author: WATSON, Judge:

text:
    UNITED STATES of America, Plaintiff, v. FEDERAL INSURANCE COMPANY and Cometals, Inc., Defendants.
    Court No. 82-05-00594.
    United States Court of International Trade.
    March 14, 1985.

      Richard K. Willard, Acting Asst. Atty. Gen., Washington, D.C., Joseph I. Liebman, Atty. in Charge, Intern. Trade Field Office, and Barbara M. Epstein, Dept. of Justice, Civil Div. Commercial Litigation Branch, New York City, for plaintiff.
    Serko & Simon, New York City, David Serko, Margaret H. Sachter, and George S. Locker, New York City, for defendants.
   WATSON, Judge:

The plaintiff brought this action against the importer, (Cometals, Inc.), and the importer’s surety, Federal Insurance Company, in order to recover approximately $230,-344.12 in import duties, plus interest. It is before the court on the plaintiff’s motion for summary judgment, defendants’ opposition thereto and their cross motion for summary judgment on their counterclaims for equitable recoupment. There is no dispute as to the facts.

Underlying this action is the plaintiff’s failure to obtain payment of import duties, despite Cometal’s transmittal of the money owed, to its broker, James Loudon & Co. (Loudon).

In this decision, the Court finds that the plaintiff-government disregarded its own regulations, interpreted a decisive regulation unlawfully, and disregarded the manifest intention of Congress. Thus, sole responsibility for not receiving the duties that are claimed to be owed by the defendants, must be attributed to the plaintiff’s malfeasance. In short, the government is equitably estopped from recovering on its claim.

This action has its origin in the importation by Cometals of titanium sponge. As a result of the entry involved Cometals owed approximately $230,344.12 in import duties. Loudon, after receiving the necessary funds from Cometals on or about May 2, 1980, tendered its own uncertified check in the amount of $230,344.12 on May 12, 1980, as payment to the Customs Service for the duties owed by defendant-importer.

On May 29, 1980, however, this check was returned to Customs by the Bank of America because of insufficient funds in Loudon’s account. Customs then requested and subsequently received a second check from Loudon on June 12, 1980. This cheek was also returned by the bank because of insufficient funds. Finally, after the Customs Service’s direct demands for payment from Loudon proved futile, it turned to the defendants for payment.

It should also be noted that the government had audited Loudon in October of 1977, and that audit had revealed a severe net worth deficiency. The September, 1977, financial statement, which the government admits it obtained as a result of this audit, showed that Loudon’s liabilities exceeded its assets by over $164,000 and that it was responsible for more than $190,000 in overdrafts. Despite this fact, no further audits were conducted by the Customs Service.

Moreover, in late 1979, and early 1980, six of Loudon’s uncertified checks covering Cometal’s entries were returned to the government because of insufficient funds. Nevertheless, the government continued to re-deposit those checks or to accept new checks from Loudon.

I

Regulations promulgated by the Customs Service provide a detailed procedure for the payment of duties. See generally, 19 C.F.R. § 24. The tender and acceptance of uncertified checks is governed by 19 C.F.R. § 24.1(3) which reads as follows: 19 C.F.R. § 24.1(3)

(3) An uncertified check drawn by an interested party on a national or state bank or trust company of the United States or a bank in Puerto Rico or any possession of the United States if such checks are acceptable for deposit by a Federal Reserve bank, branch Federal Reserve bank, or other designated depository shall be accepted if there is on file with the district director an entry bond or other bond to secure the payment of the duties, taxes, or other charges, or if a bond has not been filed, the organization or individual drawing and tendering the uncertified check has been approved by the district director to make payment in such manner. In determining whether an uncertified check shall be accepted in the absence of a bond, the district director shall use available credit data obtainable without cost to the Government, such as that furnished by banks, local business firms, better business bureaus, or local credit exchanges, sufficient to satisfy him of the credit standing or reliability of the drawer of the check, [emphasis supplied]

The government argues that when it accepted the uncertified checks in question from Loudon it was acting in compliance with 19 C.F.R. § 24.1(3). According to the government, as long as there was a bond on file, even if it was a bond posted by the importer, it was acting in accordance with the law.

The Court finds that the government’s interpretation of 19 C.F.R. § 24.1(3) violates three sections of the law which are in pari materia; 19 U.S.C. § 66, 19 U.S.C. § 1641(d) and 19 U.S.C. § 1648.

19 U.S.C. § 66 requires that all regulations prescribed by the Secretary of the Treasury relating to the collection of duties from importation must not be inconsistent with the law.

§ 66. Rules and forms prescribed by Secretary
The Secretary of the Treasury shall prescribe forms of entries, oaths, bonds, and other papers, and rules and regulations not inconsistent with law, to be used in carrying out the provisions of law relating to raising revenue from imports, or to warehousing, and shall give such directions to customs officers and prescribe such rules and forms to be observed by them as may be necessary for the proper execution of the law. [emphasis supplied]

19 U.S.C. § 1641 deals with the regulation of brokers. When enacting 19 U.S.C. § 1641(d) Congress expressly stated that the Secretary of the Treasury shall promulgate rules and regulations regarding Customs brokers to protect both importers and the revenue of the United States. 19 U.S.C. § 1641(d) reads as follows:

19 U.S.C. § 1641 Customhouse brokers (d) Regulations by Secretary. The Secretary of the Treasury shall prescribe such rules and regulations as he may deem necessary to protect importers and the revenue of the United States, and to carry out the provisions of this section, including rules and regulations requiring the keeping of books, accounts, and records by customhouse brokers, and the inspection thereof, and of their papers, documents, and correspondence by, and the furnishing by them of information relating to their business to, any duly accredited agent of the United States, [emphasis supplied]

This Court deems the word “shall” contained within 19 U.S.C. § 1641(d) to be imperative in nature. Although Congress gave the Secretary certain discretion in how he promulgates regulations concerning the relationship between brokers, importers and the revenue of the United States, this Court finds that the Secretary must, when promulgating such regulations, adhere to Congress’s directive that these regulations protect both the importers and the revenue of the United States.

If there remained any doubt as to why Congress used the word “shall” in 19 U.S.C. § 1641(d), the legislative history of the 1935 amendment to 19 U.S.C. § 1641(d) that added the language “to protect importers,” makes it clear that Congress intended that the word “shall” be given its common imperative meaning. The overwhelming impact of this legislative history justifies the following extended quotation:

While the large importers are more or less familiar with customs procedure the great majority of importers are solely dependent upon the honesty and the competency of their customs brokers to protect their interests. Even in the case of large importers, however, due to the specialized nature of customs procedure, great reliance must be placed upon their brokers for proper entry of merchandise.
In view of the fact that these customhouse brokers are quasi officers of the Treasury and that by licensing them the Treasury holds out to importers that it has investigated their character and represents to such importers that they are capable and honest in their conduct of their customs business, and in view of the large opportunities for profitable fraud open to dishonest persons who, from the very nature of things, occasionally succeed in obtaining licenses as customhouse brokers despite the strictest possible investigation by the Treasury of their character and qualifications, it is essential that the Department have wide discretion in dealing with these brokers and that the Secretary of the Treasury, therefore, be given broad powers to supervise and regulate their activities. Under existing law his powers in these respects are very limited, and it is the purpose of the present amendments to broaden the Secretary’s powers so that he can in the future more effectively cope with frauds practiced by customhouse brokers on both importers and the revenues of the United States.
Although the great majority of these brokers are entirely above reproach in the conduct of their business, the corrupt practices of a few, unhampered by adequate statutory provisions for supervision, have proved a grave menace to importers and customs revenue alike. The present amendments are designed to remedy this situation. They will give to the Secretary of the Treasury the power to regulate the conduct of the business of customhouse brokers in such a manner that the opportunity for fraudulent practices will be reduced to an absolute minimum, [emphasis supplied]
S.Rep. No. 1170, 74th Cong., 1st Sess., 3 (1935).

It is thus clear that Congress was extremely concerned with the victimization of importers by brokers and required that the Secretary prescribe regulations protecting both importers and the revenue of the United States from possible frauds by brokers.

19 U.S.C. § 1648 granted the Customs Service broad authority to promulgate regulations regarding the payment of Customs duties with uncertified checks. See 19 C.F.R. § 24.1(3). However, when the Customs Service agrees to accept an uncertified check from a broker pursuant to any regulation it promulgates under 19 U.S.C. § 1648, such regulation and the Customs Service’s interpretation of this regulation, must conform to clear Congressional intent contained within 19 U.S.C. § 1641(d).

The regulation contained in 19 C.F.R. § 24.1(3) cannot operate to the detriment of importers entrusting their funds to brokers, without violating 19 U.S.C. § 1641(d). A regulation such as this one that authorizes the government to accept an uncertified check from a broker cannot be exclusively used for the protection of the revenue of the United States at the unwitting expense of the importer, without failing to fully effectuate 19 U.S.C. § 1641(d) and its clear legislative purpose. It would be palpably absurd to have the importer guarantee the conduct of its broker when the clear intent of 19 U.S.C. § 1641(d) was to protect both the revenue of the United States and the importer from possible misconduct by brokers.

It is inconceivable that the sum at issue would not be safely within the hands of the government, had it complied with its own regulation. The regulation in question, 19 C.F.R. § 24.1(3), must be interpreted so that it comports with the law, in which case, the bond posted must be the bond of the party making payment. Any interpretation of this regulation which would allow the bond of the importer to protect the legal obligation of the broker is unlawful.

This Court also takes note of another regulation promulgated pursuant to 19 U.S.C. § 1641 which also must protect both the importer and the revenue of the United States.

19 C.F.R. § Ill.27 states:

The Regional Director ... shall make such audit or inspection of the books and papers to be required to be kept and maintained by a broker as may be necessary ... to determine whether or not the broker is complying with the requirements of this part. Furthermore the Regional Director ... may inspect such books and papers to obtain information regarding specific Customs transactions for the purpose of protecting importers or the revenue of the United States, [emphasis supplied]

The Regional Director must conduct audits in a manner designed to protect both importers and the revenue of the United States. This Court cannot permit the plaintiff to benefit from its own violation of the law nor can it condone the Custom Service’s failure to conform to its own-regulations. By continuing to redeposit Loudon’s “bouncing checks” in early 1980, the government was directly responsible for endangering the payment of duties by Cometals. At the same time, the government was not enforcing a law intended to protect both importers and the revenue of the United States.

The government’s failure to act in accordance with 19 C.F.R. § 24.1(3) and its violation of the manifest intention of Congress would be sufficient by itself to estop it from obtaining the duties in question. Moreover, by the loose enforcement of 19 C.F.R. § Ill.27 and by failing to follow up its September, 1977, audit of Loudon, the government was increasing its risk and the risk of importers who were entrusting their funds to the broker. This Court holds that under the facts presented the government has committed affirmative misconduct and further holds that it is equitably estopped from recovering the import duties in question.

II

Equitable estoppel adjusts the relative rights of parties based upon a consideration of justice and good conscience. United States v. Georgia-Pacific Company, 421 F.2d 92, 95 (9th Cir.1970) (and cases cited therein). It has been stated that equitable estoppel precludes a party both at law and equity “[fjrom asserting rights which might perhaps have otherwise existed either of property, of contract, or of remedy as against another person, who has in good faith relied upon such conduct, and has been led thereby to change his position for the worse, and who on his part acquires some corresponding right, either of property, of contract or of remedy.” 3 Pomeroy, Equity Jurisprudence' § 804 at 189 (5th ed. Symons 1941).

Generally, in suits not involving the government, four elements must be present in order to establish the defense of estoppel: (1) the party to be estopped must know the facts; (2) he must intend that his conduct shall be acted on or must so act that the party asserting the estoppel has a right to believe it is so intended; (3) the latter must be ignorant of the true facts and (4) he must rely on the former’s conduct to his injury, United States v. Ruby Co., 588 F.2d 697, 703 (9th Cir.1978).

The traditional elements of estoppel are clearly present in the instant action. The government knew about Loudon’s precarious financial condition and improperly relied upon Cometal’s bond when it accepted Loudon’s uncertified checks. The defendants were not aware of Loudon’s precarious financial condition, nor did they know that the government was relying on them as guarantors of Loudon’s “bouncing” checks. The government's mechanism for collecting duties is in its nature intended to encourage reliance on its regularity and propriety by those owing duties. As a result of reliance on the propriety of the government’s conduct, Cometals lost $230,-344.12. The government’s failure to adhere to its own regulations and to act in accordance with the law provides the crucial element of affirmative misconduct that is necessary to estop the government.

The Court in Corniel Rodriguez v. I.N.S., 532 F.2d 301 (2nd Cir.1976) held that: “[n]on compliance with an affirmatively required procedure, obviously designed to protect individuals ... (is) an act of affirmative misconduct.... Indeed since 22 C.F.R. § 42.122(d) was validly adopted ... it carries the force of law (and) must be respected and enforced by the Government.” Corniel Rodriguez v. I.N.S., 532 F.2d, at 306, 307 (1976) (and cases cited therein), [emphasis supplied]

The presence of an additional element of affirmative misconduct must be established in order for the government to be subject to equitable estoppel. This additional element is necessary because the government cannot be estopped under the same terms as a private litigant:

[W]hen the government is unable to enforce the law because the conduct of its agents has given rise to an estoppel, the interests of the citizenry as a whole in obedience to the rule of law is undermined. It is for this reason that it is well settled that the government may not be estopped on the same terms as any other litigant. Heckler v. Community Health Services of Crawford, — U.S. -, 104 S.Ct. 2218, 2224, 81 L.Ed.2d 42 (1984).

This Court must take note however, that failing to estop the government when it has breached the law would encourage disobedience of the law by the government as well as private citizens.

It has also been said that the government cannot be estopped under the same conditions as a private party because of the government’s responsibility to protect the public interest. “As a general rule, laches or neglect of duty on the part of officers of the Government is no defense to a suit by it to enforce a public right or protect a public interest....” Utah Power and Light Co. v. United States, at 243 U.S. 389, 409, 37 S.Ct. 387, 391, 61 L.Ed. 791 (1917) [emphasis supplied].

In the instant case the public interest required to be protected consisted of both the revenue of the United States and importers. The plaintiff here failed to comply with the law and ignored the public interest by not protecting both importers and the revenue of the United States. The reasons for limiting the application of equitable estoppel against the government certainly cannot justify the plaintiffs failure to act in accordance with the law in a matter of the utmost importance.

It must be acknowledged that the opinion in Air Sea Brokers v. United States, 66 C.C.P.A. 64, C.A.D. 1222, 596 F.2d 1008 (1979) held that equitable estoppel is not available in cases involving the collection of duties on imports. The conduct complained of in Air Sea Brokers however, did not involve the breach of a regulation or a statute. In Air Sea Brokers, the alleged misconduct consisted of the filling out of forms by the government which might have allowed a broker to achieve duty free entry without certain documents. This conduct was counterbalanced by an ambiguous stamp on the form and more importantly, actual knowledge by the broker that the Custom Service was not waiving the documentary requirement.

Thus, the government’s conduct in Air Sea Brokers was milder and more ambiguous than the conduct involved in this case. In the instant case there is no possible ambiguity in what the government did and no ameliorating factors in justifying its dereliction of duty. Here, the conduct of the government directly contravened two basic purposes of the law; the protection of the revenue of the United States and the protection of importers. Also of significance is that in the instant action, the defendants justifiably relied on the government’s conformance with the law, while in Air Sea Brokers, the broker had actual knowledge of the government’s conduct. The opinion in Air Sea Brokers does not sanction all possible government misconduct in the area of duty collection, particularly when it displays a blatant disregard for the public interest in a matter of the utmost importánce.

Moreover, for the government to be immune from the defense of equitable estoppel it must be acting for the benefit of the public. See Utah Power and Light v. United States, supra. Thus, in Federal Crop Insurance v. Merrill, 332 U.S. 380, 68 S.Ct. 1, 92 L.Ed. 10 (1947) a farmer who had planted wheat relying on the advice of an agent of the Federal Crop Insurance Corp. (FCIC) that it was insured under its program could not recover for the loss of his crop, because the regulation of the FCIC precluded coverage for spring wheat which had been reseeded on winter wheat acreage. To permit the farmer to recover in Federal would undermine a fundamental public policy.

In the instant case it is affirmative government conduct not the representation of a mere government agent that has contravened the government’s own regulations as well as the express intent of Congress. Here, it is the government that has acted in opposition to the public interest, by violating its duty to protect both importers and its own revenue. The government has given a higher priority to a display of leniency to a broker, the one party under the facts presented whose role is least identifiable with the public interest. The violation of the government’s duty to protect importers as well as the revenue of the United States cannot be sanctioned by this Court.

In I.N.S. v. Miranda, 459 U.S. 14, 103 S.Ct. 281, 74 L.Ed.2d 12 (1982) an 18-month delay in considering an immigration application did not amount to affirmative misconduct. In I.N.S. however, no regulation or statute was violated by the government and there was also justification for the administrative delay.

In Schweiker v. Hansen, 450 U.S. 785, 101 S.Ct. 1468, 67 L.Ed.2d 685 (1981) incorrect advice given by a field representative of the Social Security Administration did not amount to affirmative misconduct. Most revealingly, the Supreme Court stated in Schweiker that “[a]t most, Connelly's [the government’s] conduct did not cause respondent to take action ... or fail to take action, ... that respondent could not correct at any time.” (Citations omitted) Id. at 789, 101 S.Ct. at 1471 [emphasis supplied]. Furthermore, the Supreme Court emphasized that the field representa-. tive’s neglect only violated the agency’s claims manual and not a regulation. See Schweiker v. Hansen, 450 U.S. 785, 101 S.Ct. 1468, 67 L.Ed.2d 685. The contrast with the facts of this case could hardly be more striking, in that here the importer was irreparably injured as a result of an obvious disregard by the government of its own regulations and a statute.

The loss of revenue here is directly attributable to the government’s failure to act in accordance with its own regulations and in accordance with a clear Congressional mandate. In this case the plaintiff has not acted in behalf of the public interest and thus has no right to resist the just effect of equitable estoppel.

In conclusion, this Court holds that the government’s failure to act in accordance with the law equitably estops it from obtaining the duties in question. The defendants’ claims, for equitable recoupment as well as the government’s obligation to the surety are not reached in this opinion because this action is resolved on more fundamental grounds.

JUDGMENT

This case having been duly submitted for decision and the Court, after due deliberation, having rendered a decision herein, now, in conformity with said decision,

IT IS HEREBY ORDERED, ADJUDGED, and DECREED:

That plaintiff’s motion for summary judgment is DENIED; and it is further

ORDERED that defendant’s motion for summary judgment is GRANTED.

      . In an earlier decision the Court dismissed counterclaims made by defendants under the Federal Tort Claims Act (28 U.S.C. § 2671 et seq.), the Tucker Act (28 U.S.C. § 1491), and the Administrative Procedure Act, 5 U.S.C. § 701 et seq., United States v. Federal Ins. Co. and Cometals Inc., 6 C.I.T. -, (Slip Op. 83-118, November 15, 1983).

      . For example, Check No. 43896 dated March 7, 1980, was not paid until April 21, 1980; Check No. 44314 elated April 15, 1980, was not paid until May 5, 1980.

      . § 1648. Uncertified checks, United States notes, and national bank notes receivable for customs duties.
      Customs officers may receive uncertified checks, United States notes, and circulating notes of national banking associations in paymenl of duties on imports, during such time and under such rules and regulations as the Secretary of the Treasury shall prescribe; but if a check so received is not paid the person by whom such check has been tendered shall remain liable for the payment of the duties and for all legal penalties and additions to the same extent as if such check had not been tendered, [emphasis supplied]

      . The statute also expressly states that "[i]f a check so received is not paid the person by whom such check has been tendered shall remain liable for the payment of the duties____” See 19 U.S.C. § 1648. [emphasis supplied]

      . The sovereign’s duly lo protect the public interest is subsumed within the doctrine of sovercign immunity. However the seope of sovereign immunity and the degree to which it lias insulated the government has been narrowed considerably. The doctrine of sovereign immunity and its corollary the governmental-proprietary distinction has been criticized and narrowed. See United States v. Georgia Pacific Co., 421 F.2d 92, 99. See also Garcia v. San Antonio Metropolitan Transit Authority, - U.S. -, ---, 105 S.Ct. 1005, 1009-1017, 83 L.F.d.2d-(1985).


source: Caselaw Access Project

author: HORACE T. WARD, District Judge.

license: Public Domain

text:
    Roger FRIEDMAN, Plaintiff, v. FEDERAL BUREAU OF INVESTIGATION, et al., Defendants.
    Civ. A. No. C78-309A.
    United States District Court, N.D. Georgia, Atlanta Division.
    Oct. 6, 1981.
    Supplemental Order of Court Oct. 5, 1984.

      Roger Friedman, pro se.
    Myles Eastwood, Asst. U.S. Atty., Atlanta, Ga., for defendants.
   ORDER OF COURT

HORACE T. WARD, District Judge.

This action is brought pursuant to the Freedom of Information Act against the Federal Bureau of Investigation and the Justice Department as a whole. Jurisdiction in this court is founded on 5 U.S.C. § 552(a)(4)(B). Plaintiff first sought the release of information from defendants by letter dated August 31, 1977. Also in 1977, plaintiff mailed requests to the San Francisco, New York, Atlanta, and Boston field offices of the FBI pursuant to then regulations establishing field offices as separate record systems. On January 28, 1978, plaintiff mailed an FOIA request to the Department of Justice’s Office of Management and Finance, and was advised of an indefinite delay due to need of consultation with the FBI. At the time of the filing of the complaint on February 24, 1978, plaintiff had received no documents. By Order dated May 3, 1978, Judge O’Kelley denied as premature plaintiff’s Vaughn v. Rosen (I), 484 F.2d 820 (D.C.Cir.1973) cert. denied, 415 U.S. 977, 94 S.Ct. 1564, 39 L.Ed.2d 873 (1974) motion for itemization of withheld records. On April 11,1978, the FBI delivered some of the documents requested by plaintiff. By Order dated September 6, 1978, Judge O’Kelley granted plaintiff’s Vaughn motion as to the FBI so that plaintiff would have sufficient information with which to challenge FBI claims of exemption. The itemization was filed on October 6, 1978, in the form of an Affidavit and as an answer to an interrogatory.

As a threshold matter, the court must clarify the materials encompassed within the plaintiff’s action. Plaintiff contends that the scope of his action includes requests sent to the field offices in 1977, and to the following field offices in May of 1978: Atlanta, Savannah, Baltimore, Charlotte, N.C., Detroit, Jackson, Miss., and Columbia, S.C. Plaintiffs 1978 request makes specific reference to records compiled on the Mt. Beulah conference of Southeastern Underground Newspapers held in October, 1970, and the Ann Arbor Conference held in July, 1979. Materials located by the Jackson office have been withheld pursuant to the national security exemption of the FOIA, and documents at the Charlotte office have been destroyed. Plaintiffs position regarding the scope of the action led him to include in his motion for summary judgment, certain “Undisputed Material Facts.” The facts refer to inadequate or unjustified government processing of the request on the Mt. Beulah Conference and illegal destruction of documents in Charlotte. Plaintiff also seeks court orders to produce all records requested. However, it cannot be disputed that the complaint dealt only with the Washington and Boston FOIA requests. The defendants contend that those requests are the only ones material to this lawsuit. Defendants have structured their response to the motion for summary judgment, their cross-motion for summary judgment, and their statement of material facts in support of their motion, in line with that contention. The court will not comment on the merits of defendants’ or plaintiff’s arguments regarding Local Rule 91.72. Technical discussions of Local Rules are inappropriate in the face of the necessity to clarify the proper scope of this action.

Plaintiff relies on the September 6, 1978 Order of Judge O’Kelley to justify including field office requests within this action. Judge O’Kelley ruled that plaintiff’s Vaughn v. Rosen motion, originally filed on February 27, 1978 and denied as premature, should be granted as to the FBI so that plaintiff would have sufficient information with which to challenge claims of exemption. Judge O'Kelley also ruled that the plaintiff was deemed to have exhausted administrative appeals due to delay by other divisions of the Department of Justice. Therefore, the motion of defendants to stay proceedings was denied, and plaintiff’s motion to compel was granted. Defendants’ answers to plaintiff’s interrogatories were filed on October 6, 1978. The court does not read Judge O’Kelley’s ruling to enlarge the scope of the action beyond those requests considered in the complaint and original Vaughn motion. Accordingly, disputes specifically concerning documents outside this action will not be addressed. Thus, the court rules that the standards for determining whether the FOIA has been complied with should be applied to the Washington and Boston requests only. All the Boston documents are covered by the FBI national office release, but some material has been withheld in reliance on FOIA exemptions.

I. FBI Compliance with Plaintiffs Request under the FOIA

The FBI maintains index cards in two general categories. “Main” cards bear the name of an individual, organization, activity or the like, which is the main subject of a file in the system. A “see” card bears the name of an individual, organization, activity or the like, which has been cross-referenced with the “main” card’s subject. The second King Affidavit, as amended, established that the “see” cards refer a reader to all documents in which a subject is indexed. The FBI indexes names and information considered relevant for future retrieval. The affidavit states that “ ‘see’ references contain insufficient information by which a positive identification can be made with a given name ... receipt of additional information can assist in making positive identification or in locating the file in which the requested information is maintained.” Apparently, the relationship between the request and the file appearing on the “see” card is not alone always enough to tell the FBI what part of the “see” file is requested or should be revealed.

In the case at bar, plaintiff requested information on himself “and his activities,” and he listed files which he requested to be searched. The search was conducted by locating those files which appeared on “main” and “see” cards. Plaintiff argues that this search was not responsive to the request. The FOIA requires production of all records “reasonably described by the request.” 5 U.S.C. § 552(a)(3). The defendants describe the request as one seeking “all documents on himself.” Such a description acts to justify the scope of the search, but it is not helpful in dealing with the plaintiff’s argument. The request clearly seeks access to materials on FBI investigations of political activities with which he was affiliated. The problem occurs because personal involvement in any given activity may, or may not, result in a “see” card. Thus, undisputed facts pose the following legal question: Is the FBI fulfilling its duties under the FOIA by searching only the “main” and “see” cards when the plaintiff includes a request for materials about investigations of specified activities in which he was involved?

A similar question has been addressed by the District Court of Massachusetts. Stern v. United States, No. 77-3812-C (D.Mass. August 25, 1980). The plaintiff requested that the FBI provide him with any documents in the FBI’s possession which referred to plaintiff or any of his alleged activities. He also listed several organizations with which he was involved, such as the National Lawyers Guild. The plaintiff claimed that a search of the indices is incomplete if limited to the FBI’s “main” and “see” cards. However, the court ruled that FOIA responsibilities are satisfied by a search of its general indices. The court reasoned that it is in the best interests of the FBI to index all references which it might need to retrieve in the future. Further, that interest acts as a safeguard against any danger that the FBI might narrow the scope of its indices in an effort to narrow the application of the FOIA to its agency.

This court agrees with the reasoning of the District Court of Massachusetts. Accordingly, the FBI’s “main” and “see” search policy comports with FOIA responsibilities when a request seeks materials pertaining to an individual and his activities. However, plaintiff in the instant case appears to argue that the scope of his request is not restricted to information “pertaining to” himself. He appears to contend that the request seeks materials about investigative material on organizations and activities beyond those referring to his own personal involvement. If this was the case, then a search limited to “main” and “see” materials would not be fully responsive to the request. However, the demand for materials which do not focus on personal involvement seeks matter not “reasonably described” by the request. 5 U.S.C. § 552(a)(3). The FBI construed the request to be one seeking information “pertaining to the subject” of materials. The agency thus technically avoids the mandate of 28 C.F.R. § 16.3(d)(2) (1980), giving the requester an opportunity to confer with personnel to reformulate a request which was denied on grounds that it did not reasonably describe records sought. Since the request is at best ambiguous, the court does not find that defendant failed to make a “good faith attempt to assist the requester.” See Ferri v. Bell, 645 F.2d 1213 (3rd Cir.1981).

II. Exemptions

Only a portion of the documents returned by the “see” reference cards were released to plaintiff. The FlJl first consulted its “main” index which indicated a file on plaintiff under “Security Matter-New Left.” There were eight references on a “see” card, and defendants processed the referenced material “pertaining to” plaintiff. Second King Affidavit, ¶ 12. Withholding was based on FOIA exemptions (b)(7)(C) and (b)(7)(D). Under 5 U.S.C. § 552(b), agency records are exempt from disclosure if they are:

(7) investigatory records compiled for law enforcement purposes, but only to the extent that the production of such records would ...
(C) constitute an unwarranted invasion of personal privacy, (D) disclose the identity of a confidential source.

The threshold question for both exemptions is whether the records were compiled for “law enforcement purposes.” Defendants contend that these records fall within the language because they were compiled (1) to investigate acts which are illegal and can result in criminal or civil sanctions, (2) to ascertain the identity and actions of those committing the acts, and (3) to ascertain the identity and actions of those aiding and abetting, or conspiring with, such actors. Rural Housing Alliance v. Department of Agriculture, 498 F.2d 73 (D.C.Cir.1974). Plaintiff agrees that records compiled in connection with an investigation of an armed robbery in South Carolina, in which a car registered in plaintiff’s name was used by men associated with the Black Panther Party, do fall within “law enforcement purposes.” However, plaintiff contends that the records which are unrelated to the robbery investigation were not compiled for “law enforcement purposes.” Specifically, plaintiff contends that the records represent unlawful monitoring of activities protected by the First Amendment. Defendants contend that those records were compiled through investigations of actual or possible violations of one or more of the following or related statutes: 18 U.S.C. § 2383 (Rebellion or Insurrection); 18 U.S.C. § 2384 (Seditious Conspiracy); 18 U.S.C. § 2385 (Advocating the Overthrow of the Government); 18 U.S.C. § 2387 (Sedition). Second Affidavit of King. ¶ 12(E), p. 6.

The defendant carries the burden of proof of establishing that exemptions are proper, and the district court’s ruling on a claim of exemption must not rely solely upon an affidavit to determine factual basis and bona fides. See Irons v. Bell, 596 F.2d 468 (1st Cir.1979). The defendants maintain that investigations of plaintiff as well as other persons did involve looking into whether there was planning for an armed uprising against the government. By reviewing the excised documents, defendants contend that the court can find that a law enforcement purpose was the basis for their compilation. That procedure has been approved in Kuehnert v. F.B.I., 620 F.2d 662, 666-667 (8th Cir.1980). Several documents in which plaintiff or others are the subject, supnort the defendants’ contention that these were investigations of possible plans for taking up arms against the government. Thus, the plaintiff’s position can only be upheld if the burden of showing a law enforcement purpose requires proof of a specific violation. That argument has been rejected in Ramo v. Department of Navy, 487 F.Supp. 127, 130-131 (N.D.Cal.1979), and this court agrees with the ruling of the District Court of California. The court is mindful of the need to prevent the use of exemptions to defeat the congressional purpose of exposing FBI overreaching. There is some evidence that enforcement of internal security laws against the plaintiff was unlikely. In one of the released documents the following statement appears:

In _ confidential sources familiar with the various phases of Atlanta New Left and Black Extremist activity have noted—that Friedman is not known to have participated in any Atlanta New Left or Black Extremist activities.

However, other documents do support the defendants under an appropriate, though admittedly lenient test of exemption (b)(7). The records indicate that the agency was “gathering information with the good faith belief that the subject may violate or has violated federal law” rather than “merely monitoring the subject for purposes unrelated to enforcement of federal law.” Lamont v. Department of Justice, 475 F.Supp. 761 (S.D.N.Y.1979). Accordingly, the defendant is held to have established the requisite law enforcement purpose. It is worthwhile to note that while this ruling does allow the FBI to delete certain information, it does not prevent the exposure of FBI practices.

Plaintiff has not offered any significant rebuttal on the (b)(7)(C) and (b)(7)(D) issues beyond the threshold “law enforcement purpose” question. The defendants contend that disclosure of the names withheld would constitute an unwarranted invasion of personal privacy of any person mentioned in the requested files. 120 Cong.Rec. S-9330 (daily ed. May 30, 1974) (Remarks of Senator Phillip Hart). The names are those of persons who appear in the plaintiff’s file, but are not the main focus of that file or the investigation and those persons who are subjects of investigations in whose file plaintiff’s name also appears. When names, identifying characteristics, personal information about witnesses, accomplices or conspirators have been deleted, courts have upheld the agency action. See, e.g., Kuehnert v. F.B.I., supra at 667. The plaintiff has not shown that the public’s interest in knowing this information offsets the possible harm to individuals from disclosure. See Ferri v. Bell, supra at 1217. Nor has the plaintiff shown that disclosure of agents’ names, federal agency officials’ names, or names of local law enforcement officers would be of greater benefit than detriment to the public. Accordingly, the claimed (b)(7)(C) exemptions are valid.

The (b)(7)(D) exemption is meant to prevent the loss of cooperation from people who give information confidentially Legislative history indicates that it protects the identity of a source and information from that source which may lead to disclosure of identity. 120 Cong.Rec. S-19812 (Nov. 21, 1974) (Remarks of Senator Phillip Hart). The Second King Affidavit explains that the FBI received information from persons interviewed; information furnished by local law enforcement, and sources reporting information on a regular basis. Second King Affidavit, pp. 10-14. Deletions in the documents appear to be consistent with the proper application of the exemption. The exemption has been discussed and upheld before. Shaver v. Bell, 433 F.Supp. 438, 440 (N.D.Ga.1977). Accordingly, the claimed (b)(7)(D) exemptions are valid.

With respect to plaintiff’s plea for in camera inspection of documents, the court notes that where sufficient description of contested materials exist, the agency need not be put to further tests. See Weissman v. C.I.A., 565 F.2d 692, 697 (D.C.Cir.1977). This court has before it the Second King Affidavit which discusses the reasons for exemptions, lists the files retrieved by descriptions, states what documents were released, details the exemptions claimed, and supplies copies of each excised document. Having examined such documents, this court holds that in camera review is not required.

In sum, this order addresses plaintiff’s complaint regarding FOIA requests to Washington and the FBI field office in Boston. Undisputed facts allow the court to resolve this case. The court rules that the FBI’s search policy was responsive to the request and complied with the FOIA. Further, the court rules that the agency appropriately applied the exemptions of 5 U.S.C. § 552(b). Accordingly, plaintiff’s motion for summary judgment is DENIED, and defendants’ motion for summary judgment is GRANTED.

SUPPLEMENTAL ORDER OF COURT

This action is brought pursuant to the Freedom of Information Act (“FOIA”), 5 U.S.C. § 552, as amended, to obtain public access to certain records or segregated portions of records on the plaintiff which the defendants have withheld from release to plaintiff. Plaintiff initially filed a request for documents under the FOIA with the Secret Service (Department of Treasury), Selective Service System, Department of Defense, Central Intelligence Agency (“CIA”), Department of Justice, and the Federal Bureau of Investigation (“FBI”) on August 31, 1977. Following plaintiff’s request to the FBI’s Washington, D.C. office and Boston office, a substantial number of documents were released. However, some material was withheld by the Washington office in reliance on the exemptions contained in the FOIA, 5 U.S.C. § 552(b), specifically exemption 7, for law enforcement records.

Plaintiff then filed this lawsuit in 1978, covering his FOIA request for all documents pertaining to him in the Boston and Washington, D.C. offices of the FBI. Following the filing of a Vaughn v. Rosen Index, see 484 F.2d 820 (D.C.Cir.1973), cert. denied, 415 U.S. 977, 94 S.Ct. 1564, 39 L.Ed.2d 873 (1974) with supporting affidavits, the parties filed cross-motions for summary judgment. By Order of October 6, 1981, this court granted the defendants’ motion for summary judgment, upholding the FBI’s withholding of various documents or portions of documents as valid (b)(7)(C) and (b)(7)(D) exemptions. The plaintiff then moved for leave to amend the complaint to include FOIA requests from FBI field offices in Atlanta; Baltimore; Charlotte; Columbia, South Carolina; Detroit; Jackson, Mississippi; Pittsburgh and Savannah. Plaintiff’s motion to amend was granted. Numerous documents were released to the plaintiff, however, portions of some of the records were excised. A Vaughn v. Rosen index was filed with respect to the subject documents, along with the affidavits of Douglass C. Ogden and Maurice C. Hurst, special agents for the FBI.

This matter is now before the court on:

1) Defendants’ motion for a protective order;
2) plaintiff’s motion to amend the complaint;
3) defendants’ motion for summary judgment;
4) defendants’ motion to dismiss all defendants other than the FBI;
5) plaintiff’s motion for a continuance and other forms of relief; and
6) plaintiff’s motion to strike the affidavits.

Plaintiffs Motion to Amend the Complaint

Plaintiff moves the court for leave to amend the complaint to add the Internal Revenue Service, Department of Treasury (“IRS”) as a party defendant. Plaintiff claims that information was shared between the FBI and the IRS on plaintiff and his activities. Plaintiff contends that the documents produced in a FOIA lawsuit filed by the National Lawyers Guild in the Southern District of New York establish that at the time of his request, the IRS had certain documents in its files which plaintiff requested, but which the IRS denied having. The plaintiff claims that the documents were improperly withheld by the IRS. Defendant strongly opposes this motion.

It is well settled law that a motion to amend a complaint is within the sound discretion of the district court. Such leave to amend should be liberally granted absent “undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of the amendment, [and] futility of amendment.” Foman v. Davis, 371 U.S. 178, 83 S.Ct. 227, 9 L.Ed.2d 222 (1962).

In the instant case, plaintiff has failed to show sufficient cause for the long delay in seeking leave to amend the complaint to add the IRS. Plaintiff’s exhibits show that he knew that the FBI had sent documents to the IRS concerning him and his activities and that he was aware of his appeal rights in 1978 with respect to his request for documents from the IRS. Furthermore, this action is ripe for determination, and the court finds that amendment would unduly delay resolution of the issues in this case. Moreover, it appears that plaintiff is not precluded from filing a separate lawsuit against the IRS. For the above-stated reasons, plaintiff’s motion for leave to amend the complaint is DENIED.

Plaintiffs Motion to Strike the Affidavits

Plaintiff has moved to strike- the affidavits of Maurice C. Hurst and Douglass C. Ogden for failure to comply with the requirements of Fed.R.Civ.P. 56(e). The affidavits are relied upon by defendants in their motion for summary judgment. Specifically, plaintiff contends that the affidavit of Maurice Hurst, which pertains to the (b)(1) national security exemption claim under 5 U.S.C. § 552(b)(1), should be stricken because: 1) there are no factual allegations in the affidavit with respect to the individual processing of the claims, but only conclusory statements of law; 2) the Hurst affidavit, on its face, raises substantial and material questions of fact with respect to the processing of documents for which a (b)(1) exemption was made; and 3) the affidavit fails to set forth factual allegations within Hurst’s personal knowledge showing the harm resulting from the disclosure of the classified information.

With respect to the affidavit of Douglas C. Ogden, which pertains to exemptions under 5 U.S.C. § 552(b)(7)(C) and (b)(7)(D), plaintiff claims that this affidavit should be stricken because it fails to establish, as a factual matter, that assurances of confidentiality were provided for in each instance.

While it appears that plaintiff may have raised some meritorious arguments in support of his motion to strike the affidavits, the court finds said motion to be inappropriate in a FOIA case. Rather, if the court finds that these affidavits are insufficient for a responsible de novo determination of the defendants’ classification decision, the appropriate procedure is to order supplementation of the affidavits or in camera inspection of the disputed documents. See Lesar v. United States Department of Justice, 636 F.2d 472 (D.C.Cir.1980); Founding Church of Scientology v. National Security Agency, 610 F.2d 824, 833 (D.C.Cir.1979); Diamond v. Federal Bureau of Investigation, 532 F.Supp. 216 (S.D.N.Y.1981), aff’d, 707 F.2d 75 (2nd Cir.1983), cert. denied, — U.S. -, 104 S.Ct. 995, 79 L.Ed.2d 228 (1984).

For the foregoing reasons, the plaintiff’s motion to strike the affidavits is DENIED. However, the court will consider the arguments raised by the plaintiff in this motion when considering and reviewing the affidavits in connection with the defendants’ motion for summary judgment.

Plaintiff’s Motion for Continuance and to Order Defendants to Respond to Discovery and Defendants’ Motion Requesting a Protective Order

Plaintiff moves the court to grant a continuance and for an order requiring defendants to respond to discovery. Defendants urge this court to enter a protective order.

Pursuant to Fed.R.Civ.P. 56(f), plaintiff argues for a continuance until the defendant answers discovery. Plaintiff alleges that the discovery requested is necessary to address defendants’ motion for summary judgment. Furthermore, plaintiff requests reasonable time to conduct subsequent discovery.

In opposing the motion, defendants argue that the agency affidavits are the focus of the court’s determination for summary judgment in FOIA cases. If the court should find the affidavits have defects, defendants contend that the agency should be permitted to supplement the existing ones or submit new affidavits. Defendants claim this is consistent with Fed. R.Civ.P. 56(e). However, if the court finds that the affidavits are not satisfactory, defendants urge that the court follow the Stephenson v. Internal Revenue Service, 629 F.2d 1140 (5th Cir.1980), mechanism. In addition, defendants move the court to grant a protective order.

In FOIA cases, discovery is appropriate; however, such discovery is limited to factual disputes. Such factual disputes include whether the agency engaged in a good faith search for all materials, whether the agency indexed all documents, and whether the agency did, in fact, classify the documents it seeks to withhold based on exemptions (b)(1) and (b)(7).

In FOIA cases, discovery is a question of fact which must be determined from the agency’s affidavit. If government affidavits in FOIA cases satisfy the court that the search was adequate and complete, the court may deny discovery. However, if the record demonstrates the presence of a factual dispute, discovery may ensue. See Murphy v. FBI, 490 F.Supp. 1134 (D.C.Cir.1980).

Discovery in FOIA actions is limited to determining whether complete disclosure has been made. In this form, discovery is used to find whether withheld items are exempt from disclosure or whether a thorough search for documents has taken place. Under the FOIA, the district court has jurisdiction to order the production of improperly withheld agency records. See Giza v. Secretary of Health, Education and Welfare, 628 F.2d 748 (1st Cir.1980).

On the issue of granting a continuance, the court finds that the affidavits submitted by the defendants satisfy the requirements for adequacy and completeness in FOIA cases. The affidavit of Douglass C. Ogden specifically documents the scope and methods undertaken for the search. Likewise, the affidavit of Maurice C. Hurst clearly sets out the basis for the security indexing and classification process of materials requested by the plaintiff and withheld by the agency. Based on the affidavits, the court finds that there is no factual dispute, and discovery may be properly denied.

For the reasons hereinstated, plaintiff’s motions requesting a continuance and to order defendants to respond to discovery are hereby DENIED. Furthermore, defendants’ motion requesting a protective order is hereby GRANTED.

Defendants’ Motion to Dismiss Defendants Other Than The FBI

On December 12, 1982, defendants filed a motion requesting that the court dismiss all named defendants other than the FBI. The defendants contend that the FBI is the only proper party defendant. Plaintiff opposes said motion arguing that emerging case law permits suit against both agencies and their department heads in FOIA cases.

Under 5 U.S.C. § 552(e), the term “agency” is defined by reference to § 551. Under that provision, no mention is made of naming specific individuals as party defendants under § 552. By way of comparison, the Privacy Act, under 5 U.S.C. § 552(a)(4)(B), extends the subject matter jurisdiction of the district court to that agency controlling and withholding requested documents. The pertinent language of the Privacy Act clearly states that “the individual may bring a civil action against the agency.” Taken as a whole, the jurisdictional coverage of both acts is aimed at agencies and not individuals.

As plaintiff has pointed out, several decisions have construed the language of the act to cover suit against agency department heads. See Hamlin v. Kelley, 433 F.Supp. 180 (N.D.Ill.1977); Varona Pacheco v. Federal Bureau of Investigation, 456 F.Supp. 1024 (D.C.P.R.1978). This line of decision also clearly holds a former Attorney General is not a proper party defendant in FOIA cases. See Hamlin v. Kelley, supra.

However, the court finds that the language of the act clearly states that only an agency may be sued and the court has no jurisdiction over individual department heads. Developing case law supports this view. See Ott v. Levi, 419 F.Supp. 750 (E.D.Mo.1976); OKC Corporation v. Williams, 461 F.Supp. 540 (D.C.Tex.1978), aff’d, 5th Cir., 614 F.2d 58, rehearing denied, 617 F.2d 1207, cert. denied, 449 U.S. 952, 101 S.Ct. 357, 66 L.Ed.2d 216 (1980); Gary Energy Corp. v. Department of Energy, 89 F.R.D. 675 (D.C.Co.1981); Weberman v. National Security Agency, 490 F.Supp. 9 (D.C.N.Y.1980), remanded, 646 F.2d 563 (2nd Cir.), aff’d, 668 F.2d 676 (2nd Cir.1982); Savarese v. Califano, C.A. No. C78-243A (N.D.Ga.1979); Providence Journal Co. v. Federal Bureau of Investigation, 460 F.Supp. 778 (D.C.R.I.), reversed on other grounds, 602 F.2d 1010 (1st Cir.), cert. denied, 444 U.S. 1071, 100 S.Ct. 1015, 62 L.Ed.2d 752 (1980).

For the above-stated reasons, defendants’ motion to dismiss defendants other than the FBI is hereby GRANTED. Accordingly, the proper party defendant to the instant action is the FBI, the remaining agency named in the complaint.

Defendants’ Motion for Summary Judgment

Defendants filed a motion for summary judgment on November 23, 1982. In support of the motion, defendant submitted affidavits filed on August 17, 1982, in conjunction with the Vaughn v. Rosen index. The affidavit of Douglass C. Ogden sets out the factual basis for the agency’s decision to excise information from documents under the § 552(b)(7) exemption. Likewise, the affidavit of Maurice C. Hurst sets out the factual basis for the agency’s determination to delete portions of documents under the (b)(1) exemption.

At this time, the court will consider the arguments advanced by plaintiff under the motion to strike the affidavits.

The contentions of both parties are clear and simple. Defendants contend that the FOIA exemptions claimed were proper and that the supporting affidavits specifically enumerated the basis for the agency’s decision to withhold the documents. With respect to the exemptions, plaintiff argues that the defendants have failed to satisfy the burden of showing that procedural and substantive requirements have been satisfied. Furthermore, the plaintiff challenges the factual information contained in the accompanying affidavits as failing to show that disclosure would entail an unwarranted invasion of personal privacy.

1. The 5 U.S.C. § 552(b)(1) Exemption.

The (b)(1) exemption is characterized as the national security exemption to the FOIA. This exemption protects against disclosure of matters that are “(A) specifically authorized under criteria established by an Executive order to be kept secret in the interest of national defense or foreign policy and (B) are in fact properly classified pursuant to such Executive order.” 5 U.S.C. § 552(b)(1) (1976). Pursuant to the holding in Lesar v. United States Department of Justice, supra, the applicable Executive order is contained in Executive Order No. 12,065 (hereinafter “E.O. 12,065”).

In pertinent part, E.O. 12,065 calls for information to be classified in one of three designations.

1-102 “Top secret” shall be applied only to information, the unauthorized disclosure of which reasonably could be expected to cause exceptionally grave damage to national security.
1-103 “Secret” shall be applied only to information the unauthorized disclosure of which reasonably could be expected to cause serious damage to the national security.
1-104 “Confidential” shall be applied to information the unauthorized disclosure of which could be expected to cause identifiable damage to the national security.

Furthermore, E.O. 12,065 states that information may not be so classified unless it covers one of seven categories, the focal classification being:

(g) other categories of information which are related to national security and which require protection against unauthorized disclosure as determined by the President or by a person designated by the President pursuant to Section 1-201, or by an agency head.

Exec.Order No. 12,065, § 1-301, 3 C.F.R. 190, 193 (1979).

The statute clearly provides that the burden of proving proper classification is upon the FBI. The court will conduct a de novo review of the classification decision. The applicable standard of review used by the court is whether the information in question falls within the above-stated category and whether unauthorized disclosure of the requested material under the act could be reasonably expected to cause the requisite potential harm. See Lesar v. Department of Justice, supra, at 481, n. 46; Hayden v. National Security Agency/Central Security Service, 608 F.2d 1381, 1387 (D.C.Cir.1979), cert. denied, 446 U.S. 937, 100 S.Ct. 2156, 64 L.Ed.2d 790 (1980).

Regarding the above-stated standard, the agency may carry the burden by submitting affidavits to the court that specifically set forth the nature of the documents questioned and the reason for their withholding. In reaching its determination, the district court is to afford “substantial weight” to the agency’s affidavits. See Hayden v. National Security Agency, supra; Weissman v. Central Intelligence Agency, 565 F.2d 692, 697, n. 10 (D.C.Cir.1977). This means that “if the affidavits contain information of reasonable detail, sufficient to place the documents within the exemption category, and if the information is not challenged by contrary evidence in the record or evidence of agency bad faith, then summary judgment for the government is appropriate without an in camera review of the documents.” See Lesar v. Department of Justice, supra.

The four documents at issue received a security classification of “confidential” pursuant to E.O. 12,065. However, the documents received this classification almost ten years after origination. Under E.O. 12,065, § 1-606, the subject of belated classification is covered.

No document originated on or after the effective date of this Order may be classified after an agency has received a request for the document under the Freedom of Information Act or the Mandatory Review provisions of this Order (Section 3-5), unless such classification is consistent with this Order and is authorized by the agency head or deputy agency head. Documents originated before the effective date of this Order and subject to such a request may not be classified unless such classification is consistent with this Order and is authorized by the senior official designated to oversee the agency information security program or by an official with Top Secret classification authority. Classification authority under this provision shall be exercised personally, on a document-by-document basis.

Exec.Order No. 12,065, § 1-606, 3 C.F.R. 190, 194-95 (1979). Documents that are later classified after an initial period of unclassified status will not be barred from later classification where the substantive standards of E.O. 12,065 are complied with. See Halperin v. Department of State, 565 F.2d 699 (D.C.Cir.1977); Lesar v. Department of Justice, supra. With respect to the procedural issue, the court finds that the affidavit of Maurice C. Hurst sets out the proper procedural mechanism that was followed.

In classifying the excised documents “confidential,” the Hurst affidavit states that disclosure of information covering intelligence activities, sources and methods, would result in “identifiable” damage to the national security.

The substantive basis for the “confidential” classification covers the improper release of information relating to intelligence and counterintelligence collection methods and the injury to intelligence collection resulting from the disclosing of the identity of an intelligence source.

While affording substantial weight to the defendants’ affidavits, the court views the assertions contained therein as more conclusory than factual. The information at issue is contained in documents averaging thirteen years old. The government has only seen fit to classify the excised documents since 1980 and 1981. Specifically, documents numbered 29 and 52 have been excised in their entirety rather than merely removing the portions containing “a singular identifier” for intelligence collection. Furthermore, the government alleges that “due to the uniqueness and recurrence of this information, a more detailed description could reasonably be expected to identify the source and result in identifiable damage as explained in paragraph 9 through 16.” (See affidavit of Maurice C. Hurst, p. 22.) The government states no reason, other than those previously stated, for the substantial editing, and mainly relies on a bold assertion that the claim is reasonable. See Diamond v. Federal Bureau of Investigation, supra at 221.

Under § 552(a)(4)(B), in camera review of the excised documents is commanded to the discretion of the district court. Such discretion should be exercised with restraint. See Lead Industries Association v. Occupational Health & Safety Administration, 610 F.2d 70, 87 (2d Cir.1979); Cliff v. Internal Revenue Service, 496 F.Supp. 568, 572 n. 9 (S.D.N.Y.1980). However, where the excised portions are inadequately described and insufficiently substantiated, in camera inspection is appropriate. Ray v. Turner, 587 F.2d 1187, 1194-95 (D.C.Cir.1978); Lamont v. Department of Justice, 475 F.Supp. 761, 770-73 (S.D.N.Y.1979).

For the reasons hereinstated, defendants are ORDERED to produce for in camera inspection documents numbers 29 and 52, within thirty (30) days from receipt of a copy of this Order. With respect to documents numbered 30 and 31, the defendants’ motion for summary judgment on the (b)(1) exemption is hereby GRANTED.

2. The (b)(7)(C) and (b)(7)(D) Exemption.

Under 5 U.S.C. § 552(b)(7)(C) and (b)(7)(D), agency records are made exempt from disclosure if they are:

(7) investigatory records compiled for law enforcement purposes, but only to the extent that the production of such records would ... (C) constitute an unwarranted invasion of personal privacy, (D) disclose the identify of a confidential source....

With these two exemptions, the primary issue is whether the records exempted were compiled for “law enforcement purposes.”

Exemption (b)(7)(C) exempts the disclosure of law enforcement records if disclosure would cause an unwarranted invasion of personal privacy. The focus of the (b)(7)(C) exemption is to protect the privacy of any person mentioned in investigative files including those persons not targeted by the investigation.

The (b)(7)(D) exemption protects the identity of a confidential source and confidential information furnished only by the confidential source. This exemption is also the basis for the government withholding the identities of state, local and foreign agencies that have provided information in confidence to the FBI. See Baez v. United States, 647 F.2d 1328, 1339 (D.C.Cir.1980), en banc, 684 F.2d 999 (D.C.Cir.1982).

Under these exemptions, defendants contend that summary judgment is appropriate because the records attached to the Ogden affidavit are clearly ones dealing with law enforcement. The records were compiled: (1) to investigate acts which are illegal and which can result in criminal or civil sanctions; (2) to ascertain the identity and actions of those committing the acts; and (3) to ascertain the identity and actions of those aiding and abetting, or conspiring with such actors. See Rural Housing Alliance v. Department of Agriculture, 498 F.2d 73 (D.C.Cir.1974), rehearing denied, 502 F.2d 1179 (D.C.Cir.1974). Specifically, defendants claim that those excluded records were compiled through investigations for the violation of federal criminal statutes.

The defendants also argue that the exemption of information is proper where it is necessary to protect intelligence sources and information networks. By way of affidavit, defendants claim that the FBI received: (1) information from persons interviewed; (2) information furnished by local law enforcement agencies; (3) information from sources reporting on a regular basis; and (4) information from commercial sources. Defendants argue that it is crucial for an investigative organization to be able to obtain information from confidential sources and it is necessary that these sources remain confidential to insure a continual stream of information.

Plaintiff argues that summary judgment is inappropriate because the defendants have completely failed to satisfy their burden under Fed.R.Civ.P. 56(e). Plaintiff charges that the Ogden affidavit does not affirmatively show that under the (7)(D) exemption, promises of confidentiality were ever extended to agency sources. Furthermore, plaintiff claims that the Ogden affidavit does not establish the requisite factual balancing of privacy interests under the (7)(C) exemption. Under this exemption, plaintiff argues that the defendants have relied on a per se rule of exclusion rather than identifying the public and private interests relating to each document.

The exemptions under (b)(7)(C) and (b)(7)(D) require that the defendants carry the burden of proof of establishing that exemptions are proper, and the district court’s ruling on a claim of exemption must not rely solely upon an affidavit to determine the factual basis for the exemption. See Irons v. Bell, 596 F.2d 468 (1st Cir.1979). In support of the motion, defendants are not required to show that records were compiled concerning a specific violation of law by the plaintiff. See Ramo v. Department of Navy, 487 F.Supp. 127 (N.D.Cal.1979). Proof can be established by court review of the excised documents. See Kuehnert v. FBI, 620 F.2d 662, 666 (8th Cir.1980). However, files reviewed in the instant case show the FBI was “gathering information with the good faith belief that the subject may violate or has violated federal law” rather than “merely monitoring the subject for purposes unrelated to enforcement of federal law.” Lamont v. Department of Justice, supra at 770. For the above-stated reasons, the court finds that the defendants have shown that the records were compiled for law enforcement purposes.

Plaintiff argues that defendants have not shown the required balancing of privacy interests under (7)(C). The challenged deletions cover the names and other unique personal information of witnesses, accomplices or parties that appear in files pertaining to the plaintiff. The courts have upheld the deletion of such information where no showing has been offered that disclosure would serve the public interest. See L & C Marine, Ltd. v. United States, 740 F.2d 919 (11th Cir.1984); Kuehnert v. FBI, supra at 667.

However, defendants’ affidavit has clearly outlined how the disclosure of deleted information would cause both possible harm to individuals named and to agency information sources. Likewise, plaintiff has not shown that disclosure of agents’ names, federal agency officials’ names, or names of local law enforcement officers would be more beneficial than detrimental to the public interest. The court finds that the defendants’ reliance on the (b)(7)(C) exemption is valid.

The (b)(7)(D) exemption covers not only the privacy of the information source, but also the confidentiality of the information offered. Varona Pacheco v. FBI, supra at 1032. For purposes of the (b)(7)(D) exemption, the confidentiality of the source or the information offered can be assured either explicitly or implicitly by the agency. See Varona Pacheco v. FBI, supra; Mobile Oil Corp. v. Federal Trade Commission, 430 F.Supp. 849 (S.D.N.Y.1977).

Plaintiff argues that defendants have not made an affirmative factual showing that promises of confidentiality were made as required under the exemption. However, a review of some of the challenged files and reference to the Ogden affidavit show otherwise. The Ogden affidavit explains under what circumstances the FBI received information from witnesses, local law enforcement agencies and sources reporting on a regular basis. The examined deletions and defendants’ factual basis for the exemptions appear to show that (b)(7)(D) has been properly applied. See Shaver v. Bell, 433 F.Supp. 438, 441 (N.D.Ga.1977). Based on the reasoning hereinstated, the court finds that the defendants have shown an adequate factual basis for the (b)(7)(D) exemption.

Procedural Requirements

Central to plaintiff’s motion to strike defendants’ affidavits is the contention that inadequate search procedures were utilized by the agency. Plaintiff claims that the Ogden affidavit fails to specifically set out the agency’s attempt to locate and identify the documents either concerning the plaintiff directly or citing his name. Defendants claim that in camera inspection should not be ordered unless the defendants have clearly failed to demonstrate by affidavit that the exemptions and procedures used were proper.

The Ogden affidavit states the search procedures followed by the agency with some specificity and includes a list of where the documents were found and in what number. By Order of this court dated October 6, 1981, summary judgment was granted for the defendants pursuant to the factual allegations in the agency’s second affidavit of Edward King. The King affidavit, like the Ogden affidavit, covers the procedural basis and the adequacy of the document search. A review of both affidavits show a similarity in the description of procedures and the search methods utilized.

In Weissman v. CIA, supra, the Court of Appeals determined that in camera review of the challenged documents is unnecessary where the agency has sufficiently described the appropriate procedures and basis for the exceptions. The court views the agency’s description of the search policy, as compared to the plaintiff’s requests, as being proper and thorough. Having also examined some of the documents in question with the facts set out in the Ogden affidavit, the court finds that an in camera review of the documents is unnecessary.

CONCLUSION

For the above-stated reasons, the court ORDERS that the defendants’ motion for summary judgment on the (b)(7)(C) and the (b)(7)(D) exemptions to the FOIA is hereby GRANTED.

      . The request read in pertinent part, as follows:
      This is a request under the Freedom of Information Act as amended (5 U.S.C. § 552).
      I write to request a copy of any reports or files which you may have on me or my activities. In connection with this request, I request that you check, in addition to files on me personally, the files of the following organizations with which I have been associated, by which I have been employed, or with whom I have had contact: Extra! (Providence, Rhode Island); Great Speckled Bird, Atlanta Cooperative News Project (Atlanta, Georgia); National Lawyers Guild (New York City and Atlanta); Georgia Power Project (Atlanta); National Jury Project (New York City and Atlanta); Pacific Counseling Service (San Francisco, California). I hereby provide you with the following identification information solely for use in this request: Social security number [ XXX-XX-XXXX ]; date of birth, 1-4-46; selective service number 18-54-46-9. A verification of my signature is given below. (Exhibit "A”)

      . Plaintiff seeks from this court the following rulings:
      (1) an order that requires the FBI to process fully his FOIA request for all files concerning plaintiff or his activities, including but not limited to the disclosure of the files specifically listed by plaintiff;
      (2) a declaratory judgment that defendant’s policy regarding responses to requests violate the FOIA;
      (3) an order that requires the FBI to provide an index of all files examined and justifications for withholding;
      (4) an order that requires production of particular files;
      (5) an order that requires production of files for which the FBI has failed to establish requisite law enforcement purposes under the 5 U.S. C.A. § 552(b)(7) exemption;
      (6) an order that the FBI disclose the names of commercial credit bureaus who were requested to provide information to the FBI;
      (7) an order enjoining the FBI from destroying documents and requiring the agents and employees of the Charlotte, South Carolina FBI office to set forth reasons why records relating to plaintiff were destroyed after his FOIA request was submitted.

      . The court is aware of the slow trickle of releases from defendants, the judicial intervention required, and the burden of administrative persistence on the plaintiff. However, those facts cannot form the basis of a ruling that the FBI’s "main” and "see" search policy does not comport with FOIA requirements. It should be noted that the plaintiff did receive items from the Great Speckled Bird file (see par. 12 of Second King Affidavit), materials involving his activities with the Pacific Counseling Service (see Document 10 of Second King Affidavit), and documents on his activities with the Atlanta Cooperative New Project (see Document 2 of Second King Affidavit).

      . Document 3 shows that the plaintiff's published writing advocates armed violence to advance revolution. Excised documents also include memorandum on Black Panther principals’ statements concerning armed revolution at Document 16, p. 4. A review of documents to see if there is substantiation for a claim of exemption is a procedure consistent with the Act and the role of the trial court. See Stephenson v. I.R.S., 629 F.2d 1140, 1145 (5th Cir.1980).

      . The court need not decide whether to go so far as to directly follow the First Circuit’s holding that investigatory records of law enforcement agencies (such as the FBI), are inherently records compiled for “law enforcement purposes.” See Irons v. Bell, supra. The First Circuit points out that if the exemption were unavoidable for each piece of investigatory material not specifically related to a violation, then materials invading “personal privacy" would be released. 5 U.S.C. § 552(b)(7)(C).

      . Fed.R.Civ.P. 56(e) provides in pertinent part: Supporting and opposing affidavits shall be made on personal knowledge, shall set forth such facts as would be admissible in evidence, and shall show affirmatively that the affiant is competent to testify to the matters stated therein.

        . Plaintiff specifically refers to the fact that the four documents which defendants claim are exempted under (b)(1) were not classified until approximately ten years after they were originally generated, and were not classified until more than two years after plaintiffs FOIA request.

      . 5 U.S.C. § 552a(g)(1) (1977).

      . Under 5 U.S.C. § 552(b), agency records are exempt from disclosure if they are:
      (1)(A) specifically authorized under criteria established by an Executive order to be kept secret in the interest of national defense or foreign policy and (b) are in fact properly classified pursuant to such Executive order;

      . Under 5 U.S.C. § 552(b), agency records are exempt from disclosure if they are:
      (7) investigatory records compiled for law enforcement purposes, but only to the extent that the production of such records would.... (B) Deprive a person of a right to a fair trial or an impartial adjudication, (C) constitute an unwarranted invasion of personal privacy....

      . Affidavit of Maurice C. Hurst, p. 4, ¶ 5.

      . Affidavit of Maurice C. Hurst, p. 12, ¶ 9.

      . Hurst Affidavit, p. 14-15, ¶ 11 and ¶ 12.

      . A) Document number 29, dated April 28, 1971; this document was classified "confidential" on October 28, 1980. Hurst affidavit, p. 19.
      B) Document number 30, dated June 29, 1971; this document was classified "confidential” on October 28, 1980. Hurst affidavit, p. 20.
      C) Document number 34, dated September 29, 1971; this document was classified "confidential" on April 3, 1981. Hurst affidavit, p. 21.
      D) Document number 52, no date of origination; this document was classified "confidential” on October 29, 1980. Hurst affidavit, p. 22.

      . 18 U.S.C. § 2 (Principals-Commands or Induces Offense Against the United States); 18 U.S.C. § 231 (Civil Disorders); 18 U.S.C. § 371 (Conspiracy); 18 U.S.C. § 2101 (Antiriot); 18 U.S.C. § 2383 (Rebellion or Insurrection); 18 U.S.C. § 2384 (Seditious Conspiracy); and 18 U.S.C. § 2385 (Advocating the Overthrow of the Government). Affidavit of Douglass C. Ogden, p. 4, ¶ 7.

      . Ogden affidavit, pp. 9-12.

      . Ogden affidavit, pp. 8-10, ¶ B, B(i).

      . Ogden affidavit, pp. 10-12, ¶ B(ii), ¶ B(iii) and ¶ B(iv).

      . Id.


author: CONABOY, District Judge.

text:
    Emil KELLNER and Natalie Kellner, his wife, Plaintiffs, v. ROYAL INDEMNITY COMPANY, Defendant, v. WHAMB LEASING, INC., t/a Montgomery Sportswear, Inc., et al., Additional Defendants.
    Civ. No. 81-0299.
    United States District Court, M.D. Pennsylvania, Civil Division.
    May 14, 1982.
    See also, D.C., 605 F.Supp. 326.

      Martin J. Meyer, Kingston, Pa., for plaintiff.
    Clifford A. Rieders, Murphy, Mussina, Harris & Rieders, Williamsport, Pa., for third party defendants Whamb Leasing, Inc. T/A Montgomery Sportswear, Inc., Miss Cassie Fashions and George F. Heim, Jr.
    Cozen, Begier & O’Connor, David R. Strawbridge, Philadelphia, Pa., for Royal Indem. Co.
    Jeffrey B. Rettig, Harrisburg, Pa., for Aetna Cas. & Sur. Co.
    Timothy E. Foley, Bour, Gallager, & Foley, Scranton, Pa., for Royal Indem. Co. (defendant).
    Miller, Kistler & Campbell, Inc., Richard L. Campbell, State College, Pa., for U.S. Cas. Corp.
   MEMORANDUM AND ORDER

CONABOY, District Judge.

These actions, filed against Aetna Casualty & Surety Company (hereinafter “Aetna”) and against Royal Indemnity Company (“Royal”) on July 28, 1980, and on March 4, 1981, respectively, seek recovery of insurance proceeds allegedly due under co-extensive policies. On July 6, 1981, the cases were joined for administrative purposes. Presently before the Court are motions for summary judgment filed by Royal and United States Casualty. For the reasons set forth below, the motions will be granted.

It is, of course, well settled that for a moving party to prevail on a motion for summary judgment, he must show (a) that there is no genuine issue as to any material fact, and (b) that he is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c); See WRIGHT & MILLER, FEDERAL PRACTICE AND PROCEDURE: CIVIL SECTION 2712. Thus the Court cannot try issues of fact on a Rule 56 motion, but only is empowered to determine whether there are issues to be tried. Janek v. Celebreeze, 336 F.2d 828 (3rd Cir.1964). Finally, in determining whether an issue of material fact does exist, all inferences must be drawn against the moving party. See 6 MOORE’S FEDERAL PRACTICE ¶ 56.-04[2], The following facts are undisputed.

On January 30, 1979, the Plaintiffs and the Industrial Development Authority of the City of Wilkes-Barre, Pennsylvania, were the equitable and legal owners, respectively, of certain improved real estate located in Jersey Shore, Pennsylvania, when Aetna issued a policy of insurance covering the property.

On August 24, 1979, the Plaintiffs entered into a lease-purchase agreement with a certain George F. Heim, Jr. (“Heim”), for the sale of the property effective August 15, 1979. By virtue of said agreement, the Plaintiffs remained as legal owners of the property and Heim was the equitable owner. In accordance with the agreement, Heim had obtained a binder of insurance issued by Royal on August 24, 1979, which named the Plaintiffs as additional insureds.

On August 25, 1979, the premises in question—a brick building housing Heim’s clothing manufacturing business—was damaged and rendered untenantable by a fire subsequently determined to be of incendiary origin. The Plaintiffs promptly submitted to Aetna all notices and proofs of loss required by that policy; and, as additional insureds, submitted all notices and proofs of loss which they anticipated would be required by Royal. Aetna paid the Plaintiffs an amount equal to about 31% of their claim; Royal refused to tender any payment. The instant lawsuits were commenced presently.

It has been Royal’s position throughout these proceedings that Heim intentionally concealed the true origin of the fire and submitted statements in proof of loss that were fraudulent. On June 12, 1981, Royal had filed a Third-party Complaint alleging these matters against Heim personally and several business entities owned by him. Additional Third-party Defendants thereunder were United States Casualty, an authorized agent of Royal, and Aetna, allegedly the primary insurer. By agreement of counsel, the trial in the instant matter was deferred pending the outcome of litigation by Heim against Royal in the Court of Common Pleas for Lycoming County, Pennsylvania. On January 12, 1982, a verdict favorable to Royal was returned in that case. The jury answered affirmatively a special interrogatory inquiring whether Heim had conspired with the arsonist to set the fire.

The thrust of Royal’s motion for summary judgment is as follows: Royal first maintains that the instant Plaintiffs are precluded from relitigating issues concerning fraudulent acts by Heim under the doctrine of collateral estoppel. Since under Pennsylvania law the fraudulent act of an insured will prevent recovery of another insured when their interests are joint, the argument continues, the instant Plaintiffs are barred from recovery against Royal based upon principles of res judicata. Accordingly, Royal concludes, it is entitled to judgment as a matter of law.

Pennsylvania law requires that four prerequisites be satisfied in order to invoke collateral estoppel:

“1) the issue decided in the prior adjudication was identical with the one presented in the later action,
2) there was a final judgment on the merits,
3) the party against whom the plea is asserted was a party or in privity with a party to the prior adjudication, and
4) the party against whom it is asserted has had a full and fair opportunity to litigate the issue in question in a prior action.”

Pub. Sev. Mut. Ins. Co. v. Cohen, 616 F.2d 704, 707 (3rd Cir.1980), quoting Safeguard Mutual Insurance Co. v. Williams, 463 Pa. 567, 574, 345 A.2d 664, 668 (1975). In effect, it is the requirement of privity that Aetna attacks. However, since it is undenied that the Plaintiffs were in privity with Heim at the outset by virtue of the purchase and sale agreement, Aetna must show that the Plaintiffs held a separate and distinct—and separately insurable—interest in the property, and that Heim’s fraud does not vitiate the policy’s coverage as to them.

In opposing Royal’s motion, therefore, Aetna argues that the Plaintiffs were neither joint parties to the contract of insurance with Royal, nor partners on the binder, nor co-insureds on the policy. Aetna further asserts that the Plaintiffs were not co-owners of the property with Heim but were only sellers under a sales agreement, whereas Heim had possession of an equitable title to the property. Finally, Aetna suggests that there is a material issue of fact as to the intent of the parties to the insurance contract which prevents the imposition of summary judgment.

The principal case relied on by Royal is Bowers Co. v. London Assurance Corp., 90 Pa.Super. 121 (1926), which involved the sale of an automobile under a bailment lease that required the purchaser/lessee to maintain insurance over the life of the lease against loss or damage by fire payable to the seller and purchaser “as their interests might appear.” Id. at 123. The automobile was destroyed by a fire, subsequently determined to be the fraudulent act of the purchaser. When the insurance company refused payment to either the purchaser or the seller, the latter brought suit. The trial court held that the contract of insurance was several and not joint and that evidence of the purchaser’s fraudulent burning was therefore irrelevant as to the seller’s action against the insurer. The Superior Court reversed both these holdings.

Aetna seeks to distinguish Bowers on two grounds: that in Bowers the two insureds were both named as insureds, whereas here the Plaintiffs are listed as additional insureds; and that in Bowers the proof of loss was signed and sworn to by both named insured, but here the proof of loss was filed only by the Plaintiffs. We find neither of these arguments compelling.

In discussing the interests of the purchaser and seller in the policy of insurance the Bowers Court stated:

“Both Perry [the purchaser] and the Bowers Co. had insurable interests in the automobile. Each could have insured his interest separately, in which event neither would have been affected by the other’s individual fraudulent act. In case of a fire, each would have recovered in a separate action his respective loss or damage without regard to recovery of the other. Neither would have been precluded by the result of the action brought by the other, nor could they have been compelled to interplead. But two policies would have been required and full premium paid on the maximum insurable interest of each.... The course adopted was less expensive, or less troublesome, and as long as neither party violated the contract furnished ample protection to both at minimum expense. The interests of both parties together formed one complete legal and equitable title to the property which was the subject of insurance. As Perry made his monthly payments his interest in the automobile increased and the Bowers Company’s interest decreased, until if and when the full contract price was paid, Perry’s interest was the whole and the Bowers Company’s nothing; but until that result was obtained they did not have separate and distinct interests in the policy—as distinguished from the automobile—, which each could enforce by his own separate action irrespective of the rights of his joint assured. Their rights were interrelated. 90 Pa.Super. at 124. (emphasis in text)

In light of the Superior Court’s analysis, we conclude that Aetna’s attempted distinction regarding the Plaintiffs’ status as additional insureds under the instant policy is semantical and, under the facts of this case, without legal effect. We are likewise unpersuaded by Aetna’s other arguments. The execution of proof of loss documents solely by the Plaintiffs in no way affects their entitlement to proceeds under the Royal policy. As the above-quoted discussion makes clear, the question of the seller’s culpability concerning the fraudulent scheme was not an element of the Bowers Court’s analysis. So too, the intent of the parties was irrelevant in Bowers, 90 Pa.Super. at 125, and therefore, arguments raising such issues here must be deemed immaterial.

We thus find that, under the facts of this case, the Plaintiffs’ privity with Heim remains undisturbed; and that they are therefore collaterally estopped from contesting the Lycoming County verdict as to Heim’s participation in the arson conspiracy. Since Pennsylvania law recognizes no distinction between the Plaintiffs’ and Heim’s respective interests in the Royal policy, the fraudulent act of one insured will bar the recovery of all. Accordingly, we hold that Royal Indemnity and, by logical extension, United States Casualty are entitled to judgment as a matter of law.

An appropriate Order will be entered.

      . We omit further mention of the Industrial Development Authority in this Discussion in that the Authority is neither a party, a named insured, an additional insured, nor a loss payee in the policy under consideration today.

      . The fire having occurred a mere two days after execution of the binder, Royal had no opportunity to issue an actual policy.

      . Royal had added United States Casualty, its authorized agent, as a Third-party Defendant, alleging that the latter had failed to observe a specific Royal directive limiting the amount of coverage to be extended on this property. United States Casualty, which has conceded its duty of indemnification in the event Royal is held liable, thus joins in Royal’s motion for summary judgment, since its liability here is derivative.

      . This phrase contemplated the fact that over the life of the policy the purchaser would be making payments to the seller and, thus, their respective interests in the property would periodically change.

      . Aetna’s citation to contrary holdings from other jurisdictions do not cause us to question the vitality of this “clear albeit somewhat vintage position of the Pennsylvania courts." See, Mele v. All-Star Insurance Corp., 453 F.Supp. 1338, 1342 (E.D.Pa.1978).