author: FEIKENS, Chief Judge.

text:
    Richard TODD, Plaintiff, v. TEMPEST MARINE, INC., Defendant.
    No. 85-CV-73310-DT.
    United States District Court, E.D. Michigan, S.D.
    Dec. 12, 1985.

      Gary William Baun, The Jacques Admiralty Law Firm, P.C., Detroit, Mich., for plaintiff.
    George F. Clark, Kohl, Secrest, Wardle, Lynch, Clark & Hampton, Mt. Clemens, Mich., for defendant.
   MEMORANDUM OPINION AND ORDER

FEIKENS, Chief Judge.

Plaintiff, Richard Todd, sues defendant, Tempest Marine, under the provisions of the Jones Act, 46 U.S.C. § 688, and general admiralty and maritime law. Plaintiff alleges that defendant’s negligence and unseaworthiness of defendant’s vessel were the cause of injuries allegedly suffered in a boating accident. Subject matter jurisdiction is based upon 46 U.S.C. § 688, the Jones Act, and 28 U.S.C. § 1333, general admiralty and maritime law.

The matter before me is defendant’s Motion to Dismiss. Defendant argues that this Court is lacking personal jurisdiction over it because defendant is a Florida corporation with a principal place of business in Florida and the alleged accident occurred in the Atlantic Ocean off the coast of Florida. Further, defendant alleges that it conducts no business whatsoever in the State of Michigan. It appears that the only contact to this district is plaintiff’s residence of Detroit, Michigan.

Plaintiff presents two arguments to support denial of plaintiff’s Motion: (1) defendant waived any objection to personal jurisdiction when it allowed a clerk’s entry of default, and (2) because this is a federal question case, Michigan’s long-arm statute requirements do not apply.

I address plaintiff’s arguments in the order presented. Plaintiff argues that by allowing a clerk’s entry of default defendant waived any objection to personal jurisdiction. See Commercial Casualty Ins. Co. v. Consolidated Stone Co., 278 U.S. 177, 179-80, 49 S.Ct. 98, 99-100, 73 L.Ed. 252 (1929); see also Hoffman v. Blaski, 363 U.S. 335, 343, 80 S.Ct. 1084, 1089, 4 L.Ed.2d 1254 (1960) (dicta); Neirbo Co. v. Bethlehem Shipbuilding Corp., 308 U.S. 165, 168, 60 S.Ct. 153, 154, 84 L.Ed. 167 (1939) (dicta). In Commercial Casualty, the Court held that defendant could not move to vacate a default judgment based on lack of personal jurisdiction. The Court reasoned:

We are of opinion that the privilege is of such’ a nature that it must be asserted at latest before the expiration of the period allotted for entering a general appearance and challenging the merits. In ordinary course, when that period expires the defendant either will have appeared generally for the purpose of contesting the merits or by suffering a default will have assented that his adversary’s allegations be taken as confessed for the purposes of judgment. In either event the suit will have reached the stage where attention must be given to the merits.

278 U.S. at 179-80, 49 S.Ct. at 99-100. Unlike the Commercial Casualty case, however, defendant in this case was not subject to a default judgment, but merely a clerk’s entry of default which I set aside. Without a judgment plaintiff cannot argue that attention was given to the merits as it was in the Commercial Casualty case.

Accordingly, I hold that defendant did not waive his objections to personal jurisdiction when the clerk entered the default.

Plaintiff's second argument is that the provisions of the Michigan limited jurisdiction long-arm statute are inapplicable to this case because it involves federal question jurisdiction rather than diversity jurisdiction. See Haile v. Henderson National Bank, 657 F.2d 816 (6th Cir.1981) (In an action where service of process is effected pursuant to a federal statute which provides for nationwide service of process, the strictures of International Shoe do not apply.) Unlike Haile, however, this case does not involve a federal statute with a nationwide service provision. A more analogous ease to draw from is Handley v. Indiana & Michigan Elec. Co., 732 F.2d 1265 (6th Cir.1984).

In Handley, a case brought under the Jones Act and general maritime law, the Court held that because the Jones Act contains no service of process provision, service of process was governed by Fed.R. Civ.P. 4(e) and the long-arm statute of the forum state.

When a federal statute creating a substantive right contains no process provisions service of process in a district court action over a nonresident defendant who is not found in the forum state is governed by the applicable statute or rule of that state, under Rule 4(e)____

732 F.2d at 1268. Accordingly, the Court determined whether limited personal jurisdiction was proper under the provisions of the Kentucky long-arm statute.

In this case, I must make a similar inquiry. I must determine whether limited personal jurisdiction is proper under the provisions of the Michigan long-arm statute, which provides as follows:

The existence of any of the following relationships between a corporation or its agent and the state shall constitute a sufficient basis of jurisdiction to enable the courts of record of this state to exercise limited personal jurisdiction over such corporation and to enable such courts to render personal judgments against such corporation arising out of the act or acts which create any of the following relationships:
(1) The transaction of any business within the state.
(2) The doing or causing any act to be done, or consequences to occur, in the state resulting in an action for tort.
(3) The ownership, use, or possession of any real or tangible personal property situated within the state.
(4) Contracting to insure any person, property, or risk located within this state at the time of contracting.
(5) Entering into a contract for services to be performed or for materials to be furnished in the state by the defendant.

M.C.L.A. § 600.715.

Plaintiff has not alleged any acts of defendant which would confer personal jurisdiction under subsections (2)-(5) of M.C.L.A. § 600.715. The only subsection which arguably could apply to this case is subsection (1). Personal jurisdiction under 600.-715(1), however, must also fail, because defendant has not and does not transact any business within Michigan. The president of defendant Tempest Marine stated as follows in a sworn affidavit:

2. That Adam Erdberg knows of his own personal knowledge that Tempest Marine has not in the past and does not at the present maintain any distributors, sales office, and/or sales personnel within the State of Michigan, and has not in the past sold any boats to any persons within the State of Michigan and has not conducted any business of any kind or nature within the State of Michigan up to and including the present time.
3. Further, that Tempest Marine has not and does not maintain a registered agent within the State of Michigan for any purpose.

Adam Erdberg affidavit, 112-3. Plaintiff does not adequately rebut these statements. Thus, I hold that I do not have personal jurisdiction, limited or otherwise, over defendant Tempest Marine. Because defendant’s conduct did not meet the limited personal jurisdiction requirements of M.C.L.A. § 600.715, it is unnecessary for me to determine whether the exercise of personal jurisdiction in this case would offend the “traditional notions of fair play and substantial justice.” See International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95 (1945); Handley, 732 F.2d at 1272.

Accordingly, IT IS HEREBY ORDERED that defendant’s Motion to Dismiss be GRANTED and plaintiff’s Complaint be DISMISSED without prejudice.

IT IS SO ORDERED.

      . Affidavit by plaintiff's attorney in which he states that he received a letter from the Detroit branch of defendant’s insurance company and that defendant’s product could be repaired at a Michigan boat dealership is insufficient to place at issue the question whether defendant transacts business within Michigan.


source: Caselaw Access Project

author: GENE CARTER, District Judge.

license: Public Domain

text:
    Christopher J. MARTIN, Plaintiff, v. Allen, AFFLERBACH, Thomas Collins, James Denormanie, and Inhabitants of the Town of Norway, Defendants.
    Civ. No. 85-0035 P.
    United States District Court, D. Maine.
    Dec. 12, 1985.
    Michael J. O’Donnell, Bethel, Me., Murrough H. O’Brien, Dunlap & O’Brien, Portland, Me., for plaintiff.

      William W. Willard, Geoffrey H. Hole, John M.R. Paterson, Bernstein, Shur, Sawyer & Nelson, Portland, Me., for defendants.
   ORDER ON DEFENDANTS’ MOTION TO DISMISS AND FOR SUMMARY JUDGMENT

GENE CARTER, District Judge.

On the evening of January 31, 1983, plaintiff broke into a residence in Norway, Maine. Defendant Collins, a Norway police officer, had received a tip that the burglary would occur and obtained authorization from defendant DeNormandie, the police chief, to conduct a stakeout at the residence. Defendant Afflerbach, another Norway police officer, was positioned inside the house, and Collins was in a police cruiser in the area. Plaintiff entered the house, and was told by Afflerbach to freeze. Afflerbach then shot plaintiff in the arm.

Plaintiff has brought this eleven count complaint against Chief DeNormandie, Officers Collins and Afflerbach and the Town of Norway seeking relief for alleged violations of his civil rights and for alleged state law torts. Defendants have moved for summary judgment on all the civil rights counts brought under 42 U.S.C. § 1983 except for that stated against Afflerbach for allegedly violating plaintiff’s Fourth Amendment right to be free from unreasonable seizure. Defendants have also moved to dismiss the pendent state law claims on the grounds that their presentation will confuse the jury in its determination of the federal claims.

In its response to defendants’ summary judgment motion, plaintiff has conceded that Counts X and XI against the Town of Norway, and Count VIII against Defendant DeNormandie must be dismissed. Plaintiff has also agreed that Count IV, which is based on the Maine Constitution, is duplicative and should be dismissed, and has withdrawn his section 1983 claims to the extent they are based on either the Fifth, Eighth, and Ninth Amendments or the Maine Constitution.

In Count VI plaintiff alleges that defendant Collins violated his civil rights by negligently “failing] to instruct, supervise and control Defendant Afflerbaeh’s use of excessive and unlawful deadly force.” Complaint 11 52. The complaint alleges the initial tip was given to defendant Collins, who got authorization for the stakeout. Id. HIT 11-13. Collins assigned defendant Afflerbach to the inside of the house while he patrolled the area in the cruiser. Id. MI 14, 16. Although the officers had agreed to communicate by radio, the radios did not function properly and defendant Afflerbach was not able to contact Collins when the burglary occurred. Id. MI 18, 21.

Plaintiff asserts that defendant Collins was negligent in planning the stakeout so that Afflerbach would be in the target house alone and in failing to provide a reliable means of communication. Plaintiff contends that Collins should have foreseen that Afflerbach would panic and use deadly force under the circumstances and that the failure to plan properly led inevitably to plaintiff’s injury. The Court finds the relationship between Collins’ allegedly negligent actions and plaintiff’s injury to be too attenuated for Collins to have been a cause of the alleged constitutional injury.

The First Circuit Court of Appeals has recently addressed a similar situation. In Voutour v. Vitale, 761 F.2d 812 (1st Cir.1985) two police officers in a police cruiser sought to apprehend a particular car. They saw the parked vehicle and approached using neither siren nor blue light. One of the officers got out of the cruiser and walked toward the plaintiff’s car carrying a gun, but without his uniform hat or a prior warning. As the officer approached, the driver of the subject car accelerated, grazing the officer, who then clung to the ear and was dragged along. The officer in the cruiser fired at the driver of the subject car, seriously injuring him. Plaintiff in Voutour sued not only the officer who shot him but also the officer who had approached the car. That officer, Wheeler, just as Officer Collins here, had raised an immunity defense and the Court sustained that defense:

[W]e do not believe that an actor as remote from the primary civil rights violation as Wheeler is to be held liable under section 1983____ These facts, while arguably capable of sustaining a jury finding of negligence or even gross negligence, could not, we think, support the conclusion that the particular constitutional violation (i.e. the shooting of Voutour by Wheeler’s partner in violation of Voutour’s civil rights) was a result which a person in Wheeler’s position “would have known.”
To be sure, a reasonable person in Wheeler’s shoes might arguably have surmised that some sort of chaotic situation would arise from the arrestee’s failure to realize he was being approached by police. But this is different from saying that a reasonable man in Wheeler’s position would have known as he was approaching Voutour’s car in the way described that Vitale would eventually use excessive force against Voutour—and it was Vitale’s use of excessive force that is the constitutional violation. Wheeler would have to have “known” what would occur.

Id. at 818-19.

In this case, defendant Collins would have had to have known that Afflerbach would use excessive force (as it must be construed for purposes of this motion, id. at 817) in arresting plaintiff. The Court finds as a matter of law that that possibility is far too remote to require defendant to undergo a trial. Plaintiff concedes that a stakeout was a reasonable response to the tip that a burglary might occur. Afflerbach was a trained police officer. Collins should not have anticipated “panic” in a trained officer in a concededly responsible response to a tip. Moreover, the record demonstrates that Afflerbach had received instruction in the use of firearms and was cognizant of the department regulations on the use of firearms which provided: “The policy of this department is that members shall exhaust every other reasonable means of force before resorting to the use of a firearm.” Exhibits A and D to the Affidavit of Chief DeNormandie. Given the department policy, Afflerbach’s training and the advance planning, Collins should reasonably have foreseen only an orderly police procedure. An orderly police procedure is far less likely to give rise to excessive use of force than the police generated “chaotic situation” which the Court of Appeals dealt with in Voutour. Although as plaintiff suggests, “adoption by a supervisor of a plan or policy ... which is causally related to a constitutional deprivation may be sufficient to attribute liability to the supervisor”, Luce v. Hayden, 598 F.Supp. 1101, 1105 (D.Me.1984), the requisite causal relation is lacking here.

CONSTITUTIONAL BASIS FOR § 1983 CLAIMS

Plaintiff has withdrawn his claims brought under the Fifth, Eighth, and Ninth Amendments as well as those brought under the Maine Constitution. He continues to assert his section 1983 claims based on alleged violations of the Fourth and Fourteenth Amendments. Although conceding that the Fourth Amendment claims present a triable issue, defendants contend that plaintiff cannot state a claim under the Fourteenth Amendment for deprivation of a protected liberty interest without due process of law. The Supreme Court has held that negligent and intentional deprivations of property which are the result of random and unauthorized acts by state employees acting under color of state law, do not violate the Fourteenth Amendment when the state provides a post-deprivation tort remedy under which the plaintiff can recover for his loss. Parratt v. Taylor, 451 U.S. 527, 101 S.Ct. 1908, 68 L.Ed.2d 420 (1981); Hudson v. Palmer, 468 U.S. 517, 104 S.Ct. 3194, 82 L.Ed.2d 393 (1984). The Court has not yet decided whether the Parratt-Hudson rationale applies to deprivation of liberty as well as property. Although a number of federal courts have so held, see, e.g., Thibodeaux v. Bordelon, 740 F.2d 329 (5th Cir.1984); State Bank of St. Charles v. Camic, 712 F.2d 1140 (7th Cir.1983), in Thompson v. City of Portland, 612 F.Supp. (D.Me.1985) this Court has specifically declined to do so, adopting instead the reasoning expressed by Judge Bownes in his concurring opinion in Voutour:

I do not believe that Parratt should be extended beyond deprivations of property. See Parratt, 451 U.S. at 545 [101 S.Ct. at 1918] (Blackmun, J., concurring); Hudson v. Palmer, 468 U.S. 517,-, n. 4,104 S.Ct. 3194, 3197, n. 4, 82 L.Ed.2d 393 (1984) (Stevens, J., concurring in part and dissenting in part). Life and liberty interests are such that due process cannot be satisfied procedurally by the provision of post-deprivation remedies. At some point procedural due process shades into substantive due process, and Parratt becomes inapplicable. Thibodeaux v. Bordelon, 740 F.2d 329, 338-39, no. 9 (5th Cir.1984).

Voutour v. Vitale, 761 F.2d at 826. (Bownes, J., concurring). The Court will, therefore, deny defendants’ motion for summary judgment on claims brought by plaintiff under the fourteenth amendment.

MOTION TO DISMISS STATE CLAIMS

As plaintiff’s case is now postured, it consists of one federal claim under section 1983 against defendant Afflerbach, three state law claims against Afflerbach for assault and battery, negligence, and infliction of emotional distress and state law negligence claims against defendants Collins and DeNormandie. Plaintiff has asked the Court to assert pendent jurisdiction over the state claims. In the seminal case on the issue, the Supreme Court stated that where there exists a common nucleus of operative facts, the exercise of pendent jurisdiction is a matter of discretion. United Mine Workers v. Gibbs, 383 U.S. 715, 726, 86 S.Ct. 1130, 1139, 16 L.Ed.2d 218 (1966). “The exercise of discretion to hear a state claim ... is governed by ‘consideration of judicial economy, convenience, and fairness to litigants.’ ” Charles D. Bonanno Linen Service, Inc. v. McCarthy, 708 F.2d 1, 6 (1st Cir.1983) (quoting Mayor of Philadelphia v. Educational Equality League, 415 U.S. 605, 627, 94 S.Ct. 1323, 1336, 39 L.Ed.2d 630 (1974)). The Court may refuse to exercise pendent jurisdiction when “it appears that the state issues substantially predominate, whether in terms of proof, of the scope of the issues raised, or of the comprehensiveness of the remedy sought.” Gibbs, 383 U.S. at 726, 86 S.Ct. at 1139.

Although there is a common nucleus of operative facts underlying plaintiff’s federal claim and his five remaining state law claims, the Court finds that judicial economy and convenience demand that the latter be tried separately. By injecting five additional state law claims, the scope of the relatively straightforward federal claim would be broadened considerably. Moreover, there are now no federal claims pending against two of the defendants. While the alleged negligence of Collins and De-Normandie is part of the same incident involving defendant Afflerbach, evidence in proof of that negligence would likely have an entirely different focus from the proof of Afflerbach’s alleged excessive use of force. The Court, of course, has faith in the ability of jurors to sort out complexities of fact and law. When presentation of such complexities can be easily avoided, however, it seems worthwhile to do so. Therefore, plaintiff’s state claims will be dismissed.

Accordingly, it is ORDERED that Counts IV, VIII, X and XI are dismissed with the consent of the plaintiff. Defendant’s motion for summary judgment on Count VI is hereby GRANTED and Count VI against the defendant Collins is DISMISSED. Defendants’ motion for summary judgment is denied to the extent it seeks to exclude plaintiff’s federal claim for relief against defendant Afflerbach based on an alleged violation of the Fourteenth Amendment. Finally, Defendants’ motion to dismiss plaintiff’s state law claims is hereby GRANTED. Counts II, III, V, VII, and IX are hereby DISMISSED without prejudice to their reassertion in state court.

      . Although defendant’s motion for summary judgment does not bring forward the immunity defense raised in the pleadings, he does raise it in his memorandum by reference to Voutour. The Court will treat the issue as properly raised since plaintiff had an adequate opportunity to and did respond specifically to the points raised in defendants’ memorandum.

      . Plaintiff in his memorandum suggests that Collins is responsible for the radio failure experienced at the time of the break-in. The complaint itself and further documents submitted by plaintiff show great care on the part of defendants, however. The officers tested their radios at the scene. Realizing that their normal wave-length might not function, they agreed on an. alternate means of communication on the Sheriffs frequency.


author: WILLIAM T. HART, District Judge.

text:
    Patricia PAWLOWSKE, Plaintiff, v. CHRYSLER CORPORATION, et al. Defendants.
    No. 85 C 4209.
    United States District Court, N.D. Illinois, E.D.
    Dec. 13, 1985.

      Patricia Pawlowske, pro se.
    David N. Carvalho, Skadden, Arps, Slate, Meagher & Flom, Chicago, 111., David W. King, Chrysler Corp., Detroit, Mich., for defendants.
   MEMORANDUM OPINION AND ORDER

WILLIAM T. HART, District Judge.

Plaintiff Pawlowske filed this pro se complaint alleging that defendants “did unlawfully and without due process of law remove $568.37 from Plaintiff Pawlowske’s payroll check without her permission” and seeking actual damages in the amount withheld, punitive damages of $10,000, and her costs of bringing this suit. Presently before the court are the parties’ cross-motions for summary judgment and defendants’ motion for sanctions.

There are only two facts pertinent to these motions and they both are undisputed. On June 28, 1984 the Internal Revenue Service (IRS) served a Notice of Levy on Wages, Salary and Other Income on defendant Chrysler Corporation demanding payment of $568.37 from plaintiff’s wages. On July 18, 1984 Chrysler sent the IRS a check in that amount.

I.

Under 26 U.S.C. § 6331(a) the IRS (or more properly the Secretary of the Treasury and that person’s agents) has the power to collect delinquent taxes “by levy upon all property and rights to property.” The term “levy” is defined in § 6331(b) as including “the power of distraint and seizure by any means.” Section 6332(a) obligated Chrysler to surrender that portion of plaintiff’s salary called for by the notice of levy. Indeed, had Chrysler not complied with the levy it would have become personally liable under § 6332(c) for the amount plus a penalty equal to half the amount. Section 6332(d) of the Internal Revenue Code states that one who complies with a levy “shall be discharged from any obligation or liability to the delinquent taxpayer with respect to such property or rights to property arising from such [compliance with the levy].” Thus, plaintiff has no right to recover anything from Chrysler (or its employees) because of its compliance with the levy.

Despite this perfectly clear law, plaintiff argues that Chrysler is not protected by § 6332(d) because the levy with which it purportedly complied was defective for several reasons. First and foremost, plaintiff argues the levy was ineffective because it was not preceded by a Notice of Seizure and a court order. However, numerous cases make clear that a Notice of Levy is all that is required for the IRS to gain possession of the property (or in plaintiff’s phrasing, the Notice of Levy “makes” a levy). See In re Chicago-land Ideel Cleaners, Inc., 495 F.2d 1283, 1285 (7th Cir.1974), aff’d sub nom. Phelps v. United States, 421 U.S. 330, 335-37, 95 S.Ct. 1728, 1731-32, 44 L.Ed.2d 201 (1975) (“notice of levy and demand are equivalent to seizure”); United States v. Pittman, 449 F.2d 623, 627 (7th Cir.1971); Rosenblum v. United States, 300 F.2d 843, 844-45 (1st Cir.1962); United States v. Eiland, 223 F.2d 118, 121 (4th Cir.1955). The cases plaintiff relies upon to argue that more than a notice of levy is required were decided under a version of the statute that was replaced in 1954 with significantly different language, and the cases just cited make clear that plaintiff’s cases are no longer good law. See 495 F.2d at 1285; 449 F.2d at 627 and n. 3; and 300 F.2d at 845.

Plaintiff’s statutory argument for her idea that a Notice of Seizure must precede a levy is based on § 6502(b), which states “The date on which a levy on property or right to property is made shall be the date on which the notice of seizure provided in section 6335(a) is given.” That means, argues plaintiff, that a levy is not “made” (i.e., effective) until a notice of seizure is given. Besides being inconsistent with the binding and directly-on-point authority already cited, plaintiff’s argument is a distortion of the statute. Section 6502(b) does not define what the IRS must do to make a valid levy; rather, it simply chooses an event (the service of a notice of seizure) from which it can easily be determined whether the IRS’s collection attempt falls within the six-year time limit on tax collection stated in § 6502(a). Indeed, plaintiff’s interpretation is completely nonsensical because the event she wants to precede a valid levy (the notice of seizure) always comes after the levy. See § 6335(a), stating that “As soon as practicable after seizure of property, notice in writing shall be given by the Secretary or his delegate to the owner of the property ...” (emphasis added).

As her final argument on this point, plaintiff intimates that judicial process is necessary before her salary can be levied upon. That is simply not so, and the absence of judicial process does not violate any constitutional provision. See United States v. National Bank of Commerce,-U.S.-, 105 S.Ct. 2919, 2924-25, 86 L.Ed.2d 565 (1985). Therefore, the notice of levy was sufficient to require defendants to pay the money demanded and to give them the protection of § 6332(d).

Plaintiff also argues that because § 6331 specifically states a notice of levy is sufficient to “make” a levy on the salary of a federal or District of Columbia employee, serving a notice of levy is not sufficient to “make” a levy on the salary of a private sector employee. That same . argument was clearly rejected in Sims v. United States, 359 U.S. 108, 112-13, 79 S.Ct. 641, 644-45, 3 L.Ed.2d 667 (1959), which explains that federal and District of Columbia employees were specifically mentioned to overcome authority treating them differently and to make clear they were to be treated just like every other employee.

Finally, plaintiff argues that her wages were not subject to levy because only property “subject to forfeiture” under § 7321 can be seized, and only property that can be seized can be levied upon. However, “it is quite clear, generally, that accrued salaries are property and rights to property subject to levy.” Sims v. United States, 359 U.S. 108, 110-11, 79 S.Ct. 641, 644, 3 L.Ed.2d 667 (1959). Again, then, plaintiff’s argument is blocked by binding precedent she simply ignores. And even on its own terms plaintiff’s attempt to smuggle the limitations on forfeiture proceedings into the section on levy fails. Forfeiture and levy are two entirely distinct ways for the IRS to gain possession of property. Neither depends on the provisions respecting the other, and the things each procedure can reach are separately and independently defined. Compare 26 U.S.C. §§ 5607, 5608, 5612, 5613, 5615, 5661, 5671, 5673, 5683, 7601-7604, 7321 (defining property subject to forfeiture) with § 6331(a) (defining property subject to levy). The only way plaintiff has managed to tie the levy and forfeiture provisions together is through the same argument (that notice of seizure must precede a levy) rejected above. Therefore, plaintiff’s salary was a proper subject of the levy process.

II.

Defendants request costs and attorney fees, arguing that this action is frivolous. Fed.R.Civ.P. 11 requires that all pleadings be signed by a party not represented by an attorney and states that by signing her complaint and other filings plaintiff certifies that she

has read the pleading, motion, or other paper; that to the best of [her] knowledge, information, and belief formed after reasonable inquiry it is well grounded in fact and is warranted by existing law or a good faith argument for the extension, modification, or reversal of existing law, and that it is not interposed for any improper purpose, such as to harass or to cause unnecessary delay or needless increase in the cost of litigation____ If a pleading, motion, or other paper is signed in violation of this rule, the court, upon motion or upon its own initiative, shall impose upon the person who signed it ... an appropriate sanction, which may include an order to pay to the other party or parties the amount of the reasonable expenses incurred because of the filing of the pleading, motion, or other paper, including a reasonable attorney’s fee.

By using the words “shall impose” the rule makes imposition of a sanction where Rule 11 has been violated mandatory. Eastway Const. Corp. v. City of New York, 762 F.2d 243, 253-54 and n. 7 (2d Cir.1985) (reversing district court’s denial of motion for fees). Subjective bad faith is no longer a prerequisite to Rule 11 sanctions; “[t]he standard is an objective one.” Frazier v. Cast, 771 F.2d 259, 263 (7th Cir.1985). And as the Rule and the cases make clear, pro se litigants are subject to Rule 11, though the concerns of Haines v. Kerner, 404 U.S. 519, 92 S.Ct. 594, 30 L.Ed.2d 652 (1972), must be taken into account in evaluating pro se papers. See, e.g., Tarkowski v. County of Lake, 775 F.2d 173, 176 (7th Cir.1985) (reversing and remanding for reconsideration refusal to sanction pro se litigant and strongly implying sanctions are required); Williams v. Duckworth, 617 F.Supp. 597, 601-02 (N.D.Ind.1985) (awarding attorney’s fee and fine payable to court against pro se litigant); Richcreek v. Grecu, 612 F.Supp. Ill, 117 (N.D.Ind.1985) (awarding reasonable attorney’s fees against pro se tax litigant); Johnson v. United States, 607 F.Supp. 347, 349-50 (E.D.Mo.1985) (same); Miller v. United States, 604 F.Supp. 804, 805-06 (E.D.Mo.1985) (same). Finally, the Seventh Circuit has repeatedly warned that tax litigants who clog the courts with frivolous arguments will be sanctioned. See Lovell v. United States, 755 F.2d 517, 519-20 (7th Cir.1984), and cases cited therein.

Plaintiff claims her arguments have never been made before, and the advisory committee notes to Rule 11 do say that sanctions should not be used to chill creativity, but clearly creativity is not enough by itself. The creativity must be in service of a good faith application of the law or at least a good faith request for a change in the law. Plaintiff has done neither here. This is precisely the sort of “creativity” Rule 11 should chill. Cf. In re TCI Ltd., 769 F.2d 441, 447-48 (7th Cir.1985) (upholding sanctions under 28 U.S.C. § 1927 against the same argument).

Plaintiff also claims that the dissent in United States v. National Bank of Commerce,—U.S.-, 105 S.Ct. 2919, 2931-39, 86 L.Ed.2d 565 (1985), shows “that interpretation of the intent and application of the Internal Revenue Code is still being questioned in 1985, and subjected] to review” (brief opposing summary judgment at 10). However, the issue that provoked dissent in the National Bank case is entirely different from that involved here and to the extent it is relevant here National Bank shows plaintiff’s complaint has no basis in law, so that ease does nothing to show that the actions plaintiff here challenges are open to question.

Each of plaintiff’s arguments was precluded by precedent and invalid on its merits. The court concludes plaintiff violated Rule 11 and sanctions must be imposed. However, this court lacks the information necessary to determine what sanction is appropriate. Defendants are therefore directed to file not later than December 31, 1985 a statement as to what their costs and attorney’s fees have been, properly supported by affidavit. Plaintiff may file a response, including if she wishes a statement concerning her financial ability, no later than January 21, 1986.

If plaintiff wishes to appeal this court’s decision denying her motion for summary judgment and granting defendants’ motion for summary judgment and sanctions, she must do so by filing a notice of appeal with this court no later than thirty days from the date of this opinion. Her time for filing a notice of appeal is not suspended while this court considers the issue of an appropriate sanction. Exchange Nat. Bank of Chicago v. Daniels, 763 F.2d 286, 291 (7th Cir.1985). This court will not lose jurisdiction of the sanctions question if plaintiff does appeal. Patzer v. Board of Regents, 763 F.2d 851, 859 (7th Cir.1985).

IT IS THEREFORE ORDERED that plaintiff’s motion for summary judgment is denied, defendants’ motion for summary judgment and sanctions is granted, and judgment is entered against plaintiff and in favor of defendants. Defendant shall file a statement of the fees and costs incurred in this action no later than December 31, 1985 and plaintiff shall file any response no later than January 21, 1986.

      . Neither side has filed the statements required by this court’s local rules 12(e) and 12(f) (though defendants’ lawyer has filed an affidavit simply stating that all the facts in his brief are true). Nonetheless, the relevant facts are contained in the briefs and are not disputed.

      . Plaintiff does have a way to challenge the levy, but her remedies are against the IRS, not Chrysler. See, e.g., 26 C.F.R. § 301.6343-l(b)(2).

      . In dicta the Seventh Circuit has apparently approved of Eastway, though in somewhat guarded language. In re TCI Ltd., 769 F.2d 441, 446 (7th Cir.1985) ("Rule 11 was amended in 1983 to make it easier for a court to award fees, indeed perhaps to make the award mandatory in some cases”; but compare id. at 448, finding that in refusing to award fees for a “baseless” complaint under the discretionary standard of 28 U.S.C. § 1927 the trial judge "came close to the line of abuse [of discretion]”). In the later case of Tarkowski v. County of Lake, 775 F.2d 173 (7th Cir.1985), the court; without referring to Eastway, seems to say that sanctions are mandatory. See id. at 175 (“Rule 11 requires that sanctions be imposed if a pleading or other filing [violates the Rule]" (emphasis added)). Some other courts have refused to impose sanctions for a Rule 11 violation either because the violator was pro se or the court simply decided in its discretion that sanctions were not warranted. See, e.g., Blume v. Leake, 618 F.Supp. 95, 97 (D.Idaho 1985) (giving a pro se litigant the "benefit of the doubt” but warning that future violations will result in sanctions); Bigalk v. Federal Land Bank Ass'n, 107 F.R.D. 210, 213 (D.Minn.1985) (refusing sanctions because pro se litigants had not been able to get counsel and "showed that their efforts were sincere”); Baranski v. Serhant, 106 F.R.D. 247, 249-50 (N.D.Ill.1985) (refusing to sanction a baseless count included due to innocent mistake and interpreting committee notes stating that courts have "discretion to tailor sanctions to the particular facts of the case” as meaning that courts have discretion not to impose sanctions at all). However, those cases cannot be squared with the plain language of the Rule. Discretion is exercised in deciding what to award, not whether.

      . In Davis v. United States, 104 F.R.D. 509, 512 n. 2 (N.D.Ill.1985), this court followed Suslick v. Rothschild Securities, 741 F.2d 1000, 1007 (7th Cir.1984), in requiring subjective bad faith before Rule 11 sanctions could be imposed, but opined that Suslick appeared inconsistent with the intent of Rule ll's drafters. In Rodgers v. Lincoln Towing Service, Inc., 771 F.2d 194, 205 (7th Cir.1985), the court made clear that despite Suslick's quotation of the new version of Rule 11 (see 741 F.2d at 1003 n. 3) the Suslick court was interpreting the old version of Rule 11 so no inconsistency was committed. See also Indianapolis Colts v. Mayor & City Council of Baltimore, 775 F.2d 177, 181 (7th Cir.1985) (noting that the 1983 amendment of Rule 11 "changed the standard for finding a violation of the rule from a subjective to an objective standard”).


author: MENTZ, District Judge.

text:
    Barry L. GREENSLATE v. TENNECO OIL COMPANY.
    No. 82-4834.
    United States District Court, E.D. Louisiana.
    Dec. 16, 1985.

      Bert M. Cass, Jr., Deutsch, Kerrigan & Stiles, Philip J. Kaplan, New Orleans, La., for plaintiff.
    Julia M. Core, Salley & Associates, New Orleans, La., for defendant.
   MEMORANDUM OPINION

MENTZ, District Judge.

Marlin Drilling Co., Inc. (hereinafter referred to as “Marlin”), a defendant in this action, filed a motion for summary judgment seeking to recover from Point Marine, Inc. (hereinafter referred to as “Point Marine”) $4,755.76 in attorney’s fees and costs incurred by Marlin in its defense of this action. This Court denied the motion, stating, “it would be premature for this Court to conclude that Marlin is entitled to recover ... these ... fees and costs ... as a matter of law until the Court is instructed on what law is applicable to this action----” Greenslate v. Tenneco Oil Co., Inc., No. 82-4834, mem. op. at 4 (E.D.La. May 10, 1985). Marlin and Point Marine subsequently agreed during a pre-trial conference held on June 21, 1985 to submit the issues arising from Marlin’s motion to the Court by post-trial memoranda. Accordingly, Marlin and Point Marine filed post-trial memoranda briefing the issues discussed below. The Court has now considered the memoranda, pleadings, exhibits, and documents submitted in this matter, and based on the record and the law concludes that Marlin is entitled to the attorney’s fees and costs incurred in the defense of the claim filed by Barry Greenslate.

On March 18, 1981, Point Marine entered into a Blanket Time Charter Agreement with Tenneco Oil Company, Inc. (hereinafter referred to as “Tenneco”). Under this agreement, Point Marine agreed to, inter alia, defend and indemnify Tenneco and its subsidiary and affiliate companies in all actions arising from the performanee or breach of the charter agreement. The indemnification provision states in full:

Owner agrees to protect, defend, indemnify, reimburse, compensate and hold Charterer, its joint venturers, joint interest owners, its subsidiary and affiliate companies, their agents, employees, and insurers free and harmless from and against any and all losses, claims, demands, causes of action or judgments of every kind and character by any party hereto, their agents or employees, or by any third party or governmental agency, for injury to or illness or death of any person, or for damage to or loss or destruction of any property, or for fine or penalty of any nature, which injury, illness, death, damage, loss destruction, fine or penalty arises out of performance hereunder or a breach hereof and regardless of whether such is attributable in whole or in part to the negligence, strict liability or other legal fault of Charterer, its joint venturers, joint interest owners, its subsidiary and affiliate companies, their agents, employees, or third parties. With respect to liability based upon the negligence of indemnitees or some third party other than one who is an employee, agent or subcontractor of Owner, this indemnity shall be limited to the amounts that would be covered by insurance which Owner is required to carry under the terms hereof, and further limited as may be required for compliance with applicable state and federal laws.

The main issue to be addressed is whether Marlin, a subsidiary and affiliate of Tenneco, is entitled under the charter agreement to recover attorney’s fees and costs incurred in the defense of this action. On July 2, 1984, Tenneco’s attorney orally agreed to waive its claims against Point Marine for attorney’s fees and costs in exchange for Point Marine’s offer to defend and indemnify Tenneco. Thus, this Court must ultimately determine whether in waiving its claims against Point Marine for attorney’s fees and costs, Marlin’s parent company, Tenneco, waived as well Marr lin’s own claims for attorney’s fees and costs incurred in this action. In order to analyze the effect of Tenneco’s waiver, this Court must first consider the effect of the indemnification provision contained in the charter agreement between Tenneco and Point Marine.- Specifically, this Court must decide whether the indemnity provision conferred third-party beneficiary status upon Marlin.

I.

APPLICABLE LAW

It is well established that a charter agreement is a maritime contract whose interpretation is subject to the principles of federal maritime law. G. Gilmore and C. Black, The Law of Admiralty 196 (1975); Otto Candies, Inc. v. McDermott International, Inc., 600 F.Supp. 1334, 1335 (E.D. La.1985) (a charter party is a maritime contract whose interpretation and construction is governed by maritime law); See also M.O.N.T. Boat Rental Service, Inc. v. Union Oil Co., 613 F.2d 576 (5th Cir.1980) (construction of maritime contract generally governed by federal maritime law); But cf. Wilburn Boat Co. v. Fireman’s Fund Ins. Co., 348 U.S. 310; 75 S.Ct. 368, 99 L.Ed. 337 (1955) (state law applied to interpretation of certain contracts for marine insurance). More specifically, the interpretation of an indemnity provision in a maritime contract is ordinarily governed by federal maritime law. Corbitt v. Diamond M Drilling Co., 654 F.2d 329 (5th Cir.1981). Because this Court has already taken judicial notice of the fact that neither party has disputed that the charter executed between Tenneco and Point Marine is a maritime contract, Greenslate v. Tenneco Oil Co., Inc., No. 84-4834 mem. op. at 2-3 (E.D.La. May 10, 1985), the interpretation of the indemnity provision contained therein is in light of Corbitt subject to the principles of federal maritime law.

In addition, the Fifth Circuit has recently held by implication that a release in an admiralty case is in fact a maritime contract whose interpretation is subject to federal law. See Fisher v. Danos, 774 F.2d 1158, Slip op. at 9-11 (5th Cir.1985), aff'g 595 F.Supp. 461 (E.D.La.1984) (effect of release in admiralty cases is determined in accordance with federal law); See also Ingram Corp. v. J. Ray McDermott & Co., Inc., 698 F.2d 1295, 1317 n. 27 (5th Cir. 1983). In Fisher v. Danos, the Fifth Circuit applied federal law to interpret a release by the plaintiff of all claims arising from a maritime tort. Similarly, the case at bar was filed in this Court pursuant to admiralty jurisdiction and involved a release or waiver. Consequently, federal law is applicable to the interpretation of the release effected by Tenneco of its claim for attorney’s fees and costs against Point Marine.

However, this Court does recognize that on at least one occasion the Fifth Circuit has applied state law to determine whether a third party is an intended beneficiary of a charter agreement. See Hercules, Inc. v. Stevens Shipping Co., Inc., 629 F.2d 418 (5th Cir.1980) (citing S.C. Love-land, Inc. v. East West Towing, Inc., 608 F.2d 160, 164 (5th Cir.1979) (in which non-maritime contract was involved)). Hercules, however, did not involve an indemnity provision as did Corbitt, and as does the present case. Moreover, unlike Fisher and the case at bar, Hercules did not involve a release of a maritime claim. Because Corbitt and Fisher contain the most recent articulations by the Fifth Circuit of its views, this Court is compelled to follow the authority of those decisions. For the foregoing reasons, this Court will apply federal law to interpret the indemnity provisions contained in the Tenneco/Point Marine charter agreement.

II.

EFFECT OF THE INDEMNITY PROVISION

Federal law recognizes the validity of the third party beneficiary theory of contracts. See RESTATEMENT (SECOND) OF CONTRACTS § 302 (1981). Under this theory, contracting parties may create rights in favor of a non-contracting third party by manifesting an intention to do so. Id. § 302(b). In the case at bar, there can be little doubt after reviewing the indemnity provision that the parties to the Tenneco/Point Marine Charter intended to confer a benefit upon Marlin. That provision clearly stated that Point Marine must defend and indemnify subsidiary and affiliate companies, who are non-contracting third-parties. Accordingly, this Court holds that under principles of federal law, Marlin is a third-party beneficiary to the Tenneco/Point Marine charter agreement.

III.

EFFECT OF THE WAIVER

A third party beneficiary may enforce any duty imposed upon the promisor by the agreement creating the benefit. Id. § 304. Consequently, Marlin may, as third-party beneficiary to the Tenneco/Point Marine charter agreement, enforce the indemnification provision of that agreement against Point Marine. Point Marine argues as a defense, however, that when Tenneco waived its claims for attorney’s fees and costs in return for Point Marine’s defense and indemnification, the claims of its subsidiary, Marlin, against Point Marine were waived as well.

Although contracting parties have the power to nullify or modify a duty to an intended beneficiary, that power is terminated when the beneficiary brings suit or otherwise manifests assent to it in a manner invited by the contracting parties. Id. §§ 311(1), 311(3), comment h. Marlin clearly manifested its assent to the benefits conferred by the indemnity provision when, in a letter dated December 14, 1982, it asserted its rights to a defense and indemnification from Point Marine pursuant to the charter agreement executed between Tenneco and Point Marine. Consequently, when, in July of 1984, Tenneco agreed to release Point Marine from its duty under the indemnity provision in the charter agreement to pay Tenneco for attorney's fees and costs, Marlin had already asserted its rights under that provision. Moreover, the waiver agreement was effected solely by Tenneco and Point Marine because Tenneco’s counsel had no authority to act on behalf of Marlin, and, in fact by that point in time, Marlin had engaged its own separate counsel to protect its interest. Because Tenneco’s release came after Marlin’s assent to the provision waived by Tenneco, and because Tenneco’s agent was not acting on behalf of Marlin, Tenneco’s subsequent release of Point Marine of its obligations to pay attorney’s fees and costs pursuant to the charter agreement is therefore ineffective as to Marlin. Accordingly,

IT IS ORDERED that, pursuant to the charter agreement between Tenneco Oil Co., Inc. and Point Marine, Inc., Marlin Drilling Co., Inc., the third-party beneficiary, is entitled to $4,755.76 for attorney’s fees and costs incurred in the defense of the claim filed by Barry L. Greenslate.

      . It is a well-accepted concept that parent and subsidiary companies are separate legal identities unless the latter exists as a mere tool or "front” for the parent, or the corporation fiction is utilized to achieve an inequitable result, or to conceal fraud or illegality. See Miles v. American Tel. & Tel. Co., 703 F.2d 193, 195 (5th Cir.1983). No contention has been made by Point Marine that Marlin is just a corporate fiction created by Tenneco. Further, no suggestion has been made that Marlin does not function autonomously in terms of the conduct of its business and financial affairs. Therefore, as far as this Court is concerned, each company shall be treated as two separate business units.


author: DIANA E. MURPHY, District Judge.

text:
    MINNEAPOLIS STAR AND TRIBUNE COMPANY, Sharon Schmickle, Plaintiffs, v. UNITED STATES DEPARTMENT OF INTERIOR; Bureau of Indian Affairs; Red Lake Agency; and George Sumner, Defendants.
    Civ. No. 4-85-1255.
    United States District Court, D. Minnesota, Fourth Division.
    Dec. 16, 1985.
    Patricia A. Hirl, Associate Gen. Counsel, Minneapolis Star and Tribune Company, Minneapolis, Minn., for plaintiffs.

      Lynn A. Zentner, Asst. U.S. Atty., Minneapolis, Minn, and Mark A. Anderson, U.S. Dept, of the Interior, Twin Cities, Minn., for defendants.
   MEMORANDUM OPINION AND ORDER

DIANA E. MURPHY, District Judge.

Plaintiffs Minneapolis Star and Tribune Co. and Sharon Schmickle (the “Star and Tribune”) brought this Freedom of Information Act (FOIA) action against the United States Department of the Interior, Bureau of Indian Affairs (the “Department”) and several individual defendants, seeking access to certain files of the Red Lake Court of Indian Offenses. On the same date, the files at issue were removed from federal custody by order of the Red Lake Tribal Council. The Department has taken certain efforts to effect the return of these documents, but has not yet succeeded in regaining the documents.

At an October 17, 1985 hearing, this court requested that the Department take further action and supply the court with a status report of its efforts. On November 18, 1985, the Department submitted its status report. The Department now seeks a protective order, pursuant to Fed.R.Civ. P. 26(c), limiting disclosure of large portions of the November 18 letter. The defendant asserts that it expects the Star and Tribune to publish an article addressing, inter alia, the nature and status of this litigation.

Defendant brings its motion pursuant to Fed.R.Civ. P. 26(c), which provides for protective orders in the context of depositions and other discovery. Defendant acknowledges that the information it seeks to protect was not obtained “through the usual discovery processes”, yet it provides no authority for the extension of Rule 26(c) to a context other than discovery. The Department relies entirely on a single ease, Seattle Times Co. v. Rhinehart, 467 U.S. 20, 104 S.Ct. 2199, 81 L.Ed.2d 17 (1984). In Seattle Times, the plaintiff in a libel action, the leader of a religious organization, sought to protect certain information from discovery—specifically, the identities of all donors who made contributions to the organization and certain membership information. The trial court ordered plaintiff to disclose the information to defendant, but forbid its further dissemination. In affirming the state court’s refusal to lift the protective order, the Supreme Court stressed the significant potential for abuse of discovery—the opportunity “for litigants to obtain ... information that not only is irrelevant but if publicly released could be damaging to reputation and privacy”—and the “unique character of the discovery process [which] requires that the trial court have substantial latitude to fashion protective orders.” Id. 104 S.Ct. at 2209.

Defendant styles its request for an order limiting disclosure a “protective order,” but defendant acknowledges that the material it wishes to present was not gained “only by virtue of the trial court’s discovery process.” Id. at 2207. The First Amendment “requires the highest form of state interest” to sustain restrictions of the publication of “lawfully obtained, truthful information.” Smith v. Daily Mail Publishing Co., 443 U.S. 97, 101-02, 99 S.Ct. 2667, 2669-70, 61 L.Ed.2d 399. The defendant has simply not demonstrated a basis for granting the relief it seeks.

ORDER

Accordingly, based on the above and all the files, records, and proceedings herein,

IT IS HEREBY ORDERED that defendant’s motion for a protective order is denied.

      . Pursuant to the stipulation of the parties, this court dismissed all individual defendants except George Sumner.

      . Plaintiffs correctly note several other points distinguishing the instant case from Seattle Times. Defendant did not raise its concerns about disclosure of this information before disclosing it. Many of the matters in the portion of the letter at issue have been discussed in open court.


author: REDDEN, District Judge:

text:
    UNITED STATES of America, Plaintiff, v. Larry Bruce JOHNSON, Defendant.
    No. CR 85-137-RE.
    United States District Court, D. Oregon.
    Dec. 17, 1985.
    Charles H. Turner, U.S. Atty., Fredric N. Weinhouse, Asst. U.S. Atty., Portland, Or., for plaintiff.
    Stephen R. Sady, Asst. Federal Public Defender, Portland, Or., for defendant.
   REDDEN, District Judge:

Defendant was tried on a two count indictment charging bank robbery, 18 U.S.C. § 2113(a) and knowing possession of funds taken from a bank, 18 U.S.C. § 2113(c). The jury acquitted him of the robbery, but convicted him on the possession count. He now moves this court for acquittal on the knowing possession charge or, in the alternative, for a declaration that the knowing possession conviction was one for a misdemeanor. Defendant also seeks a new trial, again as an alternative.

Because I grant the motion for acquittal I decline to rule on the alternative motions to declare the conviction one of a misdemeanor. I deny the motion for new trial. BACKGROUND

On August 5, 1985, the United States National Bank, Tigard, Oregon branch was robbed by two individuals. One robber appeared to be a black male, and the other appeared to be a white male, disguised as black. The government contends that Larry Bruce Johnson was the black male who was directly involved in the bank robbery.

Johnson was arrested during the afternoon of the day of the robbery. His arrest resulted from the observations of two witnesses who were outside of the bank when the robbers exited. Suspicious of the conduct and dress, the witnesses wrote down the license number of the Honda automobile which those two occupied. That license number was traced to one Eugene Marzolf who resided at a Southwest Corbett Street address. A similar Honda, with the same license number, was observed near that address and surveillance was instituted. Marzolf left the residence, entered the Honda and then left it in favor of a Subaru, in which he departed the Corbett Street address. Surveillance continued. Marzolf proceeded to a Southeast Insley address and entered that residence. He then left, accompanied by Johnson. Both left in the Subaru which was subsequently stopped by the police. Johnson was searched. A large amount of cash was found on his person, including bait bills from the earlier robbery in Tigard. A hat and shirt, similar to the ones worn during the robbery, were also found in the Subaru.

Johnson denied his participation in the bank robbery. He explained his possession of the particular funds by testifying that he had received the money for marijuana sold to individuals at the Insley Street address. His defense was that although he possessed the money, he did not do so knowing that it had been unlawfully taken from the bank.

DISCUSSION

The Motion for Acquittal

Mr. Johnson moves for an order pursuant to Rule 29(c) of the Federal Rules of Criminal Procedure granting acquittal on the knowing possession count. He argues that there was insufficient evidence offered for any rational trier of fact to find, beyond a reasonable doubt, that he knew the money in his possession had been stolen from a bank. Evidence was lacking and the legislative intent of 18 U.S.C. § 2113(c) does not comprehend the result.

The only evidence of Johnson’s guilt on the possession charge was evidence that he robbed the bank and therefore must have known the source of the dollars. There was sufficient evidence for a rational trier of fact to conclude that Johnson was one of the bank robbers, but this jury did not find that the evidence proved Johnson’s guilt beyond a reasonable doubt. They found him not guilty.

The eye witness who saw the robbers enter the Honda also identified a photo throwdown in court and subsequently identified the defendant in open court. A bank teller who did not succeed in picking defendant out of a throwdown was strong in her identification of him during both pretrial proceedings and the trial itself. However, as indicated, the jury rejected this evidence in finding that the defendant was not one of the bank robbers. There was no other additional evidence that Johnson knowingly possessed the stolen funds. Having found him not guilty of the robbery, the jury necessarily relied upon speculation in concluding that he knew the funds were those which came from the bank robbery. Counts of robbery and possession can be brought in the same indictment. United States v. Gaddis, 424 U.S. 544, 96 S.Ct. 1023, 47 L.Ed.2d 222 (1976). However, a jury finding a defendant guilty of robbery must return their verdict without determining the guilt or innocence of that defendant on the possession charge. This is because the legislative intent and judicial history of § 2113(c) rejects the concept that prosecutors are given two opportunities to convict a defendant for a single criminal act.

Heflin v. United States, 358 U.S. 415, 79 S.Ct. 451, 3 L.Ed.2d 407 (1959) establishes that 18 U.S.C. § 2113 does not allow multiple punishment for a single action. In Heflin, the defendant had been convicted under both section (d) (using force in a bank robbery) and section (c) (knowing possession). He was sentenced consecutively on these charges. The United States Supreme Court disallowed the consecutive sentences, finding that pyramiding of penalties was not the intent of Congress. Rather, section (c) had been enacted to punish another class of wrongdoers: receivers. The Heflin Court concluded:

This clue to the purpose of Congress argues strongly against the position of the Government. From these Reports it seems clear that subsection (c) was not designed to increase the punishment for him who robs a bank but only to provide punishment for those who receive the loot from the robber. We find no purpose of Congress to pyramid penalties for lesser offenses following the robbery. It may be true that in logic those who divide up the loot following a robbery receive from robbers and thus multiply the offense. But in view of the legislative history of subsection (c) we think Congress was trying to reach a new group of wrongdoers, not to multiply the offense of the bank robbers themselves.

Heflin, 358 U.S. at 419-20, 79 S.Ct. at 453-54 (emphasis added).

This case is not identical to Heflin, but the legislative policy and intent is similar. Here, the issue is not multiple punishment for a single action, but rather multiple exposure to punishment for a single action. The fact is that Congress was trying to reach a new group of wrongdoers by adding section (c) to § 2113. They were not giving a prosecutor a second opportunity to obtain a conviction of a person suspected of bank robbery. Certainly, alternative counts against a defendant may be brought on the theory that if he was not the bank robber, he may have been a knowing receiver of the money. However, such an alternative theory was eschewed by the prosecution in this case. No evidence or argument was presented to support a rational finding that Johnson knew of the money’s source, if he was not the bank robber. Therefore, presentation of the alternative count can only be a double attempt to convict for a bank robbery.

United States v. Gaddis, supra, supports this acquittal as well. It states:

Receipt or possession of the proceeds of a bank robbery in violation of § 2113(c) is simply not a lesser included offense within the total framework of the bank robbery provisions of § 2113. Rather, § 2113(c) reaches a different ‘group of wrongdoers,’ i.e., ‘those who receive the loot from the robber.’

Gaddis, 424 U.S. at 549, 96 S.Ct. at 1027. That case points out that there are many cases where alternative pleading is proper. However, it condones the alternative charge only where the prosecution claims that the defendant was a bank robber or a knowing receiver, not as a double-pronged attack on a suspected bank robber.

Situations will no doubt often exist where there is evidence before a grand jury or prosecutor that a certain person participated in a bank robbery and also evidence that that person, though not himself the robber, at least knowingly received the proceeds of the robbery. In such a case there can be no impropriety for a grand jury to return an indictment or for a prosecutor to file an information containing counts charging violations of 18 U.S.C. § 2113(a), (b) or (d), as well as of § 2113(c).

Gaddis, 424 U.S. at 551, 96 S.Ct. at 1028 (emphasis added).

The motion for acquittal is granted.

As earlier stated it is unnecessary to rule on the “misdemeanor motion” and I reject the motion for a new trial.


author: DUPLANTIER, District Judge.

text:
    WASHINGTON TANKER CO. v. PANAMA CANAL COMMISSION.
    Civ. A. No. 85-4010.
    United States District Court, E.D. Louisiana.
    Dec. 17, 1985.

      David B. Lawton, New Orleans, La., for plaintiff.
    Gregory C. Weiss, Asst. U.S. Atty., New Orleans, La., for defendant.
   ORDER AND REASONS

DUPLANTIER, District Judge.

In granting the motion to dismiss filed on behalf of defendant, Panama Canal Commission, we hold that the statute of limitations in the Panama Canal Code remains applicable to vessel accidents occuring in the canal subsequent to the effective date of the Panama Canal Treaty, which abolished the Panama Canal Zone.

Plaintiff, Washington Tanker Co., is the owner of the S.S. Mount Washington, which collided with an approach wall of the Miraflores Locks in the Panama Canal. At the time of the accident the vessel was under the exclusive control of a Panama Canal Commission pilot. The Board of Local Inspectors (22 U.S.C. § 3778 (1982)) conducted an inquiry and concluded that there was fault on the part of the Commission pilot .and that plaintiff’s vessel sustained damages in the amount of $58,-500.00. Plaintiff never pursued its administrative claim against the Commission. Instead, plaintiff instituted this action 3 years and 77 days after the date of the accident. Jurisdiction is based upon 22 U.S.C. 3776 (1982), which authorizes suit against the Commission in this district.

In implementing the Panama Canal Treaty of 1977, Congress passed the Panama Canal Act of 1979, which abolished the Panama Canal Company and established in its place the Panama Canal Commission. The Act includes the following provision:

The Commission shall promptly adjust and pay damages for injuries to vessels, or to the cargo, crew, or passengers of vessels, which may arise by reason of their passage through the locks of the Panama Canal under the control of officers or employees of the United States. 22 U.S.C. § 3771 (1982).

The Commission argues that, because the plaintiff’s claim is created by statute, the claim is precluded by the three year limitation period set forth in the Canal Zone Code. C.Z. Code tit. 5, § 42 (1963):

The periods for the commencement of actions are: ... Three years upon a liability created by statute,____

Plaintiff’s threshold argument is that no provision of the Canal Zone Code is applicable to this action involving a claim which arose after the effective date of the Panama Canal Treaty of 1977, since the treaty abolished the Panama Canal Zone.

The Canal Zone Code, enacted by Congress in 1934, set forth the basic laws governing operations and activities in the Zone. C.Z. Code tit. 1, § 2 (1963). These laws applied generally to activities in the Zone, including activities of the Panama Canal Company, the corporate agency responsible for the administration of Canal Zone affairs. C.Z. Code tit. 2, § 61 (1963).

When the Panama Canal Commission was created, a number of provisions of the Canal Zone Code were repealed by Congress; those sections not expressly repealed were preserved as part of what is now termed the “Panama Canal Code.” Panama Canal Act of 1979, Pub.L. No. 96-70 § 3303(b), 93 Stat. 455, 499. Among the provisions not repealed was Title 5, which includes the limitation provision in question. Also not repealed was Title 1, § 2 which provides that the Canal Zone Code applies throughout the Canal Zone. Congress declared in the 1979 Act that “for purposes of applying the Canal Zone Code ... to occurences ... after [the effective date of the Treaty] ... the words ‘Canal Zone’ shall be deemed to refer to the areas and installations in the Republic of Panama made available to the United States pursuant to the Panama Canal Treaty of 1977 ...” 22 U.S.C. § 3602(b)(1) (1982). The Treaty made available to the United States “the waters of the Canal ... for the purposes of the management, operation and maintenance of the Panama Canal ____” Panama Canal Treaty of 1977, Sept. 7, 1977, United States-Panama, art III T.I. A.S. No. 10031. Since the accident at issue occurred in the Panama Canal, the Code, with its limitation periods, applies.

Plaintiff argues alternatively that, if the Canal Zone Code is applicable, because a tariff governs transit of the canal, plaintiff’s claim sounds in contract. Thus the four year statute of limitations for contract actions in the Canal Zone Code applies, not the three year limitation for statutory-based claims. Absent the provision of 22 U.S.C. § 3771 already quoted, plaintiff’s argument might be meritorious. But the statute is the specific source of the Commission’s liability. The claim is “upon a liability created by statute.” Thus the three year limitation period applies.

Understandably, in the relatively brief period since the effective date of the treaty, there is a dearth of reported decisions dealing generally with the continued applicability of the Code or specifically with its statute of limitations. However, in interpreting the predecessor provision of the former Canal Zone Code, the Fifth Circuit held the three year limitations period applicable to a maritime tort action against the Panama Canal Company. Luckenbach Steamship Co. v. Panama Canal Co., 196 F.Supp. 835 (D.C.Z.1961), aff'd 303 F.2d 252 (5th Cir.1962) (per curiam).

Judgment will be entered dismissing plaintiff’s action at its cost.

      . The Panama Canal Act contained a recommendation that legislation be submitted by the President to repeal the entire Canal Zone Code. 22 U.S.C. § 3602(d) (1982). However, that legislation has not yet been passed.

      . The Code establishes a 4 year limitation for actions based on a "contract, obligation or liability founded upon an instrument in writing.” C.Z. Code tit. 5, § 42(2)(A) (1963).