author: ROBERT L. CARTER, District Judge.

text:
    Albert GATES, Plaintiff, v. PINNACLE COMMUNICATIONS CORPORATION and Larry G. Shipp, individually, Defendants.
    No. 85 Civ. 760 (RLC).
    United States District Court, S.D. New York.
    Oct. 15, 1985.
    Leiby & Welsh, New York City, for plaintiff; Jeffrey Dale Welsh, Kenneth L. Lei-by, Jr., of counsel.
    Cole & Deitz, New York City, Marquis & Haney, Las Vegas, Nev., for defendants; Edward N. Meyer, New York City, of counsel.
   OPINION

ROBERT L. CARTER, District Judge.

Plaintiff Albert Gates has filed a complaint alleging breach of contract and fraud arising from the negotiations involved in financing the purchase of radio station KMZQ-FM in Las Vegas, Nevada. The defendants, Pinnacle Communications Corporation (“Pinnacle”), a Nevada corporation, and Larry Shipp, Pinnacle’s president and a Nevada citizen and resident, have moved to dismiss the complaint pursuant to Rule 12(b)(1), (2) and (3), F.R.Civ.P. Defendants claim lack of personal and subject matter jurisdiction as well as improper venue. In the alternative, defendants seek a transfer to the United States Qistrict Court for the District of Nevada pursuant to 28 U.S.C. § 1404.

On August 4, 1984, Gates, a citizen of Connecticut, discussed purchasing radio station KMZQ-FM during a telephone conversation with Shipp’s agent, Richard Mack. Neither claims to. have been in New York at the time. After this conversation, Gates sent $25,000 to the Karis Radio Corporation/Pargo Broadcasting (“Karis”), KMZQ-FM’s seller. On August 8, Gates spoke by phone with Shipp. Again, neither party is asserted to have been in New York. That day, Gates sent $5,000 to Karis and arranged for an additional $20,000 to be sent.

Later that August Shipp travelled to New York on business unrelated to the purchase of KMZQ-FM. On August 30, Shipp met with Mack and Gates at the Grand Hyatt Hotel in New York City. For about an hour, they discussed financing the purchase of the radio station. Shipp asserts that this meeting was to explore possibilities of a loan or joint venture between him and Gates. Shipp Affidavit, 114. Gates’s view of events is less clear: the complaint asserts that this meeting confirmed the terms of a joint venture between Shipp and Gates negotiated in the previous discussions (Complaint, 118); however, his affidavit in opposition to this mo-, tion asserts that the terms of the joint venture were “negotiated and agreed to” at the meeting. Gates Affidavit, 117. In any event, no written agreement emerged from the meeting. Plaintiff and defendant Shipp met socially in Washington, D.C. one month later, and again discussed arrangements to purchase KMZQ-FM.

Pinnacle was incorporated in Nevada on September 26, 1984, in order to purchase KMZQ-FM, which it now owns. Pinnacle employs Major Market Radio, Inc. (“Major Market”) to procure national advertisers for KMZQ-FM’s Nevada broadcasts. Major Market’s offices are in New York City; during the period from November, 1984 to March, 1985, it provided less than $2,000 in gross billings to Pinnacle, or less than one per cent of KMZQ-FM’s total billings.

DISCUSSION

Under New York law, which is controlling on the issues dispositive of this motion, Arrowsmith v. United Press Int’l, 320 F.2d 219 (2d Cir.1963) (en banc), there are two potential sources of jurisdiction over foreign corporations and individual nondomiciliaries such as these defendants: NYCPLR § 302 (McKinney 1972), which confers jurisdiction over specific causes of action arising from the defendant’s behavior, and the “doing business” test of Tanza v. Susqnehenna Coal Corp., 220 N.Y. 259, 115 N.E. 917 (1917), which confers general jurisdiction over foreign corporations that can be said to be “present” in New York. Simonson v. Int’l Bank, 14 N.Y.2d 281, 251 N.Y.S.2d 433, 436, 200 N.E.2d 427, 430 (1964). Neither sustains the jurisdictional claims here. Plaintiff alleges only two contacts between the parties to this litigation and the State of New York: a single hourlong meeting in a Manhattan hotel room and a minor business relationship between Pinnacle and Major Market. Whether these contacts satisfy the “minimum contacts” requirements of International Shoe Co. v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945) and its progeny is not at issue; they simply do not meet the requirements of New York law. See Longines-Wittnauer Watch Co. v. Barnes & Reinecke, Inc., 15 N.Y.2d 443, 261 N.Y.S.2d 268, 209 N.E.2d 68, cert. denied sub nom. Estwing Mfg. Co. v. Singer, 382 U.S. 905, 86 S.Ct. 241, 15 L.Ed.2d 158 (1965).

A. Defendant Pinnacle

A foreign corporation that does not itself do business in New York may nonetheless be subjected to New York’s jurisdiction if its agent does business in New York. Frummer v. Hilton Hotels Int’l Inc., 19 N.Y.2d 533, 281 N.Y.S.2d 41, 227 N.E.2d 851, cert. denied 389 U.S. 923, 88 S.Ct. 241, 19 L.Ed.2d 266 (1967); Gelfand v. Tanner Motor Tours, Ltd., 385 F.2d 116 (2d Cir.1967), cert. denied 390 U.S. 996, 88 S.Ct. 1198, 20 L.Ed.2d 95 (1968). The entity or person present in New York must be an agent of the foreign corporation, and not merely an independent contractor. Fordyce v. Round Hill Developments, Ltd., 585 F.2d 30 (2d Cir.1978). In Frummer v. Hilton Hotels Int’l Inc., supra, the New York Court of Appeals defined the functional standard for demonstrating agency for purposes of the doing business test: whether “the [local agent] does all the business which [the foreign corporation] could do were it here by its own officials.” Id., 19 N.Y.2d at 537, 281 N.Y.S.2d 41, 227 N.E.2d 851. As articulated by the Second Circuit in Gelfand v. Tanner Motor Tours, Ltd., supra, there are two aspects to this test. The services of the local business must go “beyond ‘mere solicitation’ ” and must be “sufficiently important to the foreign corporation that if it did not have a representative to perform them, the corporation would undertake to perform substantially similar services.” Id. at 121. The Gelfand court defines agency in part by looking at the breadth of powers conferred on the local business; the case held that a foreign corporation did business in New York where the local agent did not simply confirm bookings for the foreign corporation, but maintained a “broad range of services” for it. Id.

Aptly enough, the leading cases discussing the powers that a foreign corporation must confer to a local business before that business will be deemed its agent concern the travel industry. In Frummer, the defendant Hilton (U.K.) and the local contact, Hilton Reservation Service, shared a common owner. The reservation service did more than solicit clients for Hilton (U.K.)’s hotels; it accepted reservations and confirmed them. It also actively promoted Hilton (U.K.), leading the court to conclude that it did all that Hilton (U.K.) could do were it in New York. Frummer distinguished an earlier New York case, Miller v. Surf Properties, 4 N.Y.2d 475, 176 N.Y. S.2d 318, 151 N.E.2d 874 (1958), which had held the activities of a local travel agency insufficient as a basis for jurisdiction over the foreign defendant because the travel agency could make, but not confirm, reservations. Two factors in Frummer led to the inference of agency there that the Court of Appeals had refused to make in Miller: power of the local travel agency to confirm reservations and common ownership of the hotel and travel agency.

Plaintiffs bear the burden of demonstrating that the court has personal jurisdiction over the defendants. Lehigh Valley Industries, Inc. v. Birenbaum, 527 F.2d 87, 92 (2d Cir.1975). On the bare facts submitted, plaintiff has not demonstrated that Major Market possesses the powers requisite to the creation of an agency relationship for the purposes of conferring personal jurisdiction over Pinnacle upon this court. Plaintiff’s complaint fails to mention Major Market at all; it baldly asserts that Pinnacle does business in New York through its agent, Krystal Radio. Gates later states that “more recent inquiry” reveals that it is Major Market that acts as Pinnacle’s agent and that Major Market “solicits, books and confirms radio spots” for Pinnacle. Gates Affidavit, 1111. Shipp, Pinnacle’s president, asserts that Major Market merely solicits national advertisers and cannot bind Pinnacle. Shipp Affidavit, 11 5. Without more convincing proof of Major Market’s power to bind Pinnacle, or that the company provides Pinnacle the broad range of services that Gelfand demands, the court cannot find that Major Market is Pinnacle’s agent. Plaintiff does not meet the first requirement of Gelfand.

Plaintiff also fails in re the second requirement of Gelfand. He fails to show that Major Market’s services are so important to Pinnacle that, if Major Market did not provide them, Pinnacle would be forced to establish its own presence in New York to replace them. Gelfand, 385 F.2d at 121. Major Market provides only one per cent of KMZQ’s advertising revenue. In Gelfand, the local travel agent provided the foreign tour operators with three-sevenths of their business on a particular tour, totalling $120,000 per year. It is unlikely that Pinnacle would maintain a corporate presence in New York in order to replace services that generate less than $6,000 per year in revenue. Major Market’s services for Pinnacle do not render the company subject to the court’s jurisdiction.

Alternatively, plaintiff suggests that Shipp’s August meeting in New York renders Pinnacle subject to New York jurisdiction under NYCPLR § 302(a)(1) or (a)(2). Pinnacle did not exist until nearly a month after that meeting. Plaintiff’s argument that Pinnacle later ratified Shipp’s actions at that meeting is not supported by any specific acts of Pinnacle that would constitute such ratification.

. B. Defendant Shipp

Shipp’s only contact with New York is his one hour-long meeting with Mack and Gates in a Manhattan hotel room. Whether this meeting satisfies the “transaction of business” test of NYCPLR § 302(a)(1) turns on the “totality of circumstances” surrounding the agreement. Sterling National Bank & Trust Co. of New York v. Fidelity Mortgage Investors, 510 F.2d 870 (2d Cir.1975). The radio station is in Nevada. Discussions took place by phone between parties in locations unknown (but presumably not in New York) and in person in Washington, D.C. as well as in New York. Thus, the “circumstances” surrounding this agreement are chiefly outside of New York. Of course, meetings attendant to the making of a contract may constitute a “transaction of business.” In the leading New York case on this point, Longines-Wittnauer Watch Co. v. Barnes & Reinecke, Inc., supra, that test was met where several negotiating sessions over a period of two months took place in New York. The Court of Appeals declined to say whether these meetings themselves would satisfy the requirements of NYCPLR § 302. Absent other affiliating factors, a series of several negotiation sessions in New York has been held to be “transacting business.” Liquid Carriers Corp. v. American Marine Corp., 375 F.2d 951 (2d Cir.1967). However, a sole visit that is part of protracted negotiations does not satisfy § 302. In McKee Electric Co. v. Rauland-Borg Corp., 20 N.Y.2d 377, 283 N.Y.S.2d 34, 229 N.E.2d 604 (1967), the defendant corporation’s employee made one two-hour visit to New York during the course of a business trip to speak with the corporation’s New Jersey and Pennsylvania representatives. “[T]he contacts here, rather than being minimal ... [are] infinitesmal____” Id. A single meeting in New York meets the requirements of NYCPLR § 302(a)(1) only where that meeting is the beginning and end of negotiations. In Reiner v. Schwartz, 41 N.Y.2d 648, 394 N.Y.S.2d 844, 363 N.E.2d 551 (1977), a single job interview in New York was “transacting business” where the interview resulted in an agreement covering all the substantive terms of the resulting employment contract.

Although the parties dispute what happened at the August 30 hotel meeting, it is clear that the meeting resembles that at issue in McKee more closely than that in Reiner. First, by plaintiff’s own account the meeting was one of several. Second, plaintiff’s complaint asserts that the meeting merely finalized previously agreed-to terms. Complaint, ¶ 8. Such a meeting is an insufficient ground for exercising personal jurisdiction over Shipp. See National Spinning Co. v. Talent Network, Inc., 481 F.Supp. 1243 (S.D.N.Y.1979).

Finally, plaintiff argues that Shipp’s meeting in New York constitutes a “tortious act within the state” under NYCPLR § 302(a)(2). The complaint fails to state the elements of fraud as to any representations made at that meeting. Gates had already disbursed all $50,000 at issue here prior to August 30. Even if any misrepresentations were made at that time, Gates has failed to assert the detrimental reliance that is one of the elements of fraud. W. Prosser, The Law of Torts 714 (4th ed. 1971).

Since we hold that the motion to dismiss must be granted on the ground of lack of personal jurisdiction, we need not address the arguments pertaining to subject matter jurisdiction and venue. Similarly, we need not address the alternative request for transfer to another district. The motion is granted and the complaint dismissed.

IT IS SO ORDERED.

      . The statute reads in relevant part:
      (a) Acts which are the basis of jurisdiction. As to a cause of action arising from any of the acts enumerated in this section, a court may exercise personal jurisdiction over any non-domiciliary, or his executor or administrator, who in person or through an agent:
      1. transacts any business within the state; or
      2. commits a tortious act within the state, except as to a cause of action for defamation of character arising from the act____

      . It is worth noting that in Gelfand as well as Frummer, the activities of the local agent were connected to the causes of action.- The local travel service in both cases booked the arrangements for the trip on which plaintiff was injured. In this case, there is no connection between the solicitation of advertisers and the asserted breach of contract and fraud.

      . Although Shipp visited New York with some frequency on his former employer’s behalf, Shipp Affidavit, ¶ 4, he himself was not "doing business" in the state. Laufer v. Ostrow, 55 N.Y.2d 305, 449 N.Y.S.2d 456, 434 N.E.2d 692 (1982).

      . The Court in Longines-Wittnauer also relied upon the following additional contacts: the execution of a supplementary contract in New York and the partial performance of the original contract in New York. Longines-Wittnauer, 15 N.Y.2d at 457, 261 N.Y.S.2d 268, 209 N.E.2d 68.

      . One of the visits in Liquid Carriers was several days long; two were made for the sole purpose of negotiating the contract.

      . As noted above, Gates’s affidavit in opposition to this motion contradicts that assertion by claiming that this meeting established the substance of whatever agreement existed between him and Shipp. Although it is certainly appropriate for the court to consider sworn affidavits in ruling on a motion to dismiss for lack of personal jurisdiction, see Marine Midland Bank, N.A. v. Miller, 664 F.2d 899, 904 (2d Cir.1981), the contradiction between the pleadings and the motion papers militates against viewing the affidavit as determinative.


source: Caselaw Access Project

license: Public Domain

text:
    ACTMEDIA, INC., Plaintiff, v. Robert J. FERRANTE and Marketplace Communications Corp., Defendants.
    No. 85 Civ. 6946 (RLC).
    United States District Court, S.D. New York.
    Oct. 17, 1985.

      Bachner, Tally, Polevoy, Misher & Brinberg, and Ostrolenk, Faber, Gerb & Soffen, New York City (Stanley H. Lieberstein, of counsel), for plaintiff.
    Kaye, Scholer, Fierman, Hays & Handler, New York City, (Thomas A. Smart and Jo Davis, of counsel), and Stoel, Rives, Boley, Fraser & Wyse, Portland, Or. (Stephen S. Walters and Randolph C. Foster, of counsel), for defendants.
   OPINION

ROBERT L. CARTER, District Judge.

Plaintiff, Actmedia, Inc., (“Actmedia”) and defendant, Marketplace Communications Corp., (“Marketplace”) are corporate entities engaged in the business of providing in-store and display advertising in retail supermarkets. Plaintiff is a Delaware corporation, with its principal place of business located at Westhampton Beach, New York. Defendant is an Oregon corporation, with its principal place of business located in Tigard, Oregon. Defendant, Robert J. Ferrante, is a former employee of plaintiff who now works for Marketplace seeking to solicit business in New York.

Plaintiff initially brought suit in the New York Supreme Court, New York County. It claimed that Ferrante disclosed to Marketplace Actmedia’s concept, called Shelfvision, which had been developed in 1983, and solicited plaintiff's clients; that Marketplace developed its own Shelfvision as a result of its business relationship with Ferrante; and that Marketplace caused Ferrante to violate the duties he owed plaintiff. Plaintiff also charged that a brochure prepared by Marketplace concerning Shelf-vision contained false statements and that defendants were engaged in unfair competition against plaintiff.

Defendant removed the case to this court. After removal plaintiff filed an amended complaint. The principal thrust of plaintiff’s claims are now trademark infringement claims under the Lanham Act asserting that its registered trademark, Aislevision, was being infringed by defendants’ Shelfvision. Plaintiff was granted a temporary restraining order.

By order to show cause defendant was granted a hearing on its motion to reconsider the grant of the temporary restraining order and its motion to transfer the action to Oregon.

Plaintiff is a large organization which has apparently cornered the market of in-store and display supermarket advertising. It has been in the business since 1972. It operates on a national scale. Marketplace is new to the field, and is attempting to compete in the market. It has only six employees, including Ferrante: four in Oregon, one in California and Ferrante. Thus far its business has been almost entirely on the west coast, although it has an agent in New York, and through the agent and Ferrante it is seeking to expand beyond its Oregon-California beginnings. In any event, the activities about which plaintiff complains have occurred outside this district. The agreement between Safeway, Inc. and Marketplace was negotiated in California. Shelfvision, which plaintiff claims to be the infringing product, is manufactured in Seattle, Washington, and all Shelfvision advertising is developed, produced and distributed from Oregon. Marketplace has not sold any Shelfvision units in New York and has not entered a contract to sell any units in New York.

A motion to transfer pursuant to 28 U.S.C. § 1404(a) is addressed to the court’s discretion, Wyndham Associates v. Bintliff, 398 F.2d 614, 621 (2d Cir.), cert. denied, 393 U.S. 977, 89 S.Ct. 444, 21 L.Ed.2d 438 (1968); ICC Handels, A.G. v. S.S. Seabird, 544 F.Supp. 58 (S.D.N.Y.1982) (Duffy, J.), and the motion’s fate is based on an evaluation of the convenience of the parties and the interest of justice. F4 Design Ltd. v. Regensteiner Publishing Enterprises, Inc., 428 F.Supp. 1067, 1068-69 (S.D.N.Y.1977) (Bonsai, J.), citing Schneider v. Sears, 265 F.Supp. 257 (S.D.N.Y.1967) (Weinfeld, J.).

Plaintiff’s claims did not arise in New York. The action could have been brought in the District of Oregon where the corporate defendant’s principal place of business is located. Defendant, Ferrante, an employee of the corporate defendant, has consented to the transfer to Oregon. Venue as to the trademark infringement claims is appropriate in the district in which all the defendants reside or in which the claims arose. All activity in reference to these claims took place in Oregon, where defendant conceptualized and developed the mark Shelfvision and took steps to market the product.

The corporate defendant would be greatly inconvenienced and its business would be seriously disrupted in having to defend a suit here in New York. Oregon would provide by far a more convenient forum for the defendants in terms of witnesses — 4 of its 6 employees are in Oregon and a fifth, Ferrante, has consented to transfer to Oregon — and records. Plaintiff is an established organization, operating nationwide. While the necessity of defending this litigation in New York could bring ruin to defendant, no such consequence would occur to plaintiff if required to litigate in Oregon.

Ordinarily the plaintiff’s choice of forum is entitled to deference and will not readily be disturbed, Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 67 S.Ct. 839, 91 L.Ed. 1055 (1947). Indeed, the rule in this circuit is that plaintiff’s choice will not be disturbed unless the movant shows that both the balance of convenience and justice weighs heavily in favor of the transfer. Richardson Greenshields Securities, Inc. v. Metz, 566 F.Supp. 131, 134 (S.D.N.Y.1983) (Sweet, J.); Bankers Trust Co. v. Santos Suarez, 526 F.Supp. 1262, 1264 (S.D.N.Y.1981) (Brieant, J.). Defendant has met that burden. The sole factor in plaintiff’s favor is that its choice should prevail. However, since plaintiff did not choose this forum but had its case removed to this court, the rationale behind those cases placing emphasis on plaintiff’s choice becomes inapposite.

It would be both unfair and unjust to require the corporate defendant, a small start up operation, to defend a suit here concerning acts which took place some 3,000 miles away. Indeed, in such circumstances, even if plaintiff’s case had no merit, it would succeed if through the expense and disruption of litigating in this district Marketplace were eliminated as a viable competitor. Accordingly, for the convenience of the witnesses and in the interest of justice, the case is transferred to the District of Oregon.

The temporary restraining order is dissolved and the security posted by plaintiff is released.

IT IS SO ORDERED.


author: HAIGHT, District Judge:

text:
    INTERNATIONAL FIDELITY INSURANCE COMPANY and Debra Amanda Passley, Plaintiff, v. UNITED STATES IMMIGRATION AND NATURALIZATION SERVICE, NEW YORK DISTRICT OFFICE, Defendant.
    No. 84 Civ. 338-CSH.
    United States District Court, S.D. New York.
    Oct. 22, 1985.
    Schaier, Tribbitt and Schaier, New York City, for plaintiffs; Hermann Schaier, of counsel.
    Rudolph W. Giuliani, U.S. Atty. for the S.D. of N.Y., New York City, for defendant; Jorge Guttlein, Asst. U.S. Atty., of counsel.
   MEMORANDUM OPINION AND ORDER

HAIGHT, District Judge:

Plaintiffs International Fidelity Insurance Company (“Fidelity”) and Debra Amanda Passley filed their complaint in this action on January 16, 1984. Fidelity had issued a bond to secure the appearance before the Immigration and Naturalization Service (“INS”) of one Winston Passley, an alien. Plaintiff Debra Amanda Passley, a United States citizen, is the wife of Winston Passley. The complaint sought a declaratory judgment pursuant to 28 U.S.C. § 2201, and a review of adverse INS action pursuant to 8 U.S.C. § 1329. Plaintiffs also invoke 28 U.S.C. § 1331.

In the words of the complaint, plaintiff Fidelity sought a judgment declaring that:

“(a) Plaintiff was and continues to be in substantial compliance with the conditions of the delivery bond.
“(b) The determination that the delivery bond was breached on February 2, 1983 was arbitrary, unlawful, and contrary to law.”

Plaintiff Debra Passley sought a judgment declaring that:

“(a) Defendant’s delay in according plaintiff Passley’s husband immediate relative status based on her petitions in his behalf is unreasonable, unjustified, unlawful and contrary to 5 U.S.C. Sec. 706 (i).
“(b) Directing defendant to adjudicate Passley as entitled to immediate relative visa status forthwith.”
Complaint at pp. 11-12.

After joinder of issue, the parties cross-moved for summary judgment.

It is apparent from the motion papers that the relief requested by plaintiff Debra Amanda Passley has been mooted by subsequent events. The complaint was filed on January 16, 1984. Under date of January 18, 1984, the District Director of the INS New York office sent to Debra Passley, in care of her counsel, a notice stating that, as of January 11, 1984, Debra Passley’s petition to classify Winston Passley as an immediate relative of a United States citizen had been approved. That moots the cause of action pleaded by Debra Passley, which complained of the delay of INS in processing that petition, and prayed for judgment directing the INS to forthwith adjudicate Passley as entitled to immediate relative visa status.

What remains is plaintiff Fidelity’s cause of action seeking a declaration that it is not in breach of the delivery bond which it gave in respect of Winston Passley.

Fidelity’s obligations arising out of its bond are stated in the instrument as follows:

"... the obligor hereby furnishes such bond upon the following conditions: if said alien is released from custody and if the above mentioned obligor shall cause said alien to be produced or to produce himself to an immigration officer of the United States upon each and every request of such officer until deportation proceedings in his case are finally terminated or until said alien is actually accepted by such immigration officer for detention or deportation then this obligation shall be void; otherwise it shall immediately become due and payable.”

Fidelity gave this bond when Winston Passley, a citizen of Jamaica and non-immigrant crewman of a foreign vessel, was facing deportation after remaining in the United States beyond the permissible time. The statutory and regulatory scheme provides for the release of such individuals on bond. 8 U.S.C. § 1252(a); 8 C.F.R. § 103.6 (1984).

8 C.F.R. § 103.6(c) states:
“Substantial performance of all conditions imposed by the terms of a bond shall release the obligor from liability.”

8 C.F.R. § 103.6(e) states in pertinent part:

“A bond is breached when there has been a substantial violation of the stipulated conditions.”

The bond given by Fidelity is in the amount of $5,000.00, for delivery of Winston Passley on demand. That bond was posted with the INS on October 27, 1978.

There then ensued a series of petitions and administrative appeals before the INS on Passley’s behalf. In the view I take of this case, I need not describe those proceedings in detail. Ultimately Winston Passley and Fidelity were separately advised that the INS required the surrender of Passley to an INS officer on February 2, 1983. Passley did not surrender on that date. Instead, through counsel he filed additional administrative applications, specifically, an application for a stay of deportation, and a separate application for permission to reapply for admission to the United States after deportation. The District Director denied Passley’s application for a stay of deportation on March 7, 1983; and advised Fidelity that the bond had been breached on March 10, 1983. The basis for the asserted breach was Fidelity’s failure to deliver Passley for surrender to the INS on February 2, 1983. Fidelity prosecuted administrative appeals from the notice of breach, which were rejected.

In this Court, Fidelity makes two principal arguments. The first is that the INS acted arbitrarily and capriciously in rejecting applications made on Winston Passley’s behalf. The second argument is that Passley was prejudiced, in that context, by the inexcusable delay of the INS in granting Debra Passley’s petition, on Winston Passley’s behalf, for immediate relative immigration status. The conclusion for which Fidelity argues is that, in the totality of the circumstances, it should be regarded as having made “substantial performance” of the conditions of its bond, so that no liability arises.

I cannot accept these arguments. It is of course true that the INS cannot, by considering any failure to appear a warrant for forfeiture, effectively read “the requirement of ‘substantial’ violation out of the regulation,” International Fidelity Insurance Company v. Crosland, 490 F.Supp. 446, 448 (S.D.N.Y.1980) (Leval, D.J.). However, Crosland involved an alien’s inadvertent failure to appear, caused in part by the fact that no notice requiring his appearance had been sent to him, his attorney thereafter contacting the INS and offering to have the alien appear upon request. Notwithstanding those mitigating circumstances, the INS breached the bond. Judge Leval understandably remanded the case to the Regional Commissioner for further consideration as to the meaning, in these particular circumstances, of the qualifying adjective “substantial.” Id. at 449. Comparable circumstances of innocent, good-faith attempts at compliance are found in another case relied upon by Fidelity in the case at bar, Bahramizadeh v. United States Immigration and Naturalization Service, 717 F.2d 1170 (7th Cir.1983).

The instant case presents no such mitigating circumstances. Passley was directed to surrender for deportation. The condition of Fidelity’s bond was that he would do so. Passley did not surrender. I appreciate that his counsel made a written application for a stay of deportation, in lieu of surrender. However, the regulations specifically provide, in respect of such an application, that “neither the making of the request nor the failure to receive notice of disposition of the request shall relieve the alien from strict compliance with any outstanding notice to surrender for deportation.” 8 C.F.R. § 243.4. Faced with that explicit stricture, Fidelity cannot be heard to argue that it has made “substantial performance” of its obligations under the bond.

As for the alleged delay of the INS in processing certain aspects of this matter, Fidelity’s argument sounds essentially in estoppel. I may agree that INS did not distinguish itself in dealing with certain aspects of the matter, particularly clarification of Mrs. Passley’s status as a United States citizen. But it has been clear at least since Immigration and Naturalization Service v. Miranda, 459 U.S. 14, 103 S.Ct. 281, 74 L.Ed.2d 12 (1982), that delay on the part of the service does not in law rise to the level of “affirmative misconduct” which arguably might estop the Government from enforcing the immigration laws (although the Court in Miranda expressly left that question open, id. at 19, 103 S.Ct. at 283).

In short, the decision of the Associate Commissioner of the INS, rejecting Fidelity’s appeal from the order of the District Director declaring the bond breached, may not be successfully attacked in this Court.

CONCLUSION

The motion of plaintiff International Fidelity Insurance Company for summary judgment is denied.

The motion of defendant U.S. Immigration Service, New York City District Office, for summary judgment is granted.

The complaint on behalf of plaintiff Debra Amanda Passley is dismissed as moot.

In the exercise of my discretion, I deny defendant’s application for costs and attorney’s fees.

Defendant’s counsel is directed to settle a judgment consistent with this opinion on five (5) days’ notice.

It is SO ORDERED.


author: BARRINGTON D. PARKER, District Judge.

text:
    Daisy GREENFIELD, et al., Plaintiffs, v. DISTRICT OF COLUMBIA, et al., Defendants.
    Civ. A. No. 85-0903.
    United States District Court, District of Columbia.
    Nov. 8, 1985.

      Robert L. Bell, Washington, D.C., for plaintiffs.
    Arlene L. Robinson, Asst. Corp. Counsel, Washington, D.C., for defendants.
   MEMORANDUM ORDER

(Denying Reconsideration of Limitations Period)

BARRINGTON D. PARKER, District Judge.

Plaintiff has sued the District of Columbia government and several of its police officers pursuant, in part, to 42 U.S.C. § 1983. The suit stems from an incident in which plaintiff alleges that those officers used unnecessary and unlawful force while taking plaintiff into custody. Plaintiff also alleges that the government was negligent in failing to properly train and supervise its police officers.

Defendants have moved this Court to reconsider its May 22, 1985 ruling that the limitations period applicable to this § 1983 action is three years, as provided for by D.C.Code Ann. § 12-301(8) (“catchall” period). The motion for reconsideration was filed within several weeks of the scheduled trial date — November 7, 1985. For the reasons set forth below, defendants’ motion is denied.

A.

This Court’s May 22 Order considered the effect on the applicable limitations period of the Supreme Court's recent pronouncement in Wilson v. Garcia,—U.S.-, 105 S.Ct. 1938, 85 L.Ed.2d 254 (1985). Wilson dealt with a situation similar to the one presented here. In Wilson a respondent brought a § 1983 action to redress his alleged beating by a New Mexico state police officer. Petitioners moved to dismiss, pleading that the applicable Statute of Limitations barred the action. In denying petitioners’ motion, the district court rejected their claim that the New Mexico Tort Claims Act provided the applicable limitations period and, hence, barred the suit. Rather, the court held that the appropriate period was to be found in a “catchall” provision of the New Mexico Statute of Limitations, N.M.Stat.Ann. § 37-1-4 (four-year period). In affirming the district court, the court of appeals, for reasons later approved by the Supreme Court, held that, since § 1983 actions were most analogous to those founded upon injury to the person, the three-year period for personal injury actions should provide the applicable period for § 1983 actions. 731 F.2d 640, 650-51 (10th Cir.1984) (applying N.M.Stat. Ann. § 37-1-8).

In affirming the appellate decision, the Supreme Court agreed with the lower court that fidelity to the congressional purpose behind the enactment of the Reconstruction Civil Rights Acts requires that a uniform limitations period be applied to all § 1983 actions.—U.S.-, 105 S.Ct. at 1945-47. To obviate the need for drawing analogies between the many kinds of § 1983 actions and their state law counterparts, the Court held that a general limitations period, encompassing the full range of possible § 1983 actions, should be adopted. Id. Accordingly, it found that the applicable period should be that period provided for “general remedpes] for injuries to personal rights.” Id. 105 S.Ct. at 1948.

In their motion for reconsideration, defendants argue that two post- Wilson decisions have dealt with a situation not presented in Wilson, but presented in the instant case — a situation in which there is arguably more than one “personal injuries” limitations period. In the first of the cases, Jones v. Preuit & Maudlin, 763 F.2d 1250 (11th Cir.1985), plaintiff challenged the constitutionality of a certain pre-judgment attachment procedure, arguing that the three-year period governing suits on attachment bonds, Ala.Code § 6-6-148, also governed his § 1983 action. Instead, the district court applied a one-year “catchall provision,” and dismissed the suit. In overruling the lower court, the court of appeals focused on the distinction between common law trespass and trespass on the case. 763 F.2d at 1254-56. Because the latter cause of action encompassed only those acts that did not involve intentional conduct, the court held that the limitations period applicable to § 1983 actions was that governing suits in trespass. Id.

The second of the cases cited by defendants involved the discharge of a school teacher, which the teacher alleged was wrongful and in violation of her first amendment rights. Gates v. Spinks, 771 F.2d 916 (5th Cir.1985). In that case, plaintiff pressed the court to apply the Mississippi “catchall” provision, Miss.Code Ann. § 15-1-49 (six years). The court of appeals, affirming the district court, held that the one-year limitations period governing intentional torts barred plaintiffs § 1983 action. 771 F.2d at 919-20. In arriving at this conclusion, the court focused on the issue of intentionality, citing Jones, id. at 919, and rejected the argument that the most general limitations period should apply. Id. at 920. Rather, it reasoned that, since “[m]ost 1983 actions are predicated on intentional rather than negligent acts,” the one-year period governing intentional torts must provide the applicable period. Id. (emphasis added).

In addition to relying upon those two cases, defendants assert that in Wilson the Court rejected the sort of “catchall” provision represented by D.C.Code Ann. § 12-301(8) (applied to the instant case by this Court’s Order of May 22, 1985). Memorandum of Points and Authorities at [7] (citing Wilson,—U.S.-, 105 S.Ct. at 1948).

Taking up the last argument first, defendants’ citation to Wilson as supporting a rejection of all “catchall” periods is inapposite. In the first place, the Court merely stated that “it [is] unlikely that Congress would have intended to apply the catchall periods of limitations for statutory claims that were later enacted by many States.”—U.S.-, 105 S.Ct. at 1948 (emphasis added). Because, unlike the New Mexico “catchall” provision, that of the District of Columbia is not limited in its application to statutory claims, this portion of the Court’s analysis is not relevant to the instant case. In the second place, the District of Columbia has no limitations period applicable to all personal injury actions; rather, its most general limitations period governing personal injury actions is the “catchall” provision. See Alley v. Dodge Hotel, 501 F.2d 880, 881-82 n. 3 (D.C.Cir. 1974), cert. denied, 431 U.S. 958, 97 S.Ct. 2684, 53 L.Ed. 277 (1977); Marusa v. District of Columbia, 484 F.2d 828, 833 (D.C. Cir.1973).

More importantly, by asserting that this Court should apply the limitations period specifically governing intentional torts, defendants are asking the Court to do exactly what the Wilson Court was trying to prevent — to pick and choose from among the various state causes of action the one that most closely resembles the particular § 1983 action in question. See — U.S. -, 105 S.Ct. at 1945-47. Instead, the Wilson Court predicated its holding upon the need to find the most general provision available. Id. 105 S.Ct. at 1948. The goal was not to encompass “[m]ost 1983 actions,” Gates, 771 F.2d at 920, but “all § 1983 [actions].” Wilson,—U.S.-, 105 S.Ct. at 1947. Wilson counsels the selection of D.C.Code Ann. § 12-301(8) as the applicable limitations period in the instant case all the more so because plaintiff here has alleged negligent as well as intentional torts. Complaint Ml 26-30. To apply D.C.Code Ann. § 12-301(4) instead would not only fly in the face of Wilson, but would be wholly inappropriate to the present case.

B.

Because defendants filed their motion so close to the trial date, plaintiffs have moved this Court to impose sanctions pursuant to Fed.R.Civ.P. 11 and 16(f). Sanctions are appropriate, however, only where the offending party has acted at least in bad faith. Hall v. Cole, 412 U.S. 1, 5, 93 S.Ct. 1943, 1946, 36 L.Ed.2d 702 (1973); Lipsig v. Nat’l Student Marketing Corp., 663 F.2d 178, 181 n. 21 (D.C.Cir. 1980); Aero Corp. v. Dep’t of the Navy, 558 F.Supp. 404, 428-29 (D.D.C.1983). Because defendants raised a plausible legal theory in connection with a motion seeking relief central to the disposition of this action, the Court finds no element of bad faith to be present. Moreover, the filing of this motion has occasioned no delay.

Accordingly, it is this 5th day of November, 1985,

ORDERED

That defendants’ motion for reconsideration is denied.

That plaintiffs’ motion for sanctions is denied.

      . The case was referred to a United States Magistrate, on July 9, 1985, for purposes of discovery, pretrial and trial.

      . The respondent in Wilson also named the Chief of the New Mexico State Police as a defendant,. alleging that he was negligent in the training and supervision of Officer Wilson.

      . N.M.Stat.Ann. § 41-4-15(A) (two-year period). The New Mexico Supreme Court had previously held that that statute provided "the most closely analogous state cause of action." DeVargas v. New Mexico, 97 N.M. 563, 564, 642 P.2d 166 (1982). As the district court noted, "the matter of characterization [of a § 1983 action] should be treated as a federal question.” Wilson,-U.S.-, 105 S.Ct. at 1943.

      . In Wilson, the Court was faced with only a single provision governing actions "for [] injuries] to the person or reputation of any person.” N.M.Stat.Ann. § 37-1-8. The District of Columbia has one "catchall" period, D.C.Code Ann. § 12-301(8) (similar to N.M.Stat.Ann. § 37-1-4), and a period governing a litany of intentional torts. D.C.Code Ann. § 12-301(4) ("for libel, slander, assault, battery, mayhem, wounding, malicious prosecution, false arrest or false imprisonment”).

      . Ala.Code § 6-2-34(1) (six years "for any trespass to person or liberty, such as false imprisonment or assault and battery”).

      . Ala.Code § 6 — 2—39(a)(5) (“catchall” provision). Trespass on the case includes any act that "causes harm only indirectly and without an intentional act of force.” 763 F.2d at 1254 (citations omitted).

      . The court’s reasoning here is a bit unclear. Apparently the court felt that, ”[w]ith respect to tort personal injury actions,” both the “catchall" and the one-year period were equally general in their application. 771 F.2d at 920. Yet with respect to the run of all possible personal injury actions, including those based on negligent conduct, this proposition is invalid.

      . It is unclear why plaintiffs seek sanctions under Rule 16; defendants have flouted no pretrial order in this case.

      . Under the amended Rule 11, a party may be held to a standard stricter than that of "good faith.” See 2k Moore's Federal Practice ¶ 11.-01 [4] at 11-5, ¶ 11.02[2] at 11-12 n. 3 (relating to requirement of prefiling inquiry not relevant here).


text:
    COSTA LINE CARGO SERVICES, INC., as Agent for Costa Line, Plaintiff, v. McGRAW-EDISON COMPANY, Defendant.
    No. 84 Civ. 3614 (RLC).
    United States District Court, S.D. New York.
    Nov. 12, 1985.
    Brauner Baron Rosenzweig Kligler Sparber & Bauman, New York City, for plaintiff; Howard L. Simon, Francis P. Manfredi, of counsel.
    Freehill, Hogan & Mahar, New York City, for defendant; Robert L. Mahar, of counsel.
   OPINION

ROBERT L. CARTER, District Judge.

This case involves litigation for the payment of surcharges totalling $94,800 for detention and diversion of some trucks carrying containers with defendant’s cargo to various delivery points in Iraq, other than Baghdad or Mosul, the contracted points of delivery. Plaintiff seeks to assess some $42,600 in diversion charges and $52,200 in detention charges. Both sides move for summary judgment. Although there is some disagreement by each party as to the other’s 3(g) statement, the basic facts are not in dispute, and accord on the disputed facts is not essential to a determination of the summary judgment motions. Accordingly, we proceed to their disposition.

Defendant, McGraw-Edison Company (“McGraw”),- sold a quantity of air coolers and parts to the Iraq Trading Company during the latter part of 1981 and the early part of 1982. The contract called for sale f.o.b. Phoenix, Arizona, where defendant’s manufacturing plant was located, and delivery to Baghdad and Mosul by way of a Turkish port. The transaction involved a total of 596 containers of air coolers and 8 containers of parts — 510 containers were to be delivered to Baghdad and 94 containers were to be delivered to Mosul.

Two letters of credit were issued by the Iraq Trading Company in defendant’s favor with the Rafidian Bank in Baghdad and Chase Manhattan Bank in New York as the advising bank. One letter of credit covered the shipments going to Mosul and the other covered the cargo scheduled for delivery to Baghdad. At the time of each of the listed shipments, bills of lading from Costa Line Cargo Services, Inc. (“Costa Line”) covering the cargo and relating to the particular ocean vessel and voyage and the applicable invoice, legalized by the Embassy of Iraq in the United States, were presented to the Chase Manhattan Bank and draw downs against the letters of credit were effected in favor of the defendant in the amounts of the applicable invoice.

Plaintiff, Costa Line, and defendant entered into a contract of carriage of the cargo by sea to Iskenderun, Turkey, and then overland to Baghdad and Mosul. Cos-ta Line in turn entered into agreement with the Makzume Shipping Agency for the overland transportation of the cargo from Iskenderun to the two designated delivery destinations in Iraq. The cargo was shipped in plaintiff’s container vessels to the Turkish port and overland by truck to Iraq at a cost of $6,700 per container.

The cost of the inland shipment charged by plaintiff was $2,305.40 per 40 foot container. Costa Line’s normal charges for such inland shipment (Iskenderun to Baghdad) was $2,240 per 40 foot container of up to 35,200 lbs, as evidenced by its tariff on file with the Federal Maritime Commission. The surcharge for this inland shipment was $65.40 per container for a total surcharge of $39,501.60. (Defendant’s Opposition and Reply Affidavit at 5-6).

The cargo arrived at Iskenderun on plaintiff’s vessels, was discharged and loaded onto trucks for transportation to Iraq. Inland way bills were issued listing defendant as shipper and the Iraq Trading Company as receiver. The inland route to Baghdad involved crossing the Turkey/Iraq border and proceeding approximately 600 kilometers to Iraq Customs Authority in Baghdad, where the diversions and detention charges, which plaintiff seeks to recover from defendant, were incurred.

The cargo arrived at Iskenderun on 5 shipments: on March 5, 1982, Spetses Island arrived carrying 129 containers — 53 were diverted; on May 6, 1982, the Costa Mediterránea (Voyage 1) arrived carrying 108 containers — none was diverted; on June 5, 1982, the Costa Atlántica (Voyage 2) arrived carrying 126 containers — none was diverted; on July 8, 1982, the Costa Mediterránea (Voyage 2) arrived carrying 122 containers — 40 were diverted; and on August 6, 1982, the Costa Atlántica (Voyage 3) arrived carrying 119 containers — 53 were diverted.

On arrival at Iskenderun, the containers were off loaded from plaintiff’s vessels onto trucks for inland transportation to Baghdad and Mosul. When the trucks arrived at Iraq Customs Authority in Baghdad, some 600 kilometers from the Turkish/Iraq border, a representative of the Iraq Trading Company was present, and this representative would direct the truckers from time-to-time to divert part of the shipment scheduled for delivery to Baghdad to other locations in Iraq.

These directives, plaintiff argues, had the weight of the Iraq Customs Authority which had to approve delivery to any place other than that listed on the way bill, which was Baghdad. Moreover, plaintiff contends, it could not have delivered the cargo to Baghdad contrary to the directive to deliver the cargo to another destination because the cargo would have been subject to damage or theft if discharged in Baghdad and not accepted by the Iraq Trading Company. The truckers had to remain with the cargo until advised by the Iraq Trading Company that space was available for unloading either in Baghdad or at the diverted destination. Two days’ free time was allowed for delivery. Thereafter, for each day of waiting, a demurrage charge of $100 per day, per truck was incurred. Because a state of war existed in Iraq, telephone communications from Iraq to the outside world were virtually non-existent, rendering it impossible for plaintiff to contact defendant for permission to incur these costs before abiding by the instructions of the Iraq officials. (Aff. of Ronald Makzume).

Defendant contends that at the time the diversion and detention took place, it was no longer the owner of the cargo. Plaintiff counters that while ownership had technically passed from defendant, it maintained a proprietary interest in the containers since prior to shipment defendant had executed a performance bond in the form of a standing letter of credit in the amount of $1 million or roughly 10% of the purchase price of the goods. The bond was to be discharged only on confirmation from the Iraq Trading Company to the issuing bank of the arrival and inspection of the last shipment.

Determination

Since the contract was f.o.b. Phoenix, Arizona, ownership of the containers had already passed to the Iraq Trading Company when the various shipments arrived at the Turkish port and were subsequently diverted or detained during the inland journey. Phillips Puerto Rico Core, Inc. v. Tradax Petroleum, Ltd., 782 F.2d 314 (2d Cir.1985); Madeirense do Brasil S/A v. Stulman-Emrick Lumber Co., 147 F.2d 399, 402 (2d Cir.1945) (“under a c.&f. contract the seller fulfills his duty on shipment of the goods, and that the risk thereafter is on the buyer unless other terms of the contract indicate a contrary intention”), cert. denied, 325 U.S. 861, 65 S.Ct. 1201, 89 L.Ed. 1982 (1945).

The existence of the performance bond does not change that. The cases cited by plaintiff, C.H. Leavell & Co. v. Hellenic Lines, Ltd. 1969 AMC 2177, and International Packers Ltd. v. Federal Maritime Commission, 356 F.2d 808 (D.C.Cir.1966), do not appear to be on point. In one, the surcharge resulted from an unexpected occurrence during the voyage and in International, the shippers, aware that a strike had closed United States east coast ports, requested the carrier not to unload the cargo at available alternate ports, thus authorizing it to keep the cargo, which was perishable, under refrigeration on the carrier’s vessel until an east coast port became available. Inferentially, at least, the shippers had in fact agreed to the surcharge. There are no such facts on this record to warrant a conclusion that defendant had consented to the added tariff. The action was unquestionably unilateral. The issue is whether plaintiff may unilaterally impose these surcharges on the defendant.

Under ordinary circumstances, a shipping carrier is held to its published tariff. Plaintiff is subject to the Shipping Act of 1916, as amended in 1984, 46 U.S.C. § 1701 et seq. (“the Act”). Under the Act plaintiff, as a common carrier by water, is required to file its tariffs with the Federal Maritime Commission, to keep such tariffs open for public inspection showing all its rates and charges, and to adhere to the rates, charges and services as set forth in its tariffs. Any rules or regulations which may affect or vary the rates the tariffs disclose must be set out. The carrier cannot charge a greater or lesser rate for its services than the tariffs require.

Plaintiff complied with the requirements of the Act and filed with the Commission tariffs covering the transportation of the cargo involved here. The tariffs provided freight rates and other charges for the inland movement in 40 foot containers from Phoenix to Houston, ocean carriage from Houston to Iskenderun, Turkey and inland movement from Iskenderun to Baghdad and Mosul, Iraq. Costa Line’s Intermediate Tariff No. 1, FMC-33, effective January 1, 1982, through December 31, 1982, and Costa Line’s Bill of Lading and Rules and Regulations Tariff FMC-26, effective January 1, 1982, to December 31, 1982, were the filed tariffs governing the movement of this cargo. The applicable tariff has the effective force of law. State of Israel v. Metropolitan Dade County, Florida, 431 F.2d 925, 928 (5th Cir.1970); Lowdeh v. Simonds-Shields-Lonsdale Grain Co., 306 U.S. 516, 520, 59 S.Ct. 612, 614, 83 L.Ed. 953 (1939). Deviation from its terms is prohibited. Louisville & Nashville R.R. Co. v. Maxwell, 237 U.S. 94, 97-98, 35 S.Ct. 494, 495, 59 L.Ed. 853 (1915). The carrier cannot contract with a shipper for a special service or rate unless the same is published. The purpose of this requirement is to require the carrier to render its services to all on like terms. Kansas City Southern R.R. Co. v. Carl, 227 U.S. 639, 653, 33 S.Ct. 391, 395, 57 L.Ed. 683 (1913); United States v. Interstate Commerce Commission, 198 F.2d 958, 966 (D.C.Cir.1952).

Plaintiff was required by the Commission to publish a through route and through rates. 46 C.F.R. 536.8(b). A through route is defined as an “arrangement for the continuous carriage of goods between points of origin and destination, either or both of which lie beyond port terminal areas.” 46 C.F.R. 536.8(a)(1).

A through rate is defined as “a rate expressed in a single number representing the charge to the shipper by a carrier or carriers holding out to provide transportation over a through route.” 46 C.F.R. 536.-8(a)(2).

The rate listed was $6,700 Phoenix to Baghdad for each container. The tariff makes no mention of detention or deviation charges. Under applicable law, the surcharges cannot be exacted. See St. Louis Southwestern Railway Co. v. Garvey Elevators, Inc. 505 F.2d 625 (5th Cir.1974); American Trading and Produce Corp. v. Shell International Marine, Ltd., 453 F.2d 939 (2d Cir.1972).

Plaintiff relies, at least in part, on Clauses 6 and 7 in its bill of lading. Clause 6 allows for discharge of goods other than at the port of discharge where because of “risk ... detention, damage, delay or disadvantage” to the ship or cargo, “in the judgment of the carrier”, it is “unsafe, imprudent or unlawful” to proceed to “discharge the goods at the port of discharge”. In such a case reasonable compensation may be exacted by the carrier.

The clause seems clearly applicable to the ocean voyage portion of the transportation.

Clause 7 reads:
The Carrier, Master and ship shall have liberty to comply with any orders or directions as to loading, departure, arrival, routes, ports of call, stoppages, discharge, destination, delivery or otherwise howsoever given by the government of any nation or department thereof or any person acting or purporting to act with the authority of such government or of any department thereof, or by any committee or person having under the terms of the war risk insurance on the ship, the right to give such orders or directions. Delivery or other disposition of the goods in accordance with such orders or directions shall be a fulfillment of the contract voyage____
In addition to all other liberties herein the Carrier shall have the right to withhold delivery of, reship to, deposit or discharge the goods at any place whatsoever, surrender or dispose of the goods in accordance with any direction, condition or agreement imposed upon or exacted from the Carrier by any government or department thereof or any person purporting to act with the authority of either of them. In any of the above circumstances the goods shall be solely at their risk and expense and all expenses and charges so incurred shall be payable by the owner or consignee thereof and shall be a lien on the goods.

Plaintiffs Memorandum of Law in Support of its Motion for Summary Judgment and in Opposition to Defendant’s Motion for Summary Judgment, pp. 16, 17. This clause also has applicability to the ocean or marine portions of the voyage.

Moreover, there was no danger or risk involved here and no emergency circumstances. What appears to have occurred is that the Iraq Trading Company had the truckers divert cargo from time to time to suit its convenience in having some of the air coolers delivered at places other than the contracted destinations of Baghdad or Morsul. Plaintiff complied with these requests and now seeks to pass expenses incurred on to defendant rather than the Iraq Trading Company.

Plaintiff charged defendant $65.40 more per container for the inland route from Iskenderun to Baghdad in apparent contemplation of the chaos and resulting difficulties that might be encountered in the final stages of its inland carriage of these air coolers in Iraq because of Iraq’s state of war. Perhaps it should have set a higher tariff. In any event, it is not entitled to receive any additional surcharge from defendant.

Defendant’s motion for summary judgment is granted.

IT IS SO ORDERED.

      . The above is found in the 1983 edition of C.F.R. 500 to end (Shipping). In the more recent publication of the shipping regulations, 46 C.F.R. 536 has been entirely eliminated. However definitions of a through rate appear at 46 C.F.R. § 550.2x and § 580.8(a)(1) and a through route is defined at 46 C.F.R. § 550.1(y) and § 580.8(a)(2). The definitions are substantially the same as in the 1983 regulations.


author: ZIEGLER, District Judge.

text:
    Tom FLAHERTY, Controller of the City of Pittsburgh, Plaintiff, v. John R. TORQUATO, Jr., Judy Ellis, Allen R. Stoneman, David I. Herbert, Robert Rade Stone and Ronald C. Schmeiser, Defendants.
    Civ. A. No. 85-1525.
    United States District Court, W.D. Pennsylvania.
    Nov. 26, 1985.

      Kevin C. Forsythe, Pittsburgh, Pa., for plaintiff.
    Harold Gondelman, Bernard D. Marcus, Frederick W. Thieman, Pittsburgh, Pa., James R. DiFrancesco, Johnstown, Pa., Alan R. Stoneman, Orange, Cal., for defendants.
   MEMORANDUM OPINION

ZIEGLER, District Judge.

The Controller of the City of Pittsburgh, Pennsylvania, filed a civil action for money damages predicated on the Racketeer Influenced and Corrupt Organizations Act of 1970. 18 U.S.C. §§ 1964(a) and (c). Plaintiff alleges that defendants participated in a scheme to obtain government contracts through the corruption of public officials, and that the controller unwittingly approved these illegal contracts for the City of Pittsburgh (“City”) in the sum of $150,-000. Defendants have filed motions to dismiss under Fed.R.Civ.P. 12(b) contending that plaintiff lacks standing. After reviewing the complaint and exhibits thereto, we find that plaintiff has suffered no injury, real or threatened, for which relief can be granted. The complaint will be dismissed for want of jurisdiction.

I. History of Case

The instant controversy arises following a number of successful prosecutions involving Computer Technology Associates, Inc. (CTA), and others, in the United States District Court for the Middle District of Pennsylvania. According to the complaint, defendants, Torquato, Ellis and Stoneman, doing business in California as CTA, Ltd., induced Robert Stone, a member of Council of the City of Pittsburgh, to advocate the company for a contract to recover Social Security overpayments made by the City and its employees. Defendant, Ronald Schmeiser, Finance Director of the City, was named for his participation in the contract. The complaint alleges that plaintiff, as controller, signed the CTA contract in good faith when presented by Schmeiser.

Plaintiff alleges that the act of signing the unlawful contract injured his “property and business” in several respects. First, the controller’s office spent time and resources to conduct an audit of CTA’s work under the contract. Second, an additional expenditure of personnel time was required to perform again the Social Security recovery work and for re-auditing of that work. Third, plaintiff is personally liable for the $150,000 spent under the CTA contract because Section 406 of the Pittsburgh Home Rule Charter renders the controller and all sureties jointly and severally liable for all funds unlawfully disbursed.

Defendants, Schmeiser, Stone, Herbert and Ellis have moved to dismiss for lack of standing. In addition, defendants, Schmeiser and Stone have moved for attorney’s fees under Fed.R.Civ.P. 11.

II. Discussion

When faced with a motion to dismiss, a district court must determine whether the allegations of the complaint, taken as true and in a light most favorable to the plaintiff, state a claim recognized at law and upon which relief , can be granted. Hughes v. Rowe, 449 U.S. 5, 101 S.Ct. 173, 66 L.Ed.2d 163 (1980). To make such a determination, the court must consider the allegations of the complaint and exhibits attached thereto, and take judicial notice of relevant laws. Iacaponi v. New Amsterdam Casualty Co., 379 F.2d 311 (3d Cir.1967), cert. denied, 389 U.S. 1054, 88 S.Ct. 802, 19 L.Ed.2d 849 (1968). Defendants challenge the instant complaint on the ground that no injury is alleged and, therefore, no relief can be granted.

Actual or threatened injury is a precedent to recovery in federal court. As the Supreme Court stated in Los Angeles v. Lyons, 461 U.S. 95, 101, 103 S.Ct. 1660, 1664, 75 L.Ed.2d 675 (1983), abstract injury is not enough for a plaintiff to state a claim recognized under the “case or controversy” requirement of Article III of the United States Constitution. A plaintiff must show that he “has sustained or is immediately in danger of sustaining some direct injury” as the result of the challenged official conduct and the injury or threat of injury must be both “real and immediate,” not conjectural or hypothetical. Id. at 102, 103 S.Ct. at 1665.

The requirement of actual injury assures that “the legal questions presented to the court will be resolved, not in the rarified [sic] atmosphere of a debating society, but in a concrete factual context conducive to a realistic appreciation of the consequences of judicial action.” Valley Forge College v. Americans United, 454 U.S. 464, 472, 102 S.Ct. 752; 758, 70 L.Ed.2d 700 (1982). A federal court does not place its imprimatur upon the actions of a plaintiff or defendant; it seeks only to grant relief where the plaintiff has been injured wrongfully by the defendant. Article III, therefore, restricts the exercise of judicial power, which can “so profoundly affect the lives, liberty, and property of those to whom it extends,” to litigants “who can show injury in fact resulting from the action which they seek to have the Court adjudicate.” Valley Forge College, supra at 473, 102 S.Ct. at 759.

In the instant case, the Controller asserts jurisdiction under Sections 1964(a) and (c) of the Racketeer Influenced Corrupt Organizations Act of 1970. 18 U.S.C. §§ 1964(a) and (c). Section 1964(c) states:

Any person injured in his business or property by reason of a (RICO) violation ... may sue therefor in any appropriate United States district court and shall recover threefold the damages he sustains and the cost of the suit, including a reasonable attorney’s fee.

Plaintiff states that his “property” has been injured because he is strictly liable to the City for $150,000 for approving a fraudulent contract for CTA. His second alleged injury is to his “business” in that the controller’s office had to divert time and resources to conduct an audit of CTA’s work and to recalculate the Social Security overpayments.

We find no injury, real or threatened, to plaintiff’s “property.” The complaint does not allege that the City or the FICA Trust Account has demanded that plaintiff pay the contract price, nor does the complaint allege that any demand has been threatened. Although not relevant to whether the complaint has stated an actual injury, the Solicitor of the City has stated under oath that “[t]he City has no intention of seeking any damages against Mr. Flaherty or his office resulting from his signing of the warrant.” Affidavit of D.R. Pellegrini, at paragraph 7.

Plaintiff argues, however, that no demand by the City is necessary for standing. He contends that he is injured as a matter of law because the Pittsburgh Home Rule Charter renders him strictly liable for $150,000. Plaintiff implores this court to take judicial notice of such liability so that he can assert a civil action under RICO. In his 107-page brief opposing the motions to dismiss, plaintiff’s counsel assumes the awkward position of arguing that his client is liable in order to allege an injury. An example of this stance can be found at page 32 of the brief: “Both the Plaintiff’s statutory liability for unlawful disbursements (which is the concomitant of his power to determine the legality of all payments in the first instance) and his additional undertaking under the terms of his bond compel the conclusion that the Plaintiff is strictly liable for unlawful disbursements from the Treasury of the City of Pittsburgh.”

We find plaintiff to be unnecessarily contrite. Thousands of potential defendants have escaped strict liability because suit was never filed. They have not raced to the courthouse to assert what amounts to a counterclaim before they were threatened with liability. Indeed, a federal district court cannot exercise subject matter jurisdiction where the federal question appears only as a defense. Pan American Petroleum Corporation v. Superior Court of Delaware, 366 U.S. 656, 81 S.Ct. 1303, 6 L.Ed.2d 584 (1961). Plaintiff cites The Dimitrios Chandris, 43 F.Supp. 829 (ED.Pa.1942), aff'd, 133 F.2d 124 (3d Cir. 1943), for the proposition that actual injury occurs where a litigant is faced with strict liability imposed by statute. In that case, however, standing existed because a fine was imposed yet not paid; standing did not exist before the fine was imposed by the proper authorities.

Further, we note that plaintiff is seeking approximately $500,000 in money damages for alleged injuries. He is not seeking declaratory relief for threatened injuries under the Home Rule Charter. Plaintiff alleges actual, compensable injuries, not a threatened future injury. Reading the complaint in a light most favorable to plaintiff, we cannot find any actual, compensable injury to plaintiff’s property.

Secondly, plaintiff alleges actual, compensable injury to his “business” under jurisdiction granted by Section 1964(c) of RICO. The Controller argues that defendants’ alleged RICO violation forced his staff to conduct an audit beyond the normal course of business. Plaintiff alleges injury to his “business” because “this audit disrupted the normal course of business by making it necessary to reallocate staff and supervisory time thus curtailing the ability of Plaintiff’s office to perform its several duties mandated by law.” Plaintiff’s brief at 91-92.

The exhibits to the complaint reveal that plaintiff does not exercise autocratic control over the city controller’s office. Exhibit B indicates that the office is a department of the City of Pittsburgh. Accordingly, the controller’s office is not plaintiff’s “business” within the meaning of Section 1964(c). Moreover, if any losses were incurred as a result of the CTA contract and the special audit, such losses were incurred by the City. The complaint does not state that the controller’s office suffered any particular loss. In fact, the special audit report, attached to the complaint as an exhibit, states unequivocally at p. 7 that: “The City of Pittsburgh has suffered a financial loss as a result of the negligent performance of CTA in calculating the Social Security refunds. As a result the City must use their own employees to recalculate the refunds to ensure that each employee receives the correct amount.” (Emphasis added.)

As an alternative basis for standing, plaintiff argues that he should be permitted to recover from defendants because the City will not take such actions for political reasons or conflicts of interest. Plaintiff states that the Solicitor, empowered to file suit to recover damages from the principals in the CTA contract, has refused to take action because of loyalty to Stone and Schmeiser.

Third-party standing is generally discouraged in federal court. Warth v. Seldin, 422 U.S. 490, 95 S.Ct. 2197, 45 L.Ed.2d 343 (1975). “The plaintiff generally must assert his own legal rights and interests, and cannot rest his claim to relief on the legal rights or interests of third parties.” Id. at 499, 95 S.Ct. at 2205. This rule assures the court that the issues before it will be concrete and sharply presented. Baker v. Carr, 369 U.S. 186, 204, 82 S.Ct. 691, 703, 7 L.Ed.2d 663 (1962). The Supreme Court has found third-party standing under Article Ill’s case or controversy requirement in those rare cases where practical obstacles prevent a party from asserting rights on its own behalf. See Craig v. Boren, 429 U.S. 190, 97 S.Ct. 451, 50 L.Ed.2d 397 (1976). Although the Solicitor’s alleged loyalties may frustrate plaintiff, these loyalties do not present the City with practical obstacles to enforcement of its rights. In any event, this alternative theory of third-party standing is not evident from the allegations of the complaint.

Our holding today is based solely on plaintiff’s failure to allege actual injury to meet Article Ill’s “case or controversy” requirements. Because the claim is brought under RICO, which grants standing to “[a]ny person injured,” we need not consider standing provisions of the Pennsylvania Rules of Civil Procedure (Pa.R.C.P. 2102(b) or the City’s Home Rule Charter (Section 201). 18 U.S.C. 1964(c). The Supremacy Clause, which elevates federal law above that of the states, requires us to consider whether plaintiff has standing under federal law upon his federal law claim. U.S. Const, art. VI, cl. 2. Jersey Central Power & Light Co. v. Lacey Township, 772 F.2d 1103, 1110 (3d Cir.1985).

Also, today’s holding does not deprive plaintiff of state court remedies. If, as plaintiff alleges, the City of Pittsburgh is not taking appropriate action to recover losses incurred in the CTA contract, plaintiff may seek writs of mandamus or prohibition. These writs, which would compel the City to perform duties imposed by law, are available through Pennsylvania courts. Branchick v. Commonwealth, Department of Labor and Industry, 496 Pa. 280, 436 A.2d 1182 (1981); Commonwealth, et rel. Camelot Detective Agency, Inc. v. Specter, 451 Pa. 370, 303 A.2d 203 (1973). Under the facts as alleged, the remedy of mandamus is not available in federal court. 28 U.S.C. § 1361.

Next, we consider the motion for attorney’s fees and costs filed by Stone and Schmeiser. Fed.R.Civ.P. 11 states that, if a pleading is interposed for any improper purpose, such as to harass or to cause unnecessary delay or needless increase in the cost of litigation, the court shall impose upon the person who signed it and the represented party an appropriate sanction, which may include attorney’s fees and court costs. Defendants argue that plaintiff instituted the instant suit solely to embarrass defendants and to gain publicity for himself to further political ambitions. While we have addressed only his standing, and not the merits of a RICO claim, it is arguable that a proper plaintiff may successfully bring a RICO action against these defendants. Therefore, the underlying claim is not frivolous. Whether the instant complaint was intended to harass, we cannot say with a reasonable degree of confidence. Plaintiff did conduct a news conference after filing the complaint and gained publicity, but he was quoted as saying that any recovery would inure to the City of Pittsburgh. His intent is unclear. Defendants’ motions for counsel fees will be denied.

III. Summary

Because the complaint has not alleged an actual injury, real or threatened, plaintiff has not presented an Article III case or controversy over which this court has jurisdiction. Plaintiff’s complaint will be dismissed. In addition, we shall dismiss the pendent state law claim under the doctrine of United Mine Workers v. Gibbs, 383 U.S. 715, 86 S.Ct. 1130, 16 L.Ed.2d 218 (1966).

Because sufficient evidence does not support defendants’ assertion that the complaint was filed for an improper purpose, defendants’ motions for attorney’s fees and costs will be denied.


text:
    Charles S. FOLTZ, et al., Plaintiffs, v. U.S. NEWS & WORLD REPORT, INC., et al., Defendants.
    Civ. A. No. 84-0447.
    United States District Court, District of Columbia.
    Nov. 26, 1985.
    Alan Raywid, John D. Seiver and Susan P. Baxter, Cole, Raywid & Braverman, Washington, D.C., for plaintiffs.
    Nell Strachan, Venable, Baetjer & Howard, and Lawrence Latto, Shea & Gardner, Washington, D.C., for defendants.
   MEMORANDUM ORDER

(Dismissing Claims Against Defendant Mercantile and Defendants Langston, Glassman, Mashek and Rice)

BARRINGTON D. PARKER, District Judge.

In a Restated Fifth Amended Complaint, the plaintiffs have named as added defendants the Mercantile-Safe Deposit and Trust Company (“Mercantile”) and four individuals: Gretchen Langston, James Glassman, John Mashek and Neil Rice, all members of the current Plan Committee. Plaintiffs charge that these defendants breached fiduciary duties owed them by approving a disbursement of funds held by the U.S. News Profit-Sharing Plan (“Plan”) in July 1985. The disbursement followed upon, but did not violate, this Court’s Order of June 14, 1985, enjoining distribution of a portion of the funds. All defendants have moved to dismiss on the grounds that the claims advanced against them are premature. In addition, Mercantile argues that plaintiffs fail to state a claim as to it, because Mercantile is not a fiduciary under the controlling statute, the Employee Retirement Income Security Act (“ERISA”), 29 U.S.C. § 1001, et seq.

Identical motions were filed by the same defendants in a newly-filed proceeding, Richardson, et al. v. U.S. News & World Report, et al., 623 F.Supp. 350 (D.D.C.1985), which the Court has granted on this date. The claims in Richardson against the defendants were dismissed both because the claims were purely hypothetical, and thus did not present a justiciable ease or controversy, and because the claims did not lie against these defendants, none of whom stood in a fiduciary relation to the plaintiffs at the relevant time.

The Foltz plaintiffs, however, acknowledging the importance of proving some duty owed to them that would render it wrongful for these defendants to have made any distribution of funds to the possible prejudice of rights that plaintiffs may have acquired in those funds, have argued a theory not elaborated by the Richardson plaintiffs. Specifically, the Foltz plaintiffs contend that they are current, not former, participants in the U.S. News Profit-Sharing Plan and, hence, that these defendants were under a fiduciary obligation to recognize and to protect plaintiffs’ interests. While intriguing at first glance, this theory is completely without merit.

Plaintiffs rely upon Saladino v. I.L.G. W.U. Nat. Retirement Fund, 754 F.2d 473 (2d Cir.1985) for the proposition that “former employees with a colorable claim to vested benefits” fall within the category of persons who “may become eligible” to receive benefits under ERISA. Id. at 476. However, the Saladino court went on to hold that the plaintiff was not a plan participant within the meaning of ERISA because he did not fall within the definition of a participant contained in the relevant plan document. Id. at 477. To the extent that the terms of the plan in question control the issue of whether one “may become eligible” to receive benefits, the Foltz plaintiffs clearly are not current participants in the U.S. News Plan.

The U.S. News Plan Document provides that a “member” in the Plan remains a member “so long as he or she is actively at work and so long as a continuous common-law employer-employee relationship is maintained between the Employer and such person.....” Plan Doc. at ¶ 1.9(a) (submitted as Plaintiffs’ Exhibit 6 in Support of Motion for Preliminary Injunction). The Plan Document further provides that

[notwithstanding any other provisions of this Plan, a retired Member shall not again become a Member or become entitled to share in a further allocation of the Employer’s contribution hereunder regardless of the number of hours in any period that the retired Member may work for the Employer as a part-time consultant or otherwise.

Id. at II 1.9(c). The Plan quite clearly does not contemplate that separated employees will continue to “participate” in the Plan long after their accounts have been liquidated.

It should also be noted that the Court has already visited the issue, in another context, of whether plaintiffs are “continuing participants” in the Plan. In its Order of August 23, 1985, the Court dismissed the claims brought under ERISA against the Plan by those employees who retired in 1974, prior to the effective date of ERISA. In arriving at that conclusion, the Court expressly rejected plaintiffs’ arguments that they were continuing participants and, hence, that actions taken by defendants after 1975 had some retroactive effect on the interests of plaintiffs who retired before 1975.

Finally, if plaintiffs are continuing participants in the Plan, then they, and all other U.S. News employees similarly situated, would be participants to the extent of any depreciation as well as appreciation in the Plan assets. It strains the imagination to think that the Plan could somehow demand of its former employees rebates reflecting the amounts that they may have been overpaid. Moreover, such a scheme would demand that the Plan administrators constantly calculate and recalculate the benefits owed or owing to all of the magazine’s former employees.

Accordingly, it is this 26th day of November, 1985,

ORDERED

That defendants’ motions are granted and the plaintiffs’ claims against defendant Mercantile and defendants Gretchen Langston, James Glassman, John Mashek and Neil Rice are dismissed without prejudice.

      . Just as in Richardson, plaintiffs’ claims here are dismissed without prejudice.

      . ERISA defines a plan "participant” as ,
      any employee or former employee of an employer, or any member or former member of an employee organization, who is or may become eligible to receive a benefit of any type from an employee benefit plan which covers employees of such employer or members of such organization, or whose beneficiaries may be eligible to receive any such benefit.
      Section 3(7), 29 U.S.C. § 1002(7).

      . Significantly, no member of the class has elected continued participation in the Plan after separation, as opposed to a lump-sum payment or an annuity. Only six U.S. News employees since 1962 have elected to continue to maintain an account balance in the Plan. Plaintiffs’ Statement of Material Facts Not in Genuine Issue ("S.M.F.”) ¶ 100 (citing U.S. News Req. for Adm. ¶ 19). Of these six former employees, none are in the plaintiff class. S.M.F. ¶ 101 (citing U.S. News Ans. to Interrog. ¶ 17); S.M.F. ¶ 106 (citing Plaintiffs’ Exhibit 7) (Sweet Profit-Sharing Fund Agreement); S.M.F. ¶ 108 (citing Keker Depo. at 134).

      . See ERISA §§ 414, 514, 29 U.S.C. §§ 1114, 1144.

      . Of course, plaintiffs would contend that the circumstances of their case place them in a unique situation that demands recalculation of their benefits. Such an argument, however, goes to the merits of whether any monies are owed them; it does not suggest that former participants in the Plan can, in a principled way, be considered current participants.


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

text:
    UNITED STATES of America, Plaintiff, v. Curtis Vaughan SHORT, Defendant.
    No. CR-R-84-38-ECR.
    United States District Court, D. Nevada.
    Nov. 26, 1985.

      Brian L. Sullivan, Asst. U.S. Atty., Reno, Nev., for plaintiff.
    Carter R. King, Reno, Nev., for defendant.
   ORDER

EDWARD C. REED, Jr., District Judge.

Defendant Short has filed a Fed.R. Cr.P. 35(b) motion to reduce the 18 months sentence imposed on him May 22, 1985, or, in the alternative, to grant him credit for time served awaiting trial while in the custody of the U.S. Marshal. The motion has been filed so as to avoid the 120-day limitation specified by the Rule to make such a motion. The defendant acknowledges that the real issue is whether credit against his sentence must be given for the time he was being held in a Montana prison because of a federal detainer and the time he was in the custody of the U.S. Marshal, both being in connection with the federal offense for which sentence was imposed. Affidavits have been submitted on behalf of the defendant to show that he would have been free on bail pending appeal of his Montana state conviction, but for the federal detain-er.

The circumstances are not appropriate for a discretionary reduction of sentence pursuant to Rule 35(b). See 9 Fed.Proc. L.Ed. § 22.970 (1982).

If the defendant’s release on bail as to the state charges was prevented solely because of the federal detainer, he would be entitled to credit toward his federal sentence (provided he was not given credit for that time against his state sentence). United States v. Dovalina, 711 F.2d 737, 740 (5th Cir.1983); United States v. Blankenship, 733 F.2d 433, 434 (6th Cir.1984).

According to the defendant’s moving papers, he has requested the parole authorities to rule that he is entitled to the credit he seeks. This is an essential first step, for it is the administrative responsibility of the Attorney General, the Department of Justice and the Bureau of Prisons to compute sentences and apply credit where it is due; it is not the province of the sentencing court. United States v. Clayton, 588 F,2d 1288, 1292 (9th Cir.1979); Chua Han Mow v. United States, 730 F.2d 1308, 1313 (9th Cir.1984). If the administrative authorities fail to act within a reasonable time, perhaps a petition for a writ in the nature of mandamus might be appropriate. On the other hand, if those authorities act by denying credit, review could be accomplished by a petition for a writ of habeas corpus under 28 U.S.C. § 2241. United States v. Giddings, 740 F.2d 770, 772 (9th Cir.1984).

The defendant’s Rule 35 motion is, therefore, DENIED.