author: JUNE L. GREEN, District Judge.

text:
    SHERMAN TREATERS, LTD., Plaintiff, v. Andreas AHLBRANDT, Defendant.
    Civ. A. No. 84-3319.
    United States District Court, District of Columbia.
    March 7, 1985.

      Donald Dennison, Dennison, Meserole, Pollack & Scheiner, Arlington, Va., for plaintiff; Burton L. Lilling, Bruce E. Lill-ing, Lilling & Greenspan, White Plains, N.Y., of counsel.
    Daniel F. Attridge, Kirland & Ellis, Washington, D.C., Thomas 0. Kloehn, Barry E. Sammons, Charles A. Grube, Thomas G. Atkinson, Quarles & Brady, Milwaukee, Wis., for defendant.
   MEMORANDUM OPINION

JUNE L. GREEN, District Judge.

This matter is before the Court on plaintiff’s motion for partial summary judgment as to noninfringement, invalidity, and false marking of defendant’s patent; defendant’s cross-motion for summary judgment as to lack of subject matter jurisdiction; the parties’ oppositions thereto; their respective replies; and the entire record herein. The Court heard oral arguments on these motions on February 22, 1985. For the reasons stated below, the Court grants defendant’s motion for summary judgment and denies the motion of plaintiff.

Plaintiff filed the instant action on October 30, 1984, seeking declaratory relief for noninfringement, invalidity, and false patent marking, and damages for fraud on the United States Patent and Trademark Office and unfair competition.

I.

Plaintiff is a British corporation that manufactures ceramic and quartz tube corona discharge treaters for sale and distribution in the United States. Amended Complaint HU 1, 5. Defendant is a citizen of the Federal Republic of Germany and patentee of United States Patent No. 4,446,110. The patent protects specific characteristics of ceramic and quartz tube corona discharge treaters manufactured by Ahlbrandt-Sys-tem G.m.b.H., of which defendant is president. Answer ¶¶ 2, 6; Defendant’s Statement of Points and Authorities Opposing Plaintiff’s Motion for Partial Summary Judgment (“Opposition of Defendant”) at 4-6.

In December 1983, Enercon Industries Corporation (“Enercon”) of Wisconsin was granted an exclusive license to use and sell the patented invention in the United States. Amendment to Marketing Agreement 112 (filed Feb. 14, 1985). The agreement specifically granted to Enercon the first “right to enforce [the patent] against third party infringers at Enercon’s expense.” If Ener-con failed to act, the right to enforce the patent fell to Ahlbrandt-System. Id. at 2 11(a).

Plaintiff alleges that officials from Ener-con have “threaten[ed] customers and potential customers with infringement actions in order to secure a better position for Defendant’s machines in the market place.” Plaintiff’s Memorandum of Law in Opposition to Defendant’s Motion for Summary Judgment (“Opposition of Plaintiff”) at 3. In addition, plaintiff claims that Enercon placed several advertisements in a trade magazine in which the company falsely stated that it owned the patent in question and falsely described the scope of the patent. “As a result, these ads must inevitably discourage companies from purchasing corona discharge treater systems from anyone but Defendant.” Id. at 5-6.

Plaintiff has filed suit against defendant, claiming that Enercon acted on behalf of defendant as an agent or representative. See Amended Complaint 1111 8, 36-37; Opposition of Plaintiff at 3, 5. Enercon is not a party to this action since it has no contacts with this district. Defendant, on the other hand, is a non-resident alien without an agent in the United States for service of process, and therefore is subject to jurisdiction only in this district. 35 U.S.C. § 293 (1984).

In his motion for summary judgment, defendant argues that this Court has no jurisdiction since no actual controversy exists between plaintiff and defendant. Rather, the controversy is with Enercon, who acted on its own behalf as exclusive licensee of the patent.

The Court agrees that no justiciable controversy exists between the parties to this action and, as such, dismisses the case for lack of jurisdiction.

II.

The Court’s jurisdiction is limited by Article III, section 2 of the United States Constitution, which states, in relevant part, that “judicial Power shall extend to all Cases, in Law and Equity, arising under this Constitution, the Laws of the United States, and Treaties ... [and] to Controversies between two or more States; ...” U.S. Const, art. Ill, § 2.

Courts have interpreted the “case or controversy” language of Article III as requiring

a concrete case touching the legal relations of parties having adverse legal interests, and susceptible “of an immediate and definitive determination of the legal rights of the parties in an adversary proceeding upon the facts alleged.” The distinction is between a case “appropriate for judicial determination” on the one hand, and a “difference or dispute of a hypothetical or abstract character” on the other.

Dewey & Almy Chemical Company v. American Anode, Inc., 137 F.2d 68, 70 (3d Cir.), cert. denied, 320 U.S. 761, 64 S.Ct. 70, 88 L.Ed. 454 (1943) (quoting Aetna Life Insurance Company v. Haworth, 300 U.S. 227, 240-41, 57 S.Ct. 461, 463-64, 81 L.Ed. 617 (1937)); see Willing v. Chicago Auditorium Association, 277 U.S. 274, 289-90, 48 S.Ct. 507, 509, 72 L.Ed. 880 (1928) (“The fact that the plaintiffs desires are thwarted by its own doubts, or by the fears of others, does not confer a cause of action. No defendant has wronged the plaintiff or has threatened to do so.”).

The requirements of a “case or controversy” apply equally to suits brought under the Declaratory Judgments Act, 28 U.S.C. § 2201 (1982), as to other actions. Altvater v. Freeman, 319 U.S. 359, 363, 63 S.Ct. 1115, 1117, 87 L.Ed. 1450 (1943). The parties must have a controversy of “ ‘sufficient immediacy and reality to warrant the issuance of a declaratory judgment.’ ” Golden v. Zwickler, 394 U.S. 103, 108, 89 S.Ct. 956, 959, 22 L.Ed.2d 113 (1969) (quoting Maryland Casualty Company v. Pacific Coal & Oil Company, 312 U.S. 270, 273, 61 S.Ct. 510, 512, 85 L.Ed. 826 (1941)); Davis v. Ichord, 442 F.2d 1207, 1214 (D.C.Cir.1970); Dr. Beck and Company v. General Electric Company, 317 F.2d 538, 539 (2d Cir.1963) (need “actual controversy in the constitutional sense”).

Patent cases in which the plaintiff seeks declaratory relief are no exception to the “case or controversy” requirements. Generally, an actual controversy exists in patent cases “only if the patentee-defendant in the declaratory judgment lawsuit has either expressly or impliedly charged the plaintiff with infringement of its patent.” Sherwood Medical Industries, Inc. v. DeKnatel, Inc., 512 F.2d 724, 727 (8th Cir.1975). Any statements or conduct by defendant which raise a reasonable apprehension of an infringement suit against plaintiff or its customers' may constitute a charge of infringement. Id. at 727-28; Robin Products Company v. Tomecek, 465 F.2d 1193, 1195-96 (6th Cir.1972); W.R. Grace & Company v. Union Carbide Corporation, 319 F.Supp. 307, 310 (S.D.N.Y.1970); 6A J. Moore, Moore’s Federal Practice § 57.20 (2d ed. 1984).

The Declaratory Judgments Act provides to the alleged patent infringer a cause of action if no suit is brought by the party charging the infringement. The Act protects alleged infringers by allowing them to place the issues of infringement and validity of the patent before the courts. The requirement of an “actual controversy,” on the other hand, protects patentees from harassment if they refrain from charging infringement. “ ‘[T]he mere existence of the patent is not a cloud on title, enabling any apprehensive manufacturer to remove it by suit.’ ” W.R. Grace & Company v. Union Carbide Corporation, 319 F.Supp. at 309-10 (citations omitted); see Societe de Conditionnement en Aluminium v. Hunter Engineering Company, Inc., 655 F.2d 938, 943 (9th Cir.1981).

To establish an actual controversy and thereby protect the patentee, plaintiff must show a reasonable apprehension of an infringement suit “by the defendant presently before the court.” DMP Corporation v. Rederiaktiebolaget Nordstjernan, 223 U.S.P.Q. 560, 561 (D.D.C.1983) (emphasis added).

Plaintiff in the instant action has not alleged that defendant in any way acted directly to cause plaintiff to fear suit by defendant himself. Rather, the allegations are restricted to the actions of Enercon, an exclusive licensee of defendant’s patent.

The conduct of a licensee may not be imputed automatically to the patentee. The “acts of a patentee’s agents charging infringement without specific authority do not warrant the initiation of a declaratory judgment action.” Ag-Tronic, Inc. v. Frank Paviour LTD., 70 F.R.D. 393, 397 (D.Neb.1976); see Dr. Beck and Company v. General Electric Company, 317 F.2d at 539 (statement by defendant’s employees not imputed to defendant).

To create a controversy between plaintiff and the patentee, an agent must have actual or apparent authority to level a charge of infringement on behalf of the patentee. Without such authority, plaintiff could not apprehend reasonably an infringement suit by the defendant-patentee. A reasonable apprehension in the plaintiff must be created by the patentee directly or through his authorized agents in order for the plaintiff to place the validity of the patent in question. The patentee should not be subjected to a declaratory judgment action for charges of infringement which he did not level himself or allow another to level. Id.; Acme Highway Products Corporation v. Maurer, 524 F.Supp. 1130, 1131 (D.D.C.1981). Contra Societe de Conditionnement en Aluminium v. Hunter Engineering Company, Inc., 655 F.2d at 945 (question of authority not important because focus is on plaintiff’s reasonable apprehension, not on patentee’s conduct).

In the instant case, plaintiff alleges that Enercon made all charges of infringement. Plaintiff, however, presented no relevant evidence that Enercon had specific authority to speak on behalf of defendant.

To determine the scope of Enercon’s authority, the Court must look to the license agreement. DMP Corporation v. Rederiaktiebolaget Nordstjernan, 223 U.S.P.Q. at 562. Not only did Enercon lack authority under the agreement to speak on behalf of defendant, but the licensee had express authority to act on its own behalf in instituting infringement suits. The agreement granted to Enercon “the unilateral power, authority and discretion” to enforce the patent against third-party infringers without the permission or knowledge of defendant. Affidavit of Andreas Ahlbrandt 1MI8-10 (filed with Opposition of Defendant); Affidavit of Donald H. Nim-mer ¶¶ 7, 11 (filed with Opposition of Defendant).

By granting to Enercon an independent right to sue, defendant surrendered his right unless Enercon refrained from enforcing the patent. The contractual transfer of this right provided plaintiff the opportunity to sue the licensee without fear of a separate infringement action by the patentee. Micro-Acoustics Corporation v. Bose Corporation, 493 F.Supp. 356, 359-60 (S.D.N.Y.1980); Channel Master Corporation v. JFD Electronics Corporation, 260 F.Supp. 568, 572 (E.D.N.Y.1966), reh’g denied, 262 F.Supp. 292, 294 (1967); Consolidated Vacuum Corporation v. Machine Dynamics, Inc., 230 F.Supp. 70, 73 (S.D.Cal.1964); Caldwell Manufacturing Company v. Unique Balance Company, 18 F.R.D. 258, 263-64 (S.D.N.Y.1955). Contra Agrashell, Inc. v. Hammons Products Company, 352 F.2d 443, 446 (8th Cir.1965) (agreement to sue in own name is without significance).

Plaintiff seems to contend that Enercon had apparent authority to act on behalf of defendant because defendant owned the patent and retained exclusive manufacturing rights under the license agreement. Plaintiff also disputes the validity of the license agreement and argues that it constitutes merely, a marketing agreement, giving no rights in the patent to Enercon. Opposition of Plaintiff at 13, 15; see Plaintiffs Proposed Findings of Fact ¶ 23.

“ ‘[A]pparent authority results from conduct by the principal which causes a third person reasonably to believe that a particular person, who may or may not be the principal’s agent, has authority to enter into negotiations or make representations as his agent.’ ” Ag-Tronic, Inc. v. Frank Paviour, LTD., 70 F.R.D. at 397 (quoting Seavey, Agency at 13 (1964)). Defendant Ahlbrandt engaged in no conduct to cause plaintiff to believe that he consented to the charges of Enercon. Defendant had no communication whatsoever with plaintiff. Owning the patent and retaining the right to manufacture the invention are insufficient to create a reasonable belief in plaintiff that Enercon was acting on behalf of defendant. In fact, defendant expressly granted to Enercon the right to enforce the patent on its own behalf. He could have done no more to avoid creating in Enercon the appearance of authority to speak on behalf of defendant. Moreover, Enercon made no suggestion that it was acting on behalf of anyone but itself. In fact, plaintiff claims that Enercon held itself out as owner of the patent. Opposition of Plaintiff at 5.

Even under the more liberal interpretation of a “case or controversy” in Societe de Conditionnement en Aluminium v. Hunter Engineering Company, Inc., plaintiff could not have a “real and reasonable apprehension” of an infringement suit by defendant. 655 F.2d at 944. Plaintiff knew only that Enercon sold defendant’s corona treater stations, that Enercon was leveling charges of infringement, and that defendant was the foreign owner of the patent in question. Armed with this information, plaintiff assumed that Enercon was defendant’s United States spokesman. Opposition of Plaintiff at 9-10. Plaintiff did not inquire into the authority of Enercon. “Whether such inquiry is required should be determined by whether, in the given factual situation, apprehension would be reasonable without it.” Societe de Conditionnement en Aluminium v. Hunter Engineering Company, Inc., 655 F.2d at 945. Under the facts in this case, plaintiff could not apprehend reasonably an infringement suit by defendant without at least some minimal inquiry into the relationship between Enercon and defendant.

All communications alleging infringement were from Enercon, which is not a party to this suit. Enercon had authority to act on its own behalf to protect the patent. This Circuit twice has found that the acts of an exclusive licensee with an independent right to sue could not create a case or controversy between the plaintiff and a patentee. In Acme Highway Products Corporation v. Maurer, the court held that an exclusive license to make, use, and sell the invention operated as an assignment of the patent as a matter of law and entitled the licensee to maintain an action for infringement in its own name without the advice, request, or participation of the licensor. Since the licensee had an independent right to sue and only the licensee charged the plaintiff with infringement, the court held that the controversy existed with the licensee, not the patentee. 524 F.Supp. 1130, 1131 (D.D.C.1981) (Joyce Green, J.).

The Circuit went a step further in DMP Corporation v. Rederiaktiebolaget Nordstjernan, in which the court recognized an independent right of the licensee to enforce the patent under a license agreement. That right, the court concluded, allowed the licensee to charge infringement in its sole capacity as a licensee and not on behalf of the patentees. 223 U.S.P.Q. 560, 562-63 (D.D.C.1983) (Hogan, J.). The court therefore refused to impute the actions of the licensee to the patentees and dismissed the suit against defendant-patentees. Id. at 563.

Based on the license agreement in the instant case and Enercon’s alleged actions, plaintiff could not have apprehended reasonably a suit by defendant. Nothing in the facts suggests a case or controversy between plaintiff and defendant. Rather, the controversy is between plaintiff and the licensee.

This Court therefore grants defendant’s motion for summary judgment and denies plaintiff’s motion for lack of jurisdiction. The Court need not, and does not intend to, rule on the merits of plaintiff’s motion.

      . The agreement actually is between Ahlbrandt-System and Enercon, and grants to Enercon an exclusive license to use and sell inventions "under any applicable 4U.S. patents which Ahl-brandt-System G.m.b.H. or Andreas Ahlbrandt may own or obtain." Amendment to Marketing Agreement at 1. The agreement is signed by defendant as president of Ahlbrandt-System. Id. at 3.
      Plaintiff contends that the agreement and the manufacturing plates bearing defendant’s rather than the manufacturer's name on the patented invention are evidence that Ahlbrandt-System is the alter ego of defendant. Plaintiffs Proposed Findings of Fact ¶¶ 9-13. Whether defendant and Ahlbrandt-System are one and the same is immaterial to the issue before the Court as to whether Enercon’s actions may be imputed to defendant.

      . Plaintiff contends that the affidavits misstate the scope of authority granted to Enercon under the agreement. Plaintiff argues that Enercon does not have "unilateral power” to enforce the patent since Ahlbrandt-System has a similar right if Enercon fails to act. The key test, however, is whether the licensee had an "independent" right to sue on its own behalf, rather than the “sole” right to enforce the patent. Caldwell Manufacturing Company v. Unique Balance Company, 18 F.R.D. 258, 264 (S.D.N.Y.1955); see DMP Corporation v. Rederiaktiebolaget Nordstjernan, 223 U.S.P.Q. 560, 562 (D.D.C.1983) (Either patentee or licensee, alone, could institute suit for patent infringement.).

      . The transfer of rights in a patent is governed by the legal effects of the agreement's provisions, not by the name of the agreement. Kronner v. United States, 110 F.Supp. 730, 734, 126 Ct.Cl. 156 (1953); Eterpen Financiera Sociedad de Responsabilidad Limitada v. United States, 108 F.Supp. 100, 104 (Ct.Cl.1952), cert. denied, 346 U.S. 813, 74 S.Ct. 22, 98 L.Ed. 340 (1953). The Court finds that the agreement with Ener-con, although entitled "Amendment to Marketing Agreement,” granted an exclusive license to use and sell the invention. A patentee need not release all his rights to the patent under a license agreement. See Bement v. National Harrow Company, 186 U.S. 70, 88, 22 S.Ct. 747, 754, 46 L.Ed. 1058 (1902).


source: Caselaw Access Project

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

license: Public Domain

text:
    Willie Lee PREE, Plaintiff, v. STONE AND WEBSTER ENGINEERING CORP., Ed Palmer, Roland Christensen, Plasterer & Cement Masons Local Union 241, Defendants.
    No. CV-R-83-17-ECR.
    United States District Court, D. Nevada.
    March 20, 1985.

      G.C. Backus, Reno, Nev., for plaintiff.
    Stephen S. Kent, Reno, Nev., for Stone & Webster, Ed Palmer and Roland Christensen.
    Patrick D. Dolan, Reno, Nev., for Christensen and Plasterer & Cement Masons.
   MEMORANDUM DECISION AND ORDER

EDWARD C. REED, Jr., District Judge.

Plaintiff, a black male, seeks relief under Title VII of the Civil Rights Act of 1964 (42 U.S.C. § 2000e et seq) for claimed unlawful and discriminatory discharge by defendant Stone & Webster Engineering Corp. (Stone & Webster). He also claims defendant Plasterers and Cement Masons Union Local 241 (Union) and defendant Roland Christensen, business agent for the Union, discriminated against him by not appointing him as job steward. Plaintiff alleges such discrimination occurred because of his race.

Jurisdiction of this Court is based upon 42 U.S.C. § 2000e-5(f) and 28 U.S.C. § 1343(4). Plaintiff previously exhausted his administrative remedies.

A bench trial of this action was held on December 27, 1984. Testimony and evidence were received on behalf of plaintiff and defendants.

On October 1, 1980, plaintiff was dispatched by the Union to Yalmy, Nevada, to go to work as a cement mason for Stone & Webster. That defendant was constructing a new power generating plant for Sierra Pacific Power Company. Plaintiff worked on the job continuously until he was laid off on August 14, 1981.

While plaintiff did not have formal school or apprenticeship training as a cement mason, he learned on the job (while working as a laborer) from skilled masons and became a competent mason. He obtained his “book” entitling him to work as a member of the Union in 1967. He worked more or less steadily as a mason out of the Union hiring hall after that time until his said termination by Stone & Webster.

One of the principal questions to be resolved by the Court is the level of skill which plaintiff achieved as a cement mason, and whether his skill was as good as, or superior to, that of other masons who were his junior in seniority as employees of Stone & Webster. They were retained in employment at the time plaintiff was laid off.

During the year 1981 there was a considerable turnover and reduction in all crafts at Yalmy as the first phase of construction of the power plant neared completion. The custom of both the employers and the Union in this area is that, where lay offs are to take place, the employees with least seniority as employees of the company are the first to be laid off.

By the last week of July 1981, the cement mason crew at the Valmy job consisted of defendant Ed Palmer (foreman), James Brown (job steward), Matthew Pri-bitnowsky, and plaintiff. At that time Mr. Brown retired, and Mr. Pribitnowsky was laid off. Within a week or so, at Mr. Palmer’s request on behalf of Stone & Webster, the Union dispatched Leonard F. Hughes and Leslie T. Noland to Valmy as replacement masons. Mr. Palmer specifically requested both Mr. Hughes and Mr. Noland by name to be sent to the job. He was permitted to do so under the agreements between Stone & Webster and the Union. At that point in time, plaintiff was first in seniority on the crew after the foreman, Mr. Palmer. Yet on August 14, 1981, Plaintiff was terminated in a discharge identified as on account of a “Reduction in Force” (RIF).

The decision to terminate plaintiff was made by Mr. Palmer, acting in behalf of Stone and Webster, in the course and scope of his duties as foreman. He testified that the reason he chose plaintiff for termination ahead of Mr. Hughes and Mr. Noland was that plaintiff was less skilled than the other two new crew members in the then scheduled upcoming work of finishing cement slabs and floors. He admitted plaintiff was highly skilled in cement work in walls, grinding and patchwork, but claimed in his testimony that such work on the project had, at that time, largely been completed. He claimed that plaintiff did not do slab and floor work efficiently and that he was too slow.

Mr. David Rivers, an engineer for Stone & Webster, also offered some uncomplimentary testimony concerning plaintiff’s skills as cement mason. However, the extent to which Mr. Rivers is relying on personal observation or just on what Mr.' Palmer told him is unclear.

As mentioned above, Mr. Palmer asked for Mr. Hughes and Mr. Noland by name when he asked for cement masons to be sent to the job to replace Mr. Brown and Mr. Pribitnowsky. He claims to have had extensive knowledge of the excellence of their work. He asserts it was on the basis of this knowledge that he sent for these two men, and also on the same basis that he retained them at the time he discharged plaintiff. Mr. Hughes had been working on the Valmy job for Stone & Webster at various times in 1981, and Mr. Palmer also claims to have previously observed Mr. Hughes’ work for another contractor on the Valmy smokestack. On the other hand, Mr. Noland had not worked on the Valmy job in 1981, and the evidence is questionable as to any previous work by him on the project. While the Court might conclude that Mr. Hughes was a better craftsman than plaintiff, there is little credible evidence, on the basis of what Mr. Palmer had been able to observe, that Mr. Noland was a better cement mason than plaintiff.

The testimony of all other witnesses was that plaintiff was skilled in all areas of the work of a concrete mason, and did not have the deficiencies in ability which were claimed by Mr. Palmer. Defendant Roland Christensen has been Secretary-Treasurer of the Union and its Business Agent for 17 years. He never received any complaints relative to plaintiff’s skills. It appears that Mr. Christensen has, through all the time plaintiff was a member of the Union, been responsible to dispatch masons to the jobs. Therefore, he would have heard about any complaints made by employers or others relative to plaintiff’s skills. There is no sign that plaintiff was dispatched to jobs for assignment only in patching, wall or grinding work. Rather, the preponderance of the evidence is that plaintiff worked on all kinds of jobs and assignments.

James Brown, called as a witness by the Union, testified he had not heard any complaints about plaintiff’s ability or skills as a cement mason. Mr. Brown worked side by side with plaintiff for nearly ten months at Valmy. He was a long time skilled cement mason and would have observed deficiencies in plaintiff’s skills or that plaintiff was assigned only to certain types of work.

James E. Smith was called as a witness by plaintiff. He is an experienced foreman of labor crews which handle the pouring of concrete. He has observed the work of many cement masons. Mr. Smith worked on the same Valmy assignments as plaintiff and had ample opportunity to observe plaintiff’s work. His testimony was to the effect that plaintiff had proper skills as a mason.

Plaintiff was a concrete finishing foreman on the high rise Harrah’s parking garage on Second Street in Reno. It is a large concrete structure. He also worked as a cement mason on the Harrah’s Center Street parking garage, the Reno Hilton hotel, the Veterans Administration hospital addition, and the Reno-Sparks sewer plant.

The preponderance of the evidence is that plaintiff was a skilled cement mason and that he was qualified to do the work which Stone & Webster had scheduled to be done at the time of his termination. Further, the evidence demonstrates that plaintiff was at least as skilled as the two crew members who were retained at the time of his discharge.

Plaintiff has an admitted history of narcolepsy since 1945. According to the testimony of all the witnesses (including plaintiff), except Mr. Palmer, this affliction did not affect plaintiffs work on the job as a cement mason. The effect of the narcolepsy was that plaintiff had a tendency to fall asleep after being on the job and then taking a break, such as for lunch. Apparently this did happen to plaintiff on a number of occasions during breaks. Mr. Palmer claims he found plaintiff asleep “on the job a couple of times.” Nevertheless, the Court finds from the evidence that the narcolepsy did not adversely affect plaintiffs job performance.

While there were few blacks on the Val-my job, there is no credible evidence that Stone & Webster had any company policy or custom to discriminate in employment practices ,on a basis of race. Reporting methods of Stone & Webster indicate a consciousness of the desirability of treating all persons on an equal basis.

After plaintiff was terminated, James E. Smith inquired of Mr. Palmer and the other cement masons as to why plaintiff had been laid off. No one would give him an explanation. The reason given by Stone & Webster has been RIF. Mr. Smith’s testimony was that it appeared to him to be a one person RIF. The RIF contention doesn’t hold up under scrutiny, and the Court finds it to be pretextual. The cement finishing crew was not being reduced in numbers to a point where it was necessary to lay off plaintiff. Plaintiff had the most seniority on the crew, next to the foreman, and the crew was retained for a considerable period of time thereafter at a level of at least the foreman and two masons. There was no RIF.

The somewhat offhand claim that plaintiff was discharged because of his narcolepsy appears pretextual as well. The preponderance of the evidence shows that plaintiff was not discharged because he was unable to perform the job assignments as well as the other two more recently hired masons. The custom of both Stone & Webster and the Union was that the last hired was first to be laid off. On that basis plaintiff ought to have been retained.

While the work of cement masons (and this applies to plaintiff as well) is often seasonal, with lay offs being experienced in the winter, plaintiff worked straight through the 1980-81 winter at Valmy. The record before the Court indicates that, if he had not been terminated, plaintiff would have continued as an employee of Stone & Webster on the Valmy job until he retired on November 1, 1982.

During the course of the trial the allocation of burdens and the order of presentation of proof required in a Title VII disparate treatment case were followed. See Hagans v. Clark, 752 F.2d 477, 481 (9th Cir.1985). Thus, the Court now must decide, as a fact, whether the defendants intentionally discriminated against the plaintiff; that is, whether he was treated less favorably than others because of his race. U.S. Postal Service Bd. of Govs. v. Athens, 460 U.S. 711, 715, 103 S.Ct. 1478, 1482, 75 L.Ed.2d 403 (1983). The evidence presented shows that racial discrimination made the difference between the plaintiff's retention on the job and his termination. See Mitchell v. Keith, 752 F.2d 385, 391 (9th Cir.1985). The reasons given by the defendants, i.e., narcolepsy and lesser cement mason skills than those retained on the job, have been found to be pretextual. This is supportive of a finding of intentional discrimination. See Hung Ping Wang v. Hoffman, 694 F.2d 1146, 1148 n. 2 (9th Cir.1982). The Court must determine which side’s explanation of the employer’s motivation it believes. Casillas v. United States Navy, 735 F.2d 338, 342 (9th Cir.1984). The mere fact of the difference in treatment accorded plaintiff has some probative force. E.E.O.C. v. Inland Marine Industries, 729 F.2d 1229, 1233 (9th Cir.1984), So does Stone & Webster’s and Mr. Palmer’s purported misjudgment of plaintiff’s qualifications. Texas Dept. of Community Affairs v. Burdine, 450 U.S. 248, 259, 101 S.Ct. 1089, 1096, 67 L.Ed.2d 207 (1981). The unworthiness of credence of the defendants’ explanations for the plaintiff’s termination helps prove that he was the victim of intentional discrimination. Id. at 256, 101 S.Ct. at 1095; U.S. Postal Service Bd. of Govs. v. Aikens, at 460 U.S. 716, 103 S.Ct. at 1482; Felton v. Trustees of Cal St. Universities, 708 F.2d 1507, 1509 (9th Cir.1983). The plaintiff has established that his termination resulted from intentional racial discrimination. Ijle, therefore, is entitled to recover back wages from the date of his discharge, August 14, 1981, to the date he retired, November 1, 1982.

At the time of his termination, Plaintiff was being paid at the rate of $12:55 per hour, plus fringe benefits. The evidence indicates that those benefits included employer contributions of $2.00 per hour in vacation pay and $1.00 per hour toward a pension plan. The total compensation, therefore was $15.55 per hour. However, 25$ per hour was deducted for Union dues, leaving $15.30 per hour as the compensation benefits lost by plaintiff as a result of his discharge. During the ten full calendar months of his employment by Stone & Webster, plaintiff worked 1668 hours, or an average of 166.8 hours per month. Multiplying 166.8 hours times $15.30 per hour gives a result of $2552.04 per month. Plaintiff, while on the job, utilized living quarters provided by Stone & Webster. The evidence indicates that an average of $345.37 was deducted each month therefor. Subtracting this figure from $2552.04 leaves $2207.04 as the monthly compensation lost. There being I4V2 months between the dates of plaintiff’s discharge and his retirement, $2207.04 is multiplied by 1472 to result in $32,002.08 in back wages recoverable by him.

Plaintiff did receive unemployment benefits of perhaps $8,700.00 during the 12V2 months, but they may not be used as offsets against a back pay award. Kauffman v. Sidereal Corp., 695 F.2d 343, 347 (9th Cir.1982).

The burden of proving that plaintiff failed to mitigate damages rests on the defendants. Sangster v. United Air Lines, Inc., 633 F.2d 864, 868 (9th Cir.1980). They must establish that there were suitable positions available which plaintiff could have discovered, and that he failed to use reasonable diligence in seeking them. Jackson v. Shell Oil Co., 702 F.2d 197, 202 (9th Cir.1983); Sias v. City Demonstration Agency, 588 F.2d 692, 696 (9th Cir.1978). The burden has not been sustained in this case, therefore no mitigation of damages may be allowed.

Where, as here, the discriminatory action was by a supervisory employee who was authorized to participate in hiring and firing, his employer may be held liable by reason of ratification, authorization or respondeat superior. Mitchell v. Keith, at 752 F.2d 388-9; Miller v. Bank of America, 600 F.2d 211, 213 (9th Cir.1979). All three bases apply to defendant Stone & Webster in relation to the actions of its employee, defendant Palmer. In fact, only the employer may be held liable for the back wages; the individual employee may not. Padway v. Palches, 665 F.2d 965, 968 (9th Cir.1982); Rolfe v. State of Arizona, 578 F.Supp. 1467, 1472 (D.Az.1983). Only injunctive relief would be available against the employee. Id. Plaintiff has established his entitlement to injunctive relief against defendant Palmer, forbidding the latter from further employment discrimination against plaintiff. However, since plaintiff has retired, the need for such relief has been mooted. Therefore, the back wages award will be the only relief available, and it will run only against defendant Stone & Webster. Prejudgment interest will not be ordered. Cf. Domingo v. New England Fish Co., 727 F.2d 1429, 1446 (9th Cir.1984), mod. on oth. gds. 742 F.2d 520 (9th Cir.1984).

The claims of plaintiff against the Union and Mr. Christensen are not well taken. Plaintiff apparently seeks declaratory and injunction relief against these two defendants.

The gravamen of the complaint against Mr. Christensen and the Union is that they discriminated against plaintiff on account of his race in selection of a job steward, after James Brown, the steward on the job, retired at the end of July 1981.

A job steward for a union is the representative of the union at the jobsite. It is his responsibility to watch for and attempt to resolve problems between union members on the job and the employer relating to payroll, overtime, work assignments and misassignments. The steward at Val-my was obligated to review safety conditions on the job and, if he observed problems, to advise the company and Union officials. The steward represents the Union in its relations with the company and the other crafts.

The steward must have a working knowledge of Union procedures (as may be reflected in its Constitution and bylaws), of the rights of union members on the job, and of the employer (as reflected in this case in the Project Agreement between the unions and Stone & Webster). He should understand and, to the extent possible, be experienced in dealing with the Union, Union members on the job, and the employer.

The appointment of the job steward to succeed Mr. Brown was the prerogative of Mr. Christensen as Business Agent of the Union. See Sec. 64 of Constitution and Bylaws of Local Union No. 241. He appointed Leonard Hughes, as the person he deemed most qualified for the job. It should be noted that Stone & Webster had nothing to do with the appointment of the job steward here in question.

There is no custom to appoint the most senior worker on the job as steward. The practice is to appoint the most qualified individual. The preponderance of the evidence is that Mr. Hughes was more qualified for appointment than plaintiff. Mr. Hughes had several times previously acted as a job steward, while plaintiff had not. At the time in question Mr. Hughes was president of the Union, while plaintiff had, during his some 14 years as a member, attended only one Union meeting. Mr. Hughes has served as a union negotiator in regard to the master building trades labor contract, which is negotiated periodically between all the building trade unions and the Associated General Contractors. It covers all the contractors in the area. Mr. Hughes was familiar with the workings of the Union, the rights of Union members, and the manner of handling grievances and dealing with the Union and the employer, while plaintiff had not had such experience.

Black members had previously acted as job stewards for the Union on several occasions. This has some probative value as to whether the Union had a discriminatory motivation. Furnco Construction Corp. v. Waters, 438 U.S. 567, 580, 98 S.Ct. 2943, 2951, 57 L.Ed.2d 957 (1978).

While the discharge of a job steward requires advance notice to the Union, and while it is obvious that the job steward has some additional job security when contrasted with other workers, it is not assured that he will be the last to be laid off in a RIF. Appointment as job steward would not have, in and of itself, prevented plaintiff’s termination.

The preponderance of the evidence is that neither the Union nor Mr. Christensen discriminated racially against plaintiff in the appointment of Leonard Hughes as job steward, rather than plaintiff.

Finally, there is no substantial credible evidence that Mr. Christensen or the Union had anything to do with the discharge of plaintiff at Yalmy.

This Memorandum Decision and Order shall constitute findings of fact and conclusions of law.

IT IS, THEREFORE, ORDERED that the Clerk shall enter judgment as follows:

(1) In favor of plaintiff and against defendant Stone & Webster in the amount of $32,002.08.
(2) In favor of defendants Roland Christensen and the Union and against plaintiff.
(3) No relief is awarded against defendant. Palmer.


author: KEENAN, District Judge:

text:
    Peter OTTLEY, John Kelley, Austin Cedeno, Frank Perez, Bartholomew J. Lawson, Nancy Lester, Fred Wilkins, and William McCarthy, as Trustees of the New York City Nursing Home-Local 144 Welfare Fund and the Local 144 Nursing Home Pension Fund; and Local 144, Hotel, Hospital, Nursing Home & Allied Services Union, SEIU, AFL-CIO, Plaintiffs-Petitioners, v. SHEEPSHEAD NURSING HOME, Defendant-Respondent.
    No. 85 Civ. 986 (JFK).
    United States District Court, S.D. New York.
    March 26, 1985.

      Sarah Siskind, Vladeck, Waldman, Elias & Englehard, P.C., New York City, for plaintiffs-petitioners.
    Morris Tuchman, Brenda Pilchick, New York City, for defendant-respondent.
   AMENDED OPINION and ORDER

KEENAN, District Judge:

Plaintiffs-petitioners move for a preliminary injunction and confirmation of a labor arbitrator’s award. Defendant-respondent cross-moves for an order vacating the arbitration award and dismissing plaintiff’s action. For the reasons stated below, defendant’s motion to dismiss the complaint is granted.

BACKGROUND

Plaintiffs-petitioners Peter Ottley, John Kelley, Austin Cedeno, Frank Perez, Bartholomew J. Lawson, Nancy Lester, Fred Wilkins, and William McCarthy are trustees of the New York City Nursing Home-Local 144 Welfare Fund and the Local 144 Nursing Home Pension Fund. Together with Local 144, of the Hotel, Hospital, Nursing Home & Allied Services Union, Service Employees International Union, AFL-CIO, the trustees initiated this action (collectively referred to as the “Union”). Defendant is the Sheepshead Nursing Home (“Sheepshead”).

On April 1, 1978 the Union entered into a contract with a multi-employer organization comprised of nursing homes. Sheeps-head was a member of that organization and bound by a three-year contract providing for, among other things, the payment of pension funds by Sheepshead to the Union. In 1980, Sheepshead withdrew from the multi-employer organization; but in early 1981 an arbitrator ruled that despite Sheepshead’s withdrawal from the organization, it was still bound by the contract through March 1981.

In March 1981, the multi-employer organization entered into a contract, due to expire on March 31, 1984, providing for payment of pension funds and binding arbitration. On June 30,1982, Sheepshead agreed to be bound by the agreement between the Union and the multi-employer group with some modifications. In return for Sheeps-head’s promise to bargain in good faith, the Union allowed defendant to seek relief from the contract’s economic terms and declined to implement them in the interim.

In a letter, dated July 28, 1982, Sheeps-head requested relief from its obligation to pay contributions to the Union at a rate greater than 10%. Advisory arbitration proceedings then commenced on this matter, but no recommendation was ever issued. Sheepshead made contributions, based on a 10% contribution rate, until November 1983, after which time all payments ceased.

On April 19,1983, the parties agreed that the contract terms from which Sheepshead sought relief, and were not otherwise resolved, would await resolution “by the fact finder.”

On April 2, 1984, Sheepshead gave twenty-four hours notice of its intention to terminate the agreement. Sheepshead acknowledged its legal obligation not to make unilateral changes in certain conditions of employment until an impasse in bargaining was reached, though defendant disaffirmed any intention to extend the expired agreement.

In May 1984, Sheepshead received Demands for Arbitration over a dispute concerning the discharge of two employees. Sheepshead moved to stay the arbitration demanded by the Union. After oral argument on October 17, 1984, Judge Mary Johnson Lowe ruled that the contract was lawfully terminated on April 2, 1984 and that Sheepshead had no duty to submit post-termination discharge disputes to arbitration. Transcript at 26, Sheepshead v. Ottley, No. 84 Civ. 4279 (S.D.N.Y. Oct. 17, 1984).

Also on October 17, 1984, Justice Aronin of the New York State Supreme Court appointed Alan I. Chopp receiver of Sheeps-head to avoid the closing of the facility by state and federal authorities. In re Parker, No. 23550/84 (Sup.Ct. Kings Cty. Oct. 17, 1984).

In late 1984, the Union adopted a benefit termination procedure, designed to preserve the actuarial soundness and financial viability of the pension fund, under which employee benefits will be cut off when the employer fails to remit contributions for a four-month period. In December 1984, pursuant to this procedure, the Union notified Sheepshead and its employees that, as a result of Sheepshead’s delinquency in fund payments, benefits would be terminated on February 4, 1985. In addition, the Union at some point sought arbitration of the pension fund payments issue and, on January 30, 1985, the arbitrator notified counsel for Sheepshead of an arbitration hearing scheduled for February 1st. Sheepshead’s counsel told the arbitrator that an adjournment was needed to gather records and await the return of the receiver, who was in Europe. No adjournment was granted and Sheepshead failed to appear at the hearing. An arbitration decision in the Union’s favor was issued on February 1, 1985.

The award directs Sheepshead to pay immediately to the Union delinquent contributions at the 10% rate, or $338,499.40, plus interest accrued at the rate of 12%, or $104,149.79. With regard to contributions owed over and above the 10%, the award directs Sheepshead to proceed immediately before the fact finder on its application for relief from the full contractual rates. It further directs the parties that, if no recommendation has issued by thirty (30) days from the date of the award, or if Sheeps-head fails to comply with any recommendation that has issued, Sheepshead must return to contract arbitration before him for final resolution of whether it is entitled to relief from liability for contributions in excess of 10% or whether a further award should issue granting to the Union the difference between the contractually established, 15V2% and 17V2% contribution rates and the 10% he awarded on February 1, 1985.

On February 5, 1985, this Court issued a temporary restraining order (“TRO”) compelling Sheepshead to remit the February 1985 pension fund payment on the condition that the Union post a security in the amount of the payment. On February 14, a hearing was held and the next day the Court vacated the TRO with the expectation of deciding the plaintiffs’ motion prior to the due date of defendant’s next payment to the Union.

DISCUSSION

Plaintiffs seek to confirm the arbitrator’s decision under § 301 of the Labor Management Relations Act, 29 U.S.C. § 185 (“LMRA” or “Act”). Section 301 provides federal jurisdiction over a defendant who is an “employer” within the meaning of the LMRA. Section 2(2) of the Act, however, excludes political subdivisions, or their agents, from coverage under the Act. The threshold issue in this case, therefore, is whether a receiver of a nursing home, appointed pursuant to New York Public Health Law § 2810(2), is an “employer” under § 2(2) of the LMRA.

In Greenblatt v. Ottley, 106 Misc.2d 169, 430 N.Y.S.2d 958, 962 (Sup.Ct. Albany Cty. 1980), the New York State Supreme Court ruled that a receiver is not an employer under the LMRA. The court relied on a determination, by the Regional Director of the National Labor Relations Board, that since the commissioner of the State Department of Health, as receiver for the plaintiff-nursing home in that case, exercised substantial control over the plaintiffs operations, the political subdivision exception of § 2(2) was applicable. Id. The court went on to find, under state law, that arbitration proceedings should be stayed in the absence of an agreement by the receiver to arbitrate prereceivership disputes. Id. 430 N.Y.S.2d at 962-66.

The plaintiff-Union in the instant case was the defendant in Greenblatt v. Ottley. Thus, the doctrine of collateral estoppel, embodied in 28 U.S.C. § 1738 (1982), must apply. Section 1738 provides:

[J]udicial proceedings [of any court of any State] shall have the same full faith and credit in every court, within the United States and its Territories and Possessions as they have by law or usage in the courts of Such State ...

In Allen v. McCurry, 449 U.S. 90, 96, 101 S.Ct. 411, 415, 66 L.Ed.2d 308 (1980), the Supreme Court held that § 1738 generally requires that federal courts give preclusive effect to state-court judgments where the federal claimant has a “full and fair opportunity” to litigate the federal claim in the earlier state court case. Id. at 95-96, 101 S.Ct. at 415. In Allen, the Court, in giving preclusive effect to a state court judgment on a federal Constitutional claim under 42 U.S.C. § 1983, found that there is no universal right to litigate federal claims in federal court. See id. at 104-05, 101 S.Ct. at 419-20.

In Blonder-Tongue Labs, Inc. v. University of Illinois Foundation, 402 U.S. 313, 91 S.Ct. 1434, 28 L.Ed.2d 788 (1971), a case relied on in Allen, the Supreme Court, for the first time, rejected the requirement of mutuality. The mutuality requirement limited collateral estoppel claims to cases in which the same parties were involved in the prior lawsuit. The Court allowed a defendant to preclude a plaintiffs claim based on a prior judgment on the same issue against the plaintiff in a suit to which the defendant was not a party. That ruling has been reaffirmed, see Allen, 449 U.S. at 95, 101 S.Ct. at 415 and even expanded to allow “offensive” use of collateral estoppel, Parklane Hosiery Co. v. Shore, 439 U.S. 322, 99 S.Ct. 645, 58 L.Ed.2d 552 (1979), rather than merely the “defensive” collateral estoppel employed in Blonder-Tongue.

Defendant in the instant action is seeking defensive use of collateral estoppel. There is little doubt that the Union received a full and fair opportunity to litigate the issue of whether a receiver, appointed under New York Public Health Law § 2810(2) (McKinneys 1977), is subject to federal jurisdiction as an employer under the LMRA in the prior state court action. Thus, the Union is collaterally estopped from reliti-gating that issue in this action.

The Union contends that it is not really bringing this action against the receiver, but against Sheepshead. Under a state receivership order, however, the receiver cannot be disentangled from the institution he is responsible for overseeing. New York law empowers a receiver to collect all incoming payments and administer the health care facility in all respects. N.Y.Pub.Health Law § 2810(2)(c). In the instant case, Chopp, as receiver for Sheeps-head, was specifically empowered to collect all Medicaid payments and other receivables and to take charge of all Sheepshead bank accounts, records, equipment and supplies. In re Parker, at 5-6.

Alan Chopp was not appointed to that position as part of a conspiracy to defraud the Union pensioners of their benefits. The court order appointing a receiver, made pursuant to § 2810(2), see In re Parker, at 6, was done.“[a]s a means of protecting the health, safety and welfare of the patients in a residential health care facility ...” § 2810(2)(a). To this end, state law, § 2810(2)(c), see Greenblatt, 430 N.Y.S.2d at 963; In re Riker, 204 N.Y.S.2d 60, 62 (Sup.Ct.Suffolk Cty.1960), and the state court order appointing Chopp, In re Parker, at 6, gave Chopp the discretion to affirm or reject prereceivership and receivership debts. His opposition to this lawsuit belies any notion that he has affirmed the alleged obligations of Sheepshead to the Union. Thus, Sheepshead, as administered by Chopp, cannot be found liable to the Union in this action.

. The Court, however, is aware of no reason why the Union could not proceed against the prereceivership operators and owners of Sheepshead. They agreed to be bound by the contract with the Union and the court order appointing Chopp as receiver explicitly states that “the present operators will remain liable for pre-receivership, and receivership debts, and obligations, to the extent not paid by the Receiver.” In re Parker, at 6. The appointment of a receiver does not shield Sheepshead’s prere-ceivership operators from liability; only the receiver and institution are shielded.

CONCLUSION

In Greenblatt v. Ottley, a New York State court decided that receivers, appointed under New York Public Health Law § 2810(2), are not employers under the LMRA. Since the plaintiffs in the instant action were the defendants in Greenblatt, and they had a full and fair opportunity to litigate this jurisdictional issue in that state case, plaintiffs are collaterally estopped, under 28 U.S.C. § 1738, from relitigating the jurisdictional issue before s this Court.

Accordingly, defendant’s motion to dismiss plaintiffs’ complaint is granted.

Plaintiffs are directed to return to defendant the February 10, 1985 payment made to the Union, pursuant to the TRO issued by this Court on February 5, 1985, by March 15, 1985. Should this payment not be made, plaintiffs will forfeit their posted $10,000 security and pay defendant any deficiencies from the February 10th pension payment in excess of the security. If the security exceeds the pension payment, any surplusage shall be returned to plaintiffs.

SO ORDERED.

      . Plaintiffs also seek relief under the Employee Retirement Income Security Act, 29 U.S.C. § 1145 (Supp.1984) ("ERISA”). ERISA encompasses definitions under the LMRA and therefore, to the extent this Court is collaterally es-topped from asserting jurisdiction under the LMRA to hear this case, it also lacks jurisdiction under ERISA.

      . The Supreme Court has consistently emphasized the importance of collateral estoppel in fulfilling the purpose for which civil courts have been established: the conclusive resolution of disputes within their jurisdiction. Kremer v. Chemical Construction Corp., 456 U.S. 461, 102 S.Ct. 1883, 1889 n. 6, 72 L.Ed.2d 262 (1982). Invocation of the doctrine of collateral estoppel "relieve[s] parties of the cost and vexation of multiple lawsuits, conserve[s] judicial resources, and, by preventing inconsistent decisions, encourage[s] reliance on adjudication.” Allen, 449 U.S. at 94, 101 S.Ct. at 414. This doctrine also promotes "the comity between state and federal courts that has been recognized as a bulwark of the federal system.” Id. at 96, 101 S.Ct. at 415; see Kremer, 102 S.Ct. at 1890 n. 6.

      . Plaintiffs contend that under National Labor Relations Board v. National Gas Utility District, 402 U.S. 600, 91 S.Ct. 1746, 29 L.Ed.2d 206 (1971), it is the role of a federal court, rather than a state court, to decide whether an entity is a "political subdivision" under § 2(2) of the LMRA. The Court held that, in making this determination, the lower federal courts should not rely exclusively on a state court interpretation of the state law under which the entity in question is organized. Federal, rather than state, law should control the interpretation of the LMRA. Id. at 602-03, 91 S.Ct. at 1748-49. Natural Gas, however, does not control the instant case. In Natural Gas, the state court interpretation relied on by the federal court was contrary to the interpretation of the National Labor Relations Board ("NLRB”). In the instant case, the state court relied on an NLRB interpretation in finding that a receiver is not an employer under the LMRA. More important, we based today’s decision on principles of collateral estoppel; we are not simply deferring to a state court interpretation of federal law.

      . In Ottley v. Crown Nursing Home, No. 85 Civ. 100 (S.D.N.Y. Feb. 19, 1985), Judge Sprizzo refused to enforce an arbitration decision, at the request of the same union involved in the instant case, against the receiver of another nursing home. (Transcript at 3-6). In denying the Union’s motion to confirm the arbitration award, Judge Sprizzo said: "I cannot enforce the arbitration award against the Receiver because the Receiver is not a party to the agreement. That is elementary contract law.” (Transcript at 8).

      . The Court is not vacating the arbitration award. Having failed to find jurisdiction to hear this case, we do not reach that, or any of the many other issues'raised in this case.


author: VINING, District Judge.

text:
    Elaine J. KAHN, individually and as next friend of Belton Troy Holder, III, a minor, Plaintiff, v. SEARS, ROEBUCK AND CO., U.S.A., Manco Products, Inc., and Tecumseh Products Company, Defendants.
    Civ. A. No. C 82-1483 A.
    United States District Court, N.D. Georgia, Atlanta Division.
    March 26, 1985.
    Gilbert H. Deitch & Gerald Kline, Bauer, Deitch & Raines, Atlanta, Ga., for plaintiff.
    W. Anthony Moss, Ben L. Weinberg, Jr., Long, Weinberg, Ansley & Wheeler, Atlanta, Ga., for Tecumseh.
    Ronald L. Reid, Alston & Bird, Atlanta, Ga., for Sears, Roebuck & Co.
    Glenn Frick, Lokey & Bowden, Atlanta, Ga., for Marnco Products, Inc.
   ORDER

VINING, District Judge.

This is a product liability case growing out of an incident which occurred on June 29, 1981, when the plaintiff’s son, an eleven-year-old, received burns and other injuries when a fun-kart he was operating overturned and the fuel tank burst into flames.

The fun-kart, which had been sold by Sears, Roebuck and Company, had been assembled by Manco Products, Inc., and was propelled by a gasoline engine manufactured by Tecumseh Products Company.

The original action and amendments thereto contain several causes of action, among them an allegation that the defendants violated the Consumer Products Safety Act, 15 U.S.C. § 2051, et seq. The plaintiff, Elaine J. Kahn, individually, seeks to recover for mental pain and emotional distress that she says she suffered upon learning of her child’s injury.

Each of the defendants has moved for summary judgment asserting that the Consumer Products Safety Act does not provide for a private right of action and that Kahn does not have an individual cause of action for mental pain or emotional distress in connection with her child’s injury because she was not present when the child was injured.

The plaintiff does not have a cause of action for mental pain or emotional distress alleged have occurred upon her learning of her child’s injury because she was not present at the time the injury happened. Southern Ry. Co. v. Jackson, 146 Ga. 243, 91 S.E. 28 (1916); Strickland v. Hodges, 134 Ga.App. 909, 216 S.E.2d 706 (1975); Goddard v. Watters, 14 Ga.App. 722, 82 S.E. 304 (1914).

Sears and Manco have also moved to dismiss Count V and Count VIII, respectively, of the plaintiff’s amended complaint which allege a violation of 15 U.S.C. §§ 2064, 2068, and 2069, in that Sears and Manco failed to take any action to notify any governmental agency that they had notice that the fun-karts were unsafe, defective, and dangerous even though they had allegedly obtained information which would reasonably support the conclusion that the fun-karts failed to comply with applicable consumer products safety rules or contained a defect which could create a substantial product hazard.

The code sections relied upon by the plaintiff do not themselves provide for a private right of action; the plaintiff instead relies upon 15 U.S.C. § 2072 which provides, “Any person who shall sustain injury by reason of any knowing (including willful) violation of a consumer products safety rule, or any other rule or order issued by the [Consumer Products Safety] Commission may sue any person who knowingly (including willfully) violated any such rule or order....” The clear, unambiguous wording of section 2072 provides a private cause of action only for the violation of a rule or order promulgated by the Consumer Products Safety Commission and does not provides a private cause of action for violation of section 2064, section 2068, or section 2069. The plaintiff contends, however, that she has a cause of action for Sears’ and Manco’s alleged failure to comply with the reporting requirements of section 2064(b) as detailed in certain interpretive rules issued by the Commission at 16 C.F.R. § 1115.1 et seq.

Whether section 2072 provides a private cause of action for failure to comply with interpretive rulings regarding the filing of certain information with the Commission is a question of first impression in this circuit. This court declines to follow the reasoning set forth in Young v. Robertshaw Controls Co., 560 F.Supp. 288 (N.D.N.Y.1983), and Butcher v. Robertshaw Controls Co., 550 F.Supp. 692 (D.Md.1981), which found that section 2072 did provide a cause of action for the failure to comply with the interpretive rules. This court believes that the reasoning set out in Morris v. Coleco Industries, 587 F.Supp. 8 (E.D.Va.1984), provides the better rule. As the Morris court noted, “Specific provisions dealing with a failure to report are contained in the Act. Sections 2069 and 2070 provide civil and criminal penalties as means for enforcing the disclosure requirements of § 2064. Further, the requirement to disclose is not a requirement based upon a rule or order of the Commission. It is a requirement predicated upon the statute itself. Further, it appears illogical to me that Congress would have supposed that a failure to disclose a mishap to the Commission might proximately cause an injury.” 587 F.Supp. at 9-10. This court holds that section 2072 was intended to give a cause of action only for the violation of a substantive rule promulgated by the Commission and not to any administrative rule which simply interprets the statute with respect to filing information with the Commission.

For the foregoing reasons, the defendants’ motions for summary judgment on the plaintiffs claim for mental and emotional distress and the defendants’ motions to dismiss Counts Y and VIII of the complaint, alleging a violation of the Consumer Products Safety Act, are GRANTED.


text:
    Donna Perkins NELSON, Juanita Harmon, Deborah D. Chandler, and Brenda Arrington, Plaintiffs, v. Richard H. BRYAN, Brian McKay, William D. Swackhamer, Vernon G. Housewright, Bert Koon, Brenda Burns, John Ignacio, Judy King and Jessie Walsh, Defendants.
    No. CV-R-83-230-ECR.
    United States District Court, D. Nevada.
    March 27, 1985.
    Lawrence J. Semenza, Reno, Nev., for plaintiffs.
    Brian McKay, Atty. Gen. by Dan R. Reaser, Deputy, Carson City, Nev., for defendants.
   MEMORANDUM DECISION AND ORDER

EDWARD C. REED, Jr., District Judge.

The defendants have moved for summary judgment. The plaintiffs have acknowledged that defendants Bryan, McKay and Swackhamer, who have been sued in their capacity as members of the State Board of Prison Commissioners, are not properly subject to this lawsuit. Therefore, the following discussion involves • defendants Housewright, the Director of the Nevada Department of Prisons, Koon, the Warden of the Nevada Women’s Correctional Center (NWCC), Burns, a Lieutenant assigned to NWCC at all times here material, Ignacio, the Deputy Warden of the Nevada State Prison, and King and Walsh, Counselors assigned to NWCC at all times here material.

The complaint is based on 42 U.S.C. § 1983. It alleges that the plaintiffs, who are inmates of NWCC, were placed in administrative segregation and maintained in such restrictive custody for approximately three months in violation of their procedural due process rights. Specifically, they complain of not being afforded a timely opportunity to: (1) make statements or call witnesses in their own behalf, (2) confront and question adverse witnesses, (3) be represented by inmate counsel or impartial staff members, (4) prepare for hearing, and (5) have their hearings tape-recorded.

On March 3, 1983, an emergency head count was conducted at NWCC. This necessitated a lockdown during which all inmates were confined to their assigned housing. Immediately, five of the inmates were transferred to correctional institutions in other jurisdictions, five (including plaintiffs Chandler and Arrington) were moved to the nearby Douglas County correctional facility, and eight (including plaintiffs Nelson and Harmon) were placed in administrative segregation housing within NWCC. Between March 3rd and 5th the entire remaining inmate population of approximately one hundred thirty-two women and all housing areas were searched. Among the items found were marijuana and paraphernalia, metal objects that could be used for or fashioned into weapons, electrical appliances in the possession of inmates other than their rightful owners, unauthorized identifications and excessive amounts of money. The lockdown was precipitated by the findings of an investigation consisting of interviews with inmates, confidential informants and staff members. The indications were that some eighteen inmates, including the plaintiffs, were associating together to engage in drug trafficking (with the aid of visitors and a local business). In addition, the investigation revealed that the eighteen inmates were engaging in homosexual activity, were abusing work release programs by trafficking in contraband, were intimidating other inmates to obtain drugs, money and other property, and were assaulting other inmates in connection therewith. Further, a confidential informant advised, on March 2d, that certain inmates were going to meet on March 5th to plan a prison strike or disturbance for March 14th. The administrative segregation transfers were deemed by defendants Housewright and Koon to be an appropriate way of separating the disruptive inmates from the general population of NWCC.

No contraband was discovered in the plaintiffs’ living quarters nor on their persons, although evidence of drugs was found in plaintiff Chandler’s urine. No disciplinary charges were pressed against any of the plaintiffs.

On March 3rd, at the commencement of the lockdown, eách plaintiff was taken to an office at NWCC for a “special classification hearing.” They were there informed verbally that they were charged with predatory gang activities, pressuring other inmates for sexual favors, and drug solicitation activities. They were given no opportunity to speak in their own behalf. All four plaintiffs were classified to administrative segregation for six months, with weekly reviews to be made of their classification. Written notices of the classification decisions were provided the four plaintiffs between five and eight days after their transfers. Second classification hearings were accorded them within the same time interval. They were there permitted to discuss and state their views as to the propriety of classifying them to administrative segregation. Subsequent review hearings were conducted for each of them at one-to two-week intervals for a month or so, then at two-to-three week intervals. All were returned to the general population of NWCC on or before June 1st.

A state creates a constitutionally protected liberty interest by requiring its decisionmakers to base their decisions on objective and defined criteria. Olim v. Wakinekona, 461 U.S. 238, 249, 103 S.Ct. 1741, 1747, 75 L.Ed.2d 813 (1983). Nevada law does so limit the use of administrative segregation. Nevada Department of Prisons Procedure No. 205(7)(a) reads, in pertinent part:

“Inmates that are placed in administrative segregation or lockup, shall not be placed on this status as punishment, but this designation shall be used under the following circumstances:
—to allow time for classification of inmates;
—maintain order in the institution; or
—to protect inmates;
—to assess the possibility of re-programing in less secure housing.”

Since an inmate may not be placed in administrative segregation unless one of the specified circumstances exists, a protected liberty interest has been created.

Nevada Department of Prisons Procedure No. 205(8)(a)(2) reads:

“In those instances where an inmate’s level of custody is considered for an increase, a written notice is required. The notice shall indicate to the inmate that he/she has the right to be assisted by a counselor or staff member of the inmate’s choosing, at the classification meeting. When assistance is requested, it shall be given at a reasonable period prior to the meeting.”

This procedural regulation does not place any significant limitations on the discretion of the decisionmakers but, rather, merely provides an outline of relevant considerations; therefore it does not give rise to a constitutionally protected interest in the procedure. Goodisman v. Lytle, 724 F.2d 818, 820-1 (9th Cir.1984); Hewitt v. Helms, 459 U.S. 460, 103 S.Ct. 864, 871, 74 L.Ed.2d 675 (1983). As a consequence, any violation of the regulation would not serve as the basis for a § 1983 action in a federal court. The plaintiffs herein cannot successfully resist the instant motion for summary judgment solely on the ground that Procedure No. 205(8)(a)(2) was not complied with by the defendants.

In light of Procedure No. 205(7)(a)’s specific admonition that an inmate may not be placed in administrative segregation as punishment, a claim for relief under § 1983 would be established if the plaintiffs showed that they were so classified as punishment. Soto v. City of Sacramento, 567 F.Supp. 662, 690 (E.D.Cal.1983). The plaintiffs point out that they originally were “sentenced” to six months in such classification, rather than an indefinite period until the circumstances had changed. Also, they emphasize that the predatory gang activities which were given as reasons for their segregation would subject them to disciplinary action. None of them was charged in disciplinary proceedings. The defendants, however, have documented, in their affidavits and exhibits in support of their motion, that their activities were intended to maintain order in NWCC and protect the other inmates there. The propriety of utilizing administrative segregation to accomplish such aims is recognized. See Hewitt v. Helms, 103 S.Ct. at 869-870. In such a situation the plaintiffs must make an affirmative showing to create a genuine issue as to the fact of the defendants’ intent. See Vucinich v. Paine, Webber, Jackson & Curtis, Inc., 739 F.2d 1434, 1436 (9th Cir.1984). This the plaintiffs have not done; instead, in their opposing papers they have emphasized the procedural due process rights of an adversarial hearing, an opportunity to present witnesses, the assistance of inmate counsel or staff members, and advance notice that would give them time to prepare.

The plaintiffs were not constitutionally entitled to hearings before their transfers, but only within a reasonable time thereafter. Hewitt v. Helms, 103 S.Ct. at 872, 874 n. 8. The hearing itself need be only an informal, nonadversary evidentiary review. Id. at 874. The inmate must receive some notice of the charges against her and an opportunity to present her views to the officials charged with deciding whether administrative segregation is called for. Id. If this procedure is followed and the deci-sionmakers review the evidence, the Due Process Clause is satisfied. Id. Such a review occurring less than a month after the initial decision to transfer the inmate to administrative segregation was deemed sufficient to dispel any notion that the transfer was a pretext in Hewitt. Id. at 874-5 n. 9.

The controlling law as set forth in Hewitt having been complied with by the defendants, it must be concluded that there are no genuine issues of material fact and the defendants are entitled to judgment as a matter of law. See Zoslaw v. MCA Distributing Corp., 693 F.2d 870, 883 (9th Cir.1982).

IT IS, THEREFORE, HEREBY ORDERED that the Clerk shall enter summary judgment in favor of all the defendants and against all of the plaintiffs.