author: DUHE, District Judge.

text:
    Alfreda TRAHAN, et al. v. LAFAYETTE PARISH SCHOOL BOARD.
    Civ. A. No. 10-903 “L”.
    United States District Court, W.D. Louisiana, Lafayette-Opelousas Division.
    June 26, 1985.

      D. Warren Ashy, Victor A. Ashy, Michael Durand, Lafayette, La., for petitioners.
    Michael Darnell, St. Martinville, La., Napoleon Williams, New York City, for plaintiffs.
    John Ward, Baton Rouge, La., for defendant.
   MEMORANDUM RULING

DUHE, District Judge.

Lafayette Parish Schools have for several years operated under a standing desegregation order of this Court in order to complete the transition from formerly dejure segregated schools to a unitary system as required by the U.S. Supreme Court in Brown v. Board of Education of Topeka, 347 U.S. 483, 74 S.Ct. 686, 98 L.Ed. 873 (1954) and Green v. County School Board of New Kent County, 391 U.S. 430, 88 S.Ct. 1689, 20 L.Ed.2d 716 (1968). Defendant Lafayette Parish School Board now moves to amend the standing desegregation order to permit the rezoning of school attendance districts in Lafayette Parish. The motion is unopposed by any of the plaintiffs in this action. However, a number of third parties have petitioned this Court for leave to intervene in order to oppose the School Board’s motion.

I. THE PETITIONS FOR INTERVENTION

Interventions are governed by Federal Rule of Civil Procedure 24 and the Federal Common Law. In Hines v. Rapides Parish School Board, 479 F.2d 762 (5th Cir. 1973), the Court established the prerequisites for an intervention in a desegregation suit:

The proper course for parental groups seeking to question current deficiencies in the implementation of desegregation orders is for the group to petition the district court to allow it to intervene in the prior action. The petition for intervention would bring to the attention of the district court the precise issues which the new group sought to represent and the ways in which the goal of a unitary system had allegedly been frustrated. The district court could then determine whether these matters had been previously raised and resolved and/or whether the issues sought to be presented by the new group were currently known to the Court and parties in the initial suit. If the Court determined that the issues these new plaintiffs sought to present had been previously determined or if it found that the parties in the original action were aware of these issues and completely competent to represent the interests of the new group, it could deny intervention. If the court felt that the new group had a significant claim which it could best represent, intervention would be allowed. 479 F.2d at 762. (emphasis added).

In the facts at bar are three groups petitioning to intervene. They are, respectively, the Daspit group (filed April 23), the Bakeler group (filed April 24), and School Board member John Guidry (filed April 24). The initial question presented, then, is whether these petitions for intervention satisfy the requirements of Hines and its progeny.

The Daspit Group

The Daspit group’s petition for intervention is “primarily educational and not constitutional”. Memorandum in Support of Objection, p. 2. The petitioners simply believe that their proposal for district boundaries for the Judice Middle School is sounder as a matter of policy than that proposed by the School Board in its motion.

It is apparent that this petition fails to satisfy Hines, for “nothing in their brief or in their petition for intervention ... indicates that they are challenging [the boundaries] on the ground that it impedes the establishment of a unitary school system. Instead, they oppose the location on various policy grounds, which, though important, are unrelated to desegregation and the establishment of a unitary school system.” United States v. Perry County Board of Education, 567 F.2d 277, 279-80 (5th Cir.1978).

The Bakeler Group

This group petitions the Court for leave to intervene on the grounds that the School Board’s proposed rezoning plan: (1) violates their 14th Amendment rights; (2) is unnecessary; and (3) if it is necessary, it can be accomplished in a “superior” manner through alternative plans it submits.

This petition utterly fails to meet the requirements of Hines for intervention in a desegregation action. The assertion, in conclusionary form, and without supporting argument, explanation, or legal authorities, that the School Board rezoning plan would abridge petitioners’ 14th Amendment rights is simply not sufficient to constitute an allegation, much less a showing, that the goal of a unitary system would be frustrated by adoption of the School Board plan. In Calhoun v. Cook, 487 F.2d 680 (5th Cir.1973), the Court emphasized:

the absolute necessity that the petition for intervention contain such a clear delineation of the contentions of the intervenors as would remove all doubt that the Court would be able to determine the validity of the attempted intervention, or, if the intervention were allowed, the merits of the claim asserted. 487 F.2d at 683.

Petitioners’ remaining arguments—that the School Board’s rezoning plan is unnecessary, or alternatively that if rezoning is necessary there are less onerous means of achieving the same end—are similarly per se insufficient to permit intervention. The question of whether rezoning is necessary is immaterial to the question of whether the School Board’s rezoning plan frustrates the goal of a unitary system. As to whether there are less onerous means of rezoning, “[t]hese matters of policy are to be determined by the Board of Education, not by the Federal Courts” Perry, supra, 567 F.2d at 280.

Like the Daspit petitioners, nothing in the Bakeler Group’s petition indicates that rezoning is challenged on the grounds that it impedes the establishment of a unitary school system. Instead, rezoning is opposed on various policy grounds, which, though important, are unrelated to desegregation and the establishment of a unitary school system.

The Guidry Petition

School Board member John Guidry’s petition for intervention is essentially identical to the Bakeler Group’s petition and thus fails for the same reasons.

The Question of Standing

In addition to the failure of all petitioners to meet the Hines requirements in their petitions, intervention must be denied because:

In these circumstances the interests of [petitioners] are adequately represented by the Board and the bi-racial committee within the meaning of Rule 24(a)(2). [Petitioners] are not entitled to intervention of right simply because they would have voted differently had they been members of these representative bodies. Perry, 567 F.2d at 280.

The Hearing Requirement

The general rule in this Circuit is that:

to the extent that putative intervenors raise issues properly cognizable in a school case, and do so by submitting pleadings that conform to the guidelines established in Hines, an evidentiary hearing should be had by the district court to aid its assessment of the proposed intervention [citation omitted]. An exception to the hearing requirement applies where the petitioners allege matters unrelated to desegregation and therefore, inappropriate in a school case. See, e.g., US. v. Perry County Board of Education, 567 F.2d at 279-80 (denial of intervention without hearing proper where intervenors sought to challenge construction site of new school). United States v. Crucial, 722 F.2d 1182, 1191 (5th Cir. 1983).

All petitioners having alleged matters unrelated to desegregation, denial of intervention without a hearing is appropriate in the instant case.

II. THE BOARD’S REZONING PLAN

In order to make allowances for suburban school enrollment growth and for a continuing decline in inner city school enrollment, the School Board has moved to amend this Court’s desegregation order to permit rezoning.

The motion is unopposed by any of the plaintiffs, and has been endorsed by the bi-racial committee. After a careful review of the record, movant’s supporting exhibits, arguments and authorities, this Court is satisfied that the School Board’s rezoning plan is consistent with a unitary system.

This Court’s determination that the School Board’s rezoning plan passes Constitutional muster should in no way be construed as a judgment on the policy merits of that particular plan. The people themselves—through their elected representatives on the School Board—have made that judgment.

This Court cannot and will not become involved in the day-to-day administration of the Lafayette Parish schools, substituting its views on policy questions for that of the duly elected representatives of the people. Even if this Court had the necessary expertise and resources to become so involved— which it assuredly does not—it is constrained by the Constitution of the United States. The 10th Amendment to that fine document declares that: “The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.” The administration of the public schools of the several states is clearly not a power delegated to the Federal Government or its courts.

Accordingly, the School Board’s motion to amend the standing desegregation order to permit rezoning is granted, and the petitions of the Daspit Group, the Bakeler Group, and John Guidry to intervene are denied.


source: Caselaw Access Project

author: ELFVIN, District Judge.

license: Public Domain

text:
    In the Matter of the Grand Jury Subpoenas to MIDLAND ASPHALT CORPORATION and Krantz Asphalt Co., Inc., dated February 12, 1985.
    No. CIV-85-633E.
    United States District Court, W.D. New York.
    June 26, 1985.

      Charles V. Reilly, Antitrust Div., U.S. Dept. of Justice, New York City, for the government.
    Leslie Greenbaum, Buffalo, N.Y., for petitioners.
   MEMORANDUM and ORDER

ELFVIN, District Judge.

This is a proceeding brought by Midland Asphalt Corporation and Krantz Asphalt Co., Inc. (“the petitioners”), seeking advancement of some $18,000 in costs which they assert will be incurred by them in complying with the terms of grand jury subpoenas duces tecum that had been issued February 12, 1985 and served upon them in connection with an investigation of possible violations of the federal antitrust . laws. In addition, petitioners seek a protective order pursuant to Fed.R.Cr.P. rule 6(e) which would shield from disclosure to their competitors documents that contain confidential commercial information. Oral argument concerning petitioners’ requests was held June 17, 1985.

In support of the request for advancement of costs petitioners have submitted the affidavit of their Secretary, Bradford H. Banks, which avers that 120 hours of their employees’ time already have been expended in locating, compiling and duplicating documents that have been supplied in response to the subpoenas, that approximately 600 additional hours will be expended in gathering and duplicating the remaining documents required to be produced by said subpoenas and that it costs petitioners roughly $20 per man hour for the time utilized in responding to the subpoenas. It is further asserted that 36,000 copies of documents will be made by petitioners in complying with the subpoenas at a cost of $3,600 and therefore that their total expenses related to complying with the subpoenas will be $18,000 (720 hours x $20 per hour plus $3,600 in costs).

Petitioners contend that this sum of $18,-000 represents 41% of the net operating income of Midland Asphalt Corporation and its subsidiaries for the fiscal year ending March 31, 1984 and therefore that compliance without advancement or reimbursement of such expenses would result in an unreasonable financial burden upon them. The government has argued that petitioners’ instant application seeking to quash or modify the grand jury subpoena had been untimely under Fed.R.Cr.P. rule 17(c) and that petitioners should in any event bear the full costs of compliance.

In Be Grand Jury No. 76-3 (MIA) Subpoena Duces Tecum, 555 F.2d 1306 (5th Cir.1977), held that “a court in exercising its power under Rule 17(c) of the Federal Rules of Criminal Procedure may, in appropriate circumstances, ‘modify’ the subpoena to require that the costs of compliance be borne by the Government.” 555 F.2d at 1308. However, it was therein recognized that

“[a]s a general rule, a witness or the recipient of a subpoena duces tecum is required to bear the costs of compliance. Since some costs can be anticipated in complying with any subpoena duces tecum, Rule 17(c)’s provision that the court may quash a subpoena ‘if compliance would be unreasonable or oppressive’ must be read to mean that in the main run of cases the cost of compliance will be assumed as part of the public duty of providing evidence.” Ibid

Other courts also have recognized the general rule requiring the recipient of the subpoena to bear the full costs of compliance and have required a clear showing of unreasonableness or oppressiveness in order to warrant modification or quashing of a grand jury subpoena duces tecum. See In re Grand Jury Investigation, 459 F.Supp. 1335 (E.D.Pa.1978); In re Grand Jury Subpoena Duces Tecum, Etc., 405 F.Supp. 1192, 1198 (N.D.Ga.1975); cf. In re Corrado Brothers, Inc., 367 F.Supp. 1126 (D.Del.1973).

In the case at bar, having considered the submissions and arguments of counsel for both parties, this Court finds that petitioners have not sufficiently established that their uncompensated compliance with the terms of the subpoena would be oppressive or unreasonable. They have not disputed the government’s assertion that they have sales of $8,000,000 and that the claimed costs of $18,000 represent less than 2% of their operating expenses according to their latest financial report. In addition, the subpoenas in question had called for production of the original documents and therefore the total expenses claimed by petitioners must be reduced by the costs relating to the photocopying of the documents. See footnote 4, supra. Compliance with a subpoena duces tecum ordinarily will result in some inconvenience and costs to the recipient and the instant petitioners have not demonstrated with sufficient clarity that their shouldering of the full costs of compliance would be unduly onerous.

With respect to the application’s request for a protective order, initially it is noted that it has not been asserted by petitioners that the subpoenaed documents are irrelevant to the grand jury’s investigation or that production would violate any Fifth Amendment privilege against self-incrimination. Rather, petitioners have contended that this Court has the discretionary authority under Fed.R.Cr.P. rule 6(e) to protect them from the potential disclosure to their competitors of competitively sensitive information. They have pointed out that the subpoenas require production of profit and loss statements, cost records and other information which, if shown to any of their competitors during the course of the grand jury’s proceedings, would result in serious and irreparable injury to their business.

Although this Court recognizes petitioners’ proprietary interest in the information sought to be shielded and the harm to their businesses that might occur should their competitors view such records in the course of the grand jury proceedings, they are not entitled to the requested protective order. There is a public obligation to provide evidence to a grand jury—see Hurtado v. United States, 410 U.S. 578, 93 S.Ct. 1157, 35 L.Ed.2d 508 (1973)—and the grand jury’s right to obtain every man’s evidence and its investigative “duty ‘[are] usually paramount over any private interest which may be affected.’ ” In Re Morgan, 377 F.Supp. 281, 285 (S.D.N.Y.1974) (quoting from McMann v. Securities and Exchange Commission, 87 F.2d 377, 378 (2d Cir. 1937)). In the absence of a claim of a recognized privilege against disclosure— e.g., the Fifth Amendment or the attorney/client privilege—the recipient of a grand jury subpoena may not properly attempt to modify its terms or to limit the grand jury’s utilization of summoned documents despite the potential damage to its business upon their disclosure. Cf. In re Morgan, supra, at 285. See also United States v. Grand Jury Investigation, 417 F.Supp. 389, 391-392 (E.D.Pa.1976).

For these reasons it is hereby ORDERED that the application for advancement of costs and for a protective order is denied in all respects.

      . Krantz Asphalt Co., Inc. is a wholly owned subsidiary of Midland Asphalt Corporation.

      . During the pendency of this proceeding petitioners agreed to submit certain non-sensitive documents to the grand jury without prejudice to this Court's determination whether they would be entitled to “reimbursement” rather than "advancement" of costs.

      . Rule 17(c) provides that a court "on motion made promptly may quash or modify the subpoena if compliance would be unreasonable or oppressive.” The subpoenas in issue were returnable March 19, 1985 yet petitioners and the government had agreed that upon the submission of certain documents March 19th, petitioners could then submit by May 15th the balance of the documents due. On May 15th petitioners filed this action and obtained a stay of further compliance.

      . In addition, it was held by that court that, in determining whether the costs of compliance actually are unreasonable or oppressive, such expenses should be measured by the cost of production of the original documents rather than reproduction of such inasmuch as the duplication of documents is undertaken by the subpoena's recipient for his own convenience. Id. at 1308-09.

      . The proposed protective order submitted by petitioners essentially would prohibit disclosure of documents containing sensitive business information to persons other than attorneys, experts, statisticians and consultants employed by the Department of Justice’s Antitrust Division, members of the grand jury, employees of petitioners, and other persons designated by a court order or applicable law.

      . Counsel for the government had indicated at oral argument his recognition of petitioners’ interest in non-disclosure of the records in issue to their competitors. It is assumed that the attorneys for the Antitrust Division will act in good faith relative to such documents in view of such recognition of the proprietary value of said information in order to avoid needless disclosure of such to any witness or person involved with the grand jury’s investigation.


author: JOHNSTONE, District Judge.

text:
    James Carl HIGGS, et al., Plaintiffs, v. George WILSON, et al., Defendants. Jerald L. KENDRICK, et al., Plaintiffs, v. David H. BLAND, et al., Defendants. James M. THOMPSON, et al., Plaintiffs, v. David H. BLAND, et al., Defendants. United States of America, Amicus Curiae.
    Civ. A. Nos. 83-0256-P, 76-0079-P and 79-0092-P.
    United States District Court, W.D. Kentucky, Paducah Division.
    June 27, 1985.

      James Carl Higgs, pro se.
    Barbara W. Jones, Gen. Counsel, Linda G. Cooper, Dept. of Corrections, Frankfort, Ky., Haney W. Jones, Asst. U.S. Atty., Louisville, Ky., Mitchell W. Dale, U.S. Dept. of Justice, Civ. Rights Div., Washington, D.C., for defendants.
   MEMORANDUM OPINION

JOHNSTONE, District Judge.

Since approximately 1981 the Kentucky Department of Corrections has conducted a urinalysis procedure at the Kentucky State Reformatory and the Kentucky State Penitentiary in an attempt to curtail the use and dissemination of illicit drugs in those institutions. Urine specimens are periodically collected from certain inmates and tested for the presence of drugs with the Syva Emit drug detection system. If the EMIT test indicates that an inmate has drugs in his system, then that inmate is charged with a violation of Category IV, Item 2 of the Correction Department’s Infraction and Penalty Code, “being under the influence of drugs or intoxicants,” and is subject to a maximum punishment of 45 days in disciplinary segregation and a loss of 60 days good time credits. This action challenges the use of the EMIT test as the sole evidence of an individual’s use of contraband drugs.

The action originated as a motion for contempt under the Consent Decree entered in Kendrick v. Bland, 541 F.Supp. 21 (1981). It was consolidated with an individual action filed by James Carl Higgs and other inmates at Kentucky State Penitentiary. Civ. Action No. 83-0265-P (J). All parties demanded a preliminary injunction to enjoin the use of the Syva Emit test to punish inmates for the use of drugs. They contend that that practice constitutes a violation of the constitutional guarantee against loss of liberty without due process of law.

The court referred the action to United States Magistrate W. David King for his report and recommendation. He conducted an evidentiary hearing on the motion for preliminary injunction on May 10, 1984, in Louisville, Kentucky. The hearing continued on May 16 and 17, 1984 at the Kentucky State Penitentiary in Eddyville, Kentucky. On July 30, 1984, the magistrate entered his report on the preliminary injunction. He recommended that the court issue a preliminary injunction providing that:

1. The Syva Emit drug detection system not be used as the sole indication of intoxication in a ‘Category 4, Item 2 Being under the influence of drugs, intoxicants’ proceeding before the adjustment committee____
2. In any instance in which the results of the Syva Emit urine screen is used to support an incident report charging an inmate with being under the influence of drugs or intoxicants; the Department of Corrections shall: (a) implement reasonable procedures in the urine donor’s presence to assure the integrity and preserve the freshness of the sample; (b) implement reasonable procedures to record the chain of custody for the urine sample from the time the sample is taken until it returns to the inmate’s institution after examination; (c) allow the charged inmate to cross-examine the laboratory technician concerning the validity of the test results either in person or through written interrogatories.

The court remanded the matter to the magistrate on October 1, 1984, for more detailed findings. The second, supplemental report, entered on February 22, 1985, recommended that the same injunction be issued and included additional factual findings. This court, on May 2, 1985, accepted the magistrate’s recommendation and granted plaintiff’s motion for a preliminary injunction. It enjoined defendants from taking any disciplinary action against plaintiffs based solely upon unconfirmed results of Syva Emit drug detection tests, and stated that a formal finding of fact and conclusion of law would follow its order entering the preliminary injunction. These are those findings and conclusions as promised by the court.

FINDINGS OF FACT

The Test Itself

The urinalysis test employed by Corrections is called the enzyme multiplied immunoassay technique (EMIT). It works on a biochemical principle. An antibody which reacts to drugs by binding is added to the urine. The reactions which result produce a substance which can be compared to known values through a device called a photometer which indicates whether drugs are present in the urine. Different combinations of regents are used to produce the substance depending upon which drug is sought. The test measures a by-product of the reaction of the urine. Record of Evidentiary Hearing, May 10, 1984, at 49-52. Thus, the EMIT test does not measure the amount of drugs in the urine directly, but measures instead the reaction of an enzyme to the drug. Id. at 62.

Plaintiff’s expert, Thomas A. Regent, Chief toxicologist for Erie County in Buffalo, New York, testified that the EMIT test, without use of a confirmation test, is not sufficiently reliable to be used to identify drugs if punitive action will result from their identification. Id. at 61. He gave several reasons for his opinion. Since the EMIT test does not measure the drug itself, positive tests should be confirmed with a second test to ascertain that urine does indeed contain the drug and that the enzyme reaction was not caused by some other element. Id. at 62. The confirmation test could be gas chromatography or mass spectrometry. Id. at 69. Moreover, various elements in high quantity may cause cross-reactions, the binding of an antibody to legal compounds with a structure similar to illegal compounds. Cross-reactions may create falsely positive results. Drugs such as aspirin, darvon, amitriptylene, methaqualone, and valium are drugs which could cause cross-reactions. Id. at 83.

The primary advantages of the EMIT test are that it is quick, it is relatively inexpensive, and it can be operated by people who are not scientific experts. It will also detect drugs in very low concentrations. Id. at 61,163. Standing alone, without a confirmation test, it is sufficiently reliable for conducting a statistical survey of a population group to discover whether, for example, teenagers in Ohio smoke marijuana, because absolute accuracy is not necessary. However, “when one is dealing with one’s employment, someone’s health, someone’s goodwill, mental state and so on, any punitive action which takes place, ... confirmation is necessary.” Id.

The literature published by the Syva company which produces and markets the EMIT test recommends back-up test of positive tests. A March 1983 booklet published by the manufacturers of the test, entitled Frequently Asked Questions About Syva and Drug Abuse Testing provides, “[i]t is good scientific practice to confirm a positive result from any test method in cases where a person’s rights, privileges, treatment or employment is at stake.” Plaintiffs’ Exhibit 2 at 6. Defendant’s own expert, Ernest Slightom, testified that he was aware of no changes in the scientific procedures for administering the test that would cause it to be more accurate than it was in March, 1983. Id. at 170. He also conceded that the September 16, 1983 issue of the Morbidity and Mortality Weekly Report states that “[rjegardless of which assay kit is used, [EMIT] test results should be interpreted by qualified personnel and positive results should be verified so that there is a very limited possibility of false positive results.” Id. at 173.

Slightom testified that the EMIT test is reliable without a back-up test. However, his disagreement with Rejent was one only of degree. He admitted that in March, 1984, he testified at another hearing that the EMIT test alone is not reliable, that any single test should be backed-up with a second test. Id. at 180. This inconsistency is explained by the fact that Slightom believes that a positive test should be confirmed if the individual tested is not incarcerated. However, confirmation is not necessary if the individual is in prison or on parole. Id. at 130-131.

The Procedure

At Kentucky State Reformatory, inmates who give urine samples are chosen in several ways. A totally random sample is prepared by, for example, choosing every fourth inmate on a list. Also, inmates suspected of drug use are often selected by unit managers or shift captains. Specific types of inmates are routinely tested: for example, inmates returning from furlough, inmates residing in a housing unit where drug use is suspected, and inmates who have submitted a positive test in the past. Id. at 218-19. Kentucky State Penitentiary uses a similar method to select inmates. It keeps a drug abuse list of individuals who are “high risk drug offenders” by their background or by their institutional use of drugs. Id. at 277. In addition, the senior captain may choose a random group of inmates to be tested. Id.

The procedure used to collect urine specimens from the chosen inmates is substantially the same at the two institutions. The inmates receive a specimen cup labeled with their name and number. They are observed while giving their specimens by a correctional officer. The sample is covered and sealed with evidence tape and the identification is checked, all in the inmates’ presence. The appropriate chain-of-custody forms are then filled out and the sample is logged. At Kentucky State Reformatory the samples are placed in a locked metal container in the captain’s office and immediately sent to Luther Luckett Correctional Complex where they are locked in a refrigerator for later testing. Id., at 220. At Kentucky State Penitentiary, the samples are stored in a styrofoam transport box inside of a refrigerator in the laboratory. The laboratory is forbidden to inmates unless they are doing janitorial work, and then they are directly supervised while they are there. Id. at 860.

If an inmate at either prison has a positive urine test, then he is charged with violation of Category IV, Item 2, use of drugs or other intoxicants. The positive test is alone sufficient to convict an inmate of the infraction. No other evidence is necessary. Punishment at Kentucky State Penitentiary generally entails 45 days segregation time and 60 days loss of good time credits. Id. at 282-83. In addition, the effects of a conviction might include: denial of parole, loss of meritorious housing, denial of furlough, and denial of transfer to a less secure institution. Punishment of Reformatory inmates is of like kind, except that they are less likely to receive segregation time.

According to formal guidelines at both institutions, the positive test and chain-of-custody form should be attached to the misconduct report issued to the charged inmate. Although the Consent Decree requires that inmates be allowed to call any witness whose appearance would not be a threat to the security of the institution, no inmate has ever been allowed to call at the adjustment committee hearing the lab technician who conducts the urinalysis tests to determine whether the test was conducted correctly. Id. at 234-35. No reason is given for the denial as is required by the Consent Decree.

CONCLUSIONS OF LAW

In considering whether a preliminary injunction should be issued, a trial court must consider the following four factors:

1. Whether the plaintiffs have shown a strong or substantial likelihood of success on the merits;
2. Whether the plaintiffs have shown irreparable injury;
3. Whether the issuance of a preliminary injunction would cause substantial harm to others; and,
4. Whether the public interest would be served by issuing a preliminary injunction.

Mason County Medical Association v. Knebel, 563 F.2d 256, 261 (6th Cir.1977).

Likelihood of Success on the Merits

A disciplinary proceeding which may result in disciplinary segregation and loss of good time must comply with fundamental fairness. Incarceration in a penal institution naturally results in .the necessary withdrawal or limitation of many privileges and rights. Pell v. Procunier, 417 U.S. 817, 94 S.Ct. 2800, 41 L.Ed.2d 495. Nevertheless, inmates are not stripped of all of their constitutional rights. They retain the right to minimum fundamental fairness and diminished due process rights. Wolff v. McDonnell, 418 U.S. 539, 94 S.Ct. 2963, 41 L.Ed.2d 935 (1974). A part of the due process guarantee is that an individual not suffer punitive action as a result of an inaccurate scientific procedure. See United States v. Brown, 557 F.2d 541 (6th Cir.1977).

At least two courts have held that the chance of false positives in unconfirmed EMIT test results and the concomitant loss of liberty violates minimum fundamental fairness and the prisoners’ due process rights. Johnson v. Walton, unpublished opinion, Docket No. 561-84 Rm (Rutland Superior Court Vermont Feb. 14, 1985); Kane v. Fair, 33 Cr.L. 2492 (Mass.Superior Court, August 5, 1983). In Johnson, the Vermont court found that the authorities presented to it agreed that the EMIT test was not scientifically reliable when used alone, and that another test, mass-spectroscopy, was recognized by all authorities as 100% reliable. The court noted that it did not understand why the Commissioner of Corrections did not use mass-spectroscopy to confirm all positive tests because although that procedure was more expensive, methods should have been available for the inmates to reimburse Corrections. It did not, however, require the defendants to make mass-spectroscopy available. Instead, it found that when EMIT is confirmed by thin-layer chromotography, a positive result indicates presence .of the drug with scientific certainty beyond a reasonable doubt. Thus, it required confirmation by either mass spectroscopy or thin-layer chromotography.

The Massachusetts court in Kane v. Fair, supra, made similar findings. It concluded that the state failed to show “that knowledgeable scientists would accept an unsubstantiated EMIT-positive result as evidence of drug use.” Therefore, considering the punitive measures that flowed from a positive test and the adverse impact such a test could have on an inmate’s chance for parole, the court held that “[n]o positive EMIT test result may be introduced as evidence in any disciplinary hearing unless accompanied by evidence that the positive result was confirmed by an alternative method of analysis.”

The evidence presented to this court is similar to that which confronted the Massachusetts and Vermont courts. The plaintiffs’ expert was emphatically of the opinion that the EMIT test, standing alone, is not sufficiently reliable to show the presence of drugs if the result was a loss of liberty. Although defendant’s expert testified in this hearing to the contrary, he too, in a different hearing only a few months before, stated that the test should be confirmed. Even the manufacturer of the test recommends that positive tests be confirmed by an alternate method of analysis. Moreover, both experts agreed that legal drugs in high doses could interfere with the test and create positive results when there are no drugs in the urine.

The court recognizes that other courts have accepted the EMIT test as sufficiently reliable to stand as the only evidence in a parole revocation hearing, Smith v. State, 250 Ga. 438, 298 S.E.2d 482 (1983), and in a prison disciplinary hearing. Jensen v. Lick, 589 F.Supp. 35 (D.N.D.1984). Two other courts denied preliminary injunctions to enjoin use of the test, but have not yet tried the merits of the cases. Storms v. Coughlin, 600 F.Supp. 1214 (S.D.N.Y. 1984); Peranzo v. Coughlin, 608 F.Supp. 1504 (S.D.N.Y.1985). However, in Storms the court refused to grant the preliminary injunction because it found that plaintiffs/prisoners’ motion was premature because none of them had yet been disciplined solely on the basis of a positive test result. Storms, 600 F.Supp. at 1225. That is not the case here. The court heard a substantial amount of testimony from plaintiffs who have been disciplined solely on the basis of a positive EMIT test. Peranzo can also be distinguished from the present action. There the New York Corrections officials routinely tested each urine specimen with two EMIT tests. This decreased the risk of false-positive test results. In the present case, the lab technician at Luther Luckett does not confirm the positive tests with any second test.

Therefore, the court finds that the case law and the expert evidence at the hearing indicates a probability of success on the merits. Additionally, the court notes that the testimony included a substantial amount of evidence from inmates that the procedures provided for collecting and preserving the urine specimens were sometimes not followed, and that other inmates had access to the specimens which encouraged tampering with the samples. Thus, the danger of a “clean” inmate receiving disciplinary action for a “dirty sampie” is greatly increased, especially since the inmates cannot call the lab technician to testify, and often cannot call other actors in the chain of custody.

Irreparable Injury

The second factor to be considered by the court is whether plaintiffs have shown irreparable injury. Clearly, plaintiffs have suffered and continue to suffer damages from use of the test. Good time credits are forfeited. Inmates are forced to endure disciplinary segregation. Transfer restrictions, loss of privileged housing, and limitations on parole all result from a positive EMIT test. All of these punitive actions stem from the allegedly unconstitutional use of the EMIT test alone to convict inmates of a Code violation, and would not be compensable with monetary damages. When an alleged deprivation of a constitutional right is involved, most courts hold that no further showing of irreparable injury is necessary. See e.g., Planned Parenthood v. Citizens for Community Action, 558. F.2d 861, 867 (8th Cir.1977); Zepeda v. INS, 753 F.2d 719 (9th Cir.1983); Doe v. Mundy, 514 F.2d 1179 (7th Cir.1975). Therefore, the court finds that plaintiffs would suffer irreparable injury if the preliminary injunction was not entered.

Substantial Harm

Defendants argue that issuance of a preliminary injunction will result in substantial harm to defendants. The court does not agree. First, defendants are not prohibited from testing for drugs with the EMIT test. They need only confirm the test with other evidence—either another alternate method test, testimony that the accused was seen with contraband, testimony of symptoms of a person who has used contraband, evidence that drugs were found in his cell, or other demonstrable or circumstantial evidence that the accused inmate used the drug.

Second, the institutions have other methods of combating drug use and trafficking. Warden Rees testified that there is a drug dog which smells out marijuana. Periodically, visitors’ vehicles and the visitor’s themselves are searched. Corrections officials check in-coming mail and packages for contraband, inmates and their cells are searched, and the financial activities of the inmates are monitored. “It is a multi-faceted approach of which the urinalysis test is only a part.” Record 241.

Finally, defendants argue that the cost of confirmation tests would in itself create substantial harm. However, the monetary loss would not be great enough to outweigh the possible constitutional violations.

Service of the Public Interest

In any case where there is a strong likelihood that citizens are being deprived of their constitutional rights, it is presumed that the public interest is served by protecting those rights. Since there are alternative methods of discouraging drugs in the institution and since the defendants are not precluded from using the EMIT test if it is confirmed by other evidence, the court finds that granting the preliminary injunction would not be detrimental to the public interest.

Having considered the preceding four factors, the court determines that it is in the interest of justice to grant a preliminary injunction pending a determination of the issue on its merits. The defendants argue that they have changed the language of a Category IV, Item 2 offense from “being under the influence of drugs” to the “use of drugs;” thus, the injunction is no longer necessary. The court does not agree. The change in language does not affect the reliability of the test or the adequacy of the collection procedures—the reasons for the injunction. The court’s decision is based upon the use of the test as the sole evidence presented in a punitive action proceeding whether the proceeding is for an alleged violation of “intoxication” or “use of drugs.”

Corrections also maintains that its procedures for collection and preservation of the urine samples are adequate. The court agrees that Corrections’ procedures, in theory, protect the integrity of the sample. However, there was sufficient evidence presented at the hearing of irregularities in the procedure to warrant an injunction requiring defendants to implement practices which prevent such irregularities. Therefore, the court rejects defendant’s objections and shall maintain the preliminary injunction previously entered.


author: O’NEILL, District Judge.

text:
    Denise JACKSON v. J.C. PENNEY COMPANY, INC.
    No. 84-4890.
    United States District Court, E.D. Pennsylvania.
    June 27, 1985.
    Andrew G. Gay, Philadelphia, Pa., for plaintiff.
    Robert St. Leger Goggin, Philadelphia, Pa., for defendant.
   MEMORANDUM

O’NEILL, District Judge.

Plaintiff, an at-will employee of defendant, J.C. Penney Company, Inc., was suspected of stealing merchandise from defendant’s store and was discharged. She then filed this action charging wrongful discharge, slander, false imprisonment and, intentional infliction of emotional distress. Defendant has moved for summary judgment.

Summary judgment is appropriate when there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Any doubts as to the existence of genuine issues of fact must be resolved against the moving party. Moreover, all inferences to be drawn from the underlying facts presented to the court are viewed in the light most favorable to the party opposing the motion. Hollinger v. Wagner Mining Equipment Corp., 667 F.2d 402, 405 (3d Cir.1981).

The facts that give rise to the present action occurred on January 29, 1984. Plaintiff was entitled to purchase merchandise at a 15% employee discount. On her lunch break, plaintiff made purchases in the girl’s department. When she returned to her work station, pursuant to store policy, her shopping bag was inspected by a co-worker and it was discovered that the bag contained 17 items; the attached sales receipt showed payment for only 16. Plaintiff was asked to go to the office of the personnel manager, Charles McGowan, where in the presence of two store security guards she was told that she was suspected of theft and was terminated. She was then led out of the store by one of the guards.

Count I asserts a claim for wrongful discharge. The general rule in Pennsylvania is that an employee has no cause of action for wrongful discharge where there has been an at-will employment relationship. Reuther v. Fowler & Williams, Inc., 255 Pa.Super. 28, 31, 386 A.2d 119, 120 (1978). Therefore, absent a contractual or statutory right, either party to an employment relationship may terminate it at any time without liability.

An exception to this general rule has been established after Geary v. U.S. Steel Corp., 456 Pa. 171, 319 A.2d 174 (1974) recognized that:

“there are areas of an employee’s life in which his employer has no legitimate interest. An intrusion into one of these areas by virtue of the employer’s power of discharge might plausibly give rise to a cause of action particularly where some recognized facet of public policy is threatened. Id. at 184, 319 A.2d at 180.”

This language has been interpreted to create a cause of action where there is a clear violation of an established public policy. See, e.g., Perks v. Firestone Tire & Rubber Co., 611 F.2d 1363 (3d Cir.1979) (termination following employee’s refusal to submit to polygraph examination); Rettinger v. American Can Co., 115 LRRM 3011 (M.D.Pa.1984) (dismissal in retaliation for employee’s filing of a workmen compensa-tion claim); Hunter v. Port Authority of Allegheny County, 277 Pa.Super. 4, 419 A.2d 631 (1980) (public employer could not refuse employment on basis of a prior conviction as to which a pardon had been granted unless conviction was reasonably related to job performance); Reuther v. Fowler & Williams, Inc., supra, (employee terminated for serving on jury duty).

In Geary it was specifically held that: “where the complaint itself discloses a plausible and legitimate reason for terminating an at-will employment relationship and no clear mandate of public policy is violated thereby, an employee at will has no right of action against his employer for wrongful discharge.” 456 Pa. at 184, 319 A.2d at 180.

Plaintiff has failed to allege any specific public policy that is violated by her dismissal and none is readily perceived. If plaintiff was treated unfairly by defendant, that, without more, would not give rise to an action for wrongful discharge. See, Rogers v. International Business Machines Corp., 500 F.Supp. 867 (W.D.Pa. 1980); Cisco v. United Parcel Services, Inc., 328 Pa.Super. 300, 476 A.2d 1340 (1984).

Furthermore, even if plaintiff could show a violation of some public policy, it appears that defendant had a “plausible and legitimate reason” for termination. The plaintiff was suspected of theft after a routine investigation by defendant. This reason is not less plausible or legitimate because plaintiff possibly was innocent of any wrongdoing. In Cisco v. United Parcel Services, Inc., supra, the plaintiff while working was involved in an incident that resulted in criminal charges of theft against him. While those charges were pending and before his acquittal he was forced to resign by his employer. The court held that the criminal charges provided the employer with a plausible and legitimate reason for terminating his employment, and that no public policy was violated thereby.

In Count 2 plaintiff claims to have been slandered by her termination. A communication is defamatory when it tends to harm the reputation of another so as to lower him in the estimation of the community. Cosgrove Studio and Camera Shop, Inc. v. Pane, 408 Pa. 314, 182 A.2d 751 (1962). However, one is not liable for a publication of defamatory matter made on a conditionally privileged occasion, absent proof of abuse of that privilege. Baird v. Dunn & Bradstreet, Inc., 446 Pa. 226, 285 A.2d 166 (1971); Beckman v. Dunn, 276 Pa.Super. 527, 419 A.2d 583 (1980).

A communication is privileged when it is made on a proper occasion, from a proper motive, in a proper manner and based upon a reasonable cause. Baird v. Dunn & Bradstreet, supra. Furthermore, the privilege exists when the circumstances lead any one of several persons having a common interest in a particular matter to believe that another sharing such common interest is entitled to know a given fact. Rankin v. Phillippe, 206 Pa.Super. 27, 211 A.2d 56 (1965).

The defamatory communication in this case is the accusation by Mr. McGowan that plaintiff had “conspired to steal” a nightgown. When this statement was made only plaintiff, McGowan and two security guards were present. Plaintiff claims that there was no reason for the security personnel to participate in the proceeding. However, one security guard was the person responsible for the initial investigation that discovered the unpaid for item, while the other escorted plaintiff out of the store. This was a privileged occasion since all present shared a common interest. See, e.g., Harbridge v. Greyhound Lines, Inc., 294 F.Supp. 1059, 1064 (E.D.Pa.1969).

Abuse of the privilege may be found when the publication is actuated by malice or negligence, or is made for a purpose other than that for which the privilege is given, or to a person not needed to accomplish the purpose of the privilege, or contains matter not necessary to accomplish the purpose of the privilege. Beckman v. Dunn, 276 Pa.Super. at 537, 419 A.2d at 588. There are no such facts alleged.

Plaintiff also asserts that it was known throughout the store that she was being discharged for theft. However, she points to no communication published by the defendant that resulted in this common knowledge. In order for liability to exist, there must be a publication of defamatory matter. Harbridge v. Greyhound Lines, Inc., 294 F.Supp. at 1064.

Count 3 asserts a claim for false imprisonment, but plaintiff admits that the facts of this case do not support this claim.

Count 4 asserts a claim for intentional infliction of emotional distress. Pennsylvania recognizes this cause of action where one intentionally causes severe emotional distress by conduct that goes beyond all reasonable bounds of decency. Forster v. Manchester, 410 Pa. 192, 189 A.2d 147 (1963). The conduct complained of must be so extreme and outrageous so as to be regarded as atrocious, and utterly intolerable in a civilized community. Rose v. Wissinger, 294 Pa.Super. 265, 439 A.2d 1193 (1982); Jones v. Nissenbaum, Rudolph & Seidner, 244 Pa.Super. 377, 368 A.2d 770 (1976). There are four elements necessary to this action: 1) the conduct must be extreme and outrageous; 2) the conduct must be intentional or reckless; 3) it must cause emotional distress; and 4) the distress must be severe. Chuy v. Philadelphia Eagles Football Club, 595 F.2d 1265, 1273 (3d Cir.1979).

Plaintiff claims she was falsely charged with theft, and was humiliated, embarrassed and mocked in front of her fellow employees at the time of her discharge. It is reasonable to expect that plaintiff would feel embarrassed under the circumstances. However, no reasonable person would consider defendant’s conduct outrageous. The termination was based on the discovery that plaintiff had an item in her shopping bag that had not been paid for. One permissible inference is that plaintiff was responsible for the item being in her bag. The conduct attributed to defendant in this complaint was not so extreme and outrageous to support an action for intentional infliction of emotional distress. See, Chuy v. Philadelphia Eagles Football Club, supra (team physician tells reporter that player suffered from fatal disease, knowing it to be false); Shaffer v. National Can Corp., 565 F.Supp. 909 (E.D.Pa.1983) (retaliation for refusal of sexual advances). Furthermore, as in the Forster case, supra, there is no showing that defendant intended to cause emotional distress to plaintiff. The evidence shows that defendant had a legitimate basis for the termination, and plaintiff has asserted no facts showing another motive to cause her harm. As alleged, defendant’s conduct did not cross the threshold of decency and was not utterly intolerable in a civilized society.

For the foregoing reasons, defendant’s motion for summary judgment will be granted.

      . Plaintiff asserts that there was some hidden reason for the termination but the record discloses no facts that would substantiate this claim.


author: HAIGHT, District Judge:

text:
    In the Matter of the Arbitration between COMPANIA PORTORAFTI COMMERCIALE, S.A., as Owner of the M/V CAPTAIN GREGOS, Petitioner, and KAISER INTERNATIONAL CORPORATION, as Charterer, Respondent.
    No. 85 Civ. 3920-CSH.
    United States District Court, S.D. New York.
    June 28, 1985.
    Healy & Baillie, New York City (Jack A. Greenbaum, New York City, of counsel), for petitioner.
    Nourse & Bowles, New York City (John B. Conway and Shaun F. Carroll, New York City, of counsel), for respondent.
   MEMORANDUM OPINION AND ORDER

HAIGHT, District Judge:

These are cross-motions to compel arbitration and for related relief. Subject matter jurisdiction is founded upon the Federal Arbitration Act, 9 U.S.C. § 1 et seq.

Facts

At the pertinent times petitioner Compania Portorafti Commerciale, S.A. owned the motor vessel CAPTAIN GREGOS. Petitioner chartered the vessel for a voyage to respondent Kaiser International Corporation. The written charter party was dated November 19, 1984. Clause 24 provided for arbitration of disputes. It reads in pertinent part as follows:

“24. ARBITRATION. Any and all differences and disputes of whatsoever nature arising out of this Charter shall be put to arbitration in the City of New York or in the City of London whichever place is specified in Part I of this charter pursuant to the laws relating to arbitration there in force, before a board of three persons, consisting of one arbitrator to be appointed by the Owner, one by the Charterer, and one by the two so chosen. The decision of any two of the three on any point or points shall be final. Either party hereto may call for such arbitration by service upon any officer of the other, whereever he may be found, of a written notice specifying the name and address of the arbitrator chosen by the first moving party and a brief description of the disputes or differences which such party desires to put to arbitration. If the other party shall not, by notice served upon an officer of the first moving party within twenty days of the service of such first notice, appoint its arbitrator to arbitrate the dispute or differences specified, then the first moving party shall have the right without further notice to appoint a second arbitrator, who shall be a disinterested person with precisely the same force and effect as if said second arbitrator has been appointed by the other party____”

In the event of a party’s failing to appoint its arbitrator within the 20-day period specified, so that the demanding party also appointed the second arbitrator, those two arbitrators select the third arbitrator to complete the arbitration panel.

The chartered voyage was completed in December, 1984. Petitioner asserts a claim for demurrage. Respondent disputes the claim and asserts a balance owing to it under the charter.

The parties’ representatives engaged in a dialogue hoping to resolve the disputes. Certain of the pertinent communications appear in the motion papers. For example, on March 15, 1985 petitioner’s representative sent to Kaiser supporting documents on the demurrage claim and concluded on this relatively amicable note:

“On behalf of Owner, we would certainly appreciate your usual cooperation in placing this matter on the top of the pile since the amount involved is considerable.”

Petitioner’s representative sent a follow-up telex to Kaiser on March 20, still looking towards amicable resolution, but now suggesting that respondent remit $140,000 “as good will gesture with understanding that balance claimed will be processed within reasonable period of say 10 days.”

Rather than making such a payment, respondent apparently asserted additional claims against petitioner. That provoked a telex to respondent on behalf of petitioner dated March 29 which read in pertinent part:

“PURSUANT TO PROVISIONS OF C/P CLAUSE 24 THIS TLX WILL SERVE AS OWNS FORMAL DEMAND TO COMMENCE IMMEDIATE ARBITRATION NEW YORK FOR ALL CLAIMS ASSERTED UNDER CHARTER INCLUDING CHTRS ALLEGED CARGO LOSS/CONTAMINATION CLAIMS AT CLOGHAN POINT/ST EUSTATIUS. “OWNER HAS APPOINTED MR HAMMOND L CEDERHOLM, C/O JAMES W ELWELL AND CO INC, SUITE 1557, ONE WORLD TRADE CENTER, NEW YORK NY 10048 (TEL 212-432-0380) AS ARBITRATOR. OWNER DEMANDS THAT CHARTERER APPOINT ARBITRATOR WITHIN 20 DAYS FROM DATE OF THIS TLX.”

This demand for arbitration required, under the provisions of Clause 24, that respondent name its arbitrator on or before April 18. However, it would appear that a dialogue looking towards settlement continued between the parties. In any event, on April 19, 1985 respondent’s representative telexed to petitioner’s representative:

“IN CONSIDERATION OF OWNERS EXTENDING THE DEADLINE FOR CHARTERERS TO APPOINT AN ARBITRATOR UNTIL MAY 9, 1985, IT IS HEREBY AGREED AND UNDERSTOOD THAT KAISER WILL WIRE TRANSFER THE SUM OF $70,000 (SEVENTY-THOUSAND DOLLARS) ON MONDAY, APRIL 22, 1985 TO OWNERS’ ACCOUNT. THIS TRANSFER IS CONSIDERED A GOOD FAITH PAYMENT WITHOUT PREJUDICE TO CHARTERERS’ RIGHT TO DISPUTE OWNERS’ CLAIM FOR BUNKERS/DEMURRAGE IN THE AMOUNT OF $153,749.24 (ONE HUNDRED FIFTY THREE THOUSAND, SEVEN HUNDRED FORTY-NINE DOLLARS AND TWENTY-FOUR GENTS) IN NEW YORK ARBITRATION. IF ALL OUTSTANDING CLAIMS ARE NOT AMICABLY SETTLED BY MAY 9, 1985, CHARTERERS WILL IMMEDIATELY UNDERTAKE TO APPOINT AN ARIBTRATOR [sic], FAILING WHICH OWNERS MAY EXERCISE THEIR RIGHT UNDER THE CHARTER PARTY.”

Because respondent’s officer in charge of the matter was out of town at the time, respondent failed to appoint its arbitrator on May 9. On May 10 petitioner, invoking the quoted provision of the arbitration clause, appointed Mr. Lloyd C. Nelson as the second arbitrator. Mr. Cederholm, the arbitrator originally appointed by petitioner, and Mr. Nelson have selected Mr. Herbert Sondheim as the third arbitrator.

May 10, 1985 was a Friday. On the next business day, Monday, May 13, respondent’s New York counsel advised petitioner’s counsel that respondent appointed Mr. Jack Berg as respondent’s arbitrator. Respondent suggested that petitioner agree to the withdrawal of Mr. Nelson as the second arbitrator, and the appointment of a third arbitrator by Mr. Cederholm and Mr. Berg. Petitioner declined the suggestion, and now petitions for an order directing that arbitration go forward before the Cederholm/Nelson/Sondheim panel. Respondent cross-petitions for an order compelling arbitration before a panel comprised of Messrs. Cederholm, Berg, and a third arbitrator to be selected by them; and for an order enjoining proceedings before the Cederholm/Nelson/Sondheim panel.

Respondent also suggests the possible necessity of an evidentiary hearing under § 4 of the Act. In the view I take of the case, no hearing is necessary. For the reasons which follow, petitioner’s petition is denied and respondent’s cross-petition is granted.

Discussion

The worst that can be said of respondent is that it sought to appoint its arbitrator, Mr. Berg, three calendar days and. one business day after the May 9 deadline contained in the supplemental agreement of the parties evidenced by the telex of April 19. It further appears that the failure to make a timely appointment was inadvertent, and not for the purpose of delay or harassment. Respondent says that this is so, and there is no evidence upon which I could base a contrary inference.

There is substantial authority for the proposition that so minor a delay, uncomplicated by indications of bad faith, does not in equity deprive a party to an arbitration clause of its contraeted-for right to appoint an arbitrator of its choosing. Texas Eastern Transmission Corp. v. R.L. Barnard, 285 F.2d 536 (6th Cir.1960); Lobo & Co. v. Plymouth Navigation Co. of Monrovia, 187 F.Supp. 859 (S.D.N.Y.1960); In re Utility Oil Corp., 10 F.Supp. 678 (S.D.N.Y. 1934). These cases hold that minimal delays in appointing an arbitrator do not deprive the defaulting party of its right of appointment unless the contract makes time of the essence. The simple recitation of the time within which the appointment must be made is not sufficient, under these cases, to achieve that characterization.

Where a party couples its failure to make a timely appointment with dilatory litigation involving “charges so futile that they may reasonably appear to the court only a device for getting delay,” Orion Shipping & Trading Co., Inc. v. Eastern States Petroleum Corporation of Panama, S.A., 284 F.2d 419, 421 (2d Cir.1960), the appointive right may be lost. This is the sole case relied upon by petitioner in the case at bar. But it is not apposite on the facts.

The case closest on the facts is Lobo & Co., supra, not cited by either party. The arbitration clause was the same. A demur-rage claim arose in respect of a chartered vessel. The owner sent charterer a letter demanding arbitration and appointing its arbitrator. However, settlement discussions continued, and before the charterer’s time for appointing its arbitrator had elapsed, charterer sent to the shipowner a letter dated July 13, 1960 which read as follows:

“This is to confirm our telephone conversation of the other day whereby it was mutually agreed to suspend for two weeks arbitration proceedings in connection with a dispute arising from subject Charter Party while we are investigating the matter.”

187 F.Supp. at 859-60.

Of this letter, Judge Dawson said for this Court:

“As has been pointed out, if there had been no extension of time petitioner would have had to appoint its arbitrator within twenty days after June 23, 1960. However, admittedly there was an extension of time. The extension is susceptible of two constructions; one construction would be that the extension was an extension of time for the appointment of an arbitrator; the other would be that it was an extension of time until July 27th of all matters in the arbitration proceedings, thereby giving petitioner twenty days from July 27th to appoint an arbitrator.”

Id. at 860.

Charterer appointed its arbitrator on July 28, 1960. The shipowner rejected the appointment as untimely under the arbitration clause, and undertook to appoint a second arbitrator. Charterer filed a petition to compel arbitration before a panel which included its appointee. Judge Dawson, relying upon this Court’s prior opinion in In re Utility Oil Corp., supra, granted the petition. He stated:

“It was admitted on the argument of the motion that if there was any delay in petitioner’s naming its arbitrator, it was a delay of 24 hours, and that the most that can be claimed is that petitioner’s arbitrator should have been named on July 27th instead of July 28th. However, even this argument is open to question, because there is some doubt as to the terms of the extension agreement, i.e., whether the extension was one for the appointment of an arbitrator or the proceedings of arbitration. If it was the latter, petitioner was within its rights in appointing an arbitrator on July 28th. “Arbitration agreements are aimed at amicable determination of disputes with results which both parties will be willing to accept. Toward this end, it is desirable that the arbitration panel consist of arbitrators chosen by each of the parties. Where imbalance is unnecessarily effected the purpose and advantages of arbitration are defeated. To this end, and so far as possible, the panel should be one mutually acceptable. This determination should be made in advance to preclude subsequent useless and unnecessary litigation. Where a delay of one day in the appointment of an arbitrator has occurred in the case of parties who are in continual communication, such a delay is an immaterial variation of the terms of the contract and should not be permitted to upset the basic and original intent of the arbitration plan.”

Id. at 860-61.

I am in entire agreement with this rationale, and reach the same conclusion in the case at bar.

I appreciate that the agreement extending time in the case at bar (telex of April 19, 1985, quoted supra) is perhaps not susceptible of the differing constructions of the extension agreement before Judge Dawson in Lobo & Co. But the judge did not base his decision upon that distinction; his analysis makes it clear that, even assuming a one-day delay in appointing the charterer’s arbitrator, that failure did not in law or in equity rise to the level of depriving the charterer of its right to appoint an arbitrator.

I have also considered whether the telex of April 19, 1985 should be regarded as a mutual expression that the extended time of appointment of an arbitrator was of the essence of the contract. I do not consider that it should be so regarded, so as to deprive the present respondent of a traditionally recognized right. Unquestionably, the telex, while embodying an extention of the time within which respondent should appoint its arbitrator, specified a new date for appointment. However, under the cited cases, the printed charter party clause is insufficient to make time of the essence, and I reach the same conclusion with respect to the extension agreement, which seems to me indistinguishable in that regard from the agreement Judge Dawson considered in Lobo & Co.

Conclusion

For the foregoing reasons, petitioner’s petition to compel arbitration is denied and respondent’s cross-petition to compel arbitration is granted.

Arbitration of the disputes, arising out of the charter party before the panel comprised of Messrs. Cederholm, Nelson and Sondheim is permanently enjoined.

The Court is confident that Messrs. Cederholm and Berg will attend promptly to the selection of a third arbitrator, so that the panel may be completed and the disputes resolved.

This Court retains jurisdiction over any subsequent applications in the case that may arise.

In the interim, the Clerk of the Court is directed to place the case on the Suspense Calendar.

It is SO ORDERED.

      . I prefer not to dignify in text respondent’s collateral argument that Mr. Nelson should not be regarded as a "disinterested person," within the meaning of Clause 24 of the charter party, because he is a "shipowner’s man” and petitioner’s counsel frequently represent Mr. Nelson’s corporate employer. I construe "disinterested person” to mean an arbitrator free of such relationships or conflicts of interest which would disqualify him from acting as an arbitrator. Clearly Mr. Nelson suffers from no such impediments. Cf. International Produce, Inc. v. A/S Rosshavet, 638 F.2d 548 (2d Cir.), cert. denied, 451 U.S. 1017, 101 S.Ct. 3006, 69 L.Ed.2d 389 (1981). Mr. Nelson is, and for more years than he probably cares to acknowledge has been, a leading maritime arbitrator of this City. Had respondent forfeited the power to appoint its own arbitrator, there would be no basis in fact or in law to attack the propriety of petitioner’s appointment of Mr. Nelson as the second arbitrator. I append this footnote to make it crystal clear that the ground for decision is my conclusion that, on the facts of this case, respondent was entitled to appoint Mr. Berg at the time it did so.


author: GAGLIARDI, District Judge.

text:
    John B. MOLYNEUX, Plaintiff, v. ARTHUR GUINNESS AND SONS, P.L.C., Defendant.
    No. 83 Civ. 8265 (SDNY).
    United States District Court, S.D. New York.
    June 28, 1985.

      Skadden, Arps, Slate Meagher & Flom, New York City, N.Y., for plaintiff.
    Sonnenfeld, Busner & Weinstein, P.C., New York City, N.Y., for defendant.
   MEMORANDUM DECISION

GAGLIARDI, District Judge.

Plaintiff John B. Molyneux commenced this action seeking damages for severance pay which allegedly became due and was wrongfully withheld when defendant sold its interest in a wholly-owned subsidiary to an unrelated corporation. The complaint sets forth two causes of action—one for violation of the provisions of ERISA, 29 U.S.C. §§ 1001 et seq. and the other for breach of contract. Defendant Arthur Guinness and Sons, P.L.C. (“AGS”), has moved pursuant to Rule 12(b), Fed.R. Civ.P., to dismiss the complaint on the grounds that (1) plaintiff has failed to establish in personam jurisdiction under New York’s “long arm” statute and (2) the complaint fails to state a claim upon which relief can be granted. Both parties have submitted affidavits and legal memoranda addressing the pending motion.

Background

AGS is a British corporation with a number of wholly-owned subsidiaries in Britain and elsewhere. AGS does no direct business in New York. Certain of its subsidiaries, however, have done or transacted business within the state. Among those which apparently have transacted business in New York are Callard and Bowser, Nuttall Limited (“CBN”), at one time a wholly-owned subsidiary of AGS, and Callard and Bowser (USA), Inc. (“CB/USA”), at one time a subsidiary of Guinness-Harp Corporation (“Guinness-Harp”), itself a wholly-owned subsidiary of AGS through an entity called Guinness Overseas, Ltd. In 1982, AGS sold all of its holdings in CBN and CB/USA to Beatrice Foods (U.K.) Limited and Beatrice Foods Co. (jointly “Beatrice”).

Molyneux is a businessman who from 1957 until 1982 was directly employed by various AGS subsidiaries. In 1964, Molyneux relocated from Britain to the United States. Since that time, Molyneux’s work has been centered in the U.S. In 1978, under circumstances which are disputed, he moved from employment with Guinness-Harp to employment with CBN. Then, in 1980, he moved from CBN to CB/USA. He remained with CB/USA as its President through the time of the sale of AGS’s holdings in CBN and CB/USA to Beatrice. Molyneux’s position was unaffected by the sale; he continued to work for Beatrice.

The dispute in this case concerns an alleged policy (or contract) of AGS itself to pay severance benefits to employees of AGS and AGS subsidiaries when they are terminated for reasons beyond their control, benefits which are based on an employee’s total length of service with AGS and AGS subsidiaries. Molyneux claims that he is entitled to such benefits, as a matter of federal law under ERISA and as a matter of contract, because the sale of stock to Beatrice effectively concluded Molyneux’s association with AGS, and “triggered” the severance pay provisions. AGS claims that at the relevant times any severance pay policies were maintained not by AGS but by the subsidiaries themselves, that AGS exercised at most a general guidance over such policies, that divestiture or transfer of ownership would not trigger any severance pay policy, and that no payments have ever been made by AGS or AGS subsidiaries to an AGS subsidiary employee where the subsidiary has been divested and the employee has retained his job under the new ownership.

AGS was served with process by mail to its corporate operation in London, apparently pursuant to Rule 4 (i), Fed.R. Civ.P. Defendant contests personal jurisdiction, however, on the ground that AGS exercises insufficient control over its subsidiaries to justify application of New York’s “long arm” statute. AGS has not raised the question of subject matter jurisdiction. The complaint grounds federal jurisdiction on the provisions of 28 U.S.C. § 1331 (“federal question”) and 29 U.S.C. § 1132 (ERI-SA), and on the principle of pendent jurisdiction.

Based on the present record, the court does not find subject matter jurisdiction to decide the claims raised by the complaint. The complaint does not state a cause of action under ERISA. No reason appears why the court should exercise pendent jurisdiction over the contract claim. Accordingly, the complaint is dismissed without consideration of the issue of personal jurisdiction.

Discussion

I. Federal Question Jurisdiction

11,2] To maintain an action in federal court, the plaintiff must allege facts which, if taken as true, are sufficient to support federal jurisdiction over the claims. It is the duty of the court to consider the issue of subject matter jurisdiction, even if not raised by the parties.

In this case, plaintiff asserts that federal question jurisdiction exists based on the ERISA claim. Disputes concerning severance pay may, but do not necessarily, implicate ERISA and support federal jurisdiction. To establish federal jurisdiction, the complaint must allege such facts as will show the establishment or maintenance of a “plan, fund, or program” of the type covered by ERISA. See Donovan v. Dillingham, 688 F.2d 1367, 1369-70 (11th Cir. 1982) (en banc) (health insurance benefits).

The complaint places the conclusory label of “policy or plan” on prior payments of severance benefits by AGS, but does not state facts which would justify a court in concluding that a “plan, fund, or program” exists. Although one need not allege the existence of a formal written plan to establish federal question jurisdiction, the fact that in the past severance benefits may have been extended, or that there have been decisions to extend such benefits, is not sufficient to show establishment of a plan or program. See Donovan v. Dillingham, supra, 688 F.2d at 1373 (informal “plan” providing health benefits established where employer obtained group health insurance policy “to furnish specified insurance benefits” to class of employees). To show “establishment,” the surrounding circumstances must be such that “a reasonable person can ascertain the intended benefits, a class of beneficiaries, the source of financing, and procedures for receiving benefits.” Donovan v. Dillingham, supra, 688 F.2d at 1373; see also Roe v. General American Life Ins. Co., 712 F.2d 450 (10th Cir.1983); Blue Cross v. Peacock’s Apothecary, Inc., 567 F.Supp. 1258, 1267 (N.D.Ala.1983) (citing Donovan ); California Hosp. Assn. v. Henning, 569 F.Supp. 1544 (C.D.Cal.1983) (citing Donovan). In this case, the complaint alleges little more than that “plaintiff was aware of the company’s benefit plans,” that Molyneux was offered a choice of severance payment or transfer to CBN in 1978 when his position at Guinness-Harp became redundant, and that the possibility of a termination payment was mentioned in the letter agreement under which he accepted employment with CBN and was “not denied” when later raised with the managing director of CBN and a personnel director affiliated with AGS. Plaintiff nowhere alleges that AGS or its subsidiaries ever publicized such a policy to officers or employees, or that employees other than Molyneux were aware of such a practice. No allegations concern established procedures (written or unwritten), the employee group to be covered, or the method of financing or calculating benefits. Thus, there is nothing to suggest that AGS “established” a “plan.”

A second, and perhaps more important, flaw with the complaint is that even if it is assumed that there is a “plan, fund, or program,” it fails to allege facts which would allow the court to find that the plan or program is one covered by ERISA. Molyneux’s fundamental (and strenuously argued) position with respect to both the ER-ISA and the contract claims is that AGS was his employer for all purposes at all times from 1957 until the sale to Beatrice in 1982, because of the extent of AGS control over its subsidiaries. According to the complaint, AGS is a “foreign corporation duly organized and existing under the laws of the United Kingdom,” a “multi-national corporation, operating over fifty subsidiaries and associated companies throughout the world.” There is no dispute that AGS is based in Britain, not in the United States. Although it is not disputed that Molyneux resides in New York, it appears that he is a British subject. Nowhere in the complaint or in the lengthy affidavits before the court is there any suggestion that the severance pay “plan,” should it exist, covers even one U.S. citizen employed in the United States, or that a severance payment has ever been made by AGS to any alien in the United States. ERISA explicitly excludes from its coverage any employee benefit plan if “such plan is maintained outside of the United States primarily for the benefit of persons substantially all of whom are non-resident aliens.” 29 U.S.C. § 1003(b)(4). Thus, on the facts alleged, ERISA is irrelevant.

Under the facts alleged, then, the court sees no basis for asserting federal question jurisdiction.

II. Pendent Jurisdiction

ERISA preempts many contract claims under state law. See 29 U.S.6. § 1144. Assuming arguendo that plaintiff’s contract claim is not preempted, the only plausible basis for asserting jurisdiction over plaintiff’s claim is the doctrine of pendent jurisdiction. Where a complaint states a claim which raises a substantial federal question and the other claims arise from a “common nucleus of operative fact,” a federal court has the power to hear and determine all such claims. The exercise of such pendent jurisdiction, however, is a matter of discretion with the court. Among the factors a court is to consider are judicial economy, the character of the federal and non-federal claims, fairness to the witnesses, the law to be applied, and the possibility of jury confusion. See United Mine Workers of America v. Gibbs, 383 U.S. 715, 726-27, 86 S.Ct. 1130, 1139, 16 L.Ed.2d 218 (1966); Trustees of Ret. Ben. Plan, Etc. v. Equibank, N.A., 487 F.Supp. 58 (W.D.Pa.1980), appeal dismissed, 639 F.2d 776 (3d Cir.1980).

In this case, even if there were federal jurisdiction over the ERISA claim, the court would decline to exercise pendent jurisdiction. Not only is this a dispute between a British subject and a British corporation, but it also appears that the contract at issue is governed by British law, that the majority of witnesses and relevant records are in Britain, and that many of the allegedly significant events and decisions occurred in Britain.

III. Failure to State a Claim Under ER-ISA

To establish a claim for violation of fiduciary duties under ERISA, a plaintiff must show that the fiduciary sued acted in a manner which was arbitrary, fraudulent, or in bad faith. See, e.g., Sly v. P.R. Mallory, 712 F.2d 1209 (7th Cir.1983) (approved denial of severance benefits to employees offered continued employment with purchaser of corporate division, where written severance pay policy was “not a contract but rather an employee welfare plan under ERISA” and administrators of plan “acted in a rational and reasonable manner, in good faith, [and] within their discretion); Matthews v. Swift and Company, 465 F.2d 814, 821 (5th Cir.1972); Fentron Industries v. Nat. Shopmen Pension Fund, 674 F.2d 1300, 1307 (9th Cir.1982). Where a fiduciary’s good faith actions are rationally related to the purposes of the plan and do not violate any specific provision of ERISA, there is no violation of fiduciary duty. See Petrella v. N.L. Industries, Inc., 529 F.Supp. 1357 (D.N.J.1982); cf. Livernois v. Warner-Lambert Co., Inc., 723 F.2d 1148 (4th Cir.1983) (in action for breach of contract, whether sale of business as going concern constitutes termination entitling employees continuing work with new owner to severance benefits is a matter of contract interpretation).

The decision not to pay severance benefits to former employees who after divestiture of a corporate division continue their work under the new ownership, without more, is not itself arbitrary, fraudulent, or violative of fiduciary duties. See, e.g., Sly v. Mallory, supra, 712 F.2d at 1211 (“to award severance benefits under these facts would result in a windfall to the employees who retained their positions with the purchaser of the going concern, which was clearly not the intention or goal of ERISA”); Pinto v. Zenith Radio Corp., 480 F.Supp. 361 (N.D.Ill.1979), aff’d, 618 F.2d 110 (7th Cir.1980); cf. Calhoun v. Falstaff Brewing Corp., 478 F.Supp. 357 (E.D.Mo.1979) (summary judgment for defendant denied on claim for violation of fiduciary duty under ERISA where plaintiff alleged defendants amended the written severance plan “expressly to deny plaintiff his anticipated severance benefit” and “make employees ... ineligible, at a time when they were contemplating a large layoff of otherwise eligible employees”). Even when such a decision amounts to amendment rather than interpretation of an existing plan, no specific provision of ERISA is violated, since severance pay benefits are not subject to the participation, vesting, and funding requirements of ERI-SA. See 29 U.S.C. §§ 1051, 1081; see, e.g., Dhayer v. Weirton Steel Div. of Nat. Steel Corp., 571 F.Supp. 316, 330 (N.D.W.Va.), aff’d, 724 F.2d 406 (4th Cir.1983), cert. denied, — U.S. —, 104 S.Ct. 2387, 81 L.Ed.2d 345 (1984). Only where there is evidence of arbitrariness or bad faith in denying plaintiff benefits, as where an employer’s prior practice has been to award severance benefits in cases of divestiture or sale of a going concern, or to award benefits without regard to actual unemployment, have courts considered that a plaintiff might be entitled to recover. See, e.g., Blau v. DelMonte Corp., 748 F.2d 1348, 1353 (9th Cir.1984) (court reversed grant of summary judgment for defendant where specific formal plan was kept secret from ordinary employees, benefits were more available to officers than to employees, and provisions of ERISA were “flouted in a wholesale and flagrant manner”); Sly v. P.R. Mallory, supra, 712 F.2d at 1213 (complaint properly dismissed where employer’s practice was consistent, even though employee had been with employer since 1964 and benefits were to be based on length of service); Pinto v. Zenith Radio Corp., supra, 480 F.Supp. at 363-64; Petrella v. N.L. Industries, Inc., supra, 529 F.Supp. at 1362 (summary judgment for defendant denied where evidence suggested that vaguely worded policy had been applied to award severance benefits to all terminated employees, whether or not actually unemployed after termination); see also Calhoun v. Falstaff Brewing Corp., supra.

In this case the complaint does not allege, and plaintiff’s memorandum and affidavit do not suggest, that AGS or its subsidiaries previously have granted severance pay in cases of divestiture or sale, particularly where a former employee never became unemployed. Taken as true, the factual allegations are far from sufficient to show that AGS acted in a manner that was arbitrary, fraudulent, or in bad faith. Thus, it does not appear that the complaint states a claim under ERISA, even should Molyneux establish (1) that AGS should be considered to have been Molyneux’s employer, (2) that ERISA covers the alleged AGS practice, (3) that the practice is one which qualifies as a “plan, fund, or program,” and (4) that AGS is properly considered a fiduciary for the plan.

Conclusion

For the foregoing reasons, the complaint is dismissed for lack of subject matter jurisdiction and failure to state a claim under ERISA.

The clerk shall enter judgment.

So Ordered.

      . There is no assertion of diversity jurisdiction in this case. Molyneux apparently is a British subject; AGS is a British corporation.

      . The parties have devoted a great deal of attention in their motion papers to the facts underlying the dispute. Both sides have submitted affidavits and documentary evidence. For the purposes of this order, the material factual allegations of the complaint are taken as true. See Gardner v. Toilet Goods Assn., 387 U.S. 167, 172, 87 S.Ct. 1526, 1529, 18 L.Ed.2d 704 (1967). This does not mean, however, that the court accepts without question conclusory allegations in the complaint—naked assertions are insufficient to state a claim. Cf. Koch v. Yunich, 533 F.2d 80, 85 (2d Cir. 1976); Martin v. New York State Dept. of Mental Hygiene, 588 F.2d 371, 372 (2d Cir.1978) (actions under 42 U.S.C. § 1981 and § 2000e et seq.

      . In its motion under Rule 12(b)(6), Fed.R. Civ.P., defendant briefly argued that the ERISA claim was without basis. In his response, plaintiff discussed the basis for the claim of breach of fiduciary duty under ERISA. See plaintiff’s memorandum in opposition at 31-33.

      . Although defendant argues that AGS was not a party to the agreement Molyneux refers to, it does not dispute that paragraph 7 of the agreement states:
      Termination: The appointment will be terminable by not less than one month’s notice on either side or a longer period by mutual agreement. In the event of termination taking place for reason beyond your control the whole of your Guinness service will be taken into account in assessing any termination payment."
      It is unclear from the context whether “Guinness” refers to Guinness-Harp or AGS.

      . Plaintiff’s affidavit is similarly lacking in specificity. It states no more than that "several” employees of the alleged “group” have received severance payments.
      Read alone, certain portions of the affidavits submitted by defendant suggest that one or more of defendant’s subsidiaries have made severance payments in the past. (It is unclear whether those payments by the subsidiaries were pursuant to a scheme which would qualify as a “plan” under ERISA, or were instead simply contractual or statutory entitlements under British law.) The same affidavits, however, clearly deny (1) that AGS controlled those subsidiaries or their severance pay practices, (2) that the practices were uniform among the subsidiaries, and (3) that payments have ever been made by the subsidiaries where employees retained their jobs after a company or division was divested. Since the affidavits specifically deny that AGS itself had any plan covering service with the alleged “group”, plaintiff cannot rely on those affidavits to bolster his conclusory allegation that AGS had a “plan,” as defined by ERISA, of making severance payments based on length of service with AGS or any AGS subsidiary. See affidavit of John D.C. Smiley, ¶¶ 3, 4, 6, 7; affidavit of Martin B. Chambers, f 5; affidavit of Roger H.V. Dixon, ¶¶ 5, 6.

      . Molyneux does not make the more limited allegation that although the plan was actually one of CBN or CB/USA, AGS may nonetheless be considered a fiduciary or employer for ERI-SA purposes because of its control over the CBN or CB/USA plan. Molyneux clearly takes the position that the policy was a uniform one for AGS and AGS subsidiaries, so that service in any subsidiary or in AGS itself is relevant. Notably, neither CBN nor CB/USA is named in this action, nor is Guinness-Harp.

      . Even if it were possible to construe the clear language of 29 U.S.C. § 1003(b)(4) to permit suits such as this one, there is little to suggest that the purposes of ERISA extend to disputes between British subjects and British employers. Repeated references are made in the legislative history to American working men and women and to aspects of the Social Security system. See 1974 U.S.Code Cong. & Ad.News 4639 et seq. It is also noted that ERISA was not intended to cover “plans established or maintained outside of the United States for the benefit of non-United States citizens....” H.R.Rep. (Educ. & Labor Comm.) No. 93-533, reprinted in 1974 U.S. Code Cong. & Ad.News 4639, 4656.

      . In the absence of contrary evidence, courts generally will construe severance pay plans under ERISA as intended to "tide over” employees who must seek new jobs. See Sly v. P.R. Mallory, supra, 712 F.2d at 1211, 1213; Pinto v. Zenith Radio Corp., supra, 480 F.Supp. at 363; Petrella v. N.L. Industries, Inc., supra.


author: SUHRHEINRICH, District Judge.

text:
    Arthur W. MORRIS and The Universal Life Church, Inc., Petitioners, v. UNITED STATES of America, Respondent.
    Civ. A. No. 84-0022.
    United States District Court, E.D. Michigan, S.D.
    June 28, 1985.

      Arthur W. Morris, Royal Oak, Mich., for petitioners.
    L. Michael Wicks, Detroit, Mich., Peter Sklarew, Trial Atty., Tax Div. Dept. of Justice, Washington, D.C., for respondent.
   MEMORANDUM OPINION

SUHRHEINRICH, District Judge.

Petitioner, Arthur Morris, brought this action pursuant to 26 U.S.C. § 7609 on his own behalf and that of the Universal Life Church, Inc. to quash an Internal Revenue Service (IRS) summons issued to and served upon the Michigan National Bank of Macomb on December 13, 1983. The IRS requested bank records pertaining to an account in the name of the Universal Life Church Assembly of the Brethren in Christ, but over which petitioner Morris and two other persons have signatory authority. The IRS is investigating the tax liability of petitioner Morris for the years 1979 through 1982. Mr. Morris filed federal income tax returns as a self-employed insurance salesman for several years, but stopped filing returns in 1979. This matter is currently before the Court upon petitioners’ motion to amend and/or supplement the pleadings and the government’s motion for summary denial of the petition and enforcement of the summons. Pursuant to Local Rule 17(j), the Court will determine the motions without oral hearing.

Under 26 U.S.C. § 7602(a), the IRS is granted the authority to summon records for the purpose of determining an individual’s tax liability. Under section 7609, the IRS may serve a summons upon a third-party record keeper, such as banks and other financial institutions, consumer reporting agencies, persons extending credit, brokers, attorneys and accountants, for disclosure of the third-party’s records maintained on the individual who is the subject of an IRS investigation. 26 U.S.C. § 7609(a)(3). When such a summons is served on a third-party record keeper, § 7609(a) requires that notice of the summons be given to the person whose records are being requested. The purpose of the notice provision is to give the noticee the opportunity to quash the summons and raise available defenses at the summons enforcement proceeding. 26 U.S.C. § 7609(b).

In United States v. Powell, 379 U.S. 48, 85 S.Ct. 248, 13 L.Ed.2d 112 (1964), the Supreme Court set forth the following guidelines in deciding whether to enforce an IRS summons:

1) the investigation is being conducted for a legitimate purpose;
2) the summoned data is relevant to that purpose;
3) the information is not yet in the possession of the IRS; and,
4) the proper administrative steps have been followed.

379 U.S. at 57-58, 85 S.Ct. at 255. The burden is upon the IRS to show that these four requirements have been met. “The requisite showing is generally made by the affidavit of the agent who issued the summons and who is seeking enforcement.” United States v. Garden State National Bank, 607 F.2d 61, 68 (3d Cir.1979). Once the four requirements are met, a prima facie case has been established, and the burden shifts to the petitioners to show that a genuine issue as to any material defense exists. Powell, 379 U.S. at 58, 85 S.Ct. at 255.

Special Agent Battani stated in his sworn declaration that the summons is directed towards documents relevant to an examination of the tax liabilities, if any, of Mr. Morris for the years 1979 through 1982, including whether petitioner may have violated any criminal provisions of the Internal Revenue Code. The requested documents pertain to an account over which petitioner Morris has signatory authority. Morris has also participated in financial transactions concerning that account during the years in question. Agent Battani stated: “The reports pertaining to such accounts may contain information relating to the tax liabilities of petitioner for the years in question and the named banks are in possession of books, records, papers and other data relating to the liabilities under investigation.” Declaration at II5. The requested documents are not in the possession of the IRS. Agent Battani further stated that notice of the issuance of the summons was sent by certified mail to petitioner Morris, the two persons who also have withdrawal authority on the account and the Universal Life Church Assembly of the Brethren in Christ. Exhibit A of Declaration.

The Court finds that the IRS summons was issued for a legitimate purpose— determining Mr. Morris’ tax liability, the requested documents are relevant to that purpose, the requested documents are not already in the possession of the government, and the proper administrative procedures have been followed. 26 U.S.C. § 7602 and 7609(a). The government, therefore, has fulfilled its initial burden.

In the original petition to quash, petitioners raised the following defenses: 1) the summons is overbroad and disclosure of the church’s banking transactions violates the First Amendment rights of religion and association of the church and its members; 2) the summons is being illegally used for the sole purpose of inquiring about petitioner Morris’ possible criminal conduct; and 3) the 1982 Tax Equity and Fiscal Responsibility Act (TEFRA) violates Article I, § 7 of the U.S. Constitution.

As a threshold matter, the Universal Life Church, Inc. does not have standing under § 7609(b)(2)(A) to challenge the summons issued for bank records in the name of Universal Life Church Assembly of the Brethren in Christ. Universal Life Church, Inc. v. United States, 582 F.Supp. 79, 80 (N.D.Cal.1984). The Universal Life Church, Inc., headquartered in Modesto, California, is separate and distinct from its chapter or charter churches, and not entitled to notice under § 7609(a). To argue that the Universal Life Church Assembly of the Brethren and Universal Life Church, Inc. are the same entity runs contrary to the tax exemption granted Universal Life Church, Inc. The exemption is not a group exemption; therefore, charter and chapter churches are not covered. Id. See also Davis v. Commissioner, 81 T.C. 806 (1983). Universal Life Church, Inc. will be dismissed from this action.

As to petitioner Morris’ first argument, the court finds the rationale of United States v. Grayson County State Bank, 656 F.2d 1070 (5th Cir.1981), persuasive. In Grayson, the IRS had summoned certain records “on (or on behalf of) the First Pentecostal Church ... for the years 1973, 1974, 1975 and 1976 and on which the [minister-taxpayer] has signature privileges and/or trustee assignment.” The Fifth Circuit reversed the holding of the district court which concluded that “First Amendment rights of the church or its members were implicated by the issuance of the summons.” 656 F.2d at 1074. The court noted that the summons “was issued to secure access to records in the possession of a bank, in connection with a taxpayer investigation, to examine those records of the bank pertaining to the church that were relevantly connected with the taxpayer’s financial activity for the tax years of the investigation.” Id. The court determined that “allowing the IRS access to information to determine the correct tax liability of the taxpayer, the church’s minister, does not restrict the church’s freedom to espouse religious doctrine nor to solicit members or support.” Id. The court concluded that issuance of the summons did not constitute any significant burden on the free exercise of religious activity by the church or its members. Id. This Court reaches the same conclusion. Petitioner has not shown that enforcement of the summons would hamper the religious freedoms of the church members. See United States v. Manufacturers Bank, 518 F.Supp. 495 (E.D.Mich.1981).

Petitioner’s reliance upon United States v. Trader’s State Bank, 695 F.2d 1132 (9th Cir.1983), is misplaced. In that case, the IRS summoned all records relating to the Life Science Church while investigating the tax liability of the founders and trustees of the church. The court found the summons overbroad because the IRS requested all church banking records, not only those related to the individuals. Id. at 1133. In this case, the IRS limited the summons to those bank records on an account over which Morris has signatory authority. The First Amendment concerns which formed the basis of the decision in Trader’s State Bank are not present in this case.

Petitioner’s second and third defenses are without merit. Under 26 U.S.C. § 7602(b) and (c)(1), a summons may be used to inquire into criminal conduct even if criminal conduct is the sole object of the investigation, as long as there has been no IRS referral to the Justice Department. See McTaggart v. United States, 570 F.Supp. 547 (E.D.Mich.1983). There has been no Justice Department referral in this matter; therefore, petitioner’s second defense does not bar enforcement of the summons.

As to the third defense, the Sixth Circuit recently held that TEFRA did not violate the origination clause, Article I, § 7 of the Constitution. Heitman v. United States, 753 F.2d 33, 35 (6th Cir.1984).

Petitioner filed a motion to amend and/or supplement the petition to quash to assert essentially three additional defenses: 1) disclosure of the bank records violates Morris’ right against self-incrimination; 2) disclosure violates the Fourth Amendment; and 3) the issuance of the summons violates due process. Because the Court finds all of these defenses to be without merit, the Court will deny petitioner’s motion to amend and/or supplement the pleading. United, States v. Blackwood, 582 F.2d 1244, 1246 (10th Cir.1978) (records sought were produced and maintained by the two banks and credit union for their own business purposes and may be summoned over the Fifth Amendment objection of a depositor). United States v. Miller, 425 U.S. 435, 442, 96 S.Ct. 1619, 1623, 48 L.Ed.2d 71 (1975) (a taxpayer has no Fourth Amendment expectation of privacy in the records of an account kept by a bank). Phillips v. Commissioner, 283 U.S. 589, 596-97, 51 S.Ct. 608, 611, 75 L.Ed. 1289 (1931) (due process is not denied where there is an adequate opportunity for a later judicial determination of legal rights).

The Court concludes that petitioner’s defenses fail to bar enforcement of the IRS summons. The government’s motion for summary denial of the petition and enforcement of the summons will be granted. An appropriate order will be entered.

      . The Court notes that Mr. Morris is the only party to sign the petition and constantly uses the singular form of petitioner. It is quite apparent that the real party of interest in this matter is only Mr. Morris.