author: CONTI, District Judge.

text:
    Maria Esther MALDONADO De VASQUEZ, Petitioner, v. David N. ILCHERT, District Director of the United States Immigration and Naturalization Service, Respondent.
    No. C-85-4779 SC.
    United States District Court, N.D. California.
    Aug. 7, 1985.
    Leslie Balog, Office of Francis Garcia-Rodriguez, Oakland, Cal., for petitioner.
    John Russoniello, U.S. Atty., Larry Gallagher, Asst. U.S. Atty., San Francisco, Cal., for respondent.
   ORDER DENYING TEMPORARY RESTRAINING ORDER, PRELIMINARY INJUNCTION, AND WRIT OF HABEAS CORPUS

CONTI, District Judge.

Petitioner Maria Esther Maldonado de Vasquez filed this action on July 17, 1985, pursuant to § 106(a)(9) of the Immigration and Nationality Act, 8 U.S.C. § 1105a(a)(9). Maldonado de Vasquez seeks a writ of habeas corpus restraining respondent David N. Ilchert, district director of the INS, from deporting her pending a ruling on a motion to reopen deportation proceedings that is currently before the Immigration Judge. Petitioner further seeks release from INS custody without bond pending resolution of that motion.

Petitioner is a citizen of Mexico who entered the United States without inspection in 1976. Following arrest and a deportation hearing, Maldonado de Vasquez was ordered deported on July 24, 1979. Petitioner did not appeal the order of deportation; nor did she apply for a suspension of deportation. In lieu of being deported, petitioner was granted the opportunity to depart voluntarily by December 31, 1979. Maldonado de Vasquez, however, failed to leave the country on the appointed date. Accordingly, on June 12, 1985, the INS served petitioner with a surrender notice ordering her to report for deportation on July 17, 1985. On July 16, 1985, Maldonado de Vasquez filed a motion to reopen deportation proceedings with the Immigration Judge, and requested a stay of deportation from respondent Ilchert. On July 17, 1985, Ilchert denied petitioner’s request for a stay. Petitioner surrendered to the INS that same day, as required by the June 12 “bag and baggage” notice.

Petitioner now argues that she has presented a prima facie case of eligibility for suspension of deportation in her motion to reopen. She claims, moreover, that “without a stay [of deportation] she will lose all rights to pursue [that] application for suspension ...” Accordingly, Maldonado de Vasquez argues, this court should issue a writ of habeas corpus and a stay of deportation pending resolution of the motion to reopen, notwithstanding the district director’s discretionary denial. Petitioner further moves for a temporary restraining order and a preliminary injunction restraining the INS from deporting her pending determination of the petition before this court.

Upon review of the record, the court finds plaintiff’s claim to be meritless. As petitioner notes, “[h]abeas corpus is an appropriate proceeding to raise the denial of discretionary relief from deportation [, such as the denial of a stay of deportation,] when deportation itself is not in issue.” Daneshvar v. Chauvin, 644 F.2d 1248, 1251 (8th Cir.1981) (quoting, United States ex rel. Parco v. Morris, 426 F.Supp. 976, 978 n. 4 (E.D.Pa.1977)); see also, 8 U.S.C. § 1105a(a)(9). The district director’s denial of a stay, however, “will not be overturned ‘absent a clear showing of abuse of discretion.’ ” Matter of Odeh, 601 F.Supp. 25, 27 (N.D.Ill.1984) (citations omitted). In this regard, it is well settled that “a stay of deportation [is a] matter[ ] of grace and not of right ...” Kladis v. Immigration and Naturalization Service, 343 F.2d 513, 515 (7th Cir.1965); see also, Bueno v. Immigration and Naturalization Service, 578 F.Supp. 22, 24 (N.D.Ill.1983).

Section 244(a)(1) of the Immigration and Nationality Act, 8 U.S.C. § 1254(a)(1), provides that the Attorney General may, in his discretion, suspend deportation in the case of an alien who,

“applies to the Attorney General for suspension of deportation and ... has been physically present in the United States for a continuous period of not less than seven years immediately preceding the date of such application, and proves that during all of such period he was and is a person of good moral character; and is a person whose deportation would, in the opinion of the Attorney General, result in extreme hardship to the alien or to his spouse, parent, or child who is a citizen of the United States or an alien lawfully admitted for permanent residence ...”

An alien who is to be deported may move to reopen deportation proceedings where “evidence sought to be offered is material and was not available and could not have been discovered or presented at the [former] hearing.” 8 C.F.R. 242.22. Finally, either the immigration judge or the district director may issue a stay of deportation pending resolution of a motion to reopen proceedings. 8 C.F.R. §§ 242.22, 243.4.

Petitioner’s motion to reopen deportation proceedings is premised upon allegations that she has been continuously present in the United States since March 5, 1976, that she is of good moral character, and that, if deported, she might be forced to separate from her two children, both American citizens. District director Ilchert denied petitioner’s associated application for a stay of deportation on grounds that,

“[her] prima facie eligibility for suspension of deportation [, largely established through her seven years of continuous residence in this country,] was gained after the issuance of an Order to Show Cause and an Immigration Judge’s final [deportation] order. This in itself is not a basis for favorable discretion.”

Maldonado de Vasquez argues that the district director’s denial is an abuse of discretion in view of the fact that she has satisfied the threshold statutory requirements for suspension of deportation. As the United States Supreme Court recently held in Immigration and Naturalization Service v. Rios-Pineda, — U.S.-, 105 S.Ct. 2098, 2102, 85 L.Ed.2d 452 (1985), however, “even assuming that [petitioner’s] motion to reopen made out a prima facie case ... for suspension of deportation, the Attorney General [has] discretion to deny” that motion and, a fortiori, an associated application for stay of deportation. In Rios-Pineda, petitioners were Mexican citizens who acquired the requisite seven years residence by pursuing frivolous appeals of their original deportation orders. In upholding administrative denial of petitioners’ motion to reopen deportation proceedings, the Supreme Court noted,

“The Attorney General can, in exercising his discretion, legitimately avoid creating a further incentive for stalling [physical deportation] by refusing to reopen suspension proceedings for those who became eligible for such suspension only because of the passage of time while their meritless appeals dragged on ... [I]t is untenable to suggest that the Attorney General has no discretion to consider ... individual conduct and distinguish among [applicants for suspension] on the basis of the flagrancy and nature of their violations.”

Id. at 2102-2103.

Similarly, the district director in the instant action could reasonably have found that Maldonado de Vasquez’ illegal entry in 1976, her failure to appeal the original 1979 deportation order, and her failure to voluntarily depart in December, 1979, justified a denial of petitioner’s application for a stay of deportation, notwithstanding the fact that she met the threshold requirements for suspension under § 244(a)(1).

In accordance with the foregoing, it is hereby ordered that:

(1) petitioner’s motion for a temporary restraining order and a preliminary injunction is denied; and

(2) petitioner’s petition for a writ of habeas corpus is denied.


source: Caselaw Access Project

license: Public Domain

text:
    William R. SPEARS, Jeff Spears, Eddie Spears, and Bill Weddington, Plaintiffs, v. FEDERAL CROP INSURANCE CORP., Defendant.
    Civ. No. 4-83-51.
    United States District Court, E.D. Tennessee, Winchester Division.
    Aug. 7, 1985.
    Robert S. Peters, Winchester, Tenn., Doyle Richardson, Tullahoma, Tenn., for plaintiffs.

      Ed Schmutzer, Asst. U.S. Atty., Chattanooga, Tenn., for defendant.
   ORDER

WISEMAN, Chief Judge, Sitting Specially-

Pursuant to a settlement agreement between the parties, this Court hereby vacates as moot its decision and judgment of February 16, 1984 in this case, 579 F.Supp. 1022. This Order will be published in the Federal Supplement Reporter published by West’s Publishing Company.


author: NANGLE, Chief Judge.

text:
    Huy Duc LUU, d/b/a Vina Trading Company, Plaintiff, v. UNITED STATES, of America, United States DEPARTMENT OF AGRICULTURE, FOOD AND NUTRITION SERVICE, Defendant.
    No. 85-641C(1).
    United States District Court, E.D. Missouri, E.D.
    Aug. 8, 1985.
    Jeanene Moenckmeier, St. Louis, Mo., for plaintiff.
    Joseph B. Moore, Asst. U.S. Atty., St. Louis, Mo., for defendant.
   MEMORANDUM

NANGLE, Chief Judge.

This is an action by plaintiff seeking review of the sanction imposed upon plaintiff by defendant for violations of the Food Stamp Act, 7 U.S.C. § 2011 et seq.

This case was tried to this Court sitting without a jury. This Court having considered the pleadings, the testimony of the witnesses, the documents in evidence, and the stipulations of the parties, and being fully advised in the premises, hereby makes the following findings of fact and conclusions of law, as required by Rule 52 of the Federal Rules of Civil Procedure. Fed.R. Civ.P. 52.

A. FINDINGS OF FACT

1. Plaintiff Huy Due Luu is the owner of Vina Trading Company, located at 8322 Lackland Road, St. Louis, Missouri 63114. The Vina Trading Company is operated by Mr. Luu, his wife, Dung My Phan, and his daughter, Tran Boi Luu.

2. Plaintiff began operating the Vina Trading Company in March, 1983, and on April 12, 1983, Mr. Luu received authorization to redeem Federal Food Stamps pursuant to the Food Stamp Act, 7 U.S.C. § 2011 et seq.

3. Defendant United States Department of Agriculture is an agency of the Federal Government which is charged with administering and enforcing the Food Stamp Act, 7 U.S.C. § 2011 et seq. The specific division of the Department of Agriculture that is charged with responsibility for the Food Stamp Program is the Food and Nutrition Service (hereinafter “FNS”).

4. As part of this compliance program, FNS conducts investigations to determine whether stores authorized to redeem Federal Food Stamps do so in compliance with the rules and regulations of the Federal Food Stamp Program. Harold Mash is an investigator with the FNS and, in June of 1983, began conducting an investigation of alleged food stamp violations at the Vina Trading Company. Mr. Mash recruited My Quan Duong, a student of Chinese origin at the Meramec Campus of the St. Louis Community College, to assist him in his investigation.

5. As part of the investigation conducted by Mr. Mash, Ms. Duong visited and made purchases at the Vina Trading Company on June 28, 1983, July 19, 1983, August 9, 1983 and August 11,1983. On each of these occasions, the Vina Trading Company accepted Federal Food Stamps for non-food merchandise. Although there was evidence to support a finding that on August 11, 1983, the Vina Trading Company accepted $20.00 in Federal Food Stamps in exchange for $20.00 in cash, this Court is not convinced that such a transaction occurred. This Court credits the testimony of Mr. Luu and his family that they never gave cash in exchange for food stamps. The cash allegedly received by Ms. Duong in exchange for the food stamps was not introduced at trial and there was no evidence, unlike the non-food items, that United States Department of Agriculture regulations require the FNS to give away cash obtained in food stamp investigations.

6. By letter dated July 10, 1984, plaintiff was notified by FNS that sales of nonfood ineligible items in exchange for food stamps had been made at the Vina Trading Company. Subsequent to this notice of violation, on November 20, 1984, the FNS sent plaintiff a first notice of disqualification. This notice informed plaintiff that he was permanently disqualified from redeeming Federal Food Stamps. Mr. Luu requested Administrative Review of the disqualification and on February 14, 1985, the Administrative Review officer upheld the decision of the FNS to permanently disqualify plaintiff. On February 27, 1985, plaintiff received notice of his permanent disqualification. A preliminary stay was entered by this Court on March 19, 1985, preventing imposition of the permanent disqualification sanction pending a trial de novo before this Court.

B. CONCLUSIONS OF LAW

This Court has jurisdiction of this case pursuant to 28 U.S.C. §§ 1331, 1441, 1442, and 7 U.S.C. § 2023(a). Plaintiff asks this Court to reverse the decision of FNS calling for his permanent disqualification from the Food Stamp Program. Plaintiff is entitled to a trial de novo before this Court under 7 U.S.C. § 2023 and 7 C.F.R. § 279.-10(c). See also Abdel v. United States, 670 F.2d 73 (7th Cir.1982).

The issue before this Court is whether FNS justifiably permanently disqualified plaintiff from participation in the Food Stamp Program under 7 U.S.C. § 2021(b). This Court may set aside the agency action upon a finding that it is invalid. Modica v. United States, 518 F.2d 374, 376-77 (5th Cir.1975).

Plaintiff was charged with “trafficking” in Federal Food Stamps, which is defined in 7 C.F.R. § 271.2 as the “buying or selling of coupons ... for cash.” Plaintiff was permanently disqualified from participation in the Federal Food Stamp Program, because this is the sanction mandated for “trafficking”. 7 U.S.C. § 2021(b)(3). However, this Court concludes that plaintiff did not engage in “trafficking”, because he did not exchange cash for Federal Food Stamps. See Findings of Fact No. 5. This does not mean that plaintiff did not violate the provisions of the Food Stamp Act. Plaintiff did sell non-food items for Federal Food Stamps, in violation of the Food Stamp Act and the regulations promulgated thereunder. The sanction for this type of violation in the first instance is disqualification for a “reasonable period of time, of no less than six months nor more than five years”. 7 U.S.C. § 2021(b)(1).

Because plaintiff did not engage in “trafficking”, the sanction imposed by FNS is invalid. However, a sanction must be imposed for plaintiffs other violations. In the opinion of this Court, plaintiff should be disqualified for a period of six (6) months from participation in the Federal Food Stamp Program.


author: . KANE, District Judge.

text:
    AMERICAN TRAIN DISPATCHERS ASSOCIATION, Plaintiff, v. The DENVER AND RIO GRANDE WESTERN RAILROAD COMPANY, Defendant.
    Civ. A. No. 85-K-993.
    United States District Court, D. Colorado.
    Aug. 9, 1985.
    Philip Hornbein, Jr., Denver, Colo., and Thomas A. Woodley, Washington, D.C., for plaintiff.
    Kathleen M. Snead, Denver, Colo., for defendant.
   ORDER

. KANE, District Judge.

In February, 1985, an unincorporated labor organization, the Dispatchers Steering Committee, filed an application with the National Mediation Board seeking to remove plaintiff American Train Dispatchers Association (ATDA) as the exclusive collective bargaining representative of The Denver and Rio Grande’s employees. The National Mediation Board conducted an investigation and sent mail ballots to all eligible employees to determine which labor organization would represent them. Plaintiff alleges that defendant DRGW interfered with the election process by urging employees to revoke their membership in ATDA and support the newer group, thus in effect encouraging the organization of a company-controlled labor organization. Such activity is proscribed by Section 2, Third and Fourth of the Railway Labor Act, 45 U.S.C. § 151 et seq.

Plaintiff filed this action seeking: (1) declaratory judgment that defendant thus violated the Railway Labor Act, 45 U.S.C. § 151 et seq.; (2) a preliminary and permanent injunction requiring defendant to end its interference with employees and to post copies of the injunction in the workplace; and, (3) attorney fees. I need not reach the merits of plaintiffs case because, for reasons that follow, I grant defendant’s motion to dismiss.

The sole question before me today is whether the district court has jurisdiction to hear the case. In the complaint, plaintiff argues that this court has jurisdiction under 45 U.S.C. § 152, Third and Fourth. Defendant argues that plaintiff’s claim is actually a representational dispute and that jurisdiction lies with the National Mediation Board which is empowered by the Railway Labor Act to settle disputes regarding representation.

In making my decision I rely on the extensive discussion of the evolution of the National Mediation Board in Aircraft Mechanics Fraternal Association v. United Airlines, 406 F.Supp. 492 (N.D.Cal.1976). The amendments to the Railway Labor Act, which increased the power of the National Mediation Board, strongly suggest a congressional intent to rely almost exclusively on the National Mediation Board to resolve disputes. There are, of course, situations in which jurisdiction by a district court may be proper under § 152, Third, such as when the complaint alleges unlawful interference by the carrier resembling company unionism. There are also times when judicial intervention under Section 2, Ninth, is appropriate, such as when the Board’s fulfillment of its duty to investigate and certify is challenged. However, as the court noted:

In determining whether an assertion of jurisdiction under the Act is proper, the court must be vigilant in guarding against the evil of interfering with, or otherwise frustrating, the Board’s sensitive role of insuring, to the maximum extent possible, peaceful labor relations in the railroad and airline industries without interruption by strikes or other disruptions of carrier operations which would imperil the national welfare.

Id. at 500.

Plaintiff frames the complaint to allege interference resulting in the maintenance of a company union. “ ‘Influence’ in this context plainly means pressure, the use of the authority or power of either party to induce action by the other in derogation of what the statute calls ‘self-organization’.” Id. at 497 (iquoting Texas & N.O.R. Co. v. Brotherhood of Ry. & S.S. Clerks, 281 U.S. 548, 568, 50 S.Ct. 427, 433, 74 L.Ed. 1034 (1930)). Paragraph 8 of the complaint charges that DRGW (1) offered increased wages and benefits and improved working conditions to employees if they would support the Dispatchers Steering Committee and oust the ATDA as their representative, and (2) met and conferred with officers of the Dispatchers Steering Committee to ensure the success of that organization. Plaintiff alleges that § 152, Third, has been violated by “interference, influence, or coercion” of the election of a collective bargaining representative, and that this court has jurisdiction.

Plaintiff does not dispute that § 152, Ninth, gives the Board almost exclusive jurisdiction to determine whether there was conduct on the part of DRGW that prevented the employees from participating in a representation election free from interference, influence, or coercion. Indeed, subsequent to the filing of the complaint in this action, plaintiff filed with the National Mediation Board an application to investigate its allegations regarding coercive conduct on the part of the defendant. The Board may find such interference, admonish participants, set aside the results of the election and order that a new election be scheduled. Plaintiff argues, however, that the Board is not empowered to enjoin statutory violations of the Act.

The facts, however, do not give rise to a claim of company unionism. Therefore, the original jurisdiction under § 152, Third, is not appropriate under the circumstances of this case. I find that the best method for ensuring DRGW compliance with the Railway Labor Act is to allow the Board to ensure elections free from interference. If the Board is delinquent in its statutory duty to investigate plaintiff’s charges, an action against the Board for violation of its statutory duties under § 152, Ninth, might be appropriate.

I agree with the rationale outlined in Airlines Mechanics, supra page 2, and restated in Texidor v. Ceresa, 590 F.2d 357 (1st Cir.1978), that the increased powers of the National Mediation Board give it exclusive jurisdiction over representation disputes, and I find that this is essentially a representation dispute. It is up to the Board to determine what level of involvement by the defendant DRGW would amount to illegal interference, influence, or coercion. I also want to avoid the possibility of conflicting outcomes in this court and before the National Mediation Board. My decision is consistent with the policy of not interfering with or frustrating the National Mediation Board’s role of insuring peaceful labor relations.

It is therefore ORDERED that defendant’s motion to dismiss is granted.

The complaint and this civil action is dismissed. Costs are to be born by the respective parties.

      . 45 U.S.C. § 152, Third, proscribes either party from interfering with the other in its choice of representatives. 45 U.S.C. § 152 Fourth makes it unlawful for a carrier to interfere with the organization of its employees.

      . 45 U.S.C. § 152, Ninth, provides in part:
      If any dispute shall arise among a carrier’s employees as to who are the representatives of such employees designated and authorized in accordance with the requirements of this chapter, it shall be the duty of the Mediation Board, upon request of either party to the dispute, to investigate such dispute____ In such an investigation, the Mediation Board shall be authorized to take a secret ballot of the employees involved, or to utilize any other appropriate method of ascertaining the names of their duly designated and authorized representatives in such manner as shall insure the choice of representatives by the employees without interference, influence, or coercion exercised by the carrier.

      . "The amendments thus represented a significant increase in the power and authority of the National Mediation Board in the area of representation disputes____ Given the explicit increase in Board power and authority, in conjunction with the rationale therefor, it seems more likely as a matter of statutory construction that Congress intended the Board to take over in this area.” Aircraft Mechanics Fraternal Association v. United Airlines, 406 F.Supp. 492, 498 (N.D.Cal.1976).

      . The court in Aircraft Mechanics, supra note 3, recognized that the amendments to the Railway Labor Act did not necessarily remove all district court jurisdiction over representation disputes:
      It is assumed for the purpose of this decision, however, that the district courts still have original jurisdiction under Section 2, Third, over cases involving special facts tending to establish company unionism.
      * * * * * *
      The Court has made clear that in a case in which the dispute is solely between two Board-certified unions within one or more employing entities over which of the two is to represent a certain type of employee of the company, the NMB’s jurisdiction under Section 2, Ninth, is exclusive, and its decision as to representation is unreviewable. [Citations omitted.]

        Id. at 498-99.

      . Plaintiffs brief in opposition to defendant’s motion to dismiss, p. 6.


author: KANE, District Judge.

text:
    Aileen H. PASCOE and Jacqueline Tomlin, Plaintiffs, v. HOYLE LOWDERMILK, INC., Defendant.
    Civ. A. No. 83-K-2272.
    United States District Court, D. Colorado.
    Aug. 12, 1985.
    Todd J. McNamara, Denver, Colo., for plaintiffs.
    David R. Gorsuch, Denver, Colo., for defendant.
   MEMORANDUM OPINION AND ORDER

KANE, District Judge.

Plaintiffs brought this action against their employer, defendant Hoyle Lowdermilk, Inc., based on the Age Discrimination in Employment Act (ADEA), 29 U.S.C. § 621 et seq. Plaintiffs have also asserted pendent state claims including wrongful discharge, outrageous conduct, and breach of contract. This case is presently before me on defendant’s motion to dismiss plaintiffs’ state law claims for lack of subject matter jurisdiction.

When deciding whether to exercise pendent claim jurisdiction, I must first determine if I have the constitutional power to exercise such jurisdiction. That power exists: 1) when there is a substantial federal claim and 2) when both the federal and state claim arise from a common nucleus of operative facts. United Mine Workers of America v. Gibbs, 383 U.S. 715, 86 S.Ct. 1130, 16 L.Ed.2d 218 (1966). Because the age discrimination claim is a substantial federal claim and the same operative facts surrounding plaintiffs’ terminations of employment give rise to both the state and federal claims, the exercise of pendent jurisdiction would be appropriate under the Gibbs constitutional test.

However, the Gibbs test does not end the inquiry into whether I have the power to hear plaintiffs’ nonfederal claims along with the federal cause of action. If the exercise of jurisdiction is proper under the Gibbs test, I must then examine the statute on which the federal jurisdiction is predicated “in order to determine whether ‘Congress in [that statute] has ... expressly or by implication negated’ the exercise of jurisdiction over the particular nonfederal claim.” Owen Equip. & Erection Co. v. Kroger, 437 U.S. 365, 373, 98 S.Ct. 2396, 57 L.Ed.2d 274 (1978), quoting Aldinger v. Howard, 427 U.S. 1, 18, 96 S.Ct. 2413, 2422, 49 L.Ed.2d 276 (1976).

The statute which confers federal jurisdiction in the present case is the ADEA. Defendant contends that I should not exercise pendent jurisdiction over plaintiffs’ state law claims because to do so would contravene the congressional intent of limiting the scope of remedies under the ADEA.

Although neither the language of the ADEA nor its legislative history expressly limit courts’ authority to provide relief for age discrimination, most courts have determined that the congressional intent of the ADEA was to limit damages to those specifically enumerated in the statute. See, e.g., Perrell v. Financeamerica Corp., 726 F.2d 654, 657 (10th Cir.1984); Pfeiffer v. Essex Wire Corp., 682 F.2d 684, 686-88 (7th Cir.1982); Vasquez v. Eastern Air Lines, Inc., 579 F.2d 107, 110-12 (1st Cir.1978). This intent is implied from the statutory content of the ADEA, the administrative conciliation scheme envisioned by the statute, and the fact that Congress could have provided for additional types of remedies but chose not to. See Pfeiffer, 682 F.2d 684, 686-88; Rogers v. Exxon Research & Engineering Co., 550 F.2d 834, 841 (3d Cir.1977); Naton v. Bank of California, 649 F.2d 691, 699 (9th Cir.1981); Slatin v. Stanford Research Inst., 590 F.2d 1292, 1296 (4th Cir.1979); Dean v. American Security Ins. Co., 559 F.2d 1036, 1038-39 (5th Cir.1977).

Compensatory and punitive damages are not specifically enumerated in the statute. Thus, a majority of courts have held that they are not available under the ADEA. See Perrell, 726 F.2d 654; Hill v. Spiegel, Inc., 708 F.2d 233 (6th Cir.1983); Pfeiffer, 682 F.2d 684; Fiedler v. Indianhead Truck Line, Inc., 670 F.2d 806 (8th Cir.1982); Naton, 649 F.2d 691; Slatin, 590 F.2d 1292; Vasquez, 579 F.2d 107; Murphy v. American Motors Sales Corp., 570 F.2d 1226 (5th Cir.1978); Dean, 559 F.2d 1036; Rogers, 550 F.2d 834; Silver v. St. Luke’s Hospital, Inc., No. 84-M-2046 (D.Colo. May 3,1985) (Matsch, J.); Borumka v. Rocky Mountain Hospital & Medical Svc., 599 F.Supp. 857 (D.Colo.1984) (Moore, J.); Prouty v. National R.R. Passenger Corp., 572 F.Supp. 200 (D.D.C.1983); James v. KID Broadcasting Corp., 559 F.Supp. 1153 (D.Idaho 1983); Whiteman v. Kroger Co., 548 F.Supp. 563 (C.D.Ill.1982); Seidel v. Chicago Sav. & Loan Ass’n, 544 F.Supp. 508 (N.D.Ill.1982); Collins v. Manufacturers Hanover Trust Co., 542 F.Supp. 663 (S.D.N.Y.1982); Allen v. Colgate-Palmolive Co., 539 F.Supp. 57 (S.D.N.Y.1981); Douglas v. American Cyanamid Co., 472 F.Supp. 298 (D.Conn.1979).

Defendant asserts, and I agree, that this analysis extends to pendent state claims which permit recovery beyond that contemplated by the ADEA. “[Ajdjudication of such state claims would circumvent the scope of remedies available under the federal cause of action...” Hannon v. Continental Nat. Bank, 427 F.Supp. 215, 218 (D.Colo.1977) (Finesilver, J.); see also Borumka, 599 F.Supp. 857, 860; Douglas, 472 F.Supp. 298, 306. Thus, “it is improper to use this Court’s pendent jurisdiction to widen the scope of recovery beyond the limits of the federal statute upon which jurisdiction is predicated.” Shirley v. Brown & Williamson Tobacco Co., 608 F.Supp. 78, 79 (E.D.Tenn.1984).

Additionally, contrary to plaintiffs’ assertion, the discretionary factors in Gibbs would not permit the exercise of pendent jurisdiction in this case. In Gibbs, the Supreme Court identified four factors that counsel against the exercise of jurisdiction over state claims even though the two-prong constitutional test is met. Discretion to dismiss state claims should be exercised: 1) when considerations of judicial economy, convenience and fairness to litigants are not present; 2) when a surer-footed reading of applicable state law can be obtained in state court; 3) when state issues predominate in terms of proof, scope of issues raised, or comprehensiveness of remedies sought; and 4) when divergent state and federal claims and theories are likely to cause jury confusion.

Under the circumstances of this case, I find that the state issues would predominate in terms of comprehensiveness of the remedy sought. Also, there is a real likelihood of jury confusion in treating these divergent legal theories of relief. See James, 559 F.Supp. 1153, 1157; Silver, No. 84-M-2046, slip op. at 4; Borumka, 599 F.Supp. 857, 860; Ritter v. Colorado Interstate Gas Co., 593 F.Supp. 1279 (D.Colo.1984) (Carrigan, J.); Lettich v. Kenway, 590 F.Supp. 1225, 1226 (D.Mass.1984). Both the comprehensiveness of the remedies provided by the state claims and the “likelihood of jury confusion” resulting from trial of the state and federal claims together far outweigh considerations of “judicial economy, convenience and fairness to litigants” which might favor trial of the claims together.

For these reasons as well as the congressional intent to limit remedies under the ADEA, defendant’s motion to dismiss plaintiffs’ pendent claims is granted. I decline to exercise pendent jurisdiction over plaintiffs’ related state law claims. This action will proceed only as a claim under the ADEA.

IT IS THEREFORE ORDERED THAT: 1. Plaintiffs’ second and third claims for relief, stating claims for wrongful discharge, outrageous conduct, and breach of contract, are dismissed without prejudice.

      . Regarding remedies, § 7(b) of the ADEA provides that
      Amounts owing to a person as a result of a violation of this chapter shall be deemed to be unpaid minimum wages or unpaid overtime compensation for purposes of sections 216 and 217 of this title: Provided, That liquidated damages shall be payable only in cases of willful violations of this chapter. In any action brought to enforce this chapter the court shall have jurisdiction to grant such legal or equitable relief as may be appropriate to effectuate the purposes of this chapter, including without limitation judgments compelling employment, reinstatement or promotion, or enforcing the liability for amounts deemed to be unpaid minimum wages or unpaid overtime compensation under this section. 29 U.S.C. § 626(b) (emphasis in original).

      . See 1967 U.S.Code Cong. & Ad.News 2213; 1978 U.S.Code Cong. & Ad.News 504.

      . In both Kennedy v. Mountain States Tel. & Tel. Co., 449 F.Supp. 1008 (D.Colo.1978) and Brenimer v. Great Western Sugar Co., 567 F.Supp. 218 (D.Colo.1983), I ruled that compensatory and punitive damages are available in ADEA cases. However, the Tenth Circuit has recently held to the contrary in Perrell v. Financeamerica Corp., 726 F.2d 654 (10th Cir.1984). Despite my earlier rulings, I am bound by the Tenth Circuit’s decision in Perrell that compensatory damages are not available in ADEA cases. By implication, the language in Perrell also suggests that punitive damages are likewise unavailable.


author: WATSON, Judge:

text:
    CONTINENTAL STEEL CORP., et al., Plaintiffs, v. UNITED STATES, Defendant. AMAX CHEMICAL, INC. and Kerr-McGee Chemical Corp., Plaintiffs, v. UNITED STATES, Defendant.
    Court No. 84-05-00728.
    United States Court of International Trade.
    July 30, 1985.

      Wiley & Rein, Washington, D.C. (Charles Owen Verrill, Jr., James M. Johnstone, Robert E. Nielsen and William B. Baker, Washington, D.C.), for plaintiffs Continental Steel Corp., Georgetown Steel Corp. and Raritan River Steel Co.
    Fried, Frank, Harris, Shriver & Kampelman, Washington, D.C. (David E. Birenbaum and Alan G. Kashdan, Washington, D.C.), for plaintiff Atlantic Steel Co.
    Drinker, Biddle & Reath, Washington, D.C. (W.N. Harrell Smith, Washington, D.C., and James S. Gkonos) for plaintiffs Amax Chemical, Inc. and Kerr-McGee Chemical Corp.
    Richard K. Willard, Acting Asst. Atty. Gen., David M. Cohen, Director, Commercial Litigation Branch, Washington, D.C. (Kevin C. Kennedy, Washington, D.C.), for defendant.
    Wilmer, Cutler & Pickering, Washington, D.C., (C. Loring Jetton, Jr., John D. Greenwald, Deborah M. Levy, and Stephen J. Schnably, Washington, D.C.), for amicus curiae, American Textile Manufacturers Institute.
   Opinion and Order

WATSON, Judge:

These consolidated actions were brought to challenge the conclusion of the International Trade Administration of the Department of Commerce (Commerce) that, as a matter of law,, subsidies cannot be found in countries which have nonmarket economies.

In two countervailing duty investigations the challenged conclusion led Commerce to reach final determinations that manufacturers, producers, or exporters of carbon steel wire rod in Czechoslovakia and Poland were not receiving subsidies. The same reasoning led Commerce to rescind the investigations into whether potassium chloride (potash) from the Soviet Union and the German Democratic Republic was being subsidized on the ground that the petitions did not allege the elements necessary for the imposition of countervailing duties.

The Commerce Department defines a nonmarket economy as one which operates on principles of nonmarket cost or pricing structures so that sales or offers for sale of merchandise in that country, or to other countries, do not reflect the market value of the merchandise. In short, a nonmarket economy is said to be one in which the price of merchandise does not normally reflect its market value.

In the determinations in dispute the existence of nonmarket economies was found to be evidenced by central government control of prices, central government control of the allocation of resources and, in the case of the Soviet Union and the German Democratic Republic, extremely limited convertibility of the national currency.

The Commerce Department reasoning had four parts: First, it said that government activity in a nonmarket economy cannot confer a subsidy because a subsidy, by definition, means an act which distorts the operation of a market. In other words, for a subsidy to exist there must be a free market to provide an independent, essential reference point or benchmark for measuring whatever is allegedly a “subsidy” to a particular enterprise. Without the uncontrolled market there can be no subsidization.

Second, Commerce said that Congress has never confronted the question of whether the countervailing duty law applies to countries with nonmarket economies. Further, that this “silence,” combined with Congressional refinement and development of legal remedies other than the countervailing duty law for use with products from nonmarket economies, leaves the agency in the position of trying to determine what Congress would have done in this situation.

Third, the agency stated that the consensus of opinion in academic literature was that the countervailing duty law cannot be applied to countries with nonmarket economies.

Finally, the agency asserted a broad discretion to determine the existence or nonexistence of subsidies.

The plaintiffs have attacked the Commerce Department determinations as contrary to the plain meaning of the law, inconsistent with judicial interpretation and without support in legislative history.

The Court is of the opinion that the Commerce Department has made a basic error in its interpretation and administration of this law. The fundamental error of the Commerce Department is its premise that a subsidy can only exist in a market economy. Stated differently, it is completely at variance with the law to find that the acts at which the countervailing duty law was aimed, do not include the acts of a government of a country with a nonmarket economy.

It should be noted that these proceedings were governed by the countervailing duty law contained in 19 U.S.C. § 1303 because the countries producing the products which were the subject of these petitions were not countries “under the Agreement” within the meaning of 19 U.S.C. § 1671(b). This meant only that the assessment of countervailing duties would not require an injury determination if a “bounty” or “grant” was found to exist. In all other respects the language of both countervailing duty laws forms a seamless web and the terminology is used interchangeably.

The position taken by Commerce is at odds with the plain meaning and purpose of the law. It contradicts judicial interpretations of the law. It is inconsistent with past administration of the law. It also appears to be self-contradictory from its inception.

Taking the last point first, it appears that the Commerce Department recognizes that the countervailing duty law covers “any country,” and does not allow per se exemptions from the law for any political entity. Nevertheless, Commerce goes on to posit what it calls an “additional jurisdictional question,” namely, whether government activities in a nonmarket economy can confer a “bounty or grant” within the meaning of the law. If this was truly a “jurisdictional” question, a failure to meet the jurisdictional criteria of the law would indeed deprive the agency of authority to enforce the law beyond the determination of that point. That would amount to a per se exemption from the law (which Commerce claims it is not making) and would be in conflict with the plain statement that the law covers any country.

It should be obvious that the question of whether any country is bestowing a bounty or grant or a subsidy is the ultimate question on the merits of a petition. It is not a question which must first be answered in order to decide whether to initiate an investigation. Nor is it a question which can be answered in advance and in the abstract for countries with certain types of economies.

The simple fact is that the countervailing duty law makes no distinctions based on the form of any country’s economy. Its language and purpose allow no such distinctions to be made.

The language of the law is so abundantly clear and its purpose so obvious that there is a danger of moving on too quickly to the complicated theoretical underpinnings of the determinations and, by sheer length of discussion, give them a weight which they do not deserve. Consequently, it is important to follow the basic principle, repeatedly stressed by the Supreme Court, that “in determining the scope of a statute, one is to look first at its language.” North Dakota v. United States, 460 U.S. 300, 312, 103 S.Ct. 1095, 1102, 75 L.Ed.2d 77 (1983).

The relevant language of the countervailing duty law, in 19 U.S.C. § 1303, reads as follows:

... Whenever any country, dependency, colony, province, or other political subdivision of government, person, partnership, association, cartel, or corporation, shall pay or bestow, directly or indirectly, any bounty or grant upon the manufacture or production or export of any article of merchandise manufactured or produced in such country, dependency, colony, province, or other political subdivision of government, then upon the importation of such article or merchandise into the United States, whether the same shall be imported directly from the country of production or otherwise, and whether such article or merchandise is imported in the same condition as when exported from the country of production or has been changed in condition by re-manufacture or otherwise, there shall be levied and paid, in all such cases, in addition to any duties otherwise imposed, a duty equal to the net amount of such bounty or grant, however the same be paid or bestowed.

The Supreme Court has also said that, absent a clearly expressed legislative intention to the contrary, the language of a statute “must ordinarily be regarded as conclusive.” Consumer Product Safety Commission v. GTE Sylvania, Inc., 447 U.S. 102, 108, 100 S.Ct. 2051, 2056, 64 L.Ed.2d 766 (1980).

It would be difficult to conceive of statutory language which would be more comprehensive than the language of the countervailing duty law. It would be hard to write a law which would be more antagonistic to the making of artificial distinctions. On its face, the law shows a meticulous inclusiveness and an unswerving intention to cover all possible variations of the acts sought to be counterbalanced.

In the opinion of the Court the language of this law is perfectly indifferent to forms of economy. The language plainly shows the strongest possible desire to prevent evasion either by means of technicalities of status, or by technicalities of form, or by technicalities of relationship.

We have a law which uses ten exhaustive alternatives to describe the possible conveyor of the subsidy. As an alternative to “pay,” which conceivably might be avoided by some other form of conveyance, it uses the general term “bestow.” It specifically seeks out benefits given “directly or indirectly.” The law takes pains to cover manufacture, production or export lest artificial distinctions be developed between levels of commercial activity. It goes on to specify that it controls in all conceivable methods of importation, whether the article in question is imported into the United States directly or otherwise and whether or not the article is changed in condition by re-manufacture or otherwise.

In the midst of this formidable demonstration of careful draftsmanship the law describes the fundamental thing which is paid or bestowed as “any bounty or grant.”

The Supreme Court has stated that “a word of broader significance than ‘grant’ could not have been used.” Nicholas & Co. v. United States, 249 U.S. 34, 39, 39 S.Ct. 218, 220, 63 L.Ed. 461 (1919).

The use of the broadest possible language clearly demonstrates an intent to cover as many beneficial acts as possible. Justice Frankfurter has stated that the purpose of a law is often imbedded in the statute even if specific manifestations are not thought of, and that is “often the very reason for casting a statute in very general terms.” F. Frankfurter, Some Reflections on the Reading of Statutes, reprinted in Sutherland Statutory Construction, Vol. 3, p. 423 (4th ed., 1972).

It should be noted at this point that the term “subsidy,” which is now used in the law, has been explicitly stated by Congress to have “the same meaning as the term ‘bounty or grant’ as that term is used in section 303 of this Act [19 U.S.C. § 1303]____” This means that the broadness of language and spirit has been carried forward without being diminished. The terms can be used interchangeably with no difference in meaning, and are so used in this opinion.

Here we have a law written with great care to apply to all countries, using words of the broadest possible significance to describe the conduct whose effect it seeks to neutralize.

We have petitions which allege the existence of government programs in the countries involved which, in the abstract, would normally encourage the exportation of merchandise. These include providing a beneficial rate of currency exchange to the exporter, allowing exporting companies to keep a portion of the hard currency earned from their exports and providing tax exemptions based on export performance.

Against this formidable background the Court is asked to approve a monumental exception to the law, an exception which is based on nothing more than certain general economic characteristics attributed to the countries whose products are the subject of petitions.

In this context common sense is offended by a preemptive conclusion that subsidization is not possible because of some general economic characteristics of the exporting country. To avoid the overwhelming indications that the law be applied to all countries in all cases there would have to be some definitive exception for countries with nonmarket economies. This would be a major exemption from a remedial law and it should not be recognized unless it has been unequivocally made. Abbott Labs v. Portland Retail Druggists, 425 U.S. 1, 11, 12, 96 S.Ct. 1305, 1313, 1313, 47 L.Ed.2d 537 (1976).

With this in mind, the shortcomings of the administrative determinations are evident.

To be blunt, the Commerce Department determination attempts to amend the countervailing duty law. It passes over the plain meaning and manifest purpose of the law to institute, by administrative fiat, a major exception for countries with non-market economies. It does so by means of a redefinition of the term “subsidy”. The redefinition is not in accordance with the language of the law and it is irrational and arbitrary.

The Commerce Department defines a subsidy as a distortion of the operation of a market economy. This is a novel definition. It depends on the premise that only in a market economy can a “distortion” exist because only in such an economy can the alleged subsidy be measured against what the normal or benchmark level of that particular element would be. This in turn presumes that there is no normality or “measurability” in a nonmarket economy, i.e., that central control makes any given economic decision unpredictable or atypical or irrational, so that one act cannot be characterized as more beneficial than another. Into this picture of economic irrationality the Commerce Department adds the additional fillip that even if “incentives” to production do exist in a nonmarket economy they are not beneficial in our sense of the word. They are assertedly some sort of ineffectual attempt to exercise control. They do not actually result in subsidization because the firms, lacking a profit motive and subject to centralized export controls, cannot respond to the incentives.

The determinations state that “even those incentives tied to export, some of which might be considered export subsidies in a market economy, do not, in our opinion, operate as export subsidies in an NME.”

This line of analytical legerdemain is developed as follows:

That the Czech government has introduced “economic mechanisms,” — for rewarding overfulfillment of targets, for rationalizing the use of imports, for promoting exports — does not mean that Czech enterprises can respond to those incentives like a competitive firm in a market economy. These mechanisms are imposed upon a system that is not economically rational. Nor are the reforms designed to lead to a rational, market system. Central planning remains the basis for defining the goals and operating conditions for the enterprises.
In this situation, “incentives” have a different meaning than in a market economy system. They are not distortions of market generated signals to competitive firms. They are imposed on a system to generate results: results that the non-market economy inherently cannot produce.

The quoted passages are amalgams of economic jargon, semantic arbitrariness and unlawful irrationality. Decisions which depend on a premise that economic conduct is irrational or inherently ineffectual cannot be allowed. Economic behavior may be one of the few areas in which rationality and effectiveness can still be presumed in world affairs. Laws cannot be enforced if conduct to which they are directed is not taken at face value. The enforcement of laws requires the investigation of reality, not the formulation of theoretical obstacles.

Subsidization in one of its purest forms is the encouragement of exportation by means of some type of special preference.

The Commerce Department cannot say that such a preference is impossible in a nonmarket economy. It can only say that distortions of a “market” are not possible. This may be true but it does not eliminate the possibility of subsidization.

The Commerce Department reasoning suggests the absurd result that the more completely a government becomes involved in production and the more thoroughly it eliminates the possibility of internal reference to “market;” in short, the more perfectly it insulates production from normal economic reality the less likely it is to be “subsidizing.”

Furthermore, there is no reason why this logic must be limited to nonmarket economies. A market economy government can conceivably eliminate the market context for the resources used by an industry it chooses to aid by totally controlling the production and sale of some important raw materials. Does it thereby eliminate the possibility of subsidization?

The Commerce Department’s definition of subsidy includes language stating that a subsidy “results in a misallocation of resources, encouraging inefficient production and lessening world wealth.”

There is not the slightest indication in the law or the legislative history to show that the allocation of resources, the efficiency of production or the diminution of world wealth is a concern of the countervailing duty law.

The Commerce Department’s definition sounds as if the countervailing duty law is being viewed as a means for influencing the way the wealth of the world is developed or the way other countries choose to allocate resources or organize production. This would be totally improper, and would be a dangerous distortion of the law. The countervailing duty law is not a tool of foreign policy.

The only purpose of the countervailing duty law is to extract the subsidies contained in merchandise entering the commerce of the United States in order to protect domestic industry from their effect. In this domestic purpose, its effectiveness is clearly intended to be complete and without exception.

The great irony of the Commerce Department’s approach is that while it gives the countervailing duty law a grandiose, theoretical objective, it destroys a significant part of its practical domestic purpose.

The practical domestic purpose of the law is what must control. That purpose is plain. The Supreme Court has stated that this law “has no uncertainty of purpose.” Nicholas & Co. v. United States, 249 U.S. 34, 39, 39 S.Ct. 218, 220, 63 L.Ed. 461 (1919). Congress has characterized the purpose as “assuring effective protection of domestic interests from foreign subsidies ...” S.Rep. No. 93-1298, 93d Cong., 2d Sess. 183 (1974), U.S.Code Cong. & Admin.News 1974, pp. 7186, 7318. In conformity with this purpose the Courts have refused to allow narrow or restricted administrative interpretations to weaken the terms “bounty” or “grant.” ASG Industries, Inc. v. United States, 67 C.C.P.A. 11, 18, C.A.D. 1237, 610 F.2d 770, 776 (1979). See also ASG Industries, Inc. v. United States, 82 Cust.Ct. 101, C.D. 4794, 467 F.Supp. 1200 (1979) (appeal dismissed). The purpose of the law does not allow distinctions or general exceptions based on the form of a country’s economy. It requires enforcement of the law to the full extent of the agency’s authority and ability.

The administrative determinations under review here also suggest that the concept of subsidy can have no meaning in a non-market economy because everything would become “subsidized.” The Commerce department says that “to impose that concept where it has no meaning would force us to identify every government action as a subsidy....”

The term “subsidy” as it applies in the export activity of a nonmarket economy does not present any real difficulties of “meaning.” The subsidies alleged to exist here are not acts which are peculiar to nonmarket economies. If there are any difficulties here, they are not difficulties of meaning, but problems of measurement, which are precisely within the expertise of the agency.

Even if we anticipate problems of meaning in the event that more problematic domestic conduct of these countries becomes subject to scrutiny, it cannot be accepted that this arises from a congenital subsidizing character of all government acts in a nonmarket economy. In other words, it cannot be assumed that central economic control is synonymous with subsidization. This goes back to the fundamental misconception that it takes distortion of a “market” to make a subsidy.

The concept of subsidization is really much broader than that. If it has to be stated in terms of distortion then it is a distortion of a pattern of regularity or even a pattern of reasonably expected fairness. But these subtleties can be left for the future. For the moment, it is sufficient to say that the Commerce Department has the authority and ability to detect patterns of regularity and investigate beneficial deviations from those patterns — and it must do so regardless of the form of the economy.

These administrative determinations display the attitude that historically has presumed a lack of differentiation in all undeveloped or unexplored areas of human knowledge. The countervailing duty law does not allow countries with nonmarket economies to remain terra incognita, blank areas which have no discernable details.

It must be said that all ongoing systems, be they molecular, biological, galactic, or economic, eventually reveal an organized pattern of activity or structure to the human mind. Pattern or structure is inherent in the continuation in existence of a stable or comprehensible unit. That is why, no matter what the environment, a reasonable understanding of its rules of normal operation will lead to recognition of the exceptional or “unfair” event.

All that will be needed in these cases is the ability to distinguish between the normal operation of central control and the exceptional or disproportionate or unfair event. It would be wrong for the Court to be more specific at this time about the method of detecting subsidies within a non-market economy. It is sufficient to state that it is not a meaningless effort. Its potential difficulties certainly do not justify the exception to the law sought to be made in this case.

Not all the dons of economic academia can persuade this Court that the government of a country with a nonmarket economy cannot show what amounts to favoritism towards the manufacture, production, or export of particular merchandise. The idea violates common sense and conflicts with a rational construction of the law.

It is important to remember that the antidumping law presented an apparent difficulty in dealing with nonmarket economies because its plain language lacked a fundamental reference point needed to measure whether or not sales were being made at less than fair market value. The nonmarket economy did not have the fair home market value against which to measure the price to the United States. This did not deter the enforcing agency from developing that “fair” home market value by reference to surrogate countries with market economies, an administrative practice that was later expressly confirmed by incorporation into the Trade Act of 1974. See S.Rep. 93-1298, 93rd Cong.2d Sess. 174 (1974).

It is ironical to see that particular legislation cited by the government as evidence that Congress wanted the antidumping law, and not the countervailing duty law, to be the instrument for dealing with merchandise from nonmarket economies. The language of the antidumping law posed a far greater problem of application to non-market economies than the countervailing duty law. The language of the countervailing duty law, on the other hand, presented no such problem of application and the simplest implication of leaving it alone is that it needed no clarification to allow it to apply to all forms of economies.

It is even more ironical to see that the term “fair market value” whose “absence,” in a literal sense, was overcome rather easily when it came to enforcing the anti-dumping law with respect to nonmarket economies, now turns up as the key term defining a nonmarket economy and obstructing the application of the countervailing duty law. The agency says that a subsidy needs a “market” and a market does not exist where there is no fair market value. But if the “absence” of a fair market value did not impede the enforcement of the antidumping law, in which it was a literal requirement, why is its absence an impediment to the enforcement of a law in which it is not even a named factor, but merely one of the possible guides to the detection or measurement of subsidies? In short, if a “perfect” fair market value is not needed to find dumping it is certainly not needed to find or measure subsidies.

The government has also argued that the passage of section 406 of the Trade Act of 1974 (19 U.S.C. § 2436) to protect U.S. industries from injurious market disruption due to sudden increases in imports from Communist countries represented a repudiation of the use of the countervailing duty law. This contention simply has no support in the language of the law or the legislative history. Section 406 is a separate remedy for separate circumstances. The potent specialized nature of the countervailing duty law is not affected by the existence of possible alternative remedies.

The history of the administration of the countervailing duty law does not show the development of any exceptions based on the degree of centralized control exercised by the government of the country of production. In fact, the law has been enforced in the past in circumstances in which central governments exercised a high degress of central control. Although the proceedings may not have involved nonmarket economies as the term is being currently used, the government of Csarist Russia exercised complete control over the sugar industry and the government of Nazi Germany controlled that economy to a very large extent. This did not prevent the imposition of countervailing duties on sugar from Russia or on numerous products from Germany during the 1930’s.

From this historical background we can conclude, at the very least, that variation in the extent of control exercised by the foreign government over the economy was not a factor impeding the enforcement of the law. These latest determinations are new developments by the administrative agency. In short, they have no weight of historical administrative practice behind them. If anything, the spirit of past administration goes the other way, as well it should, in the face of the all-inclusive power of the language of the law.

The plain meaning of the law is also not diminished by the government’s attempt to patch together a contrary legislative expression from bits and pieces of other laws and later proposed legislation. The true meaning of the amendment to the anti-dumping duty law and the passage of section 406 of the Trade Act of 1974 has already been discussed.

The parties have also engaged in argument using recent statements by legislators, made in connection with the Trade and Tariff Act of 1984, or proposed trade legislation.

The short answer to the assertion that these shed light, one way or the other, on the question of the application of the countervailing duty law, is that Congress has explicitly stated only one certain opinion on this subject in the Conference Report on the Trade and Tariff Act of 1984 — namely: that the issue is under judicial review. This is the plainest possible indication that Congress is waiting to hear the opinion of the Court.

It should also be said that despite the intensity of Congressional interest, it is not correct to interpret a law by means of what legislators say about it in later years. Southeastern Community College v. Davis, 442 U.S. 397, 411, 99 S.Ct. 2361, 2369, 60 L.Ed.2d 980 (1979).

In this case, the strength and clarity of the language of the law do not really require examination of legislative history. Moreover, the variety and ambiguity of much of the later legislative material would make it particularly unreliable to use.

The government has made an argument, difficult to follow, that Congressional approval of the Subsidies Code in the Trade Agreements Act of 1979, somehow indicated a choice of antidumping law rather than countervailing duty law for use with products from nonmarket economies. This argument evidently takes the continuation of special provision for nonmarket economies in the antidumping law (previously shown here to be nothing more than a ratification of past administrative practice) as a sign that Congress had rejected the ^countervailing duty law for use with non-market economies. Into this argument the government injects the novel idea that had Congress not rejected the countervailing duty law it would have given petitioners a way to avoid the injury test of the anti-dumping law — as if the governments of countries’ with nonmarket economies had a vested interest in getting the procedure of an injury determination before their products could be assessed with special duties.

This argument is hardly worthy of repetition except as a contrast to the simple and far more persuasive view of the implications of the Trade Agreements Act of 1979. The Act approved the Subsidies Code. Article 15 of the Code clearly gives a country the choice of using subsidy law or anti-dumping law for imports from a country with a state-controlled economy. Moreover, Congress was informed that countries with nonmarket economies had participated in the preparation of the Code and that it had been signed, subject to subsequent ratification, by two such countries.

In the opinion of the Court this constitutes overwhelming evidence that the 1979 Act shows a definite understanding by Congress that the countervailing duty law covers countries with nonmarket economies.

All these considerations lead the Court to conclude that the Commerce Department’s determinations were contrary to law. To allow it to develop such an extraordinary exception to the law would go beyond deference to an administrative agency. It would be an abdication of judicial responsibility.

For the reasons explained in this opinion the determinations under review are found to be arbitrary and not in accordance with the law.

The final determinations with respect to carbon steel wire rod from Czechoslovakia and Poland are reversed and the matters are remanded for determinations consistent with this opinion.

The recission of the investigations into potassium chloride from the Soviet Union and the German Democratic Republic is set aside and the investigations shall resume in a manner consistent with this opinion.

The parties shall have thirty days from the date of entry of this opinion to agree on a schedule for these remanded matters and to report that schedule to the Court. If they cannot agree they shall report their request for scheduling and the Court will set a schedule.

      . Carbon Steel Wire Rod from Czechoslovakia, Final Negative Countervailing Duty Determination, 49 Fed.Reg. 19,370 (May 7, 1984); Carbon Steel Wire Rod from Poland; Final Negative Countervailing Duty Determination, 49 Fed.Reg. 19,374 (May 7, 1984).

      . 49 Fed.Reg. 23428-23429 (June 6, 1984).

      . 49 Fed.Reg. 19373, 19374; 49 Fed.Reg. 19377.

      . 49 Fed.Reg. 19373.

      . 49 Fed.Reg. 19372, 19375.

      . Fed.Reg. 19372, 19376.

      . See, Downs v. United States, 187 U.S. 496, 23 S.Ct. 222, 47 L.Ed. 275 (1903).

      . See, e.g., Countervailing duties — Imports from Germany, T.D. 49878, 74 Tres.Dec. 475 (1939); Countervailing duties on imports from Germany, T.D. 49821, 74 Treas.Dec. 389 (1939), T.D. 49849, 74 Treas.Dec. 438 (1939), T.D. 49958, 75 Treas.Dec. 82 (1939), T.D. 49998, 75 Treas.Dec. 139 (1939); Countervailing duties on etheyline dibromide from Germany, T.D. 49719, 74 Treas. Dec. 192 (1938); Countervailing Duties on certain German products, T.D. 48360, 69 Treas.Dec. 1008 (1936), T.D. 48463, 70 Treas.Dec. 172 (1936), T.D. 48444, 70 Treas.Dec. 134 (1936), T.D. 48479, 70 Treas.Dec. 201 (1936); Countervailing duties — Aluminum foil and manufacturers thereof, T.D. 47312, 66 Treas.Dec. 362 (1034); T.D. 47501, 67 Treas. Dec. 187 (1935).

      . H.Rep. No. 1156, 98th Cong., 2d Sess. 191-92 (1984), U.S.Code Cong. & Admin.News 1984, p. 4910.

      . Agreement on Interpretation and Application of Articles VI, XVI and XXIII of the General Agreement on Tariffs and Trade.

      . Message from the President of the United States transmitting the Texts of the Trade Agreements Negotiated in the Tokyo Round of the Multilateral Trade Negotiations, Pursuant to Section 102 of the Trade Act of 1974, H.R.Doc. No. 153, 96th Cong., 1st Sess. 259 (1979).

      . Report of the International Trade Commission to the Subcommittee on International Trade, Senate Finance Committee, Analysis of Nontariff Agreements, U.S.I.T.C. Inv. No. 332-101, 96th Cong., 1st Sess. i-iv (1979).


author: MANSMANN, District Judge.

text:
    Herman SMITH, Plaintiff, v. GREYHOUND LINES, INC., Defendant.
    Civ. A. No. 83-628.
    United States District Court, W.D. Pennsylvania.
    Aug. 29, 1984.

      David F. Weiner, Gallo & Weiner, Pittsburgh, Pa., for plaintiff.
    Walter G. Bleil, Reed, Smith, Shaw & McClay, Pittsburgh, Pa., for defendant.
   OPINION

MANSMANN, District Judge.

This action is before the Court on Defendant’s Motion for Summary Judgment. For the reasons stated below, Defendant’s Motion is granted in part and denied in part.

FACTUAL AND PROCEDURAL BACKGROUND

Plaintiff, Herman Smith, was employed for approximately 13 years as a clerk for Defendant, Greyhound Lines, Inc. Plaintiff’s job required him to receive packages to be shipped from customers and either to accept cash or to charge the transaction to the shipper or receiver. Plaintiff is a member of Local 1063 of the Amalgamated Transit Workers Union. The union has a collective bargaining agreement with Defendant.

On March 22, 1982, a salesman from Rawlplug Company brought two packages to Plaintiff’s counter. Plaintiff marked the receipt “charge.” When Defendant later billed the company, a Rawlplug Company official informed Defendant that the company had no charge account at Greyhound and that the salesman had paid cash.

Howard Kratovel, terminal manager, began an investigation of the incident. Mr. Kratovel called the Rawlplug Company salesman who had delivered the packages and was told that the salesman had indeed paid cash. Mr. Kratovel also called upon Plaintiff to explain the discrepancy. The investigation culminated with Plaintiff’s termination on May 20,1982. At that time, Plaintiff was given a notice outlining the reason for his discharge. The notice stated:

On March 22, 1982, you accepted two packages and shipped them to Erie, PA., under Prepaid NBO Busbills # 200 231 199 3 and 200 231 198 2. The shipper paid cash in the amount of $32.60 ($16.30 each). Since you failed to report or turn in the cash, and due to the serious nature of this offense, you are hereby discharged from the services of Greyhound Lines, Inc., effective May 20, 1982.

Plaintiff pursued a grievance relative to this discharge through union procedures.

On June 9, 1982, Plaintiff met with members of Defendant’s management and with union representatives to discuss the discharge. That evening Joe O’Shea, union president, called Plaintiff and conveyed Defendant’s offer of a polygraph examination. Mr. O’Shea told Plaintiff that if he passed the polygraph exam, Defendant would reinstate him with backpay. Mr. O’Shea and Defendant claim the deal also included a promise to drop the grievance if Plaintiff failed the test. Plaintiff denies ever hearing about this portion of the bargain.

Plaintiff initially refused to take the polygraph. After consulting with his wife, who told him he had nothing to lose, Plaintiff agreed to take the test. On June 23, 1982, Plaintiff went to a room in the Hilton Hotel, signed a release, and took the polygraph test. The examiner reported to Defendant that Plaintiff had failed the test. Subsequently, Plaintiff’s grievance was dropped.

On February 17, 1983, Plaintiff filed a complaint alleging wrongful discharge, defamation, assault and battery, and invasion of privacy in the Court of Common Pleas of Allegheny County. On Defendant’s petition for removal, the case was removed to this Court on the basis of diversity of citizenship and the presence of a federal question, i.e., that Plaintiff’s wrongful discharge claim is solely cognizable under section 301 of the Labor-Management Relations Act (the “LMRA”), 29 U.S.C. § 185 (1978). Defendant now moves for summary judgment.

DISCUSSION

Under Fed.R.C.P. 56(c) summary judgment may be entered only “if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.” See also Sames v. Gable, 732 F.2d 49, 51 (3d Cir.1984). The Court of Appeals for the Third Circuit has made it clear that any doubts as to the existence of genuine issues of fact are to be resolved against the moving parties. Continental Ins. Co. v. Bodie, 682 F.2d 436, 438 (3d Cir.1982). Further, the facts and inferences to be drawn from the facts must be viewed in the light most favorable to the party opposing the motion. Continental Ins. Co. v. Bodie, 682 F.2d at 438; Betz Laboratories, Inc. v. Hines, 647 F.2d 402, 404 (3d Cir.1981).

Under Rule 56(e), however, a party resisting a summary judgment motion may not rest upon the mere allegations or denials of his pleading. Ness v. Marshall, 660 F.2d 517, 519 (3d Cir.1981). In opposing the motion, his response “must set forth specific facts showing that there is a genuine issue for trial. If he does not so respond, summary judgment, if appropriate, shall be entered against him.” Id.

As a general rule, courts do not favor the summary disposition of cases on their merits. Nevertheless, in an appropriate case, an early disposition may save the parties needless and often considerable time and expense which otherwise would be incurred during trial. Thus, summary judgment is a useful tool when the record reflects that there is no genuine dispute over the critical facts. Peterson v. Lehigh Valley Dist. Council, 676 F.2d 81, 84 (3d Cir.1982).

While remaining cognizant of the above-noted standards, this Court will consider Defendant’s motion for summary judgment in the context of each of the Counts alleged in Plaintiff’s Complaint: Wrongful Discharge, Defamation, Assault and Battery, and Invasion of Privacy.

Wrongful Discharge

The Plaintiff alleges that the Defendant is liable in tort for wrongful discharge based on the use of a polygraph in contravention of the public policy set forth in 18 PA.CONS.STAT. § 7321(a) (1983). While Pennsylvania recognizes a wrongful discharge tort where an employee is required to submit to a polygraph as a condition of employment or the continuation of employment, that tort, under Pennsylvania law, is designed solely for the protection of at-will employees. See Polsky v. Radio Shack, 666 F.2d 824, 826 (3d Cir.1981); Perks v. Firestone Tire and Rubber Co., 611 F.2d 1363, 1365 (3d Cir.1979). Indeed, the courts have refused to extend the wrongful discharge tort to Plaintiffs who either are not at-will employees, Hyman v. Dart and Kraft, Inc., No. 83-2324, slip op. at 16 (W.D.Pa. April 5, 1984); Harrison v. Fred S. James, P.A., Inc., 558 F.Supp. 438, 444 (E.D.Pa.1983), or who have an alternative statutory remedy, Wolk v. Saks Fifth Avenue, Inc., 728 F.2d 221, 223 (3d Cir.1984), reh’g denied (1984). The United States District Court for the Eastern District of Pennsylvania explained:

The cases which have established a tort or contract remedy for employees discharged for reasons violative of public policy have relied upon the fact that in the context of their case the employee was otherwise without remedy and that permitting the discharge to go unredressed would leave a valuable social policy to go unvindicated.

Wehr v. Burroughs Corp., 438 F.Supp. 1052, 1054 (E.D.Pa.1977).

Plaintiff was not an at-will employee. Rather, he was employed by Defendant full-time subject to the terms of a collective bargaining agreement which contained a mandatory grievance procedure for all discharge cases. Since he may have had a cause of action pursuant to section 301 of the Labor-Management Relations Act, 29 U.S.C. § 185 (1978), he may not avail himself of the cause of action developed to protect the at-will employee, the wrongful discharge tort. Given this disposition, it is not necessary to reach the question of whether the availability of a remedy under § 301 preempts the tort of wrongful discharge.

For these reasons Defendant’s Motion for Summary Judgment is granted with respect to the wrongful discharge count.

Defamation

Where the slander is allegedly committed in Pennsylvania, state law applies. Harbridge v. Greyhound Lines, Inc., 294 F.Supp. 1059, 1063 (E.D.Pa.1969). For the tort of defamation Plaintiff has the burden of proving the defamatory character of the communication, its publication by the Defendant, its application to the Plaintiff, the understanding by the recipient of both its defamatory meaning and its application to Plaintiff, special harm, and abuse of a conditionally privileged occasion. 42 PA. CONS. ST AT. § 8343 (1982). Defendant bears the burden of proving the truth of the communication, the existence of a privilege, or that the matter is of public concern.

The Plaintiff alleges a cause of action for defamation based on circumstances arising out of Plaintiff’s discharge and his polygraph test. Four possible sources of defamatory statements are raised by Plaintiff in the Complaint and the Statement of Genuine Issues of Fact: (1) the termination notice; (2) statements made regarding the discharge and the polygraph test during meetings between the Defendant, the Union, and the Plaintiff; (3) publication of those or similar statements to Defendant’s non-management employees; and (4) the termination itself. We will address each of these in order.

First, this Court finds that the termination notice by itself was not defamatory. There is no dispute as to the exact wording of the notice, nor is its truth disputed by the Plaintiff. Truth is an absolute defense to defamation. Harbridge v. Greyhound Lines, Inc., 294 F.Supp. at 1064; Restatement (Second) of Torts, § 581A (1977). In addition, the policy of favoring private resolution of disputes between employers, employees and unions has led to the creation of an absolute privilege for such discharge notices. DeLuca v. Reader, 227 Pa.Super. 392, 399-400, 323 A.2d 309, 313 (1974).

Second, Plaintiff claims that the statements made in meetings between the Defendant, the Union and the Plaintiff are not conditionally privileged or, if they are, that Defendant has lost that privilege by abuse. One who allegedly publishes defamatory matter is not liable if it is published on a conditionally privileged occasion. Harbridge v. Greyhound Lines, Inc., 294 F.Supp. at 1065; Restatement (Second) of Torts, § 558 (1977). An occasion is conditionally privileged when the circumstances are such as to lead any one of several persons having a common interest in a particular subject matter correctly or reasonably to believe that facts exist which another sharing such common interest is entitled to know. Harbridge v. Greyhound Lines, Inc., 294 F.Supp. at 1065; Restatement (Second) of Torts, § 596 (1977).

Plaintiff offers no evidence that those present at the May 20, 1982, discharge or at any other meeting included any one other than those employees with a legitimate interest in the proceedings. The persons involved in Plaintiff’s termination included Mr. Kratovel, Terminal Manager; Mr. Curry, District Manager; Mr. Anderson, Regional Field Director; Mr. Salisbury, Auditor of Terminal Accounts; Mr. Peyton, Regional Vice-president; and Mr. Parnell, Regional Director. The only persons present at Plaintiff’s discharge were Mr. Kratovel; Mr. Byrne, Assistant Terminal Manager; Mr. O’Shea, Union President; and Mr. Newsom, Union Representative. The meeting and discharge concerned matters of interest to those present: the money shortage and the Plaintiff’s discharge. Similarly, those present at the June 9, 1982 meeting to discuss Plaintiff’s grievance included only legitimately interested parties. Thus, these are conditionally privileged occasions.

The conditional privilege can be lost by abuse if Defendant is motivated solely by spite or ill will to the Plaintiff instead of the protection of the legitimate common interest. Campbell v. Willmark Service System, Inc., 123 F.2d 204, 206-07 (3d Cir.1941). In addition, the privilege will be lost if the statements are false, and Defendant acts in reckless disregard as to whether they are false. Berg v. Consolidated Freightways, Inc., 280 Pa.Super. 495, 501, 421 A.2d 831, 834 (1980), petition for allowance of appeal denied (1981). There is no evidence in the instant case that Defendant was motivated by any desire other than protecting the work place. Thus, the conditional privilege is not lost.

Third, Plaintiff alleges that Mr. Kratovel and other management personnel disclosed to non-management employees and others that Plaintiff was discharged for theft and had failed the polygraph test. It is Plaintiff’s burden to prove publication by Defendant. 42 PA.CONS.STAT. § 8343(a)(2) (1982).

Plaintiff notes that Mary Ellen Malley, secretary to Mr. Kratovel, typed up the discharge form and, therefore, knew of the discharge and its purpose. Plaintiff also points to the testimony that Ray Peacoe, treasurer of the credit union, knew of the discharge. As explained above, however, publication of allegedly defamatory material to such interested and necessary parties is protected by a conditional privilege. In addition, the information in the notice, which Ms. Malley had access to, is undisputedly true.

Plaintiff’s deposition as well as Herbert Jackson’s statement indicate that talk about Plaintiff’s discharge and failure to pass the polygraph test was widespread. Plaintiff also testified that Mr. Smith, a collection agent, knew of the discharge and test. As noted above, it is Plaintiff’s burden to prove publication by Defendant. A defendant is not responsible, as a matter of law, for idle statements made in the terminal when there is no evidence that any employee spoke as an official in the scope of employment. Harbridge v. Greyhound Lines, Inc., 294 F.Supp. at 1065. There is no evidence that Defendant published any of the statements regarding termination “for theft” or the failure of the polygraph test.

Finally, Plaintiff claims that the actual termination “for theft” as well as the request for and administration of the polygraph test constitute defamation. This Court cannot agree. Defendant’s suggestion of a polygraph test is not defamatory in nature and is conditionally privileged. See Id. The actual administration of the polygraph is not defamatory in nature. The discharge is part of the employer-employee relationship and subject to the collective bargaining agreement. As such it must be at least conditionally privileged, (see DeLuca v. Reader, 227 Pa.Super. at 399-400, 323 A.2d at 313), subject to failure of the privilege where abuse is shown. Id.; Berg v. Consolidated Freightways, Inc., 280 Pa.Super. at 501, 421 A2d at 834. There is insufficient evidence to raise a genuine question of abuse on the part of the Defendant.

For the foregoing reasons, this Court finds that Plaintiff does not have a viable defamation cause of action against Defendant. Accordingly, Defendant’s motion for summary judgment is granted as to this count.

Assault And Battery And Invasion of Privacy

Plaintiff alleges causes of action in tort for both assault and battery, and invasion of privacy based on the administration of the polygraph test. Defendant moves for summary judgment on the sole ground that Plaintiff executed a waiver and release when he voluntarily submitted to the polygraph.

The Court of Appeals for the Third Circuit considered the issue of consent to a polygraph in the employment setting in Polsky v. Radio Shack, 666 F.2d 824 (3d Cir.1981). In Polsky, the Plaintiff argued that she was required to sign the release as a condition of continued employment. The court vacated summary judgment on the consent issue and remanded the case. The Court cited the Pennsylvania legislature’s passage of 18 PA.CONS.STAT. § 7321 (1983) as evidence of the recognition of the “uniquely vulnerable position” in which an employee is placed when an employer requires a polygraph examination. Id. at 828. The Polsky Court said:

We believe that the Pennsylvania legislature did not intend to allow employers to circumvent section 7321 by requiring indirectly what they cannot require directly. Consequently, we hold that a release from liability for violation of section 7321(a) is not valid if signing of that release was required as a condition of employment or continued employment.

Id. at 829.

In the instant case, there is a genuine issue of fact as to whether Plaintiff signed the release and took the test as a condition of employment or continued employment. Defendant stresses the lack of communication between Defendant and Plaintiff on the polygraph issue. Defendant’s message, that Plaintiff would be reinstated if he passed the test, was conveyed through union officials. That is not enough, however, to remove the consent issue as a matter of law from the dictates of the Polsky opinion. Nor does Plaintiff’s change of mind with respect to his willingness to submit to the test necessarily remove the request for a polygraph from the gambit of a “condition of employment or continued employment.” Given the Polsky decision, this Court cannot declare that the release and waiver functioned as consent to the polygraph as a matter of law.

For the reasons previously stated, this Court finds that Defendant’s motion for summary judgment, on the basis of the consent issue, should be denied. Therefore, we need not reach the merits of either tort action. Accordingly summary judgment is denied on the assault and battery, and invasion of privacy counts.

For the foregoing reasons, this Court grants in part and denies in part Defendant’s motion for summary judgment.

An appropriate Order shall issue.

      . The Plaintiff does not allege a § 301 action here and cannot do so now because he would be time-barred by the applicable statute of limitations.

      . The Plaintiff cites this Court’s Opinion in Shaw v. Russell Trucking Line, Inc., 542 F.Supp. 776, 779 (W.D.Pa.1982), to support the claim that Plaintiff has a cause of action under both § 301 of the LMRA and the wrongful discharge tort. The Shaw opinion, however, did not reach the question of whether the wrongful discharge tort would be extended beyond the at-will employment setting.


author: ARONOVITZ, District Judge.

text:
    PARKWAY MEDICAL CENTER; Palm Beach Gardens Community Hospital; Clearwater Community Hospital; and Amisub of Florida; Plaintiffs, v. Margaret M. HECKLER, Secretary of the Dept. of Health & Human Services; and Carolyne K. Davis, Administrator, Health Care Financing Administration, Defendants. BAPTIST HOSPITAL OF MIAMI; Abbey Hospital and Medical Center; Bascom Palmer Eye Institute; Bethesda Memorial Hospital; Boca Raton Community Hospital; Broward General Medical Center; Cedars Medical Center; Doctors General Hospital; Doctors Hospital of Lake Worth; Florida Keys Memorial Hospital; Florida Medical Center; Highlands General Hospital; Holy Cross Hospital, Inc.; Imperial Point Medical Center; Jackson Memorial Hospital; James Archer Smith Hospital; Larkin General Hospital; Los Olas General Hospital; Martin Memorial Hospital; Mercy Hospital, Inc.; North Broward Hospital; Palm Beach-Martin County Medical Center; Pembroke Pines General Hospital; Walker Memorial Hospital, Plaintiffs, v. Margaret M. HECKLER, Secretary of Health and Human Services, Defendant.
    Nos. 83-1700-Civ., 83-1005-Civ.
    United States District Court, S.D. Florida.
    Sept. 24, 1984.
    Patricia D. Kenny, Asst. U.S. Atty., Miami, Fla., for plaintiffs.
    Joseph Matthews, Gerald B. Wald, Murai, Wald, Biondo & Matthews, P.A., Miami, Fla., for defendants.
   MEMORANDUM OPINION AND ORDER GRANTING PLAINTIFFS’ MOTIONS FOR SUMMARY JUDGMENT AND DENYING DEFENDANTS’ CROSS-MOTIONS FOR SUMMARY JUDGMENT

ARONOVITZ, District Judge.

Plaintiffs are Part A providers of services under the Medicare program, 42 U.S.C. § 1395x(u). They seek declaratory and injunctive relief holding Administrative Regulation 42 C.F.R. § 405.452(b)(l)(ii) invalid. This regulation alters the computation formula which had been in effect since the inception of the Medicare Program in 1966 and under which provider hospitals were reimbursed for the costs of malpractice insurance.

Plaintiffs’ and defendants’ cross-motions for summary judgment are before the Court and defendants’ motion to strike certain affidavits filed by plaintiffs as an attachment to the Complaint. The parties hereto agree that there is no material issue of fact in dispute and that these actions are ripe for summary judgment.

This Court has carefully reviewed the entire record herein, all memoranda of law, has heard oral argument by respective counsel, and being otherwise fully advised in the premises and for the reasons hereinafter stated, plaintiff’s motions for summary judgment are GRANTED, each respectively, defendants’ motions for summary judgment are DENIED, each respectively, and the matter is REMANDED to the Secretary for further consideration in accord with this Opinion. The Court further GRANTS defendants’ motion to strike affidavits and has not considered such affidavits within the scope of the ruling herein made.

BACKGROUND

At the outset of the Medicare, program, the Secretary developed a formula based on utilization principles to determine Medicare’s share of hospitals' overhead costs. 42 C.F.R. § 405, Subpart D (1966). This method of calculating reimbursement was also used by private insurance carriers which used “cost-based” reimbursement (e.g., Blue Cross carriers). Under this method, all overhead expenses incurred by a hospital over the course of the year, including all types of standard insurance carried by that hospital, were lumped together in what was commonly referred to as the pool of “general and administrative costs” (hereinafter referred to as the “G & A” costs). The hospital then allocated these G & A costs to all of the revenue producing cost centers of the hospital (e.g., the operating room or the emergency room). Then, Medicare’s portion of the total costs was determined on the basis of the utilization by Medicare reimbursed total G & A costs in the same proportion as the number of Medicare patient days bore to the hospital’s total patient days. For example, if Medicare patients constituted 80 percent of the patient days at hospital A, and non-Medicare patients constituted the remaining 20 percent, then Medicare would reimburse hospital A for 80 percent of its total G & A costs.

In or about 1979, the Secretary took the position that because the dollar amount of the risk of claims payable to Medicare patients was less than that for non-Medicare patients, the share of a hospital’s total malpractice insurance premium properly allocable to the Medicare program was significantly less than the amount calculated under the utilization method; i.e., less than the amount calculated simply using the percentage of a hospital’s patient days attributable to Medicare patients. 44 Fed.Reg. at 15745.

The new regulation, 42 C.F.R. § 405.-452(b)(1)(h), was published at 44 Fed.Reg. 31641 and became effective on July 1, 1979. After that date, hospitals were required to report their actual loss experience from medical malpractice over a five-year period. Medicare would reimburse the hospital that portion of its malpractice insurance premium that was proportionate to its actual loss experience. Under the former system, Medicare had reimbursed the hospital based upon the average utilization of the hospital services by Medicare beneficiaries.

The Secretary submits that her decision to change the system is fully supported by the Medicare Act which permits the Secretary to use averaging methods for estimating the costs to be paid and which permits her to use different methods in different circumstances. 42 U.S.C. § 1395x(v)(l)(A).

With the exception of Mercy Hospital and Abbey Hospital & Medical Center, plaintiffs explicitly sought administrative review before the Provider Reimbursement Review Board (hereinafter referred to as “PRRB”) pursuant to 42 U.S.C. § 1395oo(a). The PRRB decided that it lacked authority to determine whether the Medicare regulation governing reimbursement for malpractice insurance 405.-452(b)(1)(h) is invalid, further found that the case falls within 42 U.S.C. § 1395oo(f)(l), and granted the providers’ requests for an expedited judicial review of the malpractice insurance issue (except Mercy Hospital and Abbey Hospital & Medical Center which were not so certified and which are the subject of treatment in a separate ruling on a motion to dismiss issued under even date herewith, wherein the motion to dismiss is denied). This case is before the Court pursuant to 42 U.S.C. § 1395oo. Because of the denial of the motion to dismiss, this ruling applies to all plaintiffs in both consolidated actions.

Plaintiffs attack the subject Medicare regulation both procedurally and substantively. In terms of the procedural grounds, plaintiffs assert:

A. That the Agency failed to comply with the Administrative Procedure Act (hereinafter referred to as “APA”) 5 U.S.C. § 553, in that it failed to issue sufficient notice of the rulemaking; and,
B. That the Agency failed to provide an adequate basis and purpose statement with the malpractice regulation (5 U.S.C. § 553).

The substantive attack upon the subject regulation charges that:

A. It violates (APA) 5 U.S.C. § 706(2)(a) which requires a reviewing court to hold unlawful and set aside agency action found to be arbitrary, capricious, an abuse of discretion or otherwise not in accordance with law; and,
B. The subject regulation is violative of the Medicare statute because this cost regulation is not rational, it is arbitrary, that it does not further the purposes of the Medicare statute, and fails to allocate costs as required by that law.

This Court is aware that the standard of review of an agency decision is a narrow one. Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 91 S.Ct. 814, 28 L.Ed.2d 136. However, this does not preclude judicial review and the courts are not required to stand aside and rubber stamp their affirmance of administrative decisions that are deemed inconsistent with a statutory mandate or that frustrate congressional policy underlying a statute. National Labor Relations Board v. Brown, 380 U.S. 278, 85 S.Ct. 980. See also, Motor Vehicles Manufacturers Ass’n. of the United States v. State Farm Mutual Automobile Insurance Co., 463 U.S. 29, 103 S.Ct. 2856, 77 L.Ed.2d 443.

Therefore, this Court has proceeded to consider the contentions asserted by plaintiffs in these cases, and the Court has jurisdiction to entertain same.

Status

At least eleven United States District Courts have held the subject regulation to be invalid. See DeSoto General Hospital v. Heckler, 617 F.Supp. 110 (M.D.La.1984); and, Metropolitan Hospital, Inc. v. Heckler, Civil Action No. C-83-502-A (N.D.Ga. June 25, 1984); Mt. Carmel Mercy Hospital v. Heckler, 581 F.Supp. 1311 (E.D.Mich.1983) (DeMascio, J.) appeal docketed no. 84-1188 (Mar. 21, 1984); Abington Memorial Hospital v. Heckler, 576 F.Supp. 1081 (E.D.1983) (Fullman, J.), appeal docketed No. 84-1079 (Feb. 15, 3rd Cir.1984); Chelsea Community Hospital v. Heckler, No. 83CV-6126-AA, slip op. (E.D.Mich. Dec. 29, 1983) (Joiner, J.) (adopting opinion of DeMascio, J. in Mt. Carmel Mercy Hospital v. Heckler), appeal docketed No. 84-1146 (6th Cir. Mar. 6, 1984); St. James Hospital v. Heckler, 579 F.Supp. 757 (N.D.Ill.1984) (Will, J.) appeal docketed No. 84-1478 (7th Cir. March 27, 1984); Lloyd Noland Hospital and Clinic v. Heckler, 619 F.Supp. 1 (N.D.Ala.1984) (Propst, J.); Bedford County Memorial Hospital v. Heckler, 583 F.Supp. 367 (W.D.Va.1984) (Turk, J.); Albany General Hospital v. Heckler, 584 F.Supp. 614 (D. Oregon 1984) (Frye, J.) appeal docketed, no. 84-3865 (9th Cir. June 6, 1984); Humana of Illinois, Inc. v. Heckler, 584 F.Supp. 618 (C.D.Ill.1984) (Alderman, J.) (adopting opinion of Will, J. in St. James Hospital v. Heckler) appeal docketed no. 84-1727 (7th Cir. April 30, 1984); St. Joseph’s Hospital, Tucson v. Heckler, no. 82-781, slip op. (D.Ariz. April 24, 1984) (Marquez, J.); Alexandria Hospital v. Heckler, 586 F.Supp. 581 (E.D.Va.1984) (Merhige, J.).

At least four District Courts have held that the malpractice rule is valid. See Athens Community Hospital v. Heckler, 565 F.Supp. 695 (E.D.Tenn.1983), appeal docketed, No. 83-5546 (6th Cir. Aug. 5, 1983); Cumberland Medical Center v. Heckler, 578 F.Supp. 39 (M.D.Tenn.1983) (Morton, J.) (adopting opinion in Athens Community Hospital v. Heckler) appeal docketed, No. 83-5549 (6th Cir. Aug. 9,1983); Humana of Aurora, Inc. v. Heckler, No. 83-2-70, slip. op. (D.Colo. Sept. 19, 1983) (Weinshienk, J.); appeal docketed, No. 83-2417 (10th Cir. Nov. 4, 1983); Walter O. Boswell Memorial Hospital v. Heckler, 573 F.Supp. 884 (D.D.C.1983); appeal docketed, No. 83-2223 (D.C.Cir. Dec. 2, 1983), (argued June 4, 1984).

No United States Circuit Court of Appeals has yet ruled on the matter, to this Court’s knowledge; although several appeals are pending.

This Court agrees with the majority of other Courts which have addressed this problem and which have held that the malpractice rule is invalid. This Court therefore now holds the subject regulation to be invalid. Rather than re-state a subject matter which has been thoroughly memorialized by other District Courts, the Court specifically adopts the reasoning and the holding of the opinion of Senior United States District Judge Hubert L. Will in St. James Hospital v. Heckler, 579 F.Supp. 757 (N.D.Ill.1984), and the opinions of sister Courts not inconsistent therewith, particularly Abington Memorial Hospital v. Heckler, supra.

Conclusion

Thereupon in accordance with St. James Hospital, supra, this Court hereby holds with regard to the procedural grounds as follows:

A. The Court agrees with the reasoning and holding in St. James Hospital, supra, and the other Courts so holding that the notice was sufficient to fairly apprise the interested parties; and
B. That the Agency failed to meet the standard proscribed by statute and articulated by the courts requiring an adequate basis and purpose statement with the malpractice regulation and likewise failed to respond adequately to the uniformly negative public comments on the proposed regulation. The Agency failed to meet the standard provided by statute and articulated by the courts. It failed to comply with § 553(c) of APA.

Upon the reasoning in and again based upon St. James Hospital, supra, and the other authorities cited with regard to the substantive contentions made by plaintiffs and not inconsistent therewith, this Court holds that:

A. 42 C.F.R. 405.452(b)(l)(ii) is violative of APA 5 U.S.C. § 706(2)(a) because the Agency action is arbitrary, capricious, an abuse of discretion and not in accordance with law; and
B. That the subject regulation as promulgated violates the Medicare statute and that it is neither rational, non-arbitrary nor does it further the purpose of the Medicare statute.

This ruling does not preclude the Secretary from considering and adopting changes to the pre-July 1, 1979 procedure and practice, if made in accordance with law, both procedurally and thereafter substantively comporting with the authority conferred under the Medicare statute. Thereupon, this matter is REMANDED to the Secretary for further consideration in accordance with this Opinion. Further, the defendants’ motion to strike affidavits is GRANTED.