author: LEGGE, District Judge.

text:
    MATSON NAVIGATION COMPANY, INC., Plaintiff, v. STAL-LAVAL TURBIN AB, Asea Stal-Laval, Inc., and Asea AB, Defendants, Bremer-Vulkan Schiffbau Und Maschinenfabrik, Third-Party Defendant.
    No. C-84-0659-CAL.
    United States District Court, N.D. California.
    March 21, 1985.

      J. Stewart Harrison, Kelly C. Wooster, Brian F. Berger, Brobeck, Phleger & Harrison, San Francisco, for plaintiff.
    John H. Riddle, Lillick, McHose & Charles, San Francisco, Cal., Philip Le B. Douglas, Hale, Russell & Gray, New York City, for defendants.
    John D. Kimball, Healy & Braillie, New York City, Eric Danoff, Graham & James, San Francisco, Cal., for third party defendant.
   OPINION AND ORDER

LEGGE, District Judge.

Defendants duly moved (1) to dismiss under (a) Fed.R.Civ.P. 12(b)(6) and (b) the principle of forum non conveniens; (2) for summary judgment on behalf of two defendants; and (3) for sanctions on behalf of one defendant. At the hearing the motions for summary judgment were denied without prejudice, the motion for sanctions was denied and the motions to dismiss were submitted.

The court has studied the very competent and extensive briefs of both sides, the affidavits and declarations in support of and in opposition to the motions, and the legal authorities.

The court now orders, for the reasons set forth below, that the action be dismissed on the ground of forum non conveniens.

Because of that dismissal, the court does not reach the motion under Rule 12(b)(6),' since the applicable law should be decided by whatever forum assumes jurisdiction over this dispute.

I.

The following material facts are contained in the pleadings, affidavits and declarations. The court expresses no opinion on the merits of those facts, the allegations or the defenses.

Plaintiff Matson Navigation Company, Inc. (“Matson”) is a corporation formed under the laws of the State of Hawaii. Its corporate office and principal place of business is within this district. Defendants Stal-Laval Turbin AB (now Asea Stal AB) and Asea AB are Swedish companies. The former is a wholly-owned subsidiary of the latter. Asea Stal-Laval, Inc. (now Asea Stal Inc.) is a New York corporation and is a wholly-owned subsidiary of Stal-Laval Turbin AB. Third-party defendant Bremer-Vulkan is a West German corporation.

In 1966 Stal-Laval Turbin AB entered into a licensing agreement with Bremer-Vulkan. Under that agreement, Bremer-Vulkan was given the right to manufacture ship engines designed by Stal-Laval Turbin AB.

In 1967 Matson purchased two sets of ship engines from Bremer-Yulkan for use in two vessels being built for Matson by Bethlehem Steel Corporation in Maryland. Stal-Laval Turbin AB designed the engines, including the turbine rotors; Bremer-Vulkan manufactured those engines and supervised their installation.

In 1983 the engine on one of the ships was opened by Matson and the turbine rotor removed. During that inspection, Matson determined that the turbine rotor of the engine was fractured. The engine on the second ship was then examined, and a similar crack in its turbine rotor was discovered.

II.

Matson sues in this district. It alleges that defendants negligently designed the turbine rotors, and that defendants failed to warn plaintiff of allegedly known design defects. Matson attempts to allege tort causes of action. Defendants contend that Matson’s causes of action are actually for breach of contract and breach of warranty. Whichever theories are correct, it is apparent that the relationships between the parties arose from negotiated contracts for the design, manufacture and purchase of the engines.

Matson has not sued Bremer-Vulkan, the manufacturer of the engines. But the record shows that this dispute will involve factual questions regarding the manufacture as well as the design of the engines purchased by Matson. Under the terms of the agreement betweén Matson and Bremer-Vulkan, the parties agreed that disputes involving the engines would be resolved by arbitration before the International Chamber of Commerce (“ICG”) in Paris, France, and that the law of West Germany would be applied.

This court previously granted defendants’ motion to implead Bremer-Vulkan as a third-party defendant under Fed.R.Civ.P. 14. Defendants contend that Bremer-Vulkan is responsible for negligent manufacture of the engines, and for any defects in the design of the engines under the terms of the licensing agreement between StalLaval Turbin AB and Bremer-Vulkan. This licensing agreement provided that any disputes would be resolved through ICC arbitration under the laws of the United Kingdom. Although Bremer-Vulkan has been served with process, it has not yet appeared in the action.

III.

The standard governing a forum non conveniens motion recently has been reviewed by the Ninth Circuit in Cheng v. Boeing Co., 708 F.2d 1406 (9th Cir.), cert. denied, — U.S. —, 104 S.Ct. 549, 78 L.Ed.2d 723 (1983). There, the court endorsed the principles set forth by the Supreme Court in Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 67 S.Ct. 839, 91 L.Ed. 1055 (1947). Both decisions require this court to consider the “private interest factors” affecting the convenience of these litigants and the “public interest factors” affecting the convenience of the forum. Under those principles, Matson’s choice of forum should not be disturbed “unless the balance is strongly in favor of the defendant.” Gulf Oil, supra, 330 U.S. at 508, 67 S.Ct. at 843. In order to have this action dismissed for forum non conveniens, defendants must make:

a clear showing of facts which either (1) establish such oppression and vexation of a defendant as to be out of proportion to the plaintiff’s convenience, which may be shown to be slight or nonexistent, or (2) make trial in the chosen forum inappropriate because of considerations affecting the court’s own administrative and legal problems.

Cheng, supra, 708 F.2d at 1410.

Upon reviewing the authorities and the record, this court is of the opinion that defendants have made the requisite showing to overcome Matson’s initial right to its choice of forum.

IV.

A.

There are adequate alternative forums.

In the agreement under which Matson purchased the engines from Bremer-Vulkan, Matson consented to arbitration before the ICC in Paris. Although defendants were not parties to that agreement, Stal-Laval Turbin AB entered into a separate contract with Bremer-Vulkan regarding the use of Stal-Laval Turbin AB’s design of the engines; that contract also provided for arbitration of disputes before the ICC. In addition, later agreements between Matson and defendants, relating to replacement parts for the engines, called for ICC arbitration in the event of disputes. Matson’s dealings with Bremer-Vulkan and defendants may also be subject to a standard contract provision of the “general conditions for the supply of plant and machinery for export,” known as “UN 188.” UN 188 contemplates the application of the law of the country of the vendor, and the resolution of disputes by ICC arbitration. It appears, therefore, that all of the written agreements between the parties over the course of their twenty year relationship provided that disputes would be resolved by ICC arbitration in Paris. In these motions, defendants have consented to arbitration before the ICC in Paris.

The record also indicates that courts in several European forums could assert jurisdiction over the parties. Thus, in lieu of arbitration before the ICC, Matson could attempt to sue defendants or Bremer-Vulkan in Sweden, West Germany or another European forum.

B.

This is an international commercial dispute involving engines designed and built in Europe.

The essence of the case is what happened to the rotors and why. The issues to be litigated will relate to the design, manufacture and use of the product. The issues also will involve the contractual relationships among the parties, and of course the ultimate question of which of the parties will bear the losses.

Those issues can and should be resolved in a forum which was within the expectations of the parties. The agreements to which Matson was a party, regarding the engines and replacement parts, expressly contemplated a European forum. So did the agreement between Stal-Laval Turbin AB and Bremer-Vulkan. Thus, the parties contemplated European venue in their international transactions, and that contemplation should be given great weight.

This court would be less able to provide a full resolution of the disputes than the ICC or a court in Europe. Bremer-Vulkan is not a defendant here, and if named as a defendant would undoubtedly seek ICC arbitration under the terms of its contract with Matson. This court might not even be able to resolve the indemnification dispute between defendants and Bremer-Vulkan in the third-party complaint, because Bremer-Vulkan could compel arbitration of that dispute before the ICC. At most, this court could provide Matson a judgment against defendants; the rest of the case would require another forum. On the other hand, the ICC or a European court' could resolve the entire matter in one proceeding.

C.

The law to be applied is another factor that favors a European forum.

The parties disagree on what law should be applied to resolve the underlying disputes. Matson argues for the application of general admiralty law, and for certain principles of California law. Defendants contend primarily for the application of Swedish or West German law. The various contractual agreements between the parties provided for application of West German, British or Swedish law.

Suffice it to say, that either this court or a foreign forum would be required to resolve the issue of what law should be applied to the various aspects of the transactions. A trial in this district would not eliminate the choice of law issues and automatically require the application of California or admiralty law. And if the law of one of the European nations is to be applied, which appears probable under the language of the contractual agreements between the parties, the appropriate European forum could better interpret the law of its own country than could this court.

D.

Another consideration is the comparative burden on the parties of trial in this district or in Europe.

Each side points to numerous witnesses and documents which must necessarily be transported to some foreign forum. This court is of the opinion that the burden would be less for Matson to transport its witnesses and documents, which will primarily pertain to the fact of loss and the amount of damage, to Europe. The evidence on liability, involving design and manufacture, is in Sweden and West Germany; and that evidence, both witnesses and documents, should be far more extensive than Matson’s evidence.

Other factors cited by the parties appear to be evenly balanced between the forums; for example, the use of foreign language interpreters, the compelling of evidence, and other procedural matters.

V.

The court therefore concludes that both the private and public interest factors discussed in Cheng and Gulf Oil weigh heavily in favor of a European forum and the record meets the standards stated in those cases for dismissal under the principle of forum non conveniens.

NOW, THEREFORE, IT IS ORDERED AS FOLLOWS:

Defendants’ motion to dismiss on the ground of forum non conveniens is granted, and the action is hereby dismissed, subject to the following conditions:

1. Defendants submit themselves to a forum in which plaintiff institutes an action in Europe, either arbitration before the International Chamber of Commerce in Paris, France, or appropriate civil litigation in a European court.

2. The forum selected by plaintiff asserts jurisdiction over these disputes.

3. Defendants agree to consolidate all proceedings in these disputes, involving plaintiff, Bremer-Vulkan and themselves, into one action.

4. Defendants, or any of them who are financially responsible, consent to satisfy any judgment that may be rendered against them in favor of plaintiff.

5. Defendants agree to toll the running of all statutes of limitation during the period of time from the date this action was commenced until the date that this order is filed.

Because this action is being dismissed on the ground of forum non conveniens, the court does not reach defendants’ motion to dismiss under Fed.R.Civ.P. 12(b)(6).


source: Caselaw Access Project

author: HOBBS, Chief Judge.

license: Public Domain

text:
    Bruce A. BOTTGER, Plaintiff, v. DOSS AERONAUTICAL SERVICES, INC.; Aviation Contractor Employees, Inc., Defendants.
    Civ. A. No. 84-H-81-S.
    United States District Court, M.D. Alabama, S.D.
    March 29, 1985.

      John C. Bell, U.S. Atty., D. Broward Segrest, Asst. U.S. Atty., Montgomery, Ala., U.S. Dept, of Labor, Office of the Sol., Bobbye D. Spears, Regional Sol., and William H. Berger, Atlanta, Ga., for plaintiff.
    Kenneth T. Fuller, Enterprise, Ala., for defendants.
   MEMORANDUM OPINION

HOBBS, Chief Judge.

Plaintiff in this cause seeks an adjustment of his seniority and restitution for wages and other benefits lost due to an alleged violation of his rights under the Veterans’ Reemployment Rights Act, 38 U.S.C. § 2021, et seq. There being no issue as to any material fact in this case, the case has been submitted to the Court on a joint stipulation of fact. This Court has jurisdiction pursuant to 38 U.S.C. § 2022. The Court holds that plaintiff is entitled to a judgment in his favor in the amount of $4,857.59, with interest. The Court now enters its findings of fact and conclusions of law pursuant to Rule 52 Federal Rules Civil Procedure.

FINDINGS OF FACT

The Court is satisfied that the joint stipulation of facts entered into and submitted by the parties sets forth all of the relevant facts and the Court adopts said stipulation as its findings of fact relied upon in arriving at its conclusions of law.

CONCLUSIONS OF LAW

The Court’s analysis is in three parts. First, the Court considers whether plaintiff’s leave request was reasonable.' Secondly, it considers what effect plaintiff’s resignation and subsequent voluntary extension on active duty has on defendants’ liability. Finally, it considers the issue of liability.

Was Plaintiffs Leave Request Reasonable?

It is important to note the statutory bases around which this action revolves.

38 U.S.C. § 2024(d) provides in pertinent part:

Any employee ... shall upon request be granted a leave of absence for the period required to perform active duty for training or inactive duty training in the Armed Forces of the United States. Upon such employee’s release from a period of such active duty for training or inactive duty training ... such employee shall be permitted to return to such employee’s position with such seniority status, pay and vacation as such employee would have had if such employee had not been absent for such purposes____

38 U.S.C. § 2021(b)(3) provides:

Any person ... shall not be denied retention in employment or any promotion or other incident or advantage of employment because of any obligation as a member of a reserve component of the Armed Forces.

The Court in Lee v. City of Pensacola, 634 F.2d 886 (5th Cir. Unit B 1981) adopted a “rule of reason” in analyzing cases arising under these statutory provisions. It recognized that the appropriate evaluative process is to consider whether “the length of time of such a leave for training and the circumstances surrounding the request for it as well as the circumstances existing when the officer returned to seek employment” were reasonable under the totality of the circumstances. Lee, supra, at 888. The instant case does not involve a refusal to re-employ so the second part of the Lee inquiry is not applicable here; however, a “reasonableness” under the totality of the circumstances approach is appropriate and has been applied.

In analyzing such a request, the Act is to be “construed liberally in favor of the veteran,” Lee, supra, at 889; Duey v. City of Eufaula, Alabama, CA No. 79-149-N (M.D.Ala. Oct. 31, 1979). As plaintiff notes, this principle was further developed in Monroe v. Standard Oil Co., 452 U.S. 549, 101 S.Ct. 2510, 69 L.Ed.2d 226 (1981), when the United States Supreme Court stated that § 2024(d) provides that “employees must be granted a leave of absence for training and, upon their return, be restored to their position ‘with such seniority status, pay and vacation’ as they would have had if they had not been absent for training.” Monroe, supra, at 555, 101 S.Ct. at 2514. The Court further recognized that “the nondiscrimination requirements of (§ 2021(b)(3)) impose substantial obligations upon employers.” It stated, however, that while “[T]he frequent absences from work of an employee-reservist may affect productivity and cause considerable inconvenience to an employer who must find alternative means to get necessary work done, Congress has provided ... that employers may not rid themselves of such inconveniences and productivity losses by discharging or otherwise disadvantaging employee-reservists solely because of their military obligation.” . Monroe, supra, at 565, 101 S.Ct. at 2519. While plaintiff would apparently go so far as to read Monroe as eliminating considerations of reasonableness with respect to hardships caused the employer, this Court is not prepared to go so far. Rather, it is this Court’s opinion that Monroe is better read as reinforcing the principle that the Act is to be construed liberally in favor of the employee reservist, while Lee’s “reasonableness” concept remains as the framework for analysis.

This Court finds the variation on Lee applied by the Court in Anthony v. Basic American Foods, Inc., 600 F.Supp. 352 (N.D.Ca.1984) to be an appropriate form for an evaluation of the reasonableness of the request in the instant case. The Anthony court stated that such a leave request should be evaluated as to whether it was reasonable “in light of: 1) the circumstances giving rise to the request and 2) the requirements of the employer.” The court took the approach throughout its inquiry that there is a presumption that the leave is protected under the Act. This is clearly in line with the “liberally construed in favor of the veteran” language in Lee and shall be adopted by this Court.

Given this framework, the Court considers the parties’ contentions. Defendants contend with respect to the first prong of Anthony, the “circumstances giving rise to the request,” that plaintiff’s request was unreasonable in that plaintiff had just returned from a two-week tour of active duty and the requested 26-day leave period was not of an obligatory nature. Plaintiff responds that while the leave was not required of him by the Army, it was a “one-shot deal” which would enhance his reserve career. Moreover, the law is clear that the Act applies to training duty whether required or not, Lee, supra, at 889; and “an employee is covered by the re-employment provisions of the Act regardless of whether he volunteers for active duty or is compelled to perform such duty” Nieman v. Alpine Brook Triangle Corp., 69 CCH Labor Cases ¶ 12,940 at 24,994 (S.D.N.Y. 1972). Defendants also complain that plaintiff failed to discuss with Doss the fact that the training was not mandatory. The Court finds no merit in such a complaint and finds that the form in which plaintiff made his request comported with the Act’s requirements. See Nieman, supra, at 24, 994. In short, the circumstances giving rise to the request were reasonable and within the contemplation of the Act.

Defendants’ contentions with respect to the second prong of the Anthony “reasonableness” evaluation, the consideration of the “requirements of the employer,” have substantially more merit. Defendants again point out that plaintiff had just returned from a two-week military leave, that his request for the 26-day leave came during the “summer camp” season, that thirty to fifty percent of its employees were also reservists, and that plaintiff’s absence would further exacerbate an already difficult situation in which management had been filling in for flight instructor reservists with complaints from the union for so doing.

Defendants rely on Lee, supra, in support of their position that the request was unreasonable in light of the hardship to the employer. The Court finds this to be a rather compelling basis for their argument in general terms but finds that it fails in this case for three reasons. First, Lee is factually distinguishable from the instant case. Secondly, a reading of Lee and its “rule of reason” must be supplemented by Monroe, supra, insofar as it discusses the relative weight to be given to the inconveniences caused to the employer vis-a-vis the important service performed by the reservist and encouraged to be performed by Congress. Thirdly, there is a good bit of case law in this area in which courts have held such requests for'leave to be “reasonable” where the totality of the circumstances was far more questionable to the concept of “reasonableness” than that present in this case.

The basic factual distinction between this case and Lee, supra, is that Lee did not involve a situation in which the plaintiff was denied the leave originally requested, Lee, supra, at 888; while that is clearly what occurred here. This is a fundamental difference for in this case all which occurred, including the resignation and subsequent extension on active duty flowed from Doss’ denial of plaintiff’s request. But for that denial, which this Court finds today to have been a violation of the Act, there would be no case before the Court on this matter. Secondly, the period of time involved in the two cases varies greatly. In Lee, the plaintiff had been on a 59-day leave when he requested an extension for four months with a date chosen apparently wholly to suit his own convenience. Lee, at 888. In the instant case, plaintiff had just returned from his two week “summer camp” duty, but even assuming this to be relevant (which is arguable since his request for the 26-day period was evidently unrelated to the summer camp and was clearly not a foreseeable “extension”), his subsequent request was only for twenty-six days and the opportunity was apparently only to be offered at that time with no other dates available. (Bottger dep. at 49, 70, 73-74)

With respect to Monroe, supra, as has already been indicated, it can be said to qualify Lee to a degree without supplanting it for it makes clear that Congress anticipated that the Act would cause inconveniences and possible decreases in productivity for employers but determined that employers could not respond to such effects by denying seniority to employee reservists “solely because of the military obligations,” Monroe, supra, 452 U.S. at 565, 101 S.Ct. at 2519, which is what happened here.

Finally, with respect to other cases in this area, courts have found with sound reasoning that requests were reasonable (and therefore protected under the Act) which: 1) sought a four and a half month leave for non-obligatory training causing the employer to fire a new employee or create a superfluous position upon the reservist’s return, Anthony, supra; 2) sought a six-week leave for training sought by plaintiff on his own initiative, after having already taken approximately six weeks of military leave earlier in the year. See Green v. Spartan Stores, Inc., 95 CCH Labor Cases ¶ 13,847 at 22,470 (W.D.Mich. 1982).

In the final analysis, while it would appear that plaintiff’s requested 26-day leave, coming on the heels of a two-week leave, at a busy time of year for such leaves, and for a longer than usual period of time may well have caused Doss some serious inconveniences, it nevertheless was a reasonable request as a matter of law and was protected by the Act. Doss’ refusal to grant said request was in violation of the Act.

The Effect of Plaintiffs Resignation and Subsequent Extension on Active Duty

It is well settled that a resignation prior to entering upon active duty in the military service does not preclude the right to re-employment under the Act, since the purpose of the resignation is directly related to entry in the Armed Forces. Duey v. City of Eufaula, supra. See also Trulson v. Trane Co., 738 F.2d 770 (7th Cir.1984); Winders v. People Express Airlines, Inc., 595 F.Supp. 1512, 1518 (D.N.J.1984); Micalone v. Long Island R. Co., 582 F.Supp. 973, 978 (S.D.N.Y.1983). In this case the factor of plaintiff’s resignation is of even less relevance, since he was denied the requested leave and faced the prospect of being charged with unexcused absences (Bottger dep. 49-50, 52) which under the employee handbook could have led to his termination (Ex. G at p. 7). He resigned as a result of being faced with that prospect. Furthermore, its only relevance would be under the collective bargaining agreement or other company policy and clearly the Act prevails over either. See Hembree v. Georgia Power Co., 637 F.2d 423, 429 (5th Cir. Unit B 1981).

Similarly, plaintiff’s voluntary extension on active duty is irrelevant, for the record would clearly indicate that but for the illegal refusal of plaintiff’s request he would not have resigned and but for his resignation he would not have extended his service on active duty. There is no need therefore for the Court to consider the reasonableness of the length of time of such extension. The Court notes, however, that the court in Anthony, supra, addressed the question of whether there is a 90-day limit on such a leave of absence under the Act and found that none exists, citing rather persuasive legislative history on the subject. Accordingly, plaintiff’s resignation and subsequent voluntary extension are of no moment to the outcome in this case.

Liability of the Parties

The parties have stipulated to the fact that each of the employers is a successor in interest to the contract at Fort Rucker, Alabama, pursuant to the Service Contract Act, 41 U.S.C. § 351 et seq. (sic) They have further stipulated that if plaintiff prevails on the liability issue, his loss of wages is $4,857.59. This represents the lost wage differential between May 16, 1979 and October 1, 1983 plus lost bonuses for 1978 through 1981. Pursuant to said stipulation the loss is attributable as follows: Doss Aviation, Inc., $512.00; Doss Aeronautical Services, Inc., $3,833.53; and Aviation Contractor Employees, Inc., 512.-00. The Court has considered whether these two “successor corporations” should be held liable for the violative conduct of Doss under the framework set forth in In re National Airlines, Inc., 700 F.2d 695, 698 (11th Cir.1983) and Chaltry v. Ollie’s Idea, Inc., 546 F.Supp. 44 (W.D.Mich.1982) and concludes the following: The stipulated facts indicate that while Doss and DASI had common ownership, all three employers had the same “flight supervisory personnel, regular employees, equipment or facilities, labor policy or working conditions and the same function ... was performed.” (Stipulation No. 5) Both DASI and ACE clearly had notice of the violation of the Act and of the claim thereunder. The remaining Chaltry factors are likewise satisfied by both; accordingly, judgment is to be awarded in favor of plaintiff and against both defendants which shall be jointly and severally liable for the amount of $4,857.59, plus accrued interest from May 16, 1979.

The Court finds there to be no merit in defendants’ laches claim for there has been no sufficient showing of prejudice to the defendants by plaintiff’s action. See Goodman v. McDonnell Douglas Corp., 606 F.2d 800 (8th Cir.1979), cert. den. 446 U.S. 913, 100 S.Ct. 1844, 64 L.Ed.2d 267 (1980), and the Court finds none to have resulted.

The Court grants this judgment in plaintiff’s favor fully cognizant of the fact that the employer was faced with a very difficult situation. The • Court is bound in its determination, however, by the Act and the policies encompassed therein. Congress has established a clear policy as to how such difficult situations must be resolved and defendants have acted in contravention of that policy.

A separate judgment will be entered in accordance with this memorandum opinion.

JUDGMENT

In accordance with the attached memorandum opinion, . it is ORDERED, ADJUDGED and DECREED that plaintiff Bruce A. Bottger have and recover from defendants Doss Aeronautical Services, Inc. and Aviation Contractor Employees, Inc., jointly and severally, the sum of $4,857.59, plus accrued interest from May 16, 1979.

It is further ORDERED that (1) the motion to amend Doss’ answer is granted, (2) the parties’ motion to amend the Joint Stipulation of Facts is granted, and the summary judgment motions of the parties are moot.

It is further ORDERED that the court costs incurred in this proceeding are taxed against defendants, for which execution may issue.


author: BLÜMENFELD, Senior District Judge.

text:
    The NESTLE COMPANY, INC. v. CHESTER’S MARKET, INC. and Saccone’s Toll House, Inc.
    Civ. No. H-82-445.
    United States District Court, D. Connecticut.
    April 1, 1985.

      Thomas J. Ward, Michael A. Grow, and Nils V. Montan, Washington, D.C., John Murphy, Stephen E. Goldman, and Susan P. McHugh, Robinson & Cole, Hartford, Conn., Allen F. Maulsby, Cravath, Swaine & More, New York City, for plaintiff.
    Richard Reynolds, Day, Berry & Howard, Hartford, Conn., Barry Garfinkel, Skadden, Arps, Slate, Meagher & Flom, New York City, Dominic J. Ferraina, Windsor, Conn., for defendants.
   FINAL JUDGMENT

BLÜMENFELD, Senior District Judge.

This cause was brought on by the complaint of plaintiff, The Nestle Company, Inc. (hereinafter Nestle), filed on May 6, 1982, alleging in part an infringement by defendants Chester’s Market, Inc. (hereinafter Chester’s Market) and Saccone’s Toll House, Inc. (hereinafter Saccone) of the Nestle trademark TOLL HOUSE for cookies (Reg. No. 380,734). Defendants answered the complaint on September 7, 1982, and Saccone counterclaimed for declaratory relief and damages. On February 25,1983, defendants moved for summary judgment seeking, among other relief, dismissal of the complaint and cancellation of Reg. No. 380,734. On August 23, 1983, this court filed a Ruling and Order granting in part such motion for summary judgment, which Ruling and Order was embodied in a Partial Judgment entered on September 6, 1983, pursuant to Fed.R.Civ.P. 54(b).

Nestle appealed the Ruling and Order and Partial Judgment to the Court of Appeals for the Second Circuit. While the appeal was pending, the parties negotiated, with the aid of staff counsel for the Court of Appeals, a settlement resolving both the trademark infringement claim and all pending claims and counterclaims. One condition of the settlement was that this court vacate its prior judgment. The Court of Appeals, per Judge Newman, remanded the case to this court so that this court could consider in the first instance the parties’ joint motion to vacate the prior judgment and enter final judgment on consent.

By a Ruling filed November 5, 1984, this court denied the joint motion. 596 F.Supp. 1445 (D.Conn.1984). The parties returned to the Court of Appeals, which by a Ruling dated March 5, 1985, reversed this court’s order denying the joint motion, and remanded the case to this court with instructions to vacate the prior judgment and dismiss the complaint and counterclaims. 756 F.2d 280, at 284 (2d Cir.1985).

The court has examined the affidavit of Barry H. Garfinkel, attorney for the defendant Saccone’s Toll House, Inc., and the affidavit of Allen F. Maulsby, attorney for plaintiff The Nestle Company, Inc., both submitted in support of the joint motion for the entry of a final judgment on consent. The court is satisfied, based on the representations made by counsel, that the terms of the proposed settlement are legal, see Isbrandtsen-Moller Co. v. United States, 300 U.S. 139, 145, 57 S.Ct. 407, 410, 81 L.Ed. 562 (1937), and equitable, see United States v. Carter Products, Inc., 211 F.Supp. 144, 147 (S.D.N.Y.1962). See also United States v. ITT, Civ. No. 13,320 (Ruling on Request of Amici Curiae) (D.Conn. Jan. 14, 1974) (Blumenfeld, J.). In accordance with the instructions of the Court of Appeals, it is therefore

ORDERED, ADJUDGED AND DECREED as follows:

1. The Partial Judgment entered by this court on September 6, 1983, pursuant to Fed.R.Civ.P. 54(b) granting in part the motion of defendants for summary judgment and the Ruling and Order of this court dated August 23, 1983, together with the findings and conclusions embodied therein upon which such Partial Judgment was based, are withdrawn, vacated and set aside and shall be of no force or effect for use against Nestle, its successors and assigns, by Saccone or Chester’s Market or by third parties for collateral estoppel or other preclusive purposes.

2. The counterclaims asserted by Sac-cone in its pleading dated September 7, 1982, are dismissed with prejudice and without costs to any party as against the other.

3. Except as provided in any agreement between Nestle and Saccone, Saccone and its officers, directors, employees, agents, representatives, successors and assigns are permanently restrained and enjoined from using TOLL HOUSE as a trademark for cookies and otherwise from using TOLL HOUSE in connection with the business and operations of Saccone. Enforcement of such agreements may be sought in any court of competent jurisdiction except as limited by any such agreement.

4. Subject to any further agreements of the parties, the Order of the court dated February 4, 1983, with respect to the protection of confidential discovery materials shall continue in effect.

5. The claims against Saccone and Chester’s Market set forth in the complaint in this action are dismissed with prejudice and without costs to any party as against the other.

      . The Ruling is published at 571 F.Supp. 763 (D.Conn.1983)


author: SUSAN H. BLACK, District Judge.

text:
    Bettye K. McINTOSH, Plaintiff, v. The CITY OF LIVE OAK, FLORIDA, John H. Hale, Charles R. McCall, William J. McCullers, Keith E. Mixon, Garth R. Nobles, Jr., Each individually and in their official capacity as members of the City Council of Live Oak; Ernest A. Sellers, Individually and in his capacity as City Attorney; William J. Casey and George Horning, Each individually and in their official capacity as City Auditors; and Alan C. Sundberg, Individually, Defendants.
    No. 84-153-Civ-J-14.
    United States District Court, M.D. Florida, Jacksonville Division.
    April 2, 1985.

      Winston W. Jacobo; Fruitland Park, Fla., for plaintiff.
    Edwin B. Browning, Jr., Davis, Browning & Hardee, Madison, Fla., for all defendants except Sundberg.
    C. Harris Dittmar, Timothy J. Corrigan, Bedell, Dittmar, DeVault, Pillans & Gentry, Jacksonville, Fla., for defendant Sundberg.
   OPINION

SUSAN H. BLACK, District Judge.

This case is before the Court on defendants The City of Live Oak, Florida, John H. Hale, Charles R. McCall, William J. McCullers, Keith E. Mixon, and Garth R. Nobles, Jr.’s Motions to Dismiss and to Strike, filed herein on March 26, 1984; defendant Ernest A. Sellers’ Motions to Dismiss and to Strike, filed herein on March 30, 1984; defendants William J. Casey and George Horning’s Motions to Dismiss and. to Strike, filed herein on March 30, 1984; and defendant Alan C. Sundberg’s Motion to Dismiss, filed herein on April 17, 1984. The plaintiff filed her response to the defendants’ motions on May 1,1984. On July 25, 1984, the Court directed the parties to brief the issue of whether the plaintiff’s section 1983 claims should be dismissed because the State of Florida provides a reasonable remedy for the plaintiffs alleged grievances. The parties having responded, the Court will consider the question.

The plaintiff’s claims are based on her removal as the elected City Clerk for the City of Live Oak. On May 10, 1983, the City Council for the City of Live Oak [hereinafter “Council”] passed an ordinance creating the position of Finance Director-Deputy City Treasurer. The plaintiff alleges that this new office in effect ousted her from her position as City Clerk by absorbing many of her duties. See Complaint at paragraph 11. When the plaintiff confronted the Council with the apparent conflict between the duties of the two positions, she allegedly was threatened with a lawsuit for misconduct in office. To resolve the conflict between her office and the office of Finance Director-Deputy Treasurer, the plaintiff filed a declaratory action in the Third Judicial Circuit, in and for Suwanee County, Case No. 83-315-CA, seeking a determination of the validity of the office created by the Council. See Complaint at paragraph 16. On October 25, 1983, the mayor suspended the plaintiff from office. After a hearing on the matter the following day, the Council voted to approve the suspension.

The plaintiff’s claims in Counts I, II, and III are based on the allegation that these defendants, individually and in concert, deprived the plaintiff of her vested property interest in the office of City Clerk without due process of law in violation of 42 U.S.C. § 1983. (The plaintiff also raises state law claims in Counts IY, V, and VI. However, in determining whether this case is properly before the Court, only section 1983 claims are relevant). Although the complaint is unclear as to the state action which allegedly deprived the plaintiff of her property interest, the basis of this action appears to be the hearing held by the Council following her suspension by the mayor. The Council’s suspension hearing involved each of the defendants charged in this action. Defendant Sellers was the City Attorney at the time of the plaintiff’s removal and defendant Sunberg was a private attorney hired to advise the Council. Defendants Casey and Horning were city auditors who provided evidence at the hearing regarding the plaintiff’s financial dealings while she was City Clerk. Defendants Hale, McCall, McCullers, Mixon, and Nobles were councilmen who heard and voted on the matter of plaintiff’s suspension; and the City of Live Oak was involved as the governing entity under whose authority the hearing was held and the plaintiff suspended.

Before addressing whether the plaintiff’s section 1983 claims are properly before this Court, the Court recognizes that the interests of the State of Florida are intrinsically involved in this case and that federal abstention would be appropriate. Although cloaked in due process terms, the plaintiff’s alleged federal constitutional claims reach beyond the confines of the Council’s hearing to raise the state constitutional issue of whether the Council validly acted when it created the Office of Finance Director-Deputy Treasurer. The plaintiff acknowledged that the validity of Ordinance 676 is a key issue when she filed her action for declaratory relief in state court. Further evidence of the true nature of this case is the plaintiff’s prayer for relief which asks that the Court issue both an injunction reinstating the plaintiff as City Clerk and a “declaratory judgment that Ordinance 676 is in direct violation of the City Charter____” See Complaint at paragraphs b & c. The preeminence of state issues, including state constitutional issues, would warrant the Court abstaining from consideration of plaintiff’s federal claims until the state issues, which necessarily impact on those claims, had been resolved in state court. See Railroad Commission of Texas v. Pullman Company, 312 U.S. 496, 61 S.Ct. 643, 85 L.Ed. 971 (1941). The fact that the plaintiff presently has pending a state action which could resolve these state issues makes abstention an even more viable alternative. See Burford v. Sun Oil Company, 319 U.S. 315, 63 S.Ct. 1098, 87 L.Ed. 1424 (1943). However, for reasons discussed below, the Court will not invoke federal abstention.

The issue now before the Court is whether the plaintiffs section 1983 due process claims are foreclosed under Parratt v. Taylor, 451 U.S. 527, 101 S.Ct. 1908, 68 L.Ed.2d 420 (1981). Parratt holds that the deprivation of one’s property interest is not a violation of the fourteenth amendment due process clause so long as the state provides the deprived person a forum for redress of his grievance. The basis for the holding is that a state cannot be held accountable for a denial of due process until its actions relevant to the deprivation is complete and it either has provided or has refused to provide a suitable postdeprivation remedy. Id. at 541-542, 101 S.Ct. at 1916; see also Bonner v. Coughlin, 517 F.2d 1311 (7th Cir.1975), modified en banc 545 F.2d 565 (1976), cert, denied, 435 U.S. 932, 98 S.Ct. 1507, 55 L.Ed.2d 529 (1978). Parratt is only applicable when the deprivation complained of is the result of a negligent or intentional act by a state or local government employee. Hudson v. Palmer, — U.S. —, 104 S.Ct. 3194, 82 L.Ed.2d 393 (1984). Further, the act causing the deprivation must have been random and unauthorized; if the act was the result of “some established state procedure,” Parratt does not apply. Logan v. Zimmerman Brush Company, 455 U.S. 422, 102 S.Ct. 1148, 71 L.Ed.2d 265 (1982). Before determining whether the State of Florida provides a suitable postdeprivation remedy for the plaintiff, the Court will examine whether the acts complained of were the result of “some established state procedure.”

In Logan v. Zimmerman Brush Company, the United States Supreme Court held that Parratt was not applicable where the act causing the deprivation of property was found to be the result of an established state procedure. The complainant had filed a timely claim with the state Fair Employment Practices Commission alleging that he had been discriminated against on the basis of a physical handicap. Pursuant to state law, the Commission had 120 days from the date the claim was filed in which to convene in order to determine the appropriate action, if any, to take against the employer. The complainant’s opportunity to obtain relief was foreclosed, however, when the Commission failed to meet within the statutory time period. The complainant then filed for relief in federal court claiming that he had been deprived of his property interest without due process.

Reviewing the case in light of Parratt, the Supreme Court first addressed the question of whether the loss of property was the result of a random and unauthorized act or the result of an established state procedure. The Supreme Court found that the state system itself destroyed the complainant’s property interest. The complainant had been deprived of his property interest by operation of the law requiring that the Commission convene within 120 days, and it was this law that the complainant attacked on due process grounds. Since the due process challenge went directly to the state’s statutorily established procedure, the Supreme Court concluded that Parratt was not applicable.

Turning to the case sub judice, some of the plaintiff’s allegations describe acts which clearly were random and unauthorized. An example is the plaintiff’s claim that certain of the defendants threatened her with a lawsuit for malfeasance in office when she questioned the validity of Ordinance 676. However, whether the acts occurring within the framework of the suspension hearing were random and unauthorized or the result of an established state procedure is less clear. If they are the latter, Parratt is not applicable.

The plaintiff’s claims as regards the hearing do not attack the procedure established by the City Charter. The plaintiff recognizes that Section 10 of the Live Oak City Charter empowers the mayor to suspend any city officer. Plaintiff’s Memorandum of Law, dated August 15, 1984, at 3. The mayor is to report any suspension in writing to the Council which in turn votes to either approve or disapprove the mayor’s action. Id. Unlike the plaintiff in Logan, the plaintiff herein does not allege the Charter’s procedure is constitutionally defective. Instead, she claims that these defendants committed errors at the hearing, either intentionally or negligently, which deviated from the established procedure and thereby tainted the decision to suspend the plaintiff.

The plaintiff alleges that the Council members erred by refusing to disqualify themselves from hearing plaintiff’s case when there was a collateral action between the parties pending in state court. The Council members also allegedly erred by hearing the matter despite the fact that prior to the hearing some members had stated publicly that the plaintiff should be suspended. Complaint at paragraph 18. The plaintiff further claims the Council and the attorneys advising them failed to allow her to cross-examine witnesses and unlawfully used hearsay against her. Complaint at paragraphs 18, 20, and 21.

The Court finds that the plaintiff has alleged sufficient facts demonstrating that the acts which effectuated the property deprivation alleged herein were random and unauthorized. Some of these acts, such as threatening the plaintiff with a lawsuit, occurred outside any established state procedure. Other acts occurred within the framework of the Council’s suspension hearing. However, while the hearing is an established state procedure, the plaintiff challenges, not that the Council conducted a hearing, but that the Council conducted a defective hearing. The Court finds that the alleged errors charged against these defendants sufficiently deviate from the Charter’s established procedure to qualify as random and unauthorized acts. Therefore, the Court finds that the acts complained of were not the result of an established state procedure and that this requirement of Parratt is met. See Cohen v. City of Philadelphia, 736 F.2d 81, 84 (3rd Cir.), cert, denied, — U.S. —, 105 S.Ct. 434, 83 L.Ed.2d 360 (1984). Parratt holds, however, that the plaintiff’s section 1983 claims can only be dismissed where the state provides her with an adequate means by which to receive redress for the deprivation. The Court further finds that this last requirement is also met.

When a Florida governmental official claims that he has been improperly removed from office, the proper vehicle for relief is an action for mandamus in state court. See West v. Board of County Commissioners, 373 So.2d 83, 86 (Fla. 3d DCA 1979) and cases cited therein. Where the Playground and Recreation Board for the City of Jacksonville passed a resolution abolishing the position of Superintendent of Recreation, a peremptory writ of mandamus was issued by the state court commanding the board to rescind the resolution and reinstate the plaintiff. Arnold v. State ex rel. Mallison, 147 Fla. 324, 2 So.2d 874 (1941). The writ was issued based on the state court’s finding that the resolution was adopted in bad faith. Id. at 879; see also State ex rel. Gibbs v. Williams, 136 Fla. 110, 186 So. 816 (1938); State ex rel. Gibbs v. Bloodworth, 134 Fla. 369, 184 So. 1 (1938)., A state court will issue a writ where it appears the proceedings removing the municipal officer “were illegal or fatally defective, or if the testimony wholly fails to support the charges made.” Etzler v. Brown, 58 Fla. 221, 50 So. 416, 417 (1909).

The plaintiff herein claims that she has been wrongly removed from office. The relief she seeks is reinstatement, a declaration invalidating the resolution of the Council, compensation for lost pay and benefits, as well as damages pursuant to Florida law. The Court finds that a writ of mandamus issued by a state court would adequately provide the relief that the plaintiff seeks.

The plaintiff having an adequate remedy under state law, the Court, by separate order entered on this date, will dismiss Counts I, II, and III, which seek relief pursuant to section 1983. As to those remaining state law claims raised in Counts IV, V, and VI, the Court finds that the interests involved are not sufficient to warrant the exercise of its pendent jurisdiction and, therefore, will dismiss these claims by separate order. United Mine Workers v. Gibbs, 383 U.S. 715, 86 S.Ct. 1130, 16 L.Ed.2d 218 (1966).


author: HAIGHT, District Judge.

text:
    ASSOCIATED IMPORTS, INC., Plaintiff, v. INTERNATIONAL LONGSHOREMEN’S ASSOCIATION, AFL-CIO, and T.W. Gleason in his capacity as President of International Longshoremen’s Association, Defendants. ASSOCIATED IMPORTS, INC., Plaintiff, v. LOCAL 1814, INTERNATIONAL LONGSHOREMEN’S ASSOCIATION, AFL-CIO, Defendants.
    Nos. 82 Civ. 8589-CSH, 83 Civ. 3529-CSH.
    United States District Court, S.D. New York.
    April 3, 1985.

      Milberg, Weiss, Bershad & Specthrie & Lerach, New York City, for plaintiff.
    Thomas W. Gleason, New York City, for defendant.
   MEMORANDUM OPINION AND ORDER

HAIGHT, District Judge.

In January, 1980, defendant International Longshoremen’s Association (the “Union”) decided to act on its members’ outrage over the Soviet Union’s invasion of Afghanistan. It did so by ordering its members not to unload vessels bringing Russian goods into American ports. Plaintiff Associated Imports, Inc. (“Associated”) has for many years imported Russian-made sheet glass for sale in the United States. The sheet glass is shipped through American ports, and several shipments were allegedly on their way when the Union declared its boycott. Plaintiff claims that the Union’s refusal to unload not only these but subsequent shipments put it out of business. Claiming that the refusal constituted an illegal boycott under federal labor law, Associated has sued the Union and its president for damages. Associated now moves for summary judgment on the issue of liability. Defendants crossmove for the same relief.

The issue of the legality of the Union’s action has been litigated before in other courts. In International Longshoremen’s Association v. Allied International, Inc., 456 U.S. 212, 102 S.Ct. 1656, 72 L.Ed.2d 21 (1982), the Supreme Court held that the Union’s refusal to unload ships from the Soviet Union constituted an illegal secondary boycott under § 8(b)(4) of the National Labor Relations Act (“NLRA”), 29 U.S.C. § 158(b)(4). A secondary boycott consists of the attempt by a union to induce its members to refuse to handle goods with the object of forcing entities with which it has no dispute to cease doing business with an entity with which it has a dispute. See Allied, supra, 456 U.S. at 222, 102 S.Ct. at 1662. As a result, it was held that the boycott subjected the Union to suits for damages by those harmed by the boycott under § 303 of the Labor Management Relations Act (“LMRA”), 29 U.S.C. § 187.

Claiming an identity of issues and parties, Associated seeks summary judgment on the issue of liability by asserting offensive collateral estoppel. See Parklane Hosiery Co. v. Shore, 439 U.S. 322, 99 S.Ct. 645, 58 L.Ed.2d 552 (1979). Perhaps acknowledging the force of this argument, defendants did not dispute the applicability of Parklane collateral estoppel in their brief and raised only one objection at oral argument. The latter objection was that Associated could have, but did not, join the original Allied action. See Parklane, supra, 439 U.S. at 331-332, 99 S.Ct. at 651-652. In their defense defendants instead rely primarily on two independent theories. First, they argue that because the goods in question were manufactured by forced labor, importation of which is illegal, the Union was justified in refusing to unload them. Second, they assert the bar of the statute of limitations.

I.

The issue of whether Associated could have joined in the prior litigation, the Union’s only defense to the application of Parklane, is irrelevant to plaintiffs right to summary judgment on the merits. Assuming without deciding that collateral estoppel is available only to parties participating in the prior litigation, the stare decisis effect of Allied would require me to grant summary judgment in these circumstances. Associated has presented uncontradicted evidence that the boycott which affected it was the same boycott which affected the plaintiff in Allied. The Union has not suggested that the boycott did not exist or that it did not affect Associated. Nor has it suggested any facts which might differentiate this case from- Allied. Allied is controlling on the law. Thus it is unnecessary to apply collateral estoppel or to address issues raised in Parklane.

II.

Of course, the clear applicability of Allied is of no help to plaintiff if either of defendants’ asserted grounds for summary judgment on their own behalf are meritorious, and it is to these which I now turn.

The Tariff Act of 1930, specifically 19 U.S.C. § 1307, bars the entry into American ports of goods manufactured by “forced” labor, which is defined by the statute as that labor which is not performed voluntarily and is exacted under threat of punishment. Defendants have submitted an affidavit by a Russian emigrant who testifies not only that true prison labor is exacted by the government of the Soviet Union in its notorious Gulags but that Russian laws regarding work put all workers in the position of forced laborers. The latter claim relies on the existence of “anti-parasite” laws, which make criminal an individual’s failure to work at a permanent job for a period exceeding four months. These laws, it is claimed, force workers to accept jobs which they would otherwise prefer not to hold. It is also argued that the lack of independent trade unions makes all Russians slaves of the state to some degree. Because the affidavit raises no issues concerning manufacture of glass by prison or Gulag labor, it is only the latter claims which I must consider.

Defendants’ argument is, in essence, that because Soviet laborers do not have complete freedom of job selection and of negotiation of terms of employment their labor is “forced.” I am skeptical that this is the type of forced labor which Congress had in mind when enacting § 1307. But I do not decide the question because it is not an appropriate one for judicial resolution.

Whether or not all Soviet labor should be' characterized as “forced” is not a legal question. It is a political question, and highly charged at that, going to the heart of the social contract between the Soviet state and its citizens. Further, because the question affects the commercial access to American markets of one of the world’s largest nations, its resolution is inextricably linked to the conduct of American foreign policy. Congress could not have meant a ban under 19 U.S.C. § 1307 of the type proposed by defendants to have been self-executing. Although the statute does not explicitly so state, Congress must have intended to vest the decision of whether a whole nation’s goods should be banned in the hands of the executive branch, rather than those of private citizens, or the judiciary at behest of a private citizen’s suit. The disruptive implications for American trade and foreign policy are — as defendants have proven — otherwise too great.

Although, as noted, the statute does not explicitly vest this power in the executive, it does empower the Treasury Department to develop implementing regulations. The regulations thus promulgated prescribe a means for private citizens to cause specific foreign goods to be declared the product of forced labor and banned. 19 C.F.R. §§ 12.42-12.44 (1984). Because of the disruptive potential of any other course, particularly in these circumstances, I conclude that this is the exclusive means by which the Union could have gained § 1307 sanction for its use of what was otherwise an illegal boycott by seeking the prior approval of the Commissioner of Customs pursuant to 19 C.F.R. § 12.42(b). Indeed, if the Union’s true intent was to implement § 1307 — rather than to find a post hoc justification for an action taken for entirely different reasons — its obvious course would have been to apply to the Commissioner under § 12.42(b). The Union’s proposed self-help makes the implementing regulations pointless.

In sum, foreign goods which are purportedly the product of a national system of forced labor are not barred from entry into the United States under 19 U.S.C. § 1307 until the executive branch declares, pursuant to the regulations set out at 19 C.F.R. §§ 12.42-12.44, that in fact the goods are the product of forced labor. Because the glass in question has never been so declared, Union members would not have assisted an illegal act by unloading it. The defense is unavailable.

III.

Defendants’ statute of limitation argument relies on DelCostello v. International Brotherhood of Teamsters, 462 U.S. 151, 103 S.Ct. 2281, 76 L.Ed.2d 476 (1983), in which the Supreme Court assigned a six-month federal statute of limitations to suits brought under § 301 of the LMRA, 29 U.S.C. § 185, charging breach of a duty of fair representation by a union. It is claimed that the reasoning which led the Court to apply this statute of limitations to this type of § 301 action applies equally to actions under § 303. The few decisions bearing on the issue are split. Monarch Long Beach Corp. v. Soft Drink Workers, 593 F.Supp. 384 (E.D.N.Y.1984), appeal argued, 762 F.2d 228, (2d Cir.1985) (applying six-month statute to § 303 claims and citing two unpublished decisions in accord); Park Electric Co. v. International Brotherhood of Electrical Workers, 593 F.Supp. 1060 (N.D.Ill.1984) (contra).

Prior to DelCostello, it was uniformly assumed that § 303 actions were governed by some analogous state statute of limitations, although, as defendants point out in their helpful, and comprehensive summary of past authority, precisely what type of statute should apply was a matter of disagreement. By contrast, in DelCostello it was held that the particular action then before the Court should be governed by the six-month limitations period set by federal law for the filing of an unfair labor practice complaint with the National Labor Relations Board, § 10(b) of the NLRA, 29 U.S.C. § 160(b). Defendants seem to argue in part that because secondary boycotts are unfair labor practices § 10(b) should apply. Since the filing of defendants’ brief the Second Circuit has implicitly rejected such a mechanical rule. O’Hare v. General Marine Transport Corp., 740 F.2d 160, 168 (2d Cir.1984). It is therefore necessary to examine the reasoning of the DelCostello decision closely to properly evaluate the claim that it applies here.

DelCostello involved an action by a discharged employee jointly against his employer for breach of the collective bargaining agreement and his union for failing to represent him properly during hearings concerning his discharge. The Court began its decision by reaffirming the general rule that the initial resort for a statute of limitation when none is specified in federal law is to the analogous state rule. DelCostello, supra, 103 S.Ct. at 2287; see also id. 103 S.Ct. at 2294 (“resort to state law remains the norm”). However, “it may be inappropriate” to follow the general rule if the resulting statute of limitations is “at odds with the purpose or operation of federal substantive law.” Id. 103 S.Ct. at 2289.

In applying its analysis, the Court first turned to the available state analogs, finding three. The first of these, an action to vacate an arbitration award, was found to resemble only marginally a breach of duty of fair representation action and to afford, in most states, an unduly brief limitations period. It was noted that because of the plaintiff’s need to find counsel and marshal his case against the union, this type of § 301 action requires considerably more preparation than an action to vacate. Id. 103 S.Ct. at 2291-92. On the other hand, the other analogs, breach of contract and legal malpractice actions, were found typically to provide excessively long periods unsuited to the need for relatively rapid resolution of labor disputes. Id. Only after exhausting these alternatives did the Court turn to § 10(b), which it found uniquely to balance the national interest in speedy resolution and the employee’s interest in vindicating his rights. Id. 103 S.Ct. at 2294, citing United Parcel Service, Inc. v. Mitchell, 451 U.S. 56, 70-71, 101 S.Ct. 1559, 1567-1568, 67 L.Ed.2d 732 (1981) (Stewart, J., concurring).

The analysis of any claim that federal, not state, law should provide the statute of limitations in a similar case must follow a similarly structured analysis. As the Court noted in closing DelCostello:

“We stress that our holding today should not be taken as a departure from prior practice in borrowing limitations periods for federal causes of action, in labor law or elsewhere. We do not mean to suggest that federal courts should eschew use of state limitations periods anytime state law fails to provide a perfect analogy. See, e.g., Mitchell, 451 U.S., at 61, n. 3, 101 S.Ct. at 1563, n. 3. On the contrary, as the courts have often discovered, there is not always an obvious state-law choice for application to a given federal cause of action; yet resort to state law remains the norm for borrowing of limitations periods. Nevertheless, when a rule from elsewhere in federal law clearly provides a closer analogy than available state statutes, and when the federal policies at stake and the practicalities of litigation make that rule a significantly more appropriate vehicle for interstitial lawmaking, we have not hesitated to turn away from state law.”

103 S.Ct. at 2294. In other words, only if the state analog is particularly unsuitable is it necessary to look at federal alternatives.

The issue of which state cause of action is the most appropriate analog to a secondary boycott has not been settled in our circuit. Two decisions from this Court, Peterson v. Associated Musicians of Greater New York, Local 802, 69 Lab.Cas. (CCH) ¶ 13,180 (S.D.N.Y.1972) and Rondout Electric, Inc. v. International Brotherhood of Electrical Workers, Local 215, 77 Lab.Cas. (CCH) ¶ 11,108 (S.D.N.Y.1975), have borrowed the New York State statute of limitations for rights created by statute, N.Y.Civ.P.L.R. § 214(2). Neither decision detailed its reasons for choosing this particular statute rather than any other. Courts outside this circuit have followed a number of other guides, perhaps most appropriately the period of limitations for tortious interference with contract. Park Electric Co., supra, 593 F.Supp. at 1064. In New York, this tort is also governed by N.Y.Civ. P.L.R. § 214. Piracci Construction Co. v. Skidmore, Owings & Merrill, 490 F.Supp. 314, 317 (S.D.N.Y.1980).

. Defendants do not expressly challenge the propriety of these specific alternatives. Their primary grounds for urging adoption of § 10(b) are that it would provide a uniform nation-wide rule as a substitute for the varied periods which prevail now in § 303 cases and that it is a better analogy to a § 303 action than the proposed state alternatives.

The first concern — a (quest for uniformity — is foreclosed by DelCostello itself. In the extract from DelCostello quoted above the Court makes clear that state statutes remain paramount authority when consistent with Congressional intent. 103 S.Ct. at 2289, 2294. Its decision points out the problem of nonuniformity which such an approach necessarily entails. 103 S.Ct. at 2292 n. 18. The choice to reaffirm the general rule was thus made with an awareness of and, presumably, a tolerance for the nonuniformity which will result. Indeed, it was not their diversity which the DelCostello Court found objectionable in the myriad time periods cited in footnote 18 but their length. Although in the abstract uniformity is a desirable goal, it does not alone justify substituting federal for state law. Lack of uniformity is a necessary consequence which Congress and the Court have chosen to accept.

Defendants’ second contention— that the filing of an unfair labor practice complaint, governed by § 10(b), is a better analogy to § 303 lawsuits than the available state analogs — puts the cart before the horse. DelCostello does not seek the best analogy from among all federal and state possibilities. Rather it considers only state statutes of limitation so long as those are consistent with the federal purpose. 103 S.Ct. at 2289. I find the available state alternatives to be so and do not reach § 10(b).

In the first place, the nature of the wrongs governed by state and federal law are sufficiently similar for the state causes of action to be acceptable analogies to the federal. The concept of a right created by statute is accurate, if extremely general. Interference with contract is more precisely on target. A secondary boycott is both effective and unlawful precisely because it disrupts the business relations of two parties. It is an interference by one party with the contractual relations of two others. Although this is not a perfect analogy to the typical interference claim, generally inducement of breach of contract, it is comfortably close.

It is important in this connection to recall why an analogous state cause of action is sought: to assure that the length of time provided by the applicable statute of limitations is tailored to serve the needs of the federal cause of action. It is assumed that similar causes of action will be supported by similar policies and have similar statute of limitations needs. Viewed in this light, it is arguable that a catch-all statute of limitations for rights created by statute such as N.Y.Civ.P.L.R. § 214(2) is too general to give assurance that it serves purposes similar to those, .of § 303. The cause of action for interference with contract, however, is quite similar to a § 303 secondary boycott claim, and its statute of limitations needs are likely to be similar. See Park Electric Co., supra, 593 F.Supp. at 1064.

The Supreme Court in DelCostello did not restrict its analysis to the similarity of the causes of action but examined the actual limitations periods which these invoked to assure that they in fact did serve federal policies. See 103 S.Ct. at 2291-93. As noted above, in New York a cause of action for interference with contract is given a three-year limit. N.Y.Civ.P.L.R. § 214(4). Contrary to defendants’ arguments, this is not inconsistent with federal policy in this area. The virtue of § 10(b) is its brevity. The Supreme Court found this appealing in the context of DelCostello because of the importance of quickly settling disputes which challenge the legitimacy of the grievance and arbitration procedure which ordinarily governs employer-employee relations. See 103 S.Ct. at 2292-93, quoting Mitchell, supra, 451 U.S. at 63-64, 101 S.Ct. at 1564-1565. Section 301 breach of duty of fair representation actions are inevitably disruptive of day-to-day labor relations, for they challenge the normal dispute resolution procedure as well as the good faith of both employer and union. In addition, because they may involve interpretation of the collective bargaining agreement, such suits may introduce uncertainty into employer-employee relations. Quick resolution is important.

Section 303 secondary boycott actions, on the other hand, are entirely different creatures. Ordinarily resolution of such suits is urgent only while the boycott continues. At this time it is the plaintiff’s, rather than defendant’s, interests which are threatened by delay, a fact which insures prompt suit. Once the boycott has ended, the effect of suit is primarily financial. Frequently, as in the case at hand, the plaintiff is an employer with which the union has had no labor dispute. Unlike a § 301 suit, the subject of a § 303 suit is thus not day-today shop conduct but past actions which are by definition abnormal. Resolution of the suit does not involve interpretation of the governing bargaining agreement, nor does it involve the grievance or arbitration machinery. For a number of reasons, then, the factors which dictate an abnormally short limitations period in § 301 breach of duty of fair representation lawsuits are not present here. The statute of limitations governing the analogous state law claim is acceptable; I need not reach the issue of § 10(b).

Plaintiff’s motion for summary judgment on liability is granted. Defendants’ motion for summary judgment is denied. The parties are directed to proceed with discovery on the issue of damages in accordance with the terms of the enclosed order.

It is SO ORDERED.

      . According to data submitted by plaintiff, in 1979 — the year before the boycott — the Soviet Union exported nearly one billion dollars worth of goods to the United States.

      . Even if the importation of such glass was an illegal act, it is arguable that this is no defense to a § 303 action. See Consolidated Express, Inc. v. New York Shipping Association, Inc., 602 F.2d 494, 508 (3d Cir.1979).

      . Following defendants’ logic to its conclusion would require applying § 10(b) to, at a minimum, all § 301 and § 303 suits. This option is foreclosed, however, by O’Hare v. General Marine Transport Corp., 740 F.2d 160, 167-68 (2d Cir.1984), in which a state statute of limitations was applied to a § 301 action which involved only an employer and employees, not a union. This, too, was undoubtedly done with an awareness of the nonuniformity which would result.


author: TROUTMAN, Senior District Judge.

text:
    H. Merle BINKLEY v. Jeffrey A. SHEAFFER and Merrill Lynch, Pierce, Fenner & Smith, Inc.
    Civ. A. No. 84-3350.
    United States District Court, E.D. Pennsylvania.
    April 10, 1985.

      Robert F. Frankhouser, Lancaster, Pa., for plaintiff.
    Howard B. Krug, Harrisburg, Pa., for defendants.
   MEMORANDUM AND ORDER

TROUTMAN, Senior District Judge.

This case comes before the Court in a somewhat unique procedural posture. After the complaint was filed, defendants moved to dismiss or for a more definite statement of the claim. Before the Court acted upon that motion, plaintiff moved to amend the complaint. Before the Court now are defendants’ motion to dismiss the complaint, plaintiff’s motion to amend the complaint, and defendants’ opposition thereto, which very much resembles an anticipatory motion to dismiss the amended complaint, although stated in terms of the futility of granting plaintiff leave to amend. In order to facilitate the ultimate disposition of the case, we will consider all issues raised by the motion to dismiss and defendants’ opposition to the motion to amend.

Plaintiff Binkley accuses Shaeffer, a stockbroker employed by Merrill Lynch, Pierce, Fenner & Smith, Inc., of “churning” his securities account in violation of § 17(a) of the Securities Act of 1933, (15 U.S.C. § 77(q), § 10(b)) of the Securities Exchange Act of 1934, (15 U.S.C. § 78j(b), and Rule 10(b)(5)) promulgated thereunder, §§ 2 and 18 of Article III, National Association of Securities Dealers’ Rules of Fair Practice and the RICO statute (18 U.S.C. § 1962(c) and § 1964(c)). In addition, plaintiff alleges pendent state claims for fraud, breach of contract and punitive damages. All claims except the RICO count are included in the original complaint. The RICO allegations, including a claim for treble damages and counsel fees, are asserted in Binkley’s proposed amended complaint.

Considering the complaint and proposed amended complaint together, plaintiff alleges that more than one hundred fifty transactions in the thirty-one month period of February, 1979 to September, 1981, which resulted in a reduction of his account from $155,258.00 to $14,591.87, establishes that defendants engaged in excessive trading in his account. He also alleges that he and defendants had an agreement which they violated, that he relied upon defendants who controlled his account, that contrary to their understanding, defendants treated his account as discretionary and that they used it to create excessive profits and commissions for themselves to plaintiff’s detriment.

Defendants argue that each count of the complaint and proposed amended complaint should be dismissed. The arguments advanced by defendants will be considered seriatim.

First, defendants contend that an implied cause of action under the Securities Act of 1933, § 17(a) does not exist. Nor, they argue, does a private right of action exist pursuant to the National Association of Securities Dealers’ Rules of Fair Practice (NASDRFP). They note that the Third Circuit has not addressed these issues, but that the recent trend in the United States Supreme Court and in the Eastern District of Pennsylvania has been against implying a direct cause of action. In this defendants are correct, and this Court is persuaded by Judge Giles’ carefully reasoned conclusion in Kimmel v. Peterson, 565 F.Supp. 476 (E.D.Pa.1983) that the Congress did not intend to render superfluous §§ 11 and 12 of the Securities Act of 1933 by permitting investors to seek a remedy in the courts under § 17(a). Moreover, Kimmel appears to signal a new trend in the district courts of the Third Circuit toward limiting implied private rights of action under § 17(a). See, e.g., Warner Communications v. Murdoch, 581 F.Supp. 1482 (D.Del.1984); In Re Catanella and E.F. Hutton and Co., 583 F.Supp. 1388 (E.D.Pa.1984), and Hill v. Equitable Trust Co., 562 F.Supp. 1324 (D.Del. 1983). Similarly, although the Third Circuit has not addressed either the § 17(a) question or the existence of a private cause of action under the National Association of Securities Dealers’ Rules of Fair Practice, (plaintiff’s fourth count in both the complaint and proposed amended complaint), the trend there likewise seems to be against implying a private right of action. While in Walck v. American Stock Exchange, Inc., 687 F.2d 778 (3d Cir.1982), cert, denied, 461 U.S; 942, 103 S.Ct. 2118, 77 L.Ed.2d 1300 (1983), the court was not construing the NASDRFP, its conclusion that “... the Exchanges and not Congress promulgated the rules; and we perceive no basis for an inference that the Exchanges in their quasi-legislative capacity intended to subject themselves to damages for non-enforcement”, id. at 788, is equally, if not more, applicable in this context. Congress encouraged securities dealers to police their own ranks by requiring any association seeking national registration to promulgate rules designed to prevent manipulative acts and practices. See, 15 U.S.C. § 78o —3(b)(6). It is unlikely that dealers’ associations intended to subject their members to federal liability by aggrieved investors as they attempted to fulfill statutory requirements for registration.

Of course, the intent of such associations is not controlling. Congressional intent is the touchstone for determining whether or not a private right of action should be implied. See, Kimmel, supra, and cases cited therein. In Colonial Realty Corporation v. Bache & Co., 358 F.2d 178 (2nd Cir.1966), the court noted that there was some indication in the legislative scheme that Congress did not intend violations of rules adopted by dealers’ associations pursuant to the Securities Exchange Act to give rise to civil claims. Nevertheless, the court there did imply a private right of action. At that time, however, which was prior to the Supreme Court’s decision in Cort v. Ash, 422 U.S. 66, 95 S.Ct. 2080, 45 L.Ed.2d 26 (1975), it was commonplace to imply a private right of action unless there was an explicit proscription against it. Since Cort, the emphasis has shifted to denying a private right of action unless it is clearly supported by legislative intent. Moreover, even the Colonial Realty court recognized that a stronger case for a private cause of action is presented where the rule in question imposes a duty unknown to the common law. Here there are both common law and other statutory claims based upon the same conduct alleged to support a cause of action under the NASDRFP. Under these circumstances, this Court is reluctant to permit an implied cause of action.

Consequently, in light of the foregoing discussion, Counts I and IV of plaintiff’s complaint will be dismissed.

Defendants next argue that plaintiff’s allegations of violations of § 10(b) of the Securities Exchange Act do not meet the standards of Fed.R.Civ.P. 9(b) in that his allegations of fraud are not stated with sufficient particularity. Initially, we note that some of defendants’ objections will be overcome if plaintiff is permitted to file his proposed amended complaint, which includes as exhibits a list of all transactions in his account with Merrill Lynch from January, 1979, to September, 1981, the period during which he complains of churning. In addition, we are bound to follow the Third Circuit’s admonition to apply Rule 9(b) in light “of the general simplicity and flexibility contemplated by the rules”, Seville Industrial Machinery Corp. v. Southmost Machinery Corp., et al., 742 F.2d 786, 791 (3d Cir.1984). Plaintiff’s complaint is sufficient to apprise defendants of his claim that they disregarded his understanding of how his account would be handled, manipulated him and reduced his account considerably over the period in question. Plaintiff is not required to prove his case in the complaint.

Since the SEC Act claim under § 10(b) and Rule 10(b)(5) will not be dismissed, the Court will retain jurisdiction of plaintiffs pendent state claims. Because only one of those claims, for breach of contract, is arguably subject to arbitration, we will not stay the entire action until that claim is arbitrated. The parties are free to pursue arbitration on that claim if they so choose, or, upon appropriate motion at a more appropriate time, either party may request that that claim be severed or stayed pending the outcome of the federal and other state claims.

Although defendants may be correct that the claim for punitive damages is not properly stated as a separate count, plaintiff can easily cure that procedural defect in an amended complaint consistent with his brief in opposition to defendants’ motion to dismiss the complaint. Defendants do not contend that punitive damages are not available as a remedy if plaintiff proves his case as to fraud, merely that the claim was improperly pled.

Next, defendants argue that the complaint should be stricken for pleading scandalous and impertinent material, based partially upon plaintiff’s allegation that his disability, cerebral palsy, caused him to be unusually dependent upon defendants and thus contributed to the injury he allegedly suffered at their hands. We find no merit to this contention.

Finally, defendants argue that plaintiff should not be permitted to amend the complaint to add claims under the RICO statute because they have not been convicted of a predicate criminal offense and because there is no allegation of injury stemming from a violation of § 1962(c). This Court can find no basis for the latter argument. In proposed Counts VII and VIII, plaintiff alleges that the conduct outlined in the complaint constitutes a pattern of racketeering activity under § 1962(c) and that it injured him in his property. He also alleges mail fraud as a predicate offense. Both Counts VII and VIII are entitled “18 U.S.C. § 1964(c)”, but it is clear that plaintiff is also making allegations under § 1962(c).

Plaintiff in his reply to defendants’ memorandum in opposition to the motion to amend suggests that defendants’ argument as to racketeering activity is a contention that such activity must be related to the infiltration of legitimate businesses by organized crime. See, Sedima, S.P.R.L. v. Imrex Co., Inc., 741 F.2d 482 (2nd Cir. 1984). Although this issue has not been addressed directly by the Third Circuit, that court in Seville v. Southmost, supra, reversed the district court’s dismissal of the RICO count because the lower court “confused what must be pled with what must be proved”, Seville at 790. The quoted language referred to the “enterprise” component of the claim not racketeering activity, but is applicable to the latter as well. Under notice pleading standards plaintiff’s allegations are sufficient to survive a motion to dismiss the RICO counts. Whether or not he can sustain his burden of proof that the alleged actions were in fact such racketeering activity as contemplated by the statute is a question left for later determination.

The necessity for a conviction on a predicate offense also remains an open issue in this Circuit. Some recent cases in this district have held that a civil RICO action may not be maintained absent a criminal prosecution. Viola v. Bensalem Township, et al., 601 F.Supp. 1086 (E.D.Pa. 1984); Bernstein, et al. v. Bank Leumi Le-Israel B.M., 598 F.Supp. 922 (E.D.Pa. 1984). Again, however, in Seville the court allowed a civil RICO action to proceed with no discussion as to the necessity for a criminal conviction or prosecution. Absent a clear directive from the Third Circuit that a criminal conviction or prosecution is required we presently decline to impose such a requirement.

In summary, then, we will allow plaintiff to amend the complaint in a manner consistent with this memorandum. We will, however, dismiss Counts I and IV of the original complaint. In all other respects we will deny defendants’ motion to dismiss or for a more definite statement.


text:
    Brian RUSSELL, By and Through his parents Edward and Lynn RUSSELL, and Edward and Lynn Russell, Plaintiffs, v. JEFFERSON SCHOOL DISTRICT, Defendant.
    No. C-84-0308-CAL.
    United States District Court, N.D. California.
    April 16, 1985.

      Michael A. Zatopa, San Francisco, Cal., for plaintiffs.
    James P. Fox, Dist. Atty., Michael L. Vinson, Deputy, Redwood City, Cal., John B. Hook, G. Gregory Williams, Long & Levit, San Francisco, Cal., for defendant.
   OPINION AND ORDER OF REMAND

LEGGE, District Judge.

The case was tried to the court without a jury. The court has jurisdiction under the Education of the Handicapped Act (the “Act”), specifically 20 U.S.C. § 1415(e)(2).

The complaint originally encompassed several causes of action. However, by stipulation the parties modified the complaint to limit the alleged cause of action to claims arising under the Act. The parties have also stipulated that all procedural requirements under the Act, including all steps to be taken by both plaintiffs and defendant, have been performed.

The court has reviewed the record of the administrative hearing conducted by the State of California, and has heard and considered the additional written and testimonial evidence presented by both parties.

I.

Plaintiff Brian Russell is. a boy of approximately nine years of age. Because of medical incidents occurring both before and at birth, he is severely handicapped. It would serve no purpose here to recite all of the child’s difficulties. Suffice to say that they include at least three categories: He has severe physical problems, which result in his being small and fragile for his age; he has difficulty walking and has a surgical shunt in his brain. Second, he has deficiencies of intelligence and comprehension, which educators call “cognition.” Third, he has difficulties in language and communication, which educators refer to as “language.” It is agreed that Brian is a' multihandicapped child, and that his overall functions are at a level of approximately three to four years of age. He is a “handicapped child” within the meaning of 20 U.S.C. § 1401(1).

Both Brian’s parents and the defendant district have sought to provide the best education they can for Brian’s limited learning capabilities. Since even before normal school years, Brian has been in special educational and physical training programs. Defendant prepared an individualized education program (“IEP”) for Brian, as required by the Act; ‘ 20 U.S.C. §§ 1401(19), 1414(a)(5). Brian- has been most recently in defendant’s program for severe disorders of language (“SDL”). But both parties agreed at trial that SDL is not the proper educational placement for Brian, and pending the resolution of this action Brian is receiving home tutoring.

II.

In 1983 the district reassigned Brian from its SDL program to its program for the trainable mentally retarded (“TMR”). Brian’s parents objected to the TMR placement. They initiated appropriate proceedings under section 1415(b) of the Act, to challenge both the proposed TMR placement and certain aspects of Brian’s IEP. Pursuant to the requirements of the Act (20 U.S.C. § 1415(b)(2), a hearing was conducted in 1983 by a State hearing officer. The State hearing officer did not change Brian’s IEP, and it confirmed the decision of the defendant that the TMR placement was appropriate for Brian. Brian’s parents then initiated this action under 20 U.S.C. § 1415(e).

III.

It is important to define the standard for this court’s review. The function of this court is not to assume the role of either the parents or the school district in deciding upon the best education for Brian. Instead, the court’s more limited role has been defined by Congress and by the United States Supreme Court.

20 U.S.C. § 1415(e)(2) provides that this court “shall receive the records of the administrative proceedings, shall hear additional evidence at the request of a party, and, basing its decision on the preponderance of the evidence, shall grant such relief as the court determines is appropriate.”

The scope of this court’s review under that section has been circumscribed by the United States Supreme Court in Board of Education v. Rowley, 458 U.S. 176, 102 S.Ct. 3034, 73 L.Ed.2d 690 (1982). The Supreme Court stated that the district court's review is not just appellate; that is, affirming any decision supported by substantial evidence. Instead, this court is to give “due weight” to the administrative proceedings (458 U.S. pages 205-206, 102 S.Ct. pages 3050-3051), and its further inquiry should be taken in two steps. The first step is to examine whether defendant complied with the procedures set forth in the Act. In this case, it is stipulated by both plaintiffs and defendant that all appropriate procedures were followed. In addition this court examined the procedures giving rise to this case, and finds that all of the requirements of 20 U.S.C. § 1415(a), (b), (d), and (e) were met. The second step is for this court to determine whether “the individualized education program developed through the Act’s procedures [is] reasonably calculated to enable [Brian] to receive educational benefits” (page 207, 102 S.Ct. page 3051). In that regard, the Supreme Court said that the district court must “determine that the State has created an IEP for [Brian] which conforms to the requirements of § 1401(19)” (footnote 27). However, the Court added that district courts “must be careful to avoid imposing their view of preferable education methods upon the States” (page 207,102 S.Ct. page 3051).

This court’s review here includes not only Brian’s IEP, but also the issue of the proper special educational program for him. Under 20 U.S.C. § 1415(b)(1)(E), the parents have the right to challenge the “educational placement of the child, or the provision of a free appropriate public education to such child.” The parents did so here and in the State hearing, specifically objecting to the proposed placement of Brian in the district’s TMR program. That was a subject of the State hearing and is properly in issue before this court. However, as stated, this court’s review of that issue is limited to the powers given to it by Congress and as defined by the Supreme Court in Rowley.

IV.

The issues now before this court are the following: (a) The question whether this court can consider, without prior review by the State hearing officer, a detrimental change which occurred in Brian’s physical condition in 1984 after the formulation of his current IEP and after the decision of the hearing officer in this matter; (b) Brian’s IEP; and (c) The appropriateness of his placement in TMR.

A.

In July 1984, Brian underwent an orthopedic operation. The evidence is clear that the operation rendered Brian even more physically frail, with great difficulties in walking and an inclination to stumble and fall, which conditions will last for the indefinite future.

Plaintiffs ask this court to consider that fact in deciding whether Brian’s IEP is appropriate and what his special education placement should be. Defendant objects that the operation occurred after both the defendant’s decision and after the State hearing. Defendant argues that if this fact is to be considered, it should first be remanded for the consideration of the defendant and the hearing officer.

For the following reasons, this court is of the opinion that it can consider the operation, in addition to the facts contained in the hearing record, in order to determine whether Brian’s present IEP and special education placement are lawfully appropriate. However, the district and the hearing officer should have the first opportunity to decide the impact of that operation on Brian’s future education.

Brian’s physical condition was clearly in issue in the 1983 hearing; the subject as a whole is not a new matter in this court. Plaintiffs’ counsel stated in the letter initiating the hearing that Brian should not be with physically active children, and should be in a program that can accommodate his physical disabilities. While the orthopedic operation was subsequent to the hearing, it was another event in Brian’s on-going physical problems.

The scope of the action before this court is “with the respect to the complaint presented pursuant to this section,” which refers to the complaint which the parents made to the hearing authority below; 20 U.S.C. § 1415(e)(2). This language might suggest that this court can consider only matters previously brought to the attention of the hearing officer. But that section also provides that the court shall “hear additional evidence,” which certainly states that the court is not limited by the record made before the hearing officer. And that section authorizes the court to “grant such relief as the court determines is appropriate.”

In addition, during the pendency of court proceedings dealing with the education of handicapped children under the Act, it is likely that their physical, mental and educational conditions will change over time. Those changing conditions could result in a series of civil actions and referrals back to hearing officers whenever there were changes in conditions. The courts would then be making decisions about children’s education based on information which is months and perhaps years old. And there could be lengthy delays before reaching decisions. This case was tried one year and four months after the decision of the hearing officer.

Although the scope of this court’s review starts with the proceedings before the hearing officer as its foundational base, the court does not feel that it serves the Congressional intent of the Act to limit the court’s review to only those evidentiary facts which were specifically before the hearing officer.

This court will therefore consider Brian’s 1984 operation, and the consequences of it, in determining whether Brian’s IEP and present placement are lawfully appropriate. Since this court concludes below that they are not, the district and hearing officer will have the first opportunity to revise Brian’s IEP and recommend a placement for Brian to accommodate his future educational needs, including the impact of the operation. This will enable the court, the district and the hearing officer to perform the responsibilities assigned to each by Congress under the Act without undue delay.

B.

Brian’s parents challenge the IEP which was developed for him by defendant. Their challenge is that the IEP does not address all areas of the child’s needs; that is, cognitive, physical, and language. Plaintiffs seek an amendment to his IEP to address all three areas of need. This is a remedy requested by this action, and one which is within the powers of this court under Rowley.

Defendant argues that plaintiffs waived this claim for relief. The decision of the hearing officer does state that the parties “agree that [the IEP] is appropriate and complete.” However, based upon an examination of the record, the court finds that that statement was incorrect: Plaintiffs’ counsel first stated his objection to the IEP in writing, on the face of the IEP. The request for a hearing, which initiated these proceedings below, expressly objected to the IEP and placed it in issue. And plaintiffs’ response to a request for admissions denied that plaintiffs admitted the correctness of Brian’s IEP.

Defendant’s argument for waiver is based upon pages 1 and 2 of the transcript of the hearing. The court has reviewed that transcript, and finds that those statements did not constitute a waiver. At most there was an agreement over the “goals” set forth in the IEP. But even those statements were at most equivocal, and the hearing officer stated on the record that the definition of the issues might “become more refined as we proceed,” because they had to cut short the pretrial conference portion of the hearing in order to accommodate a witness. In short, the transcript is not sufficient to constitute waiver of the clear objection to the IEP which plaintiffs made, and which was one of the grounds for the initiation of the hearing itself.

The court has reviewed the IEP, the decision of the hearing officer, and the record of that hearing, and has considered the additional testimony and records offered by the parties. The court concludes by a preponderance of the- evidence that Brian’s IEP does not meet the statutory requirements of 20 U.S.C. § 1401(19). Specifically, because the IEP does not address all three catagories of Brian’s handicaps, it does not “meet the unique needs of [the handicapped child].” And the IEP does not contain an adequate “statement of the specific educational services to be provided to [such child].” Within the language of Rowley, the court finds that Brian’s present IEP is not “reasonably calculated to enable the child to receive educational benefits.”

This matter must therefore be remanded to the defendant district for the purpose of formulating a new IEP for Brian which addresses all three areas of his handicaps.

C.

The parties have now agreed that the SDL program in which Brian is now formally placed is not appropriate for him. Defendant believes that the appropriate placement is in the TMR program at one of its schools. Plaintiffs ask this court to determine that the TMR placement is not appropriate for Brian, and to order the district to arrange and pay for a private school placement in a program for multihandicapped children. The evidence demonstrated that there are such programs available in the area of plaintiffs’ residence.

This issue was before the hearing officer. In paragraph number three of the request for hearing, plaintiffs expressly asked that “if neither the TMR program nor Brian’s current placement are determined to be appropriate, the Russells request non-public school placement.”

As stated, the district and the hearing officer determined that TMR was the appropriate placement for Brian. Plaintiffs contend that TMR is primarily designed for children with cognitive problems, and that it does not adequately take care of Brian’s needs for language education and physical care. More specifically, they believe that placing Brian in the TMR class would present serious physical dangers to him. The district, on the other hand, contends that the TMR program is adequate to address all three of Brian’s needs, and that special modifications can be made to the program to care for the sincere concerns over Brian’s safety.

This court reviewed the record and considered the other evidence regarding the TMR program. Most of the children in the program have cognitive problems. There are approximately twelve children in the class, although class size can be as low as ten. The children are eight to ten years of age, approximately Brian’s chronological age but much ahead of him in physical development. Most are much larger and healthier. Many of the children have Downs Syndrome; they are children who are physically active and affable, but who have serious cognitive problems; and because of this combination of characteristics they could pose a physical danger to Brian, albeit accidentally. The physical concerns were evidenced not only by plaintiffs but also by expert witnesses. The physical concerns are enhanced by Brian’s 1984 operation. There was also conflicting testimony on the degree to which the TMR program could address Brian’s third category of educational need, language.

The court finds by a preponderance of the evidence that defendant’s TMR program does not address Brian’s needs for physical safety and language development. The court finds that the TMR program is not “reasonably calculated to enable [Brian] to receive educational benefits” to which he is entitled under the Act.

The issue of Brian’s proper placement in another special educational program is therefore remanded to the district for further consideration. That further consideration should include an amended IEP for Brian, and consideration of the impact of Brian’s 1984 operation. If the district concludes that in view of the revised IEP, none of its special educational programs other than TMR meet Brian’s needs, then the district must provide appropriate private school placement. If plaintiffs do not agree with the district’s decision on remand, they have appropriate remedies under § 1415(b) and following.

V.

IT IS ORDERED that this matter is remanded to the defendant district, for the following proceedings to be conducted immediately:

1. Modification of plaintiff Brian Russell’s individualized educational program, to include adequate provision for all three categories of his handicaps and educational needs;

2. Evaluation of the impact of plaintiff Brian Russell’s 1984 operation, in formulating his amended individualized educational program and deciding upon his placement in a special education program.

3. Decision on an appropriate special education placement for plaintiff Brian Russell consistent with his revised individualized educational program.

If after revising plaintiff Brian Russell’s individualized educational program, the district concludes that the only special education program which it has is TMR as now constituted, which the court finds to be inappropriate, the district is to provide for appropriate non-public school education to meet Brian’s educational needs.

Pending the above procedures, plaintiff' Brian Russell may remain in his present educational status; that is, receiving home tutoring.

      . A "local education agency" within the meaning of 20 U.S.C. § 1401(8).

      . TMR and SDL are both “special education” programs under 20 U.S.C. § 1401(16).

      . The court therefore admits plaintiffs’ exhibit No. 1 into evidence.

      . Brian’s physical handicaps were not adequately addressed, even if the 1984 operation is excluded from consideration.