author: LUONGO, Chief Judge.

text:
    Ronald POOLER v. UNITED STATES of America.
    Civ. No. 85-0035.
    United States District Court, E.D. Pennsylvania.
    May 16, 1985.
    Edward L. McCandless, Jr., Steinberg & Girsh, Philadelphia, Pa., for plaintiff.
    Serena H. Dobson, Asst. U.S. Atty., Philadelphia, Pa., for defendant.
   OPINION

LUONGO, Chief Judge.

This is an action against the government under the Federal Tort Claims Act (FTCA), 28 U.S.C. § 2671 et seq. The gravamen of plaintiffs complaint is that he was falsely arrested on drug charges as a result of a negligent investigation conducted by the Veterans Administration (VA). The government has moved to dismiss the complaint under the discretionary function exception to the FTCA. Because I conclude that the decision to initiate criminal charges and the decision as to the proper means of investigating suspected criminal conduct are discretionary functions within the meaning of 28 U.S.C. § 2680(a), I will grant the motion to dismiss.

I.

Plaintiff Ronald Pooler was employed at the Veterans Administration Medical Center in Coatesville, Pennsylvania until the time of his arrest in March, 1982. In the year preceding plaintiffs arrest the VA conducted an investigation into reports of the distribution and use of controlled substances at the Medical Center. When the inquiry proved unsuccessful, VA officials decided to attempt an undercover operation using the services of an informant.

VA officials who were involved in the decision to implement an undercover operation were: James L.G. Parsons, II, Director of the Medical Center, Peter Mango, Chief of Police at the Medical Center, and Curtis Kimmel, a VA detective. In December, 1981, Mango advised Parsons of his belief that a drug problem existed at the Medical Center. Parsons approved Mango’s request for authorization to conduct an investigation, and Mango assigned Detective Kimmel to conduct the probe.

Plaintiff alleges that Kimmel’s approach to the investigation was deficient in several respects. Plaintiff alleges that Kimmel selected for use as an informant a VA employee, John Cantrell, who had acknowledged past drug involvement and who exhibited less than average mental capacity. It is further alleged that during the course of the investigation, Kimmel failed to instruct the informant as to which individuals he should observe and as to methods of avoiding violating the rights of such persons. Plaintiff also claims that Kimmel failed to obtain corroborative evidence with respect to Cantrell’s allegation that plaintiff sold him drugs: Kimmel did not personally observe, nor did he direct others to witness, the alleged transactions between plaintiff and the informer.

As a result of the undercover investigation, Kimmel filed two criminal complaints against plaintiff on March 18, 1982. A district justice found probable cause and issued a warrant for plaintiff’s arrest. After his arrest, plaintiff was required to post bail to obtain release. The charges against plaintiff were nolle prossed by the Chester County District Attorney on August 24, 1982. Plaintiff denies participation in the alleged drug transactions.

II.

The discretionary function exception to the FTCA bars suit against the United States on:

Any claim based upon an act or omission of an employee of the Government, exercising due care, in the execution of a statute or regulation, whether or not such statute or regulation be valid, or based upon the exercise or performance or the failure to exercise or perform a discretionary function or duty on the part of a federal agency or an employee of the Government, whether or not the discretion involved be abused.

28 U.S.C. § 2680(a). On the few occasions the Supreme Court has considered the discretionary function exception, the Court has accorded the exception a broad reading. In Dalehite v. United States, 346 U.S. 15, 73 S.Ct. 956, 97 L.Ed. 1427 (1953), the Court rejected claims arising out of a disastrous explosion of ammonium nitrate fertilizer intended for shipment to Europe in the aftermath of World War II. Declining to establish a precise standard for application of the exception, the Court ruled that the exception covered at least “the initiation of programs and activities.” 346 U.S. at 35, 73 S.Ct. at 968. Moreover, the Court held the exception applicable to “determinations made by executives or administrators in establishing plans, specifications, or schedules of operations.” Id. at 35-36, 73 S.Ct. at 968 (footnote omitted). As the Court explained:

Where there is room for policy judgment and decision there is discretion. It necessarily follows that acts of subordinates in carrying out the operations of government in accordance with official directions cannot be actionable. If it were not so, the protection of § 2680(a) would fail at the time it would be needed, that is, when a subordinate performs or fails to perform a causal step, each action or nonaction being directed by the superior, exercising, perhaps abusing, discretion.

Id. at 36, 73 S.Ct. at 968 (footnote omitted). Applying that standard to the facts before it, the Court ruled that all of the government’s alleged acts of negligence — including inter alia the improper labeling of fertilizer bags — were discretionary functions. The Court reasoned that the challenged decisions “were all responsibly made at a planning rather than operational level and involved considerations more or less important to the practicability of the Government’s fertilizer program.” Id. at 42, 73 S.Ct. at 971.

The Supreme Court recently reaffirmed the principles of Dalehite v. United States in United States v. S.A. Empresa de Viacao Aerea Rio Grandense (Varig Airlines) — U.S. —, 104 S.Ct. 2755, 81 L.Ed.2d 660 (1984). There the Court ruled that the exception barred actions based on the Federal Aviation Administration’s certification of aircraft for commercial use. The Court held that the decision to adopt a “spot check” system for reviewing a manufacturer’s compliance with applicable regulations was a discretionary function. The Court heavily emphasized the discretionary character of an agency’s regulation of private conduct:

When an agency determines the extent to which it will supervise the safety procedures of private individuals, it is exercising discretionary regulatory authority of the most basic kind. Decisions as to the manner of enforcing regulations directly affect the feasibility and practicality of the Government’s regulatory program; such decisions require the agency to establish priorities for the accomplishment of its policy objectives by balancing the objectives sought to be obtained against such practical considerations as staffing and funding.

104 S.Ct. at 2768. In short, the Court found that the “nature and quality” of the decision to adopt a “spot check” system classified such a decision as a discretionary function.

The Court also ruled that the acts of FAA employees implementing the spot check program were protected by the exception. The Court noted that individuals assigned to review a given manufacturer’s compliance with applicable safety standards were specifically empowered to decide the extent to which the manufacturer could be trusted to have observed such regulations.

In this circuit, our court of appeals recently examined the scope of the discretionary function exception in General Public Utilities Corporation v. United States, 745 F.2d 239 (3d Cir.1984), cert, denied, — U.S. —, 105 S.Ct. 1227, 84 L.Ed.2d 365 (1985). In that case, the court held barred the claims of owners of the Three Mile Island nuclear plant against the government because of the Nuclear Regulatory Commission’s failure to warn them of equipment defects. The court reasoned that the character of the function performed by the agency — regulation of the nuclear industry after assessment of information gathered from nuclear facilities— required that the agency’s decision whether to report specific data be held a discretionary function. The court emphasized that the nature of the governmental activity, and not the availability of other courses of action, determines whether the conduct is discretionary.

The exemption from the Tort Claims Act is based on the nature of the governmental discretionary function, not whether there is an option to choose. Regulatory activities are within the exemption, not because alternatives exist in particular circumstances, but because of the fundamental character of the role assigned to the agency.
If a government employee performing a discretionary function acts negligently, the exemption remains applicable even though the activity constitutes an abuse of discretion. As the statute itself provides, discretionary functions are exempt “whether or not the discretion involved be abused.” 28 U.S.C. § 2680(a).

745 F.2d at 245.

III.

Apart from general pronouncements on the subject of the discretionary function exception, the courts have provided little insight into application of the exception to the investigative conduct of law enforcement officials. In this circuit, Bernitsky v. United States, 620 F.2d 948 (3d Cir.), cert, denied, 449 U.S. 870, 101 S.Ct. 208, 66 L.Ed.2d 90 (1980), is the most significant appellate ruling. In Bernitsky, a coal company brought suit after portions of its mine collapsed, causing substantial damage to equipment left in the mine. At the time of the collapse, the company was forbidden access to the mine or its equipment because of a Withdrawal Order issued by the Mining Enforcement and Safety Administration. The Withdrawal Order was based on a Notice of Violation regarding toilet facilities which the company had failed to remedy for seven months despite three extensions of time. The company claimed that closure of the mine was unreasonable under the circumstances, and brought suit under the FTCA.

The court of appeals held the suit barred under the discretionary function exception. The court noted that applicable regulations vested discretion in mine inspectors to determine the time during which a violation (other than one posing imminent danger) must be abated. In view of the “judgmental character” of the decision as to a reasonable length of time to correct a violation, the court declined to- substitute its judgment for that of the mine safety officials. The court concluded:

Decision making as to investigation and enforcement, particularly when there are different types of enforcement action available, are discretionary judgments.

620 F.2d at 955.

Following Bernitsky, the court in Amato v. United States, 549 F.Supp. 863 (D.N.J. 1982), affd mem., 729 F.2d 1445 (1984), ruled that FBI agents were acting within the scope of the exception when they delayed arresting members of a conspiracy until the suspects committed a bank robbery. Applying the planning level/operational level distinction derived from Dalehite v. United States and followed by decisions of our court of appeals, the court concluded that the agents were engaged in planning activity when they declined to charge the suspects with lesser offenses on the basis of inconclusive evidence available before the robbery.

A similar conclusion was reached by the Court of Appeals for the Fifth Circuit in Flammia v. United States, 739 F.2d 202 (5th Cir.1984). The Fifth Circuit, with the benefit of the Supreme Court’s Varig decision, ruled that the decision of the Immigration and Naturalization Service to admit a Cuban national into this country was discretionary. The court deemed the relevant inquiry to be whether the challenged conduct was of a “nature and quality that Congress intended to shield from tort liability.” 739 F.2d at 204, quoting Varig, 104 S.Ct. at 2765. Finding that the INS has “broad statutory discretion” to admit ex-cludable foreign nationals into this country, the court ruled that Varig precluded judicial review of the agency’s decision. The court also ruled that Varig precluded liability based on the “specific operational decision” to admit the foreign national involved in Flammia. Having characterized the function of deciding whether to admit foreign nationals as discretionary, the court rejected the attempt to draw a distinction between high-level decisions and specific operational decisions. In this regard, the Fifth Circuit took heed of the Supreme Court’s declaration that “it is the nature of the conduct, rather than the status of the actor, that governs whether the discretionary function exception applies in a given case.” Varig, 104 S.Ct. at 2765.

Research has disclosed, however, that circuit court treatment of law enforcement officers’ conduct has not been uniform. For example in Downs v. United States, 522 F.2d 990 (6th Cir.1975), the court held that the exception did not apply to a tort suit which challenged the manner in which FBI agents responded to a hijacking. The court limited application of the exception to (1) cases in which government agents, acting with due care, implement a statute or regulation and (2) cases in which government agents formulate policy. To determine whether government agents are formulating policy, the court looked to the nature and quality of judgment at issue, not to the governmental function for which such a decision was made.

Applying that test to the case before it, the Sixth Circuit ruled that the FBI agents were not formulating government policy when they decided to disable a captive aircraft with hostages on board. The court reasoned that governmental policy had already been articulated in an FBI handbook.

The Sixth Circuit found support for its conclusion in civil rights cases reviewing the legality of police searches, seizures, and arrests. From that body of precedent the court deduced that when a response to a particular situation does not have policy overtones, courts have “scrutinized the day-to-day activities of law enforcement officers.” Downs, 522 F.2d at 997. The court rejected the argument that the making of an arrest is a discretionary act, reasoning that, as in civil rights cases, “the fiction that making an arrest is not ‘discretionary’ is maintained because protection of personal liberties is thought to outweigh the danger of less effective law enforcement out of fear of personal tort liability.” Id. at 998.

Relying on Downs, the District Court for the Eastern District of Michigan has ruled that the exception does not bar suit for a death caused by an informant in the FBI’s control. In Liuzzo v. United States, 508 F.Supp. 923 (E.D.Mich.1981), the plaintiffs alleged that their mother was killed because the FBI recruited, but failed to train or supervise, an informant with known dangerous propensities. The plaintiffs also alleged that the FBI had notice of, and authorized the informant, a Ku Klux Klan member, to provoke or participate in violence toward civil rights protesters such as the plaintiffs’ decedent.

On a motion to dismiss, the court held that the alleged negligence of the FBI officers in implementing the Bureau’s policy regarding informants was the sort of day-to-day judgment that Downs held outside the discretionary function exception. Because the agents were not formulating policy when they responded to the various circumstances presented, the exception did not preclude judicial review of the propriety of their handling of the informant.

IV.

To decide whether the discretionary function exception bars suit for the alleged negligence of VA officials in the case before me, I must consider whether the challenged conduct is “of the nature and quality that Congress intended to shield from tort liability.” Vang, 104 S.Ct. at 2765. After considering the facts of this case in light of the Supreme Court’s recent pronouncement, the pre-Vang caselaw, and particularly our court of appeals’ decision in Bernitsky, I conclude that the challenged conduct is a discretionary function.

I note at the outset that this lawsuit involves a challenge to both the officials’ investigative techniques and their decision to initiate criminal charges against the plaintiff. The latter aspect of the officials’ behavior has traditionally been considered a quintessentially discretionary act. Smith v. United States, 375 F.2d 243 (5th Cir.), cert, denied, 389 U.S. 841, 88 S.Ct. 76, 19 L.Ed.2d 106 (1967); United States v. Faneca, 332 F.2d 872 (5th Cir.1964), cert, denied, 380 U.S. 971, 85 S.Ct. 1327, 14 L.Ed.2d 268 (1965); Accardi v. United States, 435 F.2d 1239 (3d Cir.1970); Blessing v. United States, 447 F.Supp. 1160, 1179 & n. 28 (E.D.Pa.1978). Nothing in Varig or other recent cases suggests that filing the criminal complaint was not a discretionary act, thus I hold that plaintiffs complaint must be dismissed to the extent it challenges the decision to bring such charges.

I conclude also that the VA officials’ conduct during the investigation, including their decision to accept the services of an informant with limited mental capacity, is a discretionary function. As the Third Circuit specifically ruled in Bernitsky: “Decision making as to investigation and enforcement, particularly where there are different types of enforcement action available, are discretionary judgments.” 620 F.2d at 955. While it can be said that the mine safety inspectors in Bernitsky enjoyed slightly broader discretion to decide appropriate enforcement action, the nature of the governmental conduct — investigation and enforcement of regulations of private conduct — is the same as in the instant case.

Further support for this position is found in Varig and the Third Circuit’s analysis of Varig in General Public Utilities Corporation v. United States, supra. In Varig, the Supreme Court made clear that the governing inquiry is whether the governmental function pursued through an allegedly negligent decision is discretionary. With respect to the FAA’s decision as to the extent it would oversee private manufacturers’ compliance with safety standards, the Court ruled that the regulatory character of the challenged conduct classified it as a discretionary function. Similarly, in General-Public Utilities, the court emphasized that the exception “is based on the nature of the governmental discretionary function,” and is not forfeited by the negligence of an employee performing such a function. 745 F.2d at 245. The court then went on to hold that the Nuclear Regulatory Commission’s regulatory function was a discretionary one.

The same reasoning applies to the VA’s role as regulator of the conduct of persons on VA premises. Congress has authorized the Administrator of Veterans’ Affairs, for the purpose of maintaining law and order on VA property, to establish rules and regulations, to employ special police, and to authorize such special officers to carry firearms. Special investigators, while on VA property, are authorized to enforce both rules and regulations promulgated by the VA and Federal statutes for the protection of persons and property. 38 U.S.C. § 218. With respect to conduct on VA property, therefore, the VA is entitled to the range of discretion properly accorded other law enforcement agencies.

I conclude, moreover, that when seeking to enforce a criminal statute through the use of an informant, law enforcement agencies are exercising a discretionary function under the Varig formulation. Although civil rights litigation has compelled the courts to review police conduct for the purpose of protecting individual rights, the judiciary’s limited role as Constitutional guardian does not reflect an institutional competence to weigh risks attendant to the various methods of ferreting out crime. Plaintiffs suggestion that law enforcement agencies should decline to employ informants of questionable physical, mental, or moral condition is particularly suspect. On countless occasions, the government has used the testimony of admitted criminals, perjurers, and drug abusers to obtain the conviction of the informants’ former cohorts. To require that the government rely only upon witnesses of sterling character would intolerably impede the government’s law enforcement effort. In the instant case, it makes no difference that the decision to employ Mr. Cantrell was not made by high-level administrators; the status of the decisionmakers does not alter the basic character of their judgment, a determination of the appropriate means of law enforcement.

Plaintiff's final contention, raised at oral argument, is that he is entitled to relief under the “investigative or law enforcement officer” proviso of 28 U.S.C. § 2680(h). Section 2680(h) excepts from the FTCA:

Any claim arising out of assault, battery, false imprisonment, false arrest, malicious prosecution, abuse of process, libel, slander, misrepresentation, deceit, or interference with contract rights: Provided, That, with regard to acts or omissions of investigative or law enforcement officers of the United States Government, the provisions of this chapter and section 1346(b) of this title shall apply to any claim arising, on or after the date of the enactment of this proviso, out of assault, battery, false imprisonment, false arrest, abuse of process, or malicious prosecution. For the purpose of this subsection, “investigative or law enforcement officer” means any officer of the United States who is empowered by law to execute searches, to seize evidence, or to make arrests for violations of Federal law.

As the Court of Appeals for the District of Columbia Circuit has already ruled, however, § 2680(a) bars suit with respect to discretionary governmental functions even if the discretionary conduct would constitute a tort covered by the proviso to § 2680(h). Gray v. Bell, 712 F.2d 490, 507-508 (D.C.Cir.1983), cert, denied, — U.S. —, 104 S.Ct. 1593, 80 L.Ed.2d 125 (1984). Plaintiff’s argument that the holding of Gray v. Bell should be rejected is not convincing. Although the instant case demonstrates that some activities of law enforcement officers are discretionary functions, it is not necessary to construe the proviso to § 2680(h) as a pro tanto repeal of the discretionary function exception to give the proviso its intended effect. Under the interpretation advanced by the District of Columbia Circuit, which I follow, the prime target of the proviso — violation of constitutional rights by law enforcement officers — remains actionable.

In short, I hold that both the VA officials’ decision as to the proper investigative techniques and their determination to initiate criminal charges against the plaintiff are discretionary governmental functions. Because plaintiff’s complaint is barred by the discretionary function exception, this court lacks jurisdiction over the case. Griffin v. United States, 500 F.2d 1059, 1063 (3d Cir.1974). I will therefore dismiss plaintiff’s complaint.

      . My decision in Miller v. United. States, 530 F.Supp. 611 (E.D.Pa.1982), is not to the contrary. In that case, the government was sued for failure to place certain persons in the Federal Witness Protection Program. The government moved to dismiss the complaint under the discretionary function exception. I denied the motion because the complaint alleged that the government had made the decision to protect those individuals, but that government agents negligently failed to execute that decision. In addition, because of the then-undeveloped state of the record, I declined to resolve the merits of the government’s argument that the decision whether to protect a witness is inherently bound up with the discretionary function of the prosecutor. I note that at a later stage of the Miller litigation, Judge Lord ruled that the developed record did not support the plaintiffs’ assertion that the government had decided to protect the individuals. Miller v. United States, 561 F.Supp. 1129, 1131 (E.D.Pa.1983), aff’d mem., 729 F.2d 1448 (3d Cir.1984).

      . At oral argument, plaintiff made reference to footnote nine of the Supreme Court’s opinion in Kosak v. United States, — U.S. —, 104 S.Ct. 1519, 1523, 79 L.Ed.2d 860 (1984). Plaintiff’s reference is unhelpful. In that footnote, the Court, in the context of a discussion of § 2680(c), merely stated that the exceptions to the FTCA should be interpreted according to their language and purpose, and not as narrow exceptions to the broadly-construed principle of sovereign immunity. The Supreme Court did not suggest that it rejected the Third Circuit’s treatment of the FTCA entirely, particularly in view of the Court’s affirmance of the Third Circuit’s Kosak decision.


source: Caselaw Access Project

author: HARDY, District Judge.

license: Public Domain

text:
    Eugene J. JACKSON and Sylvia L. Jackson, husband and wife on their own Behalf and as parents, natural guardians and next best friends of Tenecia R. Jackson, a minor, Plaintiffs, v. Bill N. SHEPARD and Jane Doe Shepard, husband and wife, and Needles-Desert Communities Hospital, Defendants.
    No. CIV 83-2238 PCT CLH.
    United States District Court, D. Arizona.
    May 16, 1985.

      Burton J. Kinerk, Tucson, Ariz., for plaintiffs.
    John D. Everroad, Phoenix, Ariz., for Needles-Desert Communities Hospital.
    Edward M. Ranger, Scottsdale, Ariz., for Shepards.
   MEMORANDUM OPINION AND ORDER

HARDY, District Judge.

In this diversity action for medical malpractice, the defendants have moved to dismiss for lack of personal jurisdiction. The motion will be granted.

The defendants Shepard are citizens of California. Dr. Shepard is a medical doctor who practices in Needles. He maintains a telephone listing in the yellow pages of a regional telephone directory that has listings for a number of communities along or near the Colorado River in Arizona, California and Nevada. About 20% of his annual gross income can be attributed to charges in connection with the care and treatment of Arizona residents. Mrs. Shepard has a limited partnership interest in apartments in Phoenix.

Needles-Desert Communities Hospital, which is operated by a political subdivision of California, is located in Needles. Up to 45% of its revenues come from charges in connection with the care and treatment of Arizona residents. The hospital uses an Arizona collection agency to attempt to collect past due accounts from Arizona residents. It has also frequently resorted to the Arizona courts to attempt to collect past due accounts, and has been represented by Arizona lawyers in those actions. As of May 4, 1984, 33 actions were pending in the Superior Court for Mohave County in which the hospital is plaintiff.

On December 8, 1981, the plaintiff Sylvia L. Jackson gave birth to a boy at the hospital. Dr. Shepard was the attending physician. Laboratory, tests demonstrated that Mrs. Jackson had blood type 0 with an Rh negative factor and the child had blood type 0 with an Rh positive factor. It is alleged that, given the incompatible Rh factors, standards of good medical practice required that Mrs. Jackson be administered medication to prevent isoimmunization and resultant damage to other offspring subsequently born to Mrs. Jackson.

At first blush, the determination of personal jurisdiction would appear to be controlled by Cubbage v. Merchent, 744 F.2d 665 (9th Cir.1984), where it was held that the California court had personal jurisdiction over the defendant Arizona doctors and hospital. However, there is significant legal distinction between this case and Cubbage.

To establish personal jurisdiction over a non-resident defendant, two requirements must be met: (1) the applicable state statute must confer personal jurisdiction over the nonresident and (2) the assertion of personal jurisdiction must comport with constitutional due process standards. Flynt Distributing Co., Inc. v. Harvey, 734 F.2d 1389, 1392 (9th Cir.1984); Data Disc, Inc. v. Systems Technology Associates, Inc., 557 F.2d 1280, 1286 (9th Cir. 1977).

California authorizes its courts to “exercise jurisdiction on any basis not inconsistent with the Constitution of this state or the United States.” Cal.Civ.Proc.Code § 410.10 (West 1973). By contrast, Arizona authorizes personal jurisdiction over a person or corporation “which has caused an event to occur in this state out of which the claim which is the subject of the complaint arose” or over a corporation doing business in Arizona. 16 A.R.S. Rules of Civil Procedure, rule 4(e)(2).

In Cubbage, the Ninth Circuit had only to determine whether the defendants had sufficient minimum contacts with California to satisfy the principles of due process. Here, it must be established that personal jurisdiction over the nonresident defendants has been acquired under Rule 4(e)(2) before a minimum contacts analysis is necessary or appropriate. See North-cross v. Joslyn Fruit Co., Inc., 439 F.Supp. 371, 373-74 (D.Ariz.1977); Maloof v. Raper Sales, Inc., 113 Ariz. 485, 487, 557 P.2d 522, 524 (1976) (“[E]xercise of 4(e)(2) jurisdiction is determined by a two-stage analysis ...”).

The defendants have not caused an event to occur in Arizona out of which the claims which are the subject of the complaint arose. The alleged injury causing event was the failure to administer appropriate medication to Mrs. Jackson while she was a patient at the hospital in California. The need for service was in California. Any negligent failure to render that service took place in California. Although the consequences of the alleged failure to treat were felt in Arizona, the tort itself is not portable. See Wright v. Yackley, 459 F.2d 287, 288-89 (9th Cir.1972). Injury in Arizona resulting from an out-of-state event is insufficient to establish jurisdiction under Rule 4(e)(2). See Amba Marketing Systems, Inc. v. Jobar International, Inc., 551 F.2d 784, 788 (9th Cir.1977); Houghton v. Piper Aircraft Corp., 112 Ariz. 365, 542 P.2d 24 (1975).

The hospital is not doing business in Arizona. The test of doing business for the purposes of personal jurisdiction is whether the defendant corporation engages in a “systematic and continuous course of conduct within the state.” Houghton, 112 Ariz. at 367, 542 P.2d at 27 (quoting Lycoming Division of Avco Corp. v. Superior Court, 22 Ariz.App. 150, 153, 524 P.2d 1323, 1326 (1974)).

The hospital is not doing business in Arizona by attempting to collect debts acquired in California. See California Brewing Co. v. Rino, 143 F.Supp. 801, 803 (D.Idaho 1956). Nor does the fact that a California hospital accepts Arizonans for treatment constitute doing business by the hospital within Arizona. See Walters v. St. Elizabeth Hospital Medical Center, 543 F.Supp. 559, 560 (W.D.Pa.1982).

Plaintiffs have requested, if the Court finds there is no personal jurisdiction over the defendants, that the case be transferred to the Central District of California. Transfer is appropriate. See Aguacate Consolidated Mines, Inc. of Costa Rica v. Deeprock, Inc., 566 F.2d 523, 524 (5th Cir. 1978).

IT IS ORDERED granting the motions of the defendants to dismiss for lack of personal jurisdiction.

IT IS FURTHER ORDERED transferring this case to the Central District of California.


author: RAYMOND J. BRODERICK, District Judge.

text:
    FIRST PHILADELPHIA REALTY CORPORATION v. ALBANY SAVINGS BANK.
    Civ. A. No. 84-587.
    United States District Court, E.D. Pennsylvania.
    May 16, 1985.

      Michael S. Silberman, Andrew Elash, Philadelphia, Pa., for plaintiff.
    Rush T. Haines, II, Robert J. Hoelscher, Drinker, Biddle & Reath, Philadelphia, Pa., for defendant.
   MEMORANDUM

RAYMOND J. BRODERICK, District Judge.

Plaintiff, First Philadelphia Realty Corporation (Realty), has filed this diversity action for a declaratory judgment seeking this Court’s interpretation of the language in certain mortgage instruments held by the defendant, Albany Savings Bank (Albany). Specifically, Realty asked the Court to determine whether the mortgage instruments permit the mortgagor to make a substantial prepayment of principal without incurring the obligation to pay the prepayment consideration provided in the mortgage. The Court held a hearing on the parties’ cross-motions for summary judgment and determined that there are no genuine issues of material fact. The undisputed facts may be summarized as follows:

On or about February 28, 1977, Park Drive Manor, Inc. executed a commercial mortgage note in the amount of $4,300,-000.00 with an interest rate of 9 .%% secured by a mortgage in favor of Fidelity Bond and Mortgage Company (Fidelity). At the same time, Fidelity assigned this mortgage to the defendant, Albany. Fidelity continued to service the note and mortgage. These instruments provide for specified monthly installments of principal and interest to be- paid on the first day of each month “until the principal and interest are fully paid, except that the final payment of the entire principal sum if not sooner paid shall be due and payable on the first day of March, A.D. 1987.’’ Each instrument specifically provides that the mortgagor and its successors and assigns:

shall have the privilege of prepaying the full amount of the principal sum thereof remaining unpaid after the first five years of amortization, on giving to the Holder of the Note 60 days notice of its intention to do so and paying to the Holder of the Note, simultaneously with such notice, a prepayment consideration in a sum equivalent to 5% of the unpaid balance of the principal sum secured by the Note, if such prepayment is made during the Sixth year of amortization, declining one-half of 1% per year to 1% and 1% thereafter. It is understood and agreed that such prepayment consideration shall be in addition to principal and interest unpaid on the date that the principal and interest are paid in full,

(emphasis added).

On October 15, 1983, in the seventh year after the execution of the mortgage instruments, the plaintiff, Realty, became the Managing Agent for the Park Drive Manor apartments, the property which secures the mortgage note. Under the terms of the housing management agreement, Realty is to collect rents from property owned by Park Drive Manor, Inc., and to pay all sums due on the mortgage instruments which are the subject of this lawsuit.

By letter dated October 11, 1983, Realty requested Fidelity to provide a prepayment or “payoff” statement on the mortgage loan accounts for the Park Drive Manor Apartments as of October 24, 1983. For internal accounting reasons, Fidelity had split the original $4,300,000.00 mortgage loan into two loan accounts, one in the amount of $3,000,000.00 and one in the amount of $1,300,000.00. Fidelity provided two payoff statements which were good until October 24, 1983 in response to Realty’s request. The payoff figure on the $3,000,000.00 loan account was $2,754,-214.88, which was broken down as follows: unpaid principal balance — $2,738,349.85; prepayment fee of 4¥2% — $123,225.74; interest from October 1, 1983 to October 24, 1983 — $17,799.36; late charges — $9,746.12; satisfaction fee — $35.00; less credit for escrow funds — $134,941.19. On the $1,300,-000.00 loan account, the payoff figure good until October 24 was $1,250,082.18, which was calculated as follows: unpaid principal balance — $1,186,617.90; prepayment fee of 4V2% — $53,397.81; interest from October 1, 1983 to October 24, 1983 — $7,713.12; late charges — $2,318.35; satisfaction fee— $35.00. The total of the two prepayment figures good until October 24, 1983 was $4,004,297.06. The statements provided for an additional $1,063.02 per day in interest if payment was made after October 24, 1983.

On or about October 24, 1983, Realty closed a refinancing insured by the Department of Housing and Urban Development under section 223(f) of the National Housing Act. On October 25, 1983, Fidelity received a check in the amount of $4,005,-360.08 on the mortgage loan accounts in question. This was the same amount as the October 24, 1983 payoff figures plus one day’s additional interest. Payment on the check was stopped on October 26, 1983.

By letters dated December 14, 1983, Fidelity provided payoff statements on the two loan accounts with payoff figures of $2,694,140 26 and $1,243,080.96 (total $3,937,221.22) which would be good until December 15, 1983. An additional $1,059.51 per day was required if payment was made after December 15, 1983. On or about December 16,1983, Realty wired two sums to Fidelity, $2,694,140.26 and $1,205,-859.74, for a total of $3,900,000.00 ($37,-221.22 less than the payoff figures as of December 15, 1983).

Realty asserts that this $3,900,000.00 represents a partial prepayment of the remaining unpaid principal which need not be accompanied by any prepayment consideration. Realty contends that the above-quoted language of the mortgage instruments, which refers to the prepayment consideration required for prepayment of “the full amount of the principal sum thereof remaining” is inapplicable to its partial prepayment. On the other hand, Albany contends that the only prepayment option contemplated by the mortgage instruments is a full prepayment, which triggers the prepayment consideration clause quoted above.

As stated, there are no genuine issues of material fact. This Court may grant one of the cross-motions for summary judgment if it determines that either party is entitled to judgment as a matter of law. See Hollinger v. Wagner Mining & Equipment Co., 667 F.2d 402, 405 (3d Cir.1981). For the reasons discussed below, the defendant Albany’s motion for summary judgment will be granted, and Realty’s motion for summary judgment will be denied.

The mortgage in this case calls for precise payments of principal and interest on a monthly basis until the mortgage is fully amortized on March 1, 1987. In addition, the mortgage instruments provide that the mortgagor and its successors and assigns shall have the option of prepaying the full amount of the principal sum remaining unpaid after the first five years of amortization, provided that the mortgagor gives the noteholder 60 days notice of its intention to repay and simultaneously pays a prepayr ment consideration to the noteholder. This consideration provided in the mortgage instrument is equal to five percent (5%) of the unpaid principal sura if payment is made during the sixth year of amortization. In subsequent years, the prepayment consideration percentage declines annually by ½ of 1½ until it reaches 1%, where it remains for the remaining term of the loan.

Since the mortgage was originally executed by Pennsylvania citizens on property located in Pennsylvania, the parties are agreed, and the Court concurs, that Pennsyvlania law shall apply to the resolution of the dispute. A Pennsylvania statute provides that residential mortgage obligations (obligations of $50,000.00 or less, which are secured by a lien on property containing two or fewer residential units) contracted for after 1974 may be prepaid at any time without any penalty or other charge for the prepayment. 41 Pa.Stat.Ann. §§ 401 & 405 (1984 supp.). However, no such provision governs the prepayment of commercial or non-residential mortgage obligations.

Despite the clear and unambiguous language of the mortgage instruments in this case, plaintiff contends that the terms of the mortgage authorize a partial prepayment without obligation to pay the prepayment consideration. However, the conditions under which prepayment is authorized are specifically set forth in the mortgage. Therefore, the cases relied upon by plaintiff are not controlling. In Beth-June, Inc. v. Wil-Avon Merchandise Mart, Inc., 211 Pa.Super. 5, 233 A.2d 620 (1967), where the mortgage instrument as modified did not specifically address the issue of prepayment, the Court held that the words “if not sooner paid” contemplated prepayment in whole or in part. In Mahoney v. Furches, 503 Pa. 60, 468 A.2d 458 (1983), the Court held that where a mortgage note is silent on the subject of prepayment, the mortgagor has a presumptive right to obtain a release from the mortgage upon payment of the principal balance and interest thereon. As the Mahoney Court recognized, the issue of the mortgagor’s right to prepay the loan and alienate the land does not arise in the current institutional mortgage, which customarily exacts a substantial consideration as a condition of accepting prepayment. See 503 Pa. at 63-64, 468 A.2d at 460-61. And even in the case of a private mortgage, the Court noted that specific language may rebut the presumption of a right to prepayment or qualify the terms upon which prepayment is permitted. See id.

It is well-settled that a contract must be interpreted as a whole and effect must be given to all of its provisions. See, e.g., Woytek v. Benjamin Coal Co., 300 Pa.Super. 397, 446 A.2d 914 (1982). In other words, a contract must not be construed so as to render any of its terms meaningless. See, e.g., Girard Trust Bank v. Life Ins. Co. of North America, 243 Pa.Super. 152, 364 A.2d 495 (1976). The plaintiff in this case entered into a mortgage contract that afforded two options: (1) monthly payments of principal and interest calculated to fully amortize the mortgage debt, if maintained until the end of the contract; or alternatively, (2) prepayment of the entire outstanding principal balance, provided that if such prepayment takes place in the seventh year, it must be accompanied by a 42½ prepayment consideration. Plaintiff would have this Court insert into the contract a third payment option which would authorize prepayment of a substantial part of the principal balance (but less than the entire outstanding principal balance) without the obligation of paying the prepayment consideration. Reading such a provision into the mortgage instruments would render meaningless the specific terms providing for a prepayment consideration in that this interpretation would require the mortgagee to accept payment of the entire principal balance less one dollar without the benefit of the bargained-for prepayment consideration.

Since there are no ambiguities in the terms of this mortgage, the Court must give effect to the intent of the parties as it is set forth within the four comers of the agreement. It is not the function of the Court to redraft an agreement more favorable to a given party than that which he chose for himself. See Harris v. Dawson, 479 Pa. 463, 388 A.2d 748 (1978). Accordingly, this Court has determined that the language in question cannot be construed to allow a partial prepayment of the principal balance without a payment of the prepayment consideration, for to do so would render the prepayment clause a nullity.

For the reasons stated above, this Court has determined that defendant’s motion for summary judgment will be granted, and that plaintiff’s motion for summary judgment will be denied.


author: SAFFELS, District Judge.

text:
    George E. LEDFORD, d/b/a New Era Construction, Plaintiff, v. HOUSING AUTHORITY OF the SAC AND FOX TRIBE OF MISSOURI, Defendant.
    Civ. A. No. 85-2207-S.
    United States District Court, D. Kansas.
    May 16, 1985.
    John S. Torkelson, Robert A. Babcock, Margolin & Kirwan, Kansas City, Mo., John L. Peterson, Williamson & Cubbison, Kansas City, Kan., for plaintiff.
    Robert F. Duncan, Duncan, Senecal & Bednar, Atchison, Kan., for defendant.
   MEMORANDUM AND ORDER

SAFFELS, District Judge.

This matter is before the court on plaintiff’s motion for a preliminary injunction to enjoin the defendant from dissipating or encumbering any portion of the construction funds allotted to defendant by the Department of Housing and Urban Development [hereinafter HUD] of the United States of America for construction of twenty (20) low-cost dwelling units in Reserve, Kansas, Project No. KS16B151001, or in the alternative for the posting of a bond by the defendant in the amount of Seven Hundred Fifty-Two Thousand Two Hundred Dollars ($752,200). A preliminary injunction hearing commenced on April 12, 1985, at which time plaintiff presented his evidence. At the close of plaintiffs evidence, the court recessed to allow the parties to prepare briefs on the issue of whether plaintiff may place a mechanic’s lien on the property which is the subject of this lawsuit. The court agreed to reopen the preliminary injunction hearing, if necessary, after considering the arguments in the briefs. The parties have completed briefing, and the court is now prepared to rule.

The standards which govern the issuance of a preliminary injunction are well settled. The moving party must establish: (1) a substantial likelihood that the movant will eventually prevail on the merits; (2) that the movant will suffer irreparable injury unless the injunction issues; (3) that the threatened injury to the movant outweighs whatever damages the proposed injunction may cause the opposing parties; and (4) that the injunction, if issued, would not be adverse to the public interest. Lundgrin v. Claytor, 619 F.2d 61, 63 (10th Cir.1980).

Of these standards, “[pjerhaps the single most important prerequisite for the issuance of a preliminary injunction is a demonstration that if it is not granted the applicant is likely to suffer irreparable harm before a decision on the merits can be rendered. Only when the threatened harm would impair the court’s ability to grant an effective remedy is there really a need for preliminary relief.” C. Wright & A. Miller, 11 Federal Practice and Procedure, § 2948, pp. 431-34 (1973).

The issue before this court is whether, absent a preliminary injunction, plaintiff would be denied an adequate remedy for any of the damages claimed in the complaint. This case stems from a dispute over the construction of ten duplexes (20 housing units) in Reserve, Kansas. On October 15, 1983, plaintiff entered into a contract with defendant for the construction and sale of housing units. Plaintiff agreed to use plans and specifications furnished by defendant. The original completion date of July 15, 1984, was later amended to March 28, 1985. Under the contract, the defendant agreed to purchase all twenty housing units for the total sum of Seven Hundred Fifty-Two Thousand Two Hundred Dollars ($752,200). The construction contracts incorporated by reference the Annual Contribution Contracts (ACC) executed by defendant and by HUD, pursuant to 42 U.S.C. 1437, et seq. Under the contracts, HUD agreed to make the contribution of $752,200 to finance the housing project.

Construction was not completed in the allotted time, and there is a dispute whether the completed portions of the project are in substantial compliance with the plans and specifications. Plaintiff’s contract was terminated on March 28, 1985. He has not been paid. Defendant seeks to complete the project by taking bids and awarding a contract to a new contractor. There is a dispute as to how much of the project is currently complete and how much work and expense would be required to complete the contract in accordance with the plans and specifications. Payment to the new contractor would be made from the funds allocated by HUD.

In the usual case, preliminary injunction would be unavailable because of the availability of a mechanic’s lien under Kansas law. K.S.A. 60-1101, et seq. Here, the sovereign immunity issue complicates the matter. Plaintiff contends he is barred under law from making use of the normal contractor remedies, such as a mechanic’s lien, because defendant has failed to waive sovereign immunity; consequently, a judgment would fail to create a lien against such property of the defendant. Plaintiff claims that if the court does not grant the preliminary injunctive relief, the allotted funds remaining after completion costs will not satisfy plaintiff’s claims. Defendant, a Kansas corporation, was enacted by Tribal Ordinance No. 18-81 on July 8, 1981, under municipal rules established in accordance with 24 C.F.R. 905.109. Several provisions of the tribal ordinance are relevant hereto. Article V.2 states:

The Council hereby gives its irrevocable consent to allowing the Authority to sue and be sued in its corporate name, upon any contract, claim or obligation arising out of its activities under this ordinance and hereby authorizes the Authority to agree by contract to waive any immunity from suit which it might otherwise have; but the Tribe shall not be liable for the debts or obligations of the Authority. (Emphasis added.)
At Article VII.7, it is stated:
All property including funds acquired or held by the Authority pursuant to this ordinance shall be exempt from levy and sale by virtue of an execution, and no execution or other judicial process shall issue against the same nor shall any judgment against the Authority to (sic) be a charge or lien upon such property. However, the provisions of this section shall not apply to or limit the right of obligees to pursue any remedies for the enforcement of any pledge or lien given by the Authority on its rents, fees or revenues or the right of the Federal government to pursue any remedies conferred upon it pursuant to the provisions of this ordinance or the right of the Authority to bring eviction actions in accordance with Article V, Section 3(1).

The relevant provisions of this tribal ordinance are the same as the relevant provisions of the tribal ordinance involved in Namekagon Development Co. v. Bois Forte Reservation Housing Authority, 517 F.2d 508 (8th Cir.1975). There, the court noted that since an Indian tribe is immune from unconsented suit, the court must construe any consent to suit strictly and enforce any conditional limitations imposed on that consent. The court held that under what is Article VII.7 above restrictions were placed on that waiver so that the net result of the ordinance was a waiver only of the right to be free from suit and not of the right to be free from judicial execution upon any judgment arising from such suit. Id. at 509. However, the court noted that the very terms of the ordinance (Article V.2 of the instant contract) authorized the Authority to “agree by contract to waive any immunity from suit which it might otherwise have.” Thus, it is necessary in the instant case, to consider the terms of the contract between the plaintiff and defendant. Here, at Section 2.26 of the contract between plaintiff and defendant, the parties clearly contemplated mechanics’ liens and this contractual provision must be read as a waiver by the defendant of its sovereign immunity as to mechanic’s liens. Because of this waiver, the court finds that a mechanic’s lien under state law is an available remedy to plaintiff, and therefore an injunction should not issue.

Further, an additional issue raised by plaintiff in his brief, that legal title to the property is not in the name of the defendant Housing Authority, has been corrected by warranty deed dated April 23, 1985, wherein the Sac and Fox Tribe of Missouri, Reserve, Kansas, deeded the relevant property to the housing authority of the Sac and Fox Tribe of Missouri, Reserve, Kansas.

IT IS BY THE COURT THEREFORE ORDERED that plaintiff’s motion for preliminary injunction is hereby denied.


author: ELMO B. HUNTER, Senior District Judge.

text:
    Willa BELL, Plaintiff, v. Margaret M. HECKLER, Secretary of the Department of Health and Human Services, Defendant.
    No. 84-1004-CV-W-3.
    United States District Court, W.D. Missouri, W.D.
    May 16, 1985.

      Janice I. Cebula, Legal Aid of Western Mo., Kansas City, Mo., for plaintiff.
    Judith Strong, U.S. Atty’s Office, Kansas City, Mo., for defendant.
   OPINION AND ORDER REMANDING TO THE SECRETARY

ELMO B. HUNTER, Senior District Judge.

Pending before the Court are cross motions for summary judgment filed by the parties in this case. Plaintiff originally filed for benefits on March 7,1983, alleging several physical impairments, including systemic lupus erythematosus, carpal tunnel syndrome, and high blood pressure. Plaintiff’s application was denied June 1, 1983, and was again denied after reconsideration on July 21, 1983. Plaintiff’s hearing was held before the administrative law judge [AU] on November 28, 1983, and his decision finding plaintiff not disabled was issued April 30, 1984. Plaintiff was denied review by the Appeals Council on July 23, 1984, and she filed this action September 21, 1984.

At her hearing in 1983, plaintiff complained of pain in her hands, right leg, hips, ankles, lower back, “long bones,” chest, and stomach. Tr. at 36-39, 46-47. She also complained of dizziness, memory lapses, hypertension, eye trouble, a facial rash, and hair loss (although the AU remarked on her “full head of hair” with a receding hairline). Tr. at 42, 49-51. The medical evidence included in the transcript indicated that lupus had been diagnosed in 1963' or 1964 but had previously been controlled with medication, that plaintiff had suffered previous episodes of “cerebritis” before her February, 1983, hospitalization, that she underwent a right carpal tunnel release in 1981 and a left carpal tunnel release in 1983, and that she had suffered various other physical problems for several years. Tr. at 92-127.

In concluding that plaintiff was not disabled, the AU determined that the systemic lupus erythematosus was in remission and that the “residuals of carpal tunnel syndrome” only limited her ability to carry, lift, and do fine manipulation. Tr. at 11. The AU found that plaintiffs complaints of pain were “out of proportion” to the objective medical evidence and that the lupus condition was not' a “severe” impairment, therefore he concluded that although she could not perform her past occupation, she could, based on the medical-vocational guidelines, perform light work. Tr. at 9-10.

Pursuant to 42 U.S.C. § 405(g), the Court finds it necessary to remand this case to the Secretary for further action. According to the record, it was the final decision of the Secretary that the plaintiff was unable to return to her former occupation as a licensed practical nurse. Tr. at 10. Once the plaintiff shows that she cannot perform her past work, the Secretary has the burden of proving that there is some other type of work that she is able to do. Hunt v. Heckler, 748 F.2d 478, 481 (8th Cir.1984); Carpenter v. Heckler, 733 F.2d 591, 592 (8th Cir.1984); McGhee v. Harris, 683 F.2d 256, 258 (8th Cir.1982). It is reversible error if the burden of proof is not shifted from the claimant to the Secretary in this situation. Carpenter, 733 F.2d at 592. The Secretary cannot use the medical-vocational guidelines as proof that a claimant can perform some other type of work, if the plaintiff suffers a “significant nonexertional impairment such as chronic pain.” Id., at 593. The plaintiff testified at her hearing that she suffered a significant amount of pain, such that she had difficulty walking, standing, or sitting for long periods of time, Tr. at 37-39, that she was unable to lift or hold objects, Tr. at 35-37, 53, and that it might take up to four hours to get dressed due to the pain in her hands and shoulders, Tr. at 54. The Secretary is not required to believe everything to which a claimant testifies, but she must support her disbelief with a legally sufficient reason; otherwise, “it is improper to rely on the grid as directing a finding of eligibility” for benefits. Marshall v. Heckler, 731 F.2d 555, 557 (8th Cir.1984). Of the many reported opinions in the Eighth Circuit dealing with the evaluation of subjective complaints of pain, the decision in Polaski v. Heckler, 739 F.2d 1320 (8th Cir. 1984) states most clearly that the lack of objective medical evidence to corroborate the subjective complaints is “just one factor” among several which must be considered. The Secretary’s disbelief cannot be based “solely on the lack of objective medical findings.” Clark v. Heckler, 733 F.2d 65, 68 (8th Cir.1984). Although the Secretary duly mentions the Polaski factors in her motion for summary judgment, the Polaski decision was not handed down until after the ALJ’s decision was issued. It is unclear from the record whether all factors were appropriately considered (or whether sufficient evidence was taken to consider them) in the ALJ’s finding that that plaintiff’s pain was not so significant as to be disabling or even to preclude use of the guidelines. If the Secretary cannot find legally sufficient cause to discredit plaintiff’s subjective complaints, then she must show by testimony of a vocational expert (or other evidence) that plaintiff’s pain, in combination with her exertional limitations, does not limit her ability to perform the jobs contemplated by the guidelines. Marshall v. Heckler, 731 F.2d at 557; Hunt v. Heckler, 748 F.2d at 481. Based on the record before the Court, it is unclear whether the Secretary has placed too much emphasis on her finding that the complaints of pain are “out of proportion” to the objective medical evidence.

An additional problem for the Court in this case is the record itself. It is the duty of the Secretary to develop the record, which entails inquiring into the specific limitations caused by the plaintiff’s impairments, establishing by medical evidence that plaintiff has the residual functional capacity to perform some kind of work prior to a finding of non-disability, determining the effects of the impairments that are established, and providing the Court with a complete and legible record. Miller v. Heckler, 756 F.2d 679 (8th Cir.1985); Vaughn v. Heckler, 741 F.2d 177, 179 (8th Cir.1984); Orr v. Heckler, 737 F.2d 770 (8th Cir.1984). The record does not provide sufficient insight into the effects of systemic lupus erythematosus or what functional limitations are caused by this condition, whether the attacks of “cerebritis” stemming from this condition play a significant role in limiting future activities, and whether the findings of the physicians involved in plaintiffs treatment provide support for her claim of disability. Significant statements by the treating physician, now deceased, are barely, if at all, legible. See Tr. at 117-18. The Court is unable to interpret the results of a myriad of tests without an informed medical summary or analysis which explains how they affect the plaintiff’s ability or inability to perform a recognizable job. See Brissette v. Heckler, 730 F.2d 548, 550 (8th Cir.1984).

Accordingly, the Court remands this case pursuant to 42 U.S.C. § 405(g) to the Secretary for further action as explained herein, and in particular:

(1) To explain her rejection of subjective evidence of pain for a legally sufficient reason, taking into consideration all relevant evidence, or otherwise call a vocational expert to testify concerning plaintiff’s ability to work in light of her exertional and nonexertional impairments; and

(2) To develop a sufficient record regarding the effects and functional limitations of plaintiff’s established impairments and how such impairments affect her ability to perform “substantial gainful activity,” through the introduction of a medical summary or analysis of her impairments.

SO ORDERED.


author: ORINDA D. EVANS, District Judge.

text:
    Earnestine H. CLYDE v. NATIONAL DATA CORPORATION, William Rigo, Malcolm Todd, George Shea, individually and as agents of National Data Corporation.
    Civ. No. C85-131.
    United States District Court, N.D. Georgia, Atlanta Division.
    May 17, 1985.

      John J. Strauss, Davis, Sissel & Williams, Atlanta, Ga., for plaintiff.
    John Crenshaw, Forrest W. Hunter, Alston & Bird, Atlanta, Ga., for National Data Corp. and Rigo.
    Robert F. Coheleach, Atlanta, Ga., for Todd.
   ORDER

ORINDA D. EVANS, District Judge.

This case is before the court on Plaintiffs motion to remand. Plaintiff contends that the case was removed improvidently within the meaning of 28 U.S.C. § 1447(c), and therefore must be remanded to the state court. Defendants contends that the case was properly removed or, in the alternative, that Plaintiff has waived her objection to such removal.

This action was originally filed by Plaintiff in the Superior Court of DeKalb County on December 18, 1984. Defendant George Shea (“Shea”) was served first on December 19, 1984. Defendant Malcolm Todd (“Todd”) was then served on December 21, abd Defendant National Data Corporation (“NDC”) on December 26. Service upon Defendant William Rigo (“Rigo”) was acknowledged on January 17, 1985.

On January 17, 1985, Defendants NDC, Shea and Rigo filed a Petition for Removal in this court pursuant to 28 U.S.C. § 1441. Counsel for Defendant Todd did not sign the petition, nor is Todd’s name mentioned as a Petitioner. Defendant Todd also did not file a separate petition for removal or formal consent to the other Defendants’ petition within thirty days of service upon him. Plaintiff filed this motion to remand on January 30, 1985.

Plaintiff contends that the case was improvidently removed because of Defendant Todd’s failure to join in the petition for removal. Plaintiff argues that removal is improper unless every defendant to an action either joins a petition for removal, files a separate petition, or consents to removal within the thirty day statutory period. Plaintiff contends that the petition fails to show any consent by Defendant Todd and that Todd’s subsequent filing of an Amended Answer in the state court indicates his lack of consent to removal.

Defendants contend that Defendant Todd was consulted concerning the question of removal and was in agreement that the case should be removed, although he did not sign the petition. Defendants also point out that Todd filed both his Answer and Amended Answer in this court on January 28, 1985, two days before Plaintiff filed her motion to remand. Defendants therefore maintain that removal was proper because Defendant Todd consented to the removal petition in a timely manner and acted consistently with such consent.

In the alternative, Defendants argue that Plaintiff has waived her right to object to removal by her conduct in this case. Plaintiff acknowledges in her motion that a plaintiff may waive her right to seek a remand by engaging in discovery on the merits. Defendants contend that Plaintiff has essentially done so by filing a second ease in this court on virtually the same facts and seeking extensive discovery of those facts, even though she has refrained from discovery in this case to avoid a waiver of removal. Defendants argue that Plaintiff would not be prejudiced, and judicial economy would be served were the court to deny remand and consolidate the two cases.

In response, Plaintiff argues that removal statutes must be strictly construed and time limitations on petitions strictly observed. She contends that informal consent by Defendant Todd is insufficient where the petition itself reveals no suggestion that Todd agreed to the removal. Plaintiff also strenuously objects to defendants’ characterization of her conduct as a waiver. Plaintiff emphasizes . that she sought the protection of the court against waiver by seeking a stay of discovery, and argues that her filing of a separate Title VII action is irrelevant to the question of whether this case should be remanded.

The general removal statutes provides: Except as otherwise expressly provided by Act of Congress, any civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant or the defendants, to the district court of the United States for the district and division embracing the place where such action is pending.

28 U.S.C. § 1441(a). Removal is permissible only if all defendants named in the state action “join” in the petition for removal. Gableman v. Peoria, D. & E. R. Co., 179 U.S. 335, 337, 21 S.Ct. 171, 172, 45 L.Ed. 220 (1900); Tri-Cities Newspapers, Inc. v. Tri-Cities Printing Pressmen and Assistants’ Local 349, 427 F.2d 325, 326-7 (5th Cir.1970). Furthermore, all defendants must join the petition within the thirty day time limit mandated by 28 U.S.C. § 1446(b). Schmidt v. National Organization for Women, 562 F.Supp. 210, 212 (N.D.Fla.1983); Friedrich v. Whittaker Corp., 467 F.Supp. 1012, 1014 (S.D.Texas 1979).

This rule does not require that every defendant actually sign the same petition. Adams v. Lederle Laboratories, 569 F.Supp. 234, 243 (W.D.Mo.1983); Crawford v. Fargo Manufacturing Co., 341 F.Supp. 762, 763 (M.D.Fla.1972). Nonpetitioning defendants may simply consent to the removal of the action, thereby satisfying the substantive requirement that the defendants be unanimous in their choice of a federal forum. Brooks v. Rosiere, 585 F.Supp. 351, 353 (E.D.La.1984); Colin K. v. Schmidt, 528 F.Supp. 355, 358 (D.R.I.1981). However, the cases indicate that such unanimity must be expressed to the court within the thirty day period, whether by petition, written consent or oral consent. To hold otherwise would allow circumvention of the thirty day petitioning requirement, the purpose of which is “to provide a uniform and definite time for a defendant to remove an action.” Haun v. Retail Credit Co., 420 F.Supp. 859, 863 (W.D.Pa.1976).

In this case, the consent of Defendant Todd was not conveyed to the court in any manner within thirty days of service upon him. His filing of an answer in this court on January 28 is not significant, since the answer was not only silent as to removal but also fell outside the thirty day period. Todd neither joined the other Defendants’ petition nor officially filed or voiced his consent to it within the statutory period. The alleged fact that Todd informed the other Defendants of his consent is insufficient to constitute a joinder under the statute. Godman v. Sears, Roebuck and Co., 588 F.Supp. 121, 124 (E.D.Mich.1984); Mason v. International Business Machines, Inc., 543 F.Supp. 444, 445 (M.D.N. C.1982).

Because removal is a purely statutory right, removal statutes should be strictly construed in favor of state court jurisdiction. Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 108-9, 61 S.Ct. 868, 872, 85 L.Ed. 1214 (1941); Rembrant, Inc. v. Phillips Const. Co., Inc., 500 F.Supp. 766, 768 (S.D.Ga.1980). The court therefore finds that Defendants have failed to meet the thirty day requirement of 28 U.S.C. § 1446(b).

The time limitation for removal is not jurisdictional, however, and may be waived. Harris v. Edward Hyman Co., 664 F.2d 943, 945 (5th Cir.1981); Weeks v. Fidelity and Casualty Co., 218 F.2d 503, 504 (5th Cir.1955). Several courts have held that a waiver will be found only when there is “affirmative conduct or unequivocal assent of a sort which would render it offensive to fundamental principles to remand.” Feller v. National Enquirer, 555 F.Supp. 1114, 1121 (N.D.Ohio 1983), quoting Maybruck v. Haim, 290 F.Supp. 721, 724 (S.D.N.Y.1968). See also Godman, 588 F.Supp. at 124. Examples of such conduct include unsuccessfully litigating a substantial issue in the case, or filing an amended complaint seeking further or different relief. Id. at 124; Maybruck, 290 F.Supp. at 724.

In Harris, supra, the Court of Appeals for the Fifth Circuit held that “a party who delays in seeking a remand, or otherwise participates in the proceedings in the district court” may be precluded from objecting to removal on timeliness grounds. 664 F.2d at 945. The court found that the plaintiff had waived her right to a remand to state court by serving discovery requests on the defendants after removal to federal court. Id. at 945-6. In this case, Defendants contend that Plaintiff made a similar waiver by filing a Title VII action against Defendant NDC on related facts. The Title VII complaint was accompanied by discovery requests, and was filed on January 22, 1985, five days after Defendants’ petition for removal but eight days before Plaintiff’s motion for remand.

Defendants have cited no case in which filings in one case were found to operate as a waiver in a separate action involving some of the same parties. The pleadings here show that Plaintiff sought to protect herself against a waiver in this case by requesting a stay of discovery when she moved for remand. Furthermore, the parties agreed by phone to a stay of discovery on January 30, and Plaintiff maintains that she understood the stay to apply to both actions. See Plaintiff’s Reply Memorandum, pp. 6-7 and Exhibit A. While Defendants’ counsel contends that he understood that the stay only applied to this case, that does not demonstrate that Plaintiff actively pursued discovery. In fact, Defendants’ counsel acknowledges that Plaintiff’s counsel called him as soon as Defendants filed a Notice of Deposition and advised Defendants’ counsel that he considered discovery stayed in both cases.

The court also does not believe that the filing of the Title VII complaint itself represents an act of acquiescence on Plaintiff’s part to disposition of this case. While the two actions may concern the same or related incidents, state issues clearly predominate in this case. Only one of the complaint’s twelve counts is based on federal law. See Complaint, Till 90-99. The remainder are state law claims, including battery, infliction of emotional distress and slander.

Plaintiff’s Title VII claims, however, are based entirely on federal law. In her second suit, she alleges violation of the federal constitution, with jurisdiction provided by 42 U.S.C. § 2000e-5. The court cannot conclude that Plaintiff has affirmatively sought this court’s disposition of her state law claims by filing a separate action based on federal claims. Furthermore, as Plaintiff points out, she would have lost her Title VII claims had she not filed that action in this court within ninety days of receipt of her EEOC notice of right-to-sue, which was issued on October 16, 1984. See Attachment B to Second Crenshaw Affidavit.

The court therefore concludes that Defendants have failed to show an affirmative action by Plaintiff sufficient to constitute a waiver of her right to seek a remand. As the court has already found that this case was improvidently removed, supra, pp. 1-5, the case must be remanded to the state court. 28 U.S.C. § 1447(c). Plaintiffs motion to remand is hereby GRANTED.

      . See Godman v. Sears, Roebuck and Co., 588 F.Supp. 121, 124 (E.D.Mich.1984) and cases cited therein. See abo Harris v. Edward Hyman Co., 664 F.2d 943, 945 (5th Cir.1981), reh. denied, 669 F.2d 733 (5th Cir.1982) (defendants must "manifest" consent within thirty days); Colin K. v. Schmidt, 528 F.Supp. 355, 358 (D.R.I. 1981) (consent voiced at conference with court); Sicinski v. Reliance Funding Corp., 461 F.Supp. 649, 652 (S.D.N.Y.1978) (petition showed that other defendant had authorized petitioner to state its consent).

      . Defendant Todd was served on December 21, 1985. See Sheriff’s Entry of Service, Exhibit A to Plaintiff's Motion to Remand.


text:
    Helene M. PETROWSKI, v. Richard I. KILROY, et al.
    Civ. A. No. 84-6175.
    United States District Court, E.D. Pennsylvania.
    May 17, 1985.
    Elliot B. Platt, Philadelphia, Pa., for plaintiff.
    Edward A. Gray, Liebert, Short, FitzPatrick & Lavin, Philadelphia, Pa., Joseph A. Yablonski, Yablonski, Both & Edelman, Washington, D.C., for defendant.
   MEMORANDUM

RAYMOND J. BRODERICK, District Judge.

The plaintiff, Helen M. Petrowski, brought this action in the Court of Common Pleas of Philadelphia County against her former employers, the Brotherhood of Railway, Airline & Steamship Clerks, Freight Handlers, Express and Station Employees (BRAC) and its subsidiary, Conrail System Board of Adjustment No. 86 (System Board), and Richard I. Kilroy and John A. Lieb, the International President of BRAC and International Representative of BRAC, respectively. The plaintiff alleged that defendants had breached their express and implied contracts of continued employment by discharging her without cause. The plaintiff also alleged that defendants breached their express contract, embodied in the BRAC Constitution, concerning the plaintiffs seniority rights and her right to notice and a hearing prior to being disciplined as a member of BRAC. In addition, the plaintiff alleged that defendants’ conduct constituted wrongful discharge, libel, and intentional or negligent infliction of emotional distress under Pennsylvania law. Defendants removed this action to federal court on the ground that plaintiff’s allegation of improper disciplinary action by a union was a claim founded upon the Labor-Management Reporting and Disclosure Act (LMRDA), 29 U.S.C. § 401 et seq. (1975).

Although plaintiff did not originally plead an action arising under the federal labor laws, plaintiff acquiesced in the removal. Plaintiff was then granted leave to amend her complaint to allege that defendants violated plaintiff’s rights under sections 101, 102, and 609 of the LMRDA, 29 U.S.C. §§ 411, 412, 529.

Defendants have filed a motion to dismiss the complaint under Fed.R.Civ.P. 12(b)(6), for failure to state a claim for which relief can be granted. Plaintiff asserts, inter alia, that she has stated a claim under section 301 of the Labor-Management Relations Act (LMRA), 29 U.S.C. § 185, as well as a claim under the LMRDA.

In considering defendants’ motion to dismiss under Rule 12(b)(6), this Court must view the complaint in the light most favorable to the plaintiff and deny the motion even if it appears on the face of the pleadings that recovery is very remote. Scheuer v. Rhodes, 416 U.S. 232, 94 S.Ct. 1683, 40 L.Ed.2d 90 (1974), Conley v. Gibson, 355 U.S. 41, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957). The Court will dismiss the complaint only if it “appears beyond doubt that the plaintiff can prove no set of facts in support of [her] claim which would entitle [her] to relief.” Conley v. Gibson, 355 U.S. at 45-46, 78 S.Ct. at 101-02.

Plaintiff alleges the following facts in support of her claims: In January 1977, the plaintiff was hired by BRAC and System Board to work at the offices of System Board. As a condition of her employment, the plaintiff was required to become a member of BRAC, which she did. The BRAC Constitution provided, inter alia, that the International President “shall have power to suspend, expel, or otherwise discipline a member, but only after serving such member with specific written charges stating the ground therefor, and affording the member reasonable time to prepare his defense and a full and fair hearing.” In addition, plaintiff received a BRAC personnel policy statement which provided that “[e]mployees whose positions are abolished may, seniority and qualifications permitted, exercise their seniority rights over junior employees. Other employees affected may exercise their seniority in the same manner.”

In 1981, plaintiff was promoted to the position of administrative assistant to the then General Chairman of System Board, Mr. A1 Archual. In August of 1981, Mr. Archual became International Vice President of BRAC. From that point on, BRAC and System Board each contributed one-half of plaintiff’s salary.

In September 1983, an investigation revealed that Mr. Archual was misusing union funds. BRAC and its president, Richard I. Kilroy, imposed a trusteeship on System Board. John A. Lieb served as trustee of System Board from September 7, 1983 until May 1984. Plaintiff had no knowledge of any illegal or improper activity by Mr. Archual and had not participated in any illegal or improper activity prior to September 1983, when the trusteeship was imposed. On September 7, Mr. Kilroy, the President of BRAC, told plaintiff to stay home from work until further notice. Although plaintiff continued to réceive her salary and benefits, she was not permitted to visit her place of employment. Her personal belongings were delivered to her by the defendants. Plaintiff was forced to seek and obtain permission to visit the office of her dentist, which was in the same building as the offices of System Board.

On or about September 9, 1983, Mr. Kilroy and BRAC entered an agreement with Mr. Archual which provided that Mr. Archual would resign his positions with BRAC and System Board and forego any legal challenge to the imposition of the trusteeship over System Board. In return, Mr. Archual would receive retirement benefits as a former member and officer of BRAC and System Board, and BRAC and System Board would continue to employ the plaintiff. Mr. Archual resigned and subsequently pled guilty to embezzlement and income tax evasion in federal district court. Mr. Lieb, the trustee of System Board, terminated plaintiff’s employment with BRAC and System Board, without explanation or hearing, effective December 9, 1983. All defendants authorized the action taken by Mr. Lieb with respect to plaintiff’s termination. On December 9, 1983, the plaintiff claimed her seniority rights over other office employees, but, without explanation, defendants denied plaintiff the right to assert seniority. Mr. Kilroy and Mr. Lieb falsely accused plaintiff of involvement in the misconduct of Mr. Archual. In terminating plaintiff’s employment, defendants intended to punish plaintiff for criminal activity in which they knew she had not participated, and for her association with Mr. Archual.

I. NATIONAL LABOR RELATIONS ACT CLAIM

In Count IV of her complaint, plaintiff alleges that the defendants breached their express contract not to impose discipline upon plaintiff as a member of BRAC without notice of specific charges and a hearing. Plaintiff contends that the union constitution is a contract, and that she has a federal cause of action against defendants for breach of that contract under section 301 of the Labor Management Relations Act, 29 U.S.C. § 185(a), which provides: Suits for violation of contracts between

an employer and a labor organization representing employees in an industry affecting commerce as defined in this chapter, or between any such labor organizations, may be brought in any district court of the United States having jurisdiction of the parties, without respect to the amount in controversy or without regard to the citizenship of the parties.

29 U.S.C. § 185(a) (1978).

In United Association of Journeymen and Apprentices of the Plumbing and Pipefitting Industry v. Local 334, 452 U.S. 615, 101 S.Ct. 2546, 69 L.Ed.2d 280 (1981), the Supreme Court held that a suit brought by a local union against its parent international union alleging a violation of the international’s constitution fell within the federal district courts’ jurisdiction under section 301 of the LMRA, and that there was no requirement that a significant impact on labor-management relations be alleged. The Court characterized the international union’s constitution as a contract between labor organizations. 452 U.S. at 620-21, 101 S.Ct. at 2549 (citing Coronado Coal Co. v. United Mine Workers of America, 268 U.S. 295, 304, 45 S.Ct. 551, 554, 69 L.Ed. 963 (1925) (a union constitution is a “fundamental agreement of association”)). While the Journeyman Court acknowledged that the LMRA was not intended to interfere with the internal governance of union membership, the Court found “an obvious and important difference” between such interference and “enforcement by the federal courts of freely entered into agreements between separate labor organizations.” 452 U.S. at 626, 101 S.Ct. at 2552. The Journeymen Court expressly declined to decide whether individual union members have a cause of action under section 301 of the LMRA against a labor organization alleging a breach of the union constitution. See 452 U.S. at 627, n. 16, 101 S.Ct. at 2553, n. 16 (citations omitted).

The federal courts are not in agreement as to whether Journeymen should be expanded to authorize a section 301 cause of action on the part of individual union members against a union alleging breach of the union’s constitution. See Rutledge v. Aluminum, Brick and Clay Workers International Union, 737 F.2d 965, 969-70 (11th Cir.1984) (collecting cases). Apparently, the key question is what implication should be drawn from Journeymen in light of the Supreme Court’s prior decision in Smith v. Evening News Association, 371 U.S. 195, 85 S.Ct. 267, 9 L.Ed.2d 246 (1962), holding that an individual union member had a section 301 cause of action against his employer for breach of the collective bargaining agreement. In effect, the Smith Court said that as long as there was a “contract” between an employer and a labor organization or between labor organizations, a “suit” under section 301 could be maintained by a nonsignatory to the contract. See 371 U.S. at 200, 83 S.Ct. at 270 (rejecting argument that the word “between” in section 301 refers to “suits” rather than “contracts” and that the only suit authorized by section 301 to enforce the collective bargaining agreement would be one between the labor organization and the employer).

Some courts have reasoned from Journeymen that a union constitution is a contract within section 301, and from Smith that section 301 permits enforcement by nonsignatories to the contract, and have concluded that a union member is entitled to sue a union under section 301 to enforce the union constitution. E.g., Doby v. Safeway Stores, Inc., 523 F.Supp. 1162, 1166 (E.D.Va.1981) (citing Journeymen and Smith); E. C. Alford v. National Post Office Mail Handlers, 576 F.Supp. 278, 284-86 (E.D.Mo.1983) (adopting Doby’s approach but disallowing suit based on violation of local union’s constitution). See also Kinney v. International Brotherhood of Electrical Workers, 669 F.2d 1222, 1229 (9th Cir.1981) (Journeymen does not change previous Ninth Circuit position that individual union member may sue union on basis of union constitution under section 301); Alexander v. International Union of Operating Engineers, 624 F.2d 1235, 1238 (5th Cir.1980) (collecting Journeymen eases); Abrams v. Carrier Corp., 434 F.2d 1234, 1247 (2d Cir.1970), cert, denied sub nom United Steelworkers of America v. Abrams, 401 U.S. 1009, 91 S.Ct. 1253, 28 L.Ed.2d 545 (1271) (Smith authorizes suit by individual members vs. union).

Other courts, however, have not understood Smith and Journeymen to authorize suits by individual union members against unions for breach of the union constitution. See Frenza v. Sheet Metal Workers’ International Association, 567 F.Supp. 580, 584-85 (E.D.Mieh.1983) (Sixth Circuit rule that individual union members cannot maintain an action for breach of a union constitution was not changed by Journeymen) (citing Trail v. International Brotherhood of Teamsters, 542 F.2d 961 (6th Cir.1976). In Trail, the Sixth Circuit held that Smith’s authorization of section 301 suits by individual union members should be limited to the enforcement of collective bargaining agreements:

Smith v. Evening News Association dealt with an action by individual union members against their employer based on the collective bargaining agreement. Over the years there has been the judicial creation of a Federal common law in the area of collective bargaining. This was expressly recognized in Textile Workers Union v. Lincoln Mills of Alabama, 353 U.S. 448 [77 S.Ct. 912, 1 L.Ed.2d 972] (1957). There has not been, however, this same tradition of Federal resolution of intra-union disputes and no Federal common law has developed in this area. Indeed, Congress in LMRD has provided statutory guidelines as to areas of intra-union affairs which the Federal courts would concern themselves with. In Amalgamated Association of Street, Electric Railway and Motor Coach Employees of America, et al. v. Lockridge, 403 U.S. 274 [91 S.Ct. 1909, 29 L.Ed.2d 473] (1971), the Supreme Court, in discussing Section 301(a) jurisdiction limited the applicability of Smith v. Evening News Association to contracts between unions and employers in stating:
... the principal of Smith v. Evening News is applicable only to those disputes that are covered by the terms of the collective bargaining agreement itself.

403 U.S. at 300-301 [91 S.Ct. at 1925]. 542 F.2d at 967. See Journeymen, 452 U.S. at 633-36, 101 S.Ct. at 2557 (Stevens, J., dissenting) (Section 301 was intended to create a body of substantive federal law to govern enforcement of collective bargaining agreements; there was no such intention to create substantive federal law to govern disputes over union constitution).

The Trail Court’s position is a sensible one which recognizes the legislative intent behind LMRA section 301 and the logic of the Supreme Court’s ruling in Lockridge, supra. Therefore, this Court declines to adopt the position of those courts which allow a section 301 action by an individual union member based on the union’s alleged breach of the union constitution. As the above-quoted language points out, Congress enacted the Labor Management Reporting and Disclosure Act (LMRDA), 29 U.S.C. § 411 et seq., 12 years after the enactment of the LMRA. The LMRDA, discussed in Part II of this Memorandum, was specifically intended to protect union members in their relationship to their union. See N.L.R.B. v. Allis-Chalmers Mfg. Co., 388 U.S. 175, 181, 87 S.Ct. 2001, 2007, 18 L.Ed.2d 1123 (1967) (Bill of Rights of labor organization members was included in LMRDA to assure democratic conduct of union affairs). However, neither the LMRDA nor the LMRA was intended to provide a body of federal law to govern a claim of wrongful discharge from union employment, which is essentially what the plaintiff in this case is asserting.

II. LABOR MANAGEMENT REPORTING AND DISCLOSURE ACT CLAIM

Plaintiff also claims that in their treatment of her, defendants violated sections 101, 102, and 609 of the LMRDA, 29 U.S.C. §§ 411, 412, 529. Section 609 of the LMRDA prohibits a labor organization or its representative from fining, suspending, expelling, or “otherwise disciplining] any of its members for exercising any right” protected by the LMRDA. Although she has been permitted to make two amendments to her complaint, plaintiff has failed to allege that defendants’ conduct toward her was undertaken in retaliation for her exercise of the LMRDA-protected rights of union members. The only allegations which appear to be in support of plaintiff’s LMRDA claim are that “[defendants’ termination of plaintiff’s employment was intended by defendants as punishment for crimes and acts that defendant knew plaintiff had not committed____[and] was based on plaintiff’s association with Archual and intended to punish her for that association.” Complaint, 111129, 30. These allegations do not state that plaintiff was punished in retaliation for exercising her LMRDA rights as a member of BRAC.

Moreover, plaintiff has not alleged any activity by defendants which constitutes “discipline” within the meaning of section 609. In Finnegan v. Leu, 456 U.S. 431, 102 S.Ct. 1867, 72 L.Ed.2d 239 (1982), the Supreme Court explained that the discharge of a union employee does not constitute discipline of a union member within the meaning of section 609 of the LMRA, 29 U.S.C. § 529:

Petitioners contend that discharge from a position as a union employee constitutes “discipline” within the meaning of § 609; and that termination of union employment is therefore unlawful when predicated upon an employee’s exercise of rights guaranteed to members under the Act. However, we conclude that the term “discipline,” as used in § 609, refers only to retaliatory actions that affect a union member’s rights or status as a member of the union. Section 609 speaks in terms of disciplining “members”; . and the three disciplinary sanctions specifically enumerated — fine, suspension, and expulsion — are all punitive actions taken against union members as members. In contrast, discharge from union employment does not impinge upon the incidents of union membership, and affects union members only to the extent that they happen also to be union employees. See Sheridan v. Carpenters Local No. 626, 306 F.2d 152, 156 (CA3 1962). We discern nothing in § 609, or its legislative history, to support petitioners’ claim that Congress intended to establish a system of job security or tenure for appointed union employees.

456 U.S. at 437-38, 102 S.Ct. at 1871. In Finnegan, the Supreme Court held that the plaintiffs, who held a dual status as appointed union employees and union members, could not challenge their removal from union employment under LMRDA section 609. 456 U.S. at 439, 102 S.Ct. at 1872. Plaintiff’s allegation of a violation of section 609 must fail for the same reason.

Plaintiff has also alleged that defendants violated LMRDA sections 101 and 102, 29 U.S.C. §§ 411 & 412. Section 102 provides a federal cause of action for members of labor organizations to redress the infringement of their rights under section 101. Section 101 enumerates a “Bill of Rights of Members of Labor Organizations,” which provides in pertinent part:

(a)(1) Equal rights. — Every member of a labor organization shall have equal rights and privileges within such organization to nominate candidates, to vote in elections or referendums of the labor organization, to attend membership meetings, and to participate in the deliberations and voting upon the business of such meetings____
(2) Freedom of speech and assembly.— Every member of any labor organization shall have the right to meet and assemble freely with other members; and to express any views, arguments, or opinions; and to express at meetings of the labor organization his views, upon candidates in an election of the labor organization or upon any business properly before the meeting, subject to the organization’s established and reasonable rules pertaining to the conduct of meetings: Provided, That nothing herein shall be construed to impair the right of a labor organization to adopt and enforce reasonable rules as to the responsibility of every member toward the organization as an institution and to his refraining from conduct that would interfere with its performance of its legal or contractual obligations.
(3) Dues, initiations fees, and assessments. — ...
(4) Protection of the right to sue. — ...
(5) Safeguards against improper disciplinary action. — No member of any labor organization may be fined, suspended, expelled, or otherwise disciplined except for nonpayment of dues by such organization or by any officer thereof unless such member has been (A) served with written specific charges; (B) given a reasonable time to prepare his defense; (C) afforded a full and fair hearing.

29 U.S.C. § 411.

Plaintiff contends that defendants improperly disciplined her as a union member without notice and a hearing in violation of section 101(a)(5). However, the Finnegan Court’s holding that discharge from employment is not “discipline” seems equally applicable to preclude plaintiff’s claim under section 101(a)(5). See 456 U.S. at 438, 102 S.Ct. at 1871. The Finnegan Court stated that section 101(a)(5)’s procedural protections for discipline of union members were specifically intended not to protect a union employee or officer:

The Conference Report accompanying S. 1555 as finally enacted, H.R.Rep. 1147, 86th Cong., 1st Sess. 31 (1959) I Leg. Hist. 935, explains that this “prohibition on suspension without observing certain safeguards applies only to suspension of membership in the union; it does not refer to suspension of a member’s status as an officer of the union.”

Id. (emphasis supplied by Finnegan Court). Plaintiff has made no allegation that she was “fined, suspended, expelled” from union membership or “otherwise disciplined” in her status as a union member. Indeed, plaintiff continued to be a member of BRAC at the time she filed this lawsuit. Complaint, 116. Thus, plaintiff has not stated a violation of section 101(a)(5).

Plaintiff’s counsel argues that defendants’ conduct in discharging plaintiff and restricting her access to the location of the union offices infringed plaintiff’s rights to freely speak and assemble with her fellow union members, rights protected under LMRDA section 101(a)(1) & (2), 29 U.S.C. § 411(a)(1) & (2). However, even after twice amending her complaint, plaintiff has failed to allege any facts to support a claim that her protected associational rights as a member of BRAC were infringed. Plaintiff alleged that “[o]n and after September 7, 1983, defendants would not permit plaintiff to enter the building at 1522 Locust Street without their permission. As a result, plaintiff was compelled to seek and obtain defendants’ permission to visit her dentist whose offices are at 1522 Locust Street.” 1115. Plaintiff never alleges that this denial of access caused her to be frustrated in an attempt to exercise her associational rights as a member of BRAC. In Cornelio v. Metropolitan District Council of Philadelphia and Vicinity of United Brotherhood of Carpenters and Joiners, 358 F.2d 728, 729 (3d Cir.1966), the Third Circuit affirmed the district courts dismissal of a complaint which failed to specifically allege a violation of sections 101 and 102 of the LMRDA, stating, “The only rights and privileges redressable under [section 102 of the LMRDA] are those specified in § 1 of the Act____ The obvious deficiency in the complaint is its failure to allege the infringement of any such right or privilege.” Id. See Cornelio, 243 F.Supp. 126 (E.D.Pa.1965).

Sections 101(a)(1) and (2) of the “Bill of Rights of Members of Labor Organizations” were intended to protect members’ ability to exercise their full electoral and political rights, in order to assure democratic conduct of union affairs. N.L.R.B. v. Allis Chalmers, supra, 338 U.S. at 181, 87 S.Ct. at 2007; Hodge v. Drivers, Salesmen, Warehousemen, 707 F.2d 961, 963 (7th Cir.1983). The “overriding objective” of the LMRDA “was to ensure that unions would be democratically governed, and responsive to the will of the union membership as expressed in open, periodic elections.” Finnegan, 456 U.S. at 441, 102 S.Ct. at 1873 (further citation omitted). Plaintiff’s complaint raises none of the concerns which the LMRDA was designed to address. The gravamen of plaintiff’s complaint is that she was terminated without just cause in violation of an express or implied contract, and that defendants acted tortiously in effectuating her discharge.

It is well established that “the assertion of a substantial claim under a federal statute gives a United States court jurisdiction of that claim even though that court may determine ultimately that no cause of action on which relief could have been granted was alleged.” Hughes v. Local No. 11 of International Association of Bridge, Structural and Ornamental Ironworkers, 287 F.2d 810, 814 (3d Cir.1961) (citations omitted), cert, denied, 368 U.S. 829, 82 S.Ct. 51, 7 L.Ed.2d 32 (1961). At the time of removal by the defendants and plaintiff’s request to withdraw her motion to remand, this Court did not question the parties’ allegations of a basis for federal jurisdiction under section 301 of the LMRA and sections 101, 102, & 609 of the LMRDA. However, the Court has now determined that these federal claims should be dismissed pursuant to Fed.R.Civ.P. 12(b)(6) for failure to state a claim for which relief can be granted. Because there are no longer any claims under federal law, and no basis for diversity jurisdiction has been alleged, this Court will decline to assert pendent jurisdiction over the remaining law claims. The Court has determined that in the interests of “judicial economy, convenience, and fairness to litigants”, the remaining state law claims should be remanded to the Court of Common Pleas of Philadelphia County, where this case was originally filed. See United Mine Workers v. Gibbs, 383 U.S. 715, 726-27, 86 S.Ct. 1130, 1139-40, 16 L.Ed.2d 218 (1966).