Ct. at 99 (citations omitted); e.g., Franchise Tax Board v. Construction Laborers Vacation Trust, 463 U.S. 1, 12, 103 S.Ct. 2841, 2848, 77 L.Ed.2d 420 (1983). Federal preemption may offer a valid defense to a state law claim but preemption does not convert a state law claim to which preemption is a defense into a claim arising under federal law. Accordingly, the Court finds that although a question of federal law would very likely arise in the course of this litigation, the allegations in the plaintiff’s state court petition do not demonstrate that a right or immunity created by the Constitution or the laws of the United States is an element, much less an essential element of the plaintiff’s cause of action, 299 U.S. at 112, 57 S.Ct. at 97, and thus removal by defendant or the third party defendants under section 1441(b) is improper.

The plaintiff has also argued that the defendant by filing a counterclaim in the state court action submitted itself to the jurisdiction of the state court and waived its right of removal. As a rule, where the defendant’s response to the plaintiff’s claim goes beyond that of a denial and seeks affirmative aid on its behalf, the defendant is found to have voluntarily invoked the jurisdiction of the state court and to have waived its right of removal. The Court finds however under the instant circumstances that the fact that removal under section 1441(b) is improper or the fact that the defendant by counterclaiming against the plaintiff in a state court might arguably have waived any right of removal is not fatal to the third party defendants’ attempt to remove this action to this Court, and resolving these issues in favor of the plaintiff does not require the Court to remand this case to state court.

The plaintiff has contended that the third party defendants’ removal is improper since no federal claim appears on the face of the state court petition and since the third party defendants were impleaded solely as a means of manufacturing federal jurisdiction. The Court has reviewed the plaintiff’s arguments in support of these contentions and finds that impleading these third party defendants was not improper and was not for the sole purpose of creating a basis for the exercise of this Court’s jurisdiction.

The Court finds further that the well-pleaded complaint rule is not applicable to removals under section 1442(a)(1) and thus the presence or absence of a federal claim on the face of the state court petition is irrelevant.

As stated previously, section 1442(a)(1) permits removal of civil actions by federal officers who face litigation in state courts as a result of actions taken in the course of their official duties, and the fact that a federal officer is the third party defendant rather than the defendant in the primary action is no bar to his right of removal under this section of not only the third party action but also the primary action. E.g., IMFC Professional Services v. Latin American Home Health, Inc., 676 F.2d 152, 156 (5th Cir.1982); Davenport v. Borders, 480 F.Supp. 903 (N.D.Ga.1979); 14 C. Wright, A. Miller & Cooper, Federal Practice and Procedure § 3727 & n. 36, at 691-92 (1976) (right of removal under section 1442(a)(1) is absolute and may be exercised even though action might not have been brought initially in federal court or official is sued as a third party defendant).

The third party defendants, Messrs. Gray, Jackson, and Hovde, were sued for actions taken in the course of their official duties as members of the Bank Board and accordingly the Court finds that removal of the plaintiff's claim, the defendant’s counterclaim, and the third party action by the third party defendants was proper under section 1442(a)(1) and that this Court has subject matter jurisdiction to resolve the issues raised by these parties.

Based upon the foregoing, the Court finds that the plaintiff’s Motion to Remand is DENIED and the Motions for Summary Judgment of the defendant and the third party defendants are GRANTED.