author: FILIPPINE, District Judge.

text:
    Shirley BARNES, et al., Plaintiffs, v. Freeman (Teek) BOSLEY, Jr., et al., Defendants.
    No. 83-53 C (2).
    United States District Court, E.D. Missouri, E.D.
    Aug. 28, 1985.
    On Motion for Enforcement Dec. 17, 1985.

      Charles R. Oldham, Thomas Bauer, St. Louis, Mo., for plaintiffs.
    Robert Presson, Asst. Atty. Gen., Jefferson City, Mo., for defendants.
   MEMORANDUM AND ORDER

FILIPPINE, District Judge.

This matter is before the Court on plaintiffs’ motions to determine the amount of back pay and benefits and enforcement of judgment. Defendants, through the Attorney General of the State of Missouri, have filed suggestions in opposition which the Court will treat as a Rule 60(b) motion.

FACTS

Thomas, McElroy and Barnes were discharged from their positions as deputy circuit clerks by the Clerk of the St. Louis Circuit Court, Freeman Bosley, Jr. On July 27, 1983, this Court held that the discharges violated the constitutional rights of McElroy and Barnes but not the constitutional rights of Thomas. This Court ordered the defendants, in their official capacity, to reinstate the plaintiffs with back pay and benefits from January 3, 1983. On November 29, 1983, this Court stayed its order of reinstatement and back pay pending appeal. The Court of Appeals affirmed the judgments in favor of McElroy and Barnes and reversed the judgment against Thomas. This Court entered a judgment, June 10, 1985, in favor of Thomas and ordered him reinstated with back pay and benefits from January 3, 1983. McElroy and Thomas have resolved their disputes with the defendants, and their motions are therefore moot. Plaintiff filed the motions before the Court on July 3, 1985. The State Attorney General entered his appearance and filed suggestions in opposition to plaintiff’s motions on behalf of defendants and thereby became involved in the litigation for the first time on July 19, 1985. The Attorney General had only learned of the potential award against the State on June 18, 1985 (affidavit of Robert Presson).

Plaintiff’s motion to' determine amount of back pay and benefits claims an amount due of $73,846.97 for Barnes. Plaintiff’s motion for enforcement of judgment seeks an order holding defendants in contempt, confinement of Bosley until he complies with the Court’s order, appointment of an appropriate person to act as Circuit Clerk for the purpose of reinstating plaintiff, awarding back pay, benefits and interest, an award of costs and attorney’s fees and other appropriate relief.

Defendants’ suggestions in opposition to plaintiff’s motions argue that since plaintiff’s identical position no longer exists, defendants have complied by reinstating to a similar or comparable position. Defendants feel that the amount claimed by Barnes is too high because employee contributions should be paid to the Social Security Administration rather than Barnes, state and federal tax withholdings should be paid to the respective governments, plaintiff is not entitled to medical insurance payments since these would have never gone to plaintiff directly, the eleventh amendment bars any back pay prior to the Court’s order on July 27, 1983, and interim earnings should be deducted from any award.

Plaintiff’s reply to defendants’ suggestions argue that defendants’ suggestions should be treated as a motion under Fed.R. Civ.P. 59(e) and must be made within ten days after entry of judgment, the Court is bound by the Court of Appeals’ affirmance of our remedy, there is no setoff of interim wages since the plaintiff is a public employee and, therefore, falls within an exception to the general rule of mitigation, the eleventh amendment does not bar a remedy which is prospective in relation to the filing of the suit, and any retrospective amount is awardable against Bosley in his capacity as an officer of St. Louis City.

Defendants’ response states that their suggestions in opposition should be treated as a Rule 60(b) motion and therefore not untimely and expands their constitutional argument by asserting that failure to deduct interim earnings violates the eleventh amendment.

REINSTATEMENT

It is the law in this circuit that an employer may comply with an order to reinstate a wrongfully discharged employee whose position at time of discharge is currently unavailable by placing the employee in a comparable or similar position. Brockell v. Norton, 732 F.2d 664, 669 (8th Cir.1984) (reinstatement under 42 U.S.C. § 1983); Kennedy v. Robb, 547 F.2d 408, 415 (8th Cir.1976) (same). The Court cannot determine if defendants have complied based on the record. Therefore, an evidentiary hearing on the matter is appropriate.

MITIGATION OF DAMAGES AND MEDICAL INSURANCE PAYMENTS

Defendants claim that their attempt to reduce back pay based on plaintiff’s interim earnings after failure to make this argument at trial or on appeal should be allowed as a motion under Fed.R.Civ.P. 60(b)(1) for relief from judgment for “mistake, inadvertence, surprise, or excusable neglect.” Such a motion, however, is untimely. “This circuit has not allowed relief under Rule 60(b)(1) for judicial error other than for judicial inadvertence. [Citation omitted] ... To prevent its use as a substitute for appeal, we have required a Rule 60(b) motion alleging judicial inadvertence to be made within the time period allowed for appeal.” Fox v. Brewer, 620 F.2d 177, 180 (8th Cir.1980). See also CRI, Inc. v. Watson, 608 F.2d 1137, 1141 (8th Cir.1979) (60(b) motion to correct failure to include prejudgment interest must be made within time for appeal); 11 C. Wright & A. Miller, Federal Practice and Procedure § 2858 (1973).

The Court’s original order was entered July 27, 1983. The second order was entered June 10, 1985. Defendants’ suggestions in opposition were filed July 19, 1985, and thus were not within the thirty days for filing notice of appeal. Fed.R. App.P. 4(a). Therefore, defendants’ arguments with regard to mitigation of damages and medical insurance payments are not properly before the Court. Defendants cannot evade this rule by arguing that the Attorney General did not have notice of this litigation since the State has authorized the Circuit Clerk of St. Louis to retain an attorney to represent the Clerk in court. Mo.Rev.Stat. § 483.260 (Supp.1984).

ELEVENTH AMENDMENT

Defendants’ eleventh amendment claims may be made under Rule 60(b)(4) which provides for relief from a void judgment. A judgment in violation of the eleventh amendment is void and can be challenged at any time. Ex parte Ayers, 123 U.S. 443, 8 S.Ct. 164, 31 L.Ed. 216 (1887). See also Ford Motor Co. v. Department of Treasury, 323 U.S. 459, 467, 65 S.Ct. 347, 352, 89 L.Ed. 389 (1944) (eleventh amendment may be raised for first time in Supreme Court); Jordon v. Gilligan, 500 F.2d 701, 710 (6th Cir.1974) (judgment in excess of eleventh amendment vacated under Rule 60(b); New York State Health Facilities Association, Inc. v. Carey, 76 F.R.D. 128, 132-33 (S.D.N.Y.1977) (default judgment alleged to be in violation of eleventh amendment may be attacked for first time in Rule 60(b) motion); but see Vecchione v. Wohlegemuth, 558 F.2d 150, 159 (3d Cir.1977) (judgment in violation of eleventh amendment not void). The Court of Appeals did not rule on these issues since they were not raised on appeal.

For the eleventh amendment to act as a bar, the suit must be against a state. Edelman v. Jordan, 415 U.S. 651, 663, 94 S.Ct. 1347, 1355, 39 L.Ed.2d 662 (1973); Miener v. State of Missouri, 673 F.2d 969, 980 (8th Cir.1982). The key in determining whether the suit is against the State is who will pay the judgment. Where the judgment will be paid by the State the eleventh amendment applies. Edelman 415 U.S. at 663, 94 S.Ct. at 1355; Miener at 981. So, a suit against State officers in their official capacities seeking amounts which will be paid by the State is a suit against the State for purposes of the eleventh amendment. Id.

The instant judgment is clearly against the State of Missouri since Barnes is a State employee under Mo.Rev.Stat. § 483.245, (Supp.1984). Any award relating to Barnes’ compensation is payable from the State treasury under that statute. Further, when the defendants discharged Barnes they discharged a State employee. Defendants’ acts, then, are the responsibility of the State and were done in defendants’ capacities and by virtue of their authority as State officers in the Circuit Clerk’s office, the records administrator and clerical staff of the State judiciary, see Mo.Rev.Stat. §§ 483.240 and 483.241 (1978), and not as City officials.

A suit against a state officer in his official capacity may be maintained where the relief is prospective. Edelman, 415 U.S. at 664, 94 S.Ct. at 1356; Miener at 982. The language of Edelman shows that the date of the Court’s order is the boundary between permitted prospective relief and prohibited retrospective relief. In defining the type of relief allowed by the eleventh amendment, the Court discussed cases involving “compliance with decrees which by their terms were prospective,” shaping of “official conduct to the mandate of the Court’s decrees,” and “compliance in the future with a substantive federal question determination.” Edelman, 415 U.S. at 668, 94 S.Ct. at 1358. The Court in Fitzpatrick v. Bitzer, 427 U.S. 445, 451, 96 S.Ct. 2666, 2669, 49 L.Ed.2d 614 (1975), reinforces this definition of prospective relief in its restatement of the Edelman holding. “In Edelman this Court held that monetary relief awarded by the District Court to welfare plaintiffs, by reason of wrongful denial of benefits which had occurred previous to the entry of the District Court’s determination of their wrongfulness, violated the Eleventh Amendment.” (Emphasis added.) The cases discussing the issue state that relief that is prospective with regard to a judicial imposition of a duty is permitted under the eleventh amendment. See Buckhanon v. Percy, 708 F.2d 1209, 1216 (7th Cir.1983) (payment of state benefits prior to court’s order retroactive); Nevels v. Hanlon, 656 F.2d 372, 377 (8th Cir.1981) (pay and benefits from date of order allowed); Kimble v. Solomon, 599 F.2d 599, 605 (4th Cir.1979) (state required to pay benefits after court’s decree entered on remand); Townsend v. Edelman, 518 F.2d 116, 120 (7th Cir.1975) (payments prior to entry of injunctive relief barred); Vargas v. Trainor, 508 F.2d 485, 491 (7th Cir.1974) (court order divides past from present).

This Court ordered reinstatement of Barnes on July 27, 1983. The Barnes order was stayed on November 29, 1983, pending appeal. During the time from the stay until the entry of the new order, the State was not under a judicially imposed duty to reinstate Barnes. Therefore, any attempt to fix liability for that period at a later date is retrospective relief barred by the eleventh amendment. See Nevels v. Hanlon, 656 F.2d at 377 (back pay prior to court order retrospective). The State had immunity as to Barnes prior to July 27, 1983, and during the period after the entry of the stay on November 29, 1983, until the entry of the new order on June 10, 1985, when a duty to reinstate was reimposed by this Court. Nevels at 377.

There are exceptions to the application of the eleventh amendment. For example, some legislation is not subject to the eleventh amendment. This is not the case for suits under 42 U.S.C. § 1983, however. Quern v. Jordan, 440 U.S. 332, 341-42, 99 S.Ct. 1139, 59 L.Ed.2d 358 (1978). A state can also waive the eleventh amendment by representing to the court that it will pay awards ordinarily barred by the eleventh amendment. In Toll v. Moreno, 458 U.S. 1, 102 S.Ct. 2977, 73 L.Ed.2d 563 (1981) a university, in order to convince the trial court to stay its order, stated that it would make appropriate refunds of tuition if it lost on appeal. These refunds ordinarily would have been barred by the eleventh amendment. The Supreme Court held that this representation was a waiver of the eleventh amendment. Id. at 18. See also Vargas v. Trainor, 508 F.2d 485, 492 (7th Cir.1974).

The defendants in this case have made such a waiver in their reply to plaintiffs memorandum in opposition to defendants’ motion to stay judgment pending appeal.

Plaintiffs, ... incorrectly and with exaggeration seek to describe the harm that would result to them if the stay of judgment is granted____ With respect to plaintiffs’ income and benefits, as shown by plaintiffs’ complaint, their alleged injury can be calculated and compensated by money damages if they were successful on a case on the merits.. It is obvious that the amount which may be due plaintiffs for loss of income and benefits can be calculated and paid.

Defendants’ reply at 5.

By this representation, the defendants waived the eleventh amendment protection they had as to Barnes because of the stay. The result is that defendants are liable to Barnes for reinstatement and benefits from the date of this Court’s original order, July 27, 1983. The Court finds that this representation was not a waiver of the eleventh amendment for compensation pri- or to the July 27, 1983, order since the State was not necessarily considering that period of time when it made its representation seeking stay of the judgment.

Further, the Court finds that the failure to assert the eleventh amendment during trial and on appeal does not constitute a waiver under the standard set out in Atascadero State Hospital v. Scanlon, — U.S. -, 105 S.Ct. 3142, 87 L.Ed.2d 171 (1985). The Supreme Court stated “[w]e require an unequivocal indication that the State intends to consent to federal jurisdiction that would otherwise be barred by the Eleventh Amendment.” Id., 105 S.Ct. at 3145, n. 1. The State’s neglect in asserting the eleventh amendment does not constitute an “unequivocal indication” of its consent to suit.

Defendants also claim that the eleventh amendment requires that any prospective relief be reduced by interim earnings. .First, defendants argue that failure to mitigate damages will result in a windfall, the type of award barred by the eleventh amendment. Second, defendants claim that allowing plaintiff to assert the public officer exception to the rule of mitigation constitutes the enforcement of a state law claim against a state official in conflict with the Supreme Court’s holding in Pennhurst State School and Hospital v. Halderman, 465 U.S. 89, 104 S.Ct. 900, 79 L.Ed.2d 67 (1984).

As to the first argument, the relief allowed by this order is prospective and therefore satisfies the test for constitutionality under the eleventh amendment. As to the second, the Court is not enforcing the public official exception but is refusing to alter the prior order because defendants failed to come within Rule 60(b)(1).

CONCLUSION

Plaintiff Barnes is entitled to compensation for wages, without deduction for interim earnings, from defendants in their capacities as State officers from July 27, 1983, to June 30, 1984, at a rate of $1,958.75 per month and from July 1, 1984, at a rate of $2,091.87 per month. Barnes is also entitled to medical insurance payments from July 27, 1983, at a rate of $65.40 per month.

Deduction of appropriate federal and state income taxes is within the contemplation of this Court’s previous orders. See Blair v. Western Electric, 731 F.2d 1473, 1480 n. 2 (10th Cir.1984); United States v. Lee Way Motor Freight, Inc., 15 F.E.P. 1385, 1389 (W.D.Okla.1977), rev’d on other grounds, 625 F.2d 918 (10th Cir. 1979). Interest at the lawful rate shall be paid on an amount equal to the gross amount of wages and medical insurance payments less amounts deducted for federal and state income taxes and social security taxes.

Accordingly,

IT IS HEREBY ORDERED that this Court’s judgments in this case dated July 27, 1983, and June 10, 1985, are null and void to the extent they purport to grant relief for wages and benefits for plaintiff Barnes before July 27, 1983.

IT IS FURTHER ORDERED that defendants, in their capacities as State officers pay to Barnes wages, benefits and interest less deductions for federal and state income taxes and social security taxes as set out above.

IT IS FURTHER ORDERED that a hearing is set for September 5, 1985, at 9:30 a.m., for the parties to present evidence on the issue of defendants’ compliance with this Court’s order to reinstate plaintiff.

IT IS FURTHER ORDERED that plaintiff’s motions in all other respects be and are DENIED.

IT IS FURTHER ORDERED that the motions of plaintiffs McElroy and Thomas be and are DENIED as moot.

ON MOTION FOR ENFORCEMENT

This matter is before the Court on the motion of plaintiff Barnes for enforcement of this Court’s order of reinstatement and defendants’ motion to alter or amend. This Court has previously determined that an evidentiary hearing on the issue of defendants’ compliance with the order of reinstatement is necessary. As to defendants’ motion, after consideration of the matter, the Court is of the opinion that its previous decision is correct.

Accordingly,

IT IS HEREBY ORDERED that a hearing is set at 9:30 a.m. on January 3, 1986, for the parties to present evidence on the issue of defendants’ compliance with this Court’s order to reinstate plaintiff.

IT IS FURTHER ORDERED that defendants’ motion to alter or amend be and is DENIED.

      . The Court holds that defendants were acting as State officials and not City Officials despite Mo.Rev.Stat. § 483.083 (Supp.1984). The Court believes that the exclusion of the Circuit Clerks for St. Louis, St. Louis County and Jackson County from classification as State employees is of significance for purposes of State employee benefit programs.


source: Caselaw Access Project

author: JAMES McGIRR KELLY, District Judge.

license: Public Domain

text:
    MERCURY FOAM CORP. v. L & N SALES & MARKETING, et al.
    Civ.A. No. 85-1774.
    United States District Court, E.D. Pennsylvania.
    Sept. 6, 1985.

      Stanley H. Cohen, Philadelphia, Pa., Michael J. Sweedler, New York City, for plaintiff.
    H. Robert Fiebach, Philadelphia, Pa., for all defendants.
   MEMORANDUM AND ORDER

JAMES McGIRR KELLY, District Judge.

The plaintiff Mercury Foam Corporation (Mercury) is a manufacturer and marketer of hair curlers which are sold under the trademark of “Styling Stix”. Styling Stix are rod shaped flexible foam hair curlers with a wire inserted so that the curler will hold its shape when used. Defendant L & N Sales and Marketing (L & N) (a partnership) is the exclusive distributor in the United States for Schumi Schaper brand hair curlers. Defendants Laurie Cohen (Cohen) and Neal Menaged (Menaged) are the partners of L & N. A Schumi Schaper hair curler is a flexible foam roller with a wire insert to hold the shape of the curler when it is bent or shaped. Schumi Schapers are manufactured in West Germany by defendant Herbert Weisener Kunststoffteile (Weisener). The Schumi Schaper was developed and designed by defendant Heinz Andreas Schumi, Ltd. (Schumi, Ltd.) a business organized under the laws of Great Britain and which is subject to the controlling interest of defendant Heinz Andreas Schumi (Schumi).

Plaintiff Mercury sought a preliminary injunction against defendants here from marketing the Schumi Schapers in a similar trade dress which allegedly creates a likelihood of confusion as to the origin of the Schumi Schapers. The plaintiff contends that because of its recent promotional campaign through various media emphasizing Styling Stix and its packaging, it would be unfair for the defendants here to market the Schumi Schapers in a confusingly similar package which would thus reap the benefits of Mercury’s promotion.

Defendants L & N, Cohen and Menaged brought a counterclaim against' plaintiff. This counterclaim was joined by defendants Weisener, defendant Schumi, Ltd., and defendant Schumi. Defendants contend in their counterclaim that plaintiff has palmed off on its product and has caused a likelihood of confusion in the market place by plaintiff’s various references to a European origin of Styling Stix. Additionally, defendants assert that plaintiff misappropriated trade secrets which were learned while plaintiff was in a position of confidence with defendants. Indeed, plaintiff at one time sought to market Schumi Schapers for the defendants in the United States.

The parties by agreement requested that the cross motions for preliminary injunctive relief be dismissed and that the hearing “be for final relief, on the merits of the case.” See my Order of May 14, 1985 in this matter.

Pursuant to Fed.R.Civ.P. 52, the following are the findings of facts and conclusions of law.

FINDINGS OF FACT

1. Schumi Schapers were manufactured and marketed by defendants Schumi Schapers, Ltd. and Weisener in the early 1980’s, prior to 1984.

2. The London Sunday Times Magazine of January 15, 1984 cover story featured Schumi Schapers.

3. In early 1983, Bibury, Ltd., who was defendant Weisener’s exclusive agent, introduced Schumi Schapers in the United States at a trade show.

4. In early 1985, Bibury, Ltd. appointed L & N to be the exclusive distributor of Schumi Schapers in the United States for the retail trade.

5. In the latter part of 1983 into early 1984, Schumi Schapers were sold in department stores throughout the United States.

6. The Schumi Schapers curler was the focus of a Wall Street Journal article on April 4, 1984.

7. Schumi Schaper curlers were originally marketed in a flexible clear “poly bag”. This bag permitted the display of the Schumi Schaper curlers. There were ten Schumi Schaper curlers to a bag. The Schumi Schapers were individually colored red, blue or yellow and were arranged in an alternating pattern so that no two adjacent Schumi Schaper curlers were the same col- or. The curlers were sold in two different sizes, long curlers approximately IOV2 inches in length and short curlers approximately 4V2 inches in length. The two different lengths were sold separately. Each of the packages contained a black and white picture of models demonstrating the use of the Schumi Schapers curlers.

8. In the spring of 1984, plaintiff began experimenting with the idea of manufacturing and/or marketing flexible curlers similar to the Schumi Schapers curlers.

9. In May of 1984 plaintiff’s agent, Mr. Buff, met with defendants Mr. Schumi and Mr. Weisener to discuss the possibility of plaintiff’s agent serving as a distributor and/or manufacturer of the Schumi Schaper curlers under license.

10. In June 1984, another meeting was held between plaintiffs and defendants concerning marketing Schumi Schapers through the plaintiff.

11. Defendants did not establish at the hearing that any confidential or proprietary information was conveyed to plaintiff during the two meetings.

12. During the late spring through the summer of 1984, plaintiff decided to produce and market its own flexible curler. The curler construction was similar to the Schumi Schaper curler.

18. Plaintiff developed a package design which was not unique. The package design included a clear vacuum formed tray which would act as a travel case and holder for the curlers.

14. Plaintiff marketed its curler under the name Styling Stix. The Styling Stix are each a different pastel color. The Styling Stix are enclosed in the clear vacuum package against a black cardboard. The dark background provides sufficient contrast against the pastel colored Styling Stix thus emphasizing the Styling Stix. On the black cardboard which is not covered over by the Styling Stix, are three models which demonstrate the uses of the Styling Stix.

15. Clear vacuum form packaging is used by a wide array of consumer goods and by itself is not inherently distinctive.

16. The contrasting color array of the curlers of both parties, creates the strongest visual impression when viewing the packages.

17. Plaintiff, in various marketing literature and promotional materials, has represented its product as “now in America ... the revolutionary styling device that’s causing waves and getting raves all over Europe." Styling Stix have not been marketed or sold in Europe. This type of promotion creates an inference, thus confusion, that plaintiff’s product’s origin is the same as defendant Schumi Schapers.

18. Certain promotional aids used by plaintiff contained pictures of Schumi Schapers in “poly bags” with the statement “European Import product”. Without differentiating Schumi Schapers from Styling Stix, it created the inference and the likelihood of confusion that Styling Stix have the same origin as Schumi Schapers.

19. After the Styling Stix product was marketed, Schumi Schapers redesigned its package, disposing of the poly bag and adopting a clear vacuum form package. The new package had some features of Schumi Schapers’ earlier package. Indeed, the new package had certain models who demonstrated the use of the product. The focal point of the new package, as was the old one, and certainly the Styling Stix package, is the contrasting colors of the curlers. DISCUSSION

Plaintiff seeks an injunction against defendants, enjoining defendants from distributing or marketing Schumi Schapers in its present package design, and from marketing or importing any type of foam rod shaped curler which is confusingly similar to Styling Stix. Plaintiff seeks an injunction requiring the defendants to recall all of their curlers which have not been distributed to the final consumer. Plaintiff seeks an order prohibiting further advertising of Schumi Schapers. Last, plaintiff seeks damages and requests an accounting of defendants’ profits which resulted from the alleged infringement. Plaintiff requests treble damages and attorney fees pursuant to 15 U.S.C. § 1117.

Conversely, defendants request an injunction against plaintiff enjoining defendants from: trading upon the good will of Schumi Schapers; offering for sale, selling or distributing soft flexible foam hair curlers in a multi-colored format in a size and shape identical or deceptively similar to the size and shape of the Schumi Schapers. Further, defendants seek to enjoin plaintiff from directly or indirectly representing or otherwise holding plaintiff out as related to or sponsored by or successor to any interest of Schumi, Ltd. or its affiliates; or in any manner palming off plaintiff’s product as that of defendants. Specifically, defendants seek to prohibit plaintiff from making any reference to a European origin of Styling Stix and from using pictures of the Schumi Schapers in plaintiff's advertising when it is not clearly stated that the product shown is not the product of plaintiff. Defendants additionally seek the destruction of plaintiff’s product, packages or promotional material which bear a confusingly similar likeness to the Schumi Schapers product. Last, defendant seeks treble damages and attorney fees pursuant to 15 U.S.C. § 1117.

The parties rely principally upon 15 U.S.C. § 1125, Section 43(a) of the Lanham Act for their causes of action. Section 1125 states:

(a) Any person who shall affix, apply, or annex, or use in connection with any goods or services, or any container or containers for goods, a false designation of origin, or any false ^description or representation, including words or other symbols tending falsely to describe or represent the same, and shall cause such goods or services to enter into commerce, and any person who shall with knowledge of the falsity of such designation of origin or description or representation cause or procure the same to be transported or used in commerce or deliver the same to any carrier to be transported or used, shall be liable to a civil action by any person doing business in the locality falsely indicated as that of origin or in the region in which said locality is situated, or by any person who believes that he is or is likely to be damaged by the use of any such false description or representation.
(b) Any goods marked or labeled in contravention of the provisions of this section shall not be imported into the United States or admitted to entry at any customhouse of the United States. The owner, importer, or consignee of goods refused entry at any customhouse under this section may have any recourse by protest or appeal that is given under the customs revenue laws or may have the remedy given by this chapter in cases involving goods refused entry or seized.

Additionally, the parties rely upon common law unfair competition.

Indeed, here each of the parties contend that the other party has used confusingly similar trade dress which creates a likelihood of confusion of origin of the product. “Trade dress” is a concept which embraces the total image of a given product, including advertising materials and marketing techniques used to promote its sale. John Wright, Inc. v. Casper Corporation, 419 F.Supp. 292 (E.D.Pa.1976) (citing McCarthy, Trademarks and Unfair Competition, § 8.1 at pp. 230-231 (1973)), affirmed in part, reversed in part on other grounds, 587 F.2d 602 (3d Cir.1978). For a party to violate unfair trade law, it must misrepresent its product’s origin, or it must create a likelihood of confusion as to its product’s origin, or make false representations or descriptions of its product.

The fact that two competitors have similar trade dress may not be sufficient to establish an unfair trade violation. John Wright, Inc., 419 F.Supp. at 318. A party, to establish palming off on his product’s trade dress, must show his trade dress is inherently distinctive or has acquired secondary meaning. John Wright, Inc.; Chevron Chemical Company v. Voluntary Purchasing Groups, 659 F.2d 695 (5th Cir.1981). Thus, once secondary meaning, or inherent distinctiveness is established, likelihood of confusion as to the source of the product must be shown.

If a package design is commonly used or is functional, it cannot be the focus of a trade dress infringement action.

CONCLUSIONS OF LAW

1. The clear vacuum formed tray/package in which plaintiff sells its Styling Stix is primarily functional and is commonplace. It is not inherently distinctive with no secondary meaning being established by plaintiff.

2. The black background which plaintiff uses in its packaging to set off its brightly colored curlers is not inherently distinctive and no secondary meaning has been established by plaintiff.

3. The various pictures of models demonstrating the uses of Styling Stix on its packages is functional in nature and not inherently distinctive.

4. The various pictures of models demonstrating the uses of Schumi Schapers on its packages is functional in nature and not inherently distinctive.

5. Defendant did not establish that any trade secrets were conveyed to plaintiff while the parties were in various business negotiations.

6. The plaintiff has falsely described its product by inferences in its promotional material that it is from Europe, and that it has a European origin, and, therefore, contrary to 15 U.S.C. § 1125.

7. The plaintiff has wrongly inferred that its product had European origins by showing pictures of Schumi Schapers in various promotional materials and, therefore, contrary to 15 U.S.C. § 1125.

8. Defendants do not have an adequate remedy at law.

ORDER

AND NOW, this 6th day of September, 1985, upon consideration of plaintiff Mercury Foam Corporation’s petition for an injunction and other relief, and defendants L & N Sales and marketing, Herbert Weisener Kunststoffteile, Heinz Andreas Schumi, Ltd., and Heinz Andreas Schumi’s petition for an injunction and other relief, and after reviewing the briefs and documents the parties have submitted for my consideration, and after conducting a lengthy hearing in this matter, it is ORDERED that:

1. Plaintiff’s petition for an injunction and other relief is DENIED

2. Defendants’ petition for an injunction and other relief is GRANTED in the following manner. Plaintiff and its agents are enjoined from representing or promoting to the ultimate consumer or any intermediary that its product Styling Stix has any connection with or an origin in Europe. Additionally, plaintiff must contact each and every buyer or any other person or party it has solicited who may have received erroneous or misleading information concerning the origin of the Styling Stix and inform such persons or buyers that Styling Stix has no connection or origin in Europe or any product that has been marketed previously in Europe. Last, plaintiff is prohibited from using any pictures of Schumi Schapers in any of its promotional materials.

      . Pennsylvania common law is identical to the Lanham Act, 15 U.S.C. § 1125, except that the Lanham Act requires interstate commerce. Artus Corporation v. Nordic Co., Inc., 512 F.Supp. 1184, 1187 (W.D.Pa.1981).


author: GRADY, District Judge.

text:
    Michael TELLIS, Plaintiff, v. UNITED STATES FIDELITY AND GUARANTY COMPANY, et al., Defendants.
    No. 83 C 3557.
    United States District Court, N.D. Illinois, E.D.
    Sept. 6, 1985.

      Gerald C. Risner, Martin T. Langan, Chicago, 111., for plaintiff.
    Michael J. Gibbons, Kralovec, Marquard, Doyle & Gibbons, Chicago, 111., for defendants.
    Jeffrey Singer, William F. Mahoney, Epton, Mullin, Segal & Druth, Chicago, 111., for U.S. Fidelity and Guar. Co.
   MEMORANDUM OPINION

GRADY, District Judge.

This case is before us on the defendants’ motions to dismiss plaintiff’s first amended complaint, or to strike certain portions of the complaint. The complaint consists of three counts, all based on the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. §§ 1961 et seq. (“RICO”). The plaintiff, Michael Tellis, claims that the defendants, his former employer Parker House Sausage Co. (“Parker”), and Parker’s insurer, United States Fidelity & Guaranty Co. (“USF & G”), perpetrated a fraud upon him and the Illinois Industrial Commission (“IIC”) when they falsely stated to the IIC that plaintiff would be returned to light duty work at Parker. In reliance upon this allegedly false statement made at a hearing before the IIC, plaintiff claims that he and the IIC accepted a settlement for plaintiff’s worker’s compensation claim against Parker which would not have been accepted absent the misrepresentation.

We originally dismissed this claim pursuant to Fed.R.Civ.P. 12(b)(6) because plaintiff did not allege two mailings in furtherance of the alleged scheme to defraud. Tellis v. United States Fidelity & Guaranty Co., No. 83 C 3557, Memorandum Op. (N.D.Ill. Jan. 10, 1985). Plaintiff has amended his complaint to add other mailings which he states were made in furtherance of the scheme. Defendants claim that the new mailings do not remedy the claim’s infirmities, and also renew arguments previously raised which we did not address in our first opinion.

Because we believe that plaintiff has corrected the infirmities of his original complaint upon which we based our first opinion, we must now rule upon one of the defendants’ previous arguments, which presents a difficult preemption issue. Defendants argue that plaintiff’s RICO claim is barred by the exclusivity clauses of Illinois’ Worker’s Compensation Act, Ul.Rev. Stat. ch. 48, § 138.1 et seq. Pertinent portions of the Act state that “no common law or statutory rights to recover damages ... other than the compensation herein provided, is available to any employee who is covered by the provisions of this Act”; in any case where “there has been any unreasonable underpayment of compensation ... then the commission may award compensation additional to that otherwise payable under this Act equal to 50% of the amount payable at the time of such award”; and whenever the IIC finds that the employer or insurer “has been guilty of delay or unfairness towards an employee in the adjustment, settlement, or payment of benefits ... or has been guilty of unreasonable or vexatious delay, [or] intentional underpayment of compensation benefits ... within the purview of the provisions of paragraph 19 of this Act,” it may assess all or part of the attorney’s fees and costs against the employer or insurer. Ill.Rev. Stat. ch. 48, §§ 138.5(a), 138.19(k), 138.16.

The Illinois Supreme Court has construed these paragraphs to bar an independent state cause of action by an employee for intentional infliction of emotional distress based upon his employer’s conduct in handling his worker’s compensation claim. Robertson v. Traveler’s Insurance Co., 95 Ill.2d 441, 69 Ill.Dec. 954, 448 N.E.2d 866 (1983). The Court stated that since the employee had an opportunity to seek the statutory penalties contained in §§ 138.-19(k) and 138.16, he cannot recover for delay in an action at common law:

To permit such a course would invite the indefinite prolonging of litigation and risk double recoveries and inconsistent findings of fact, a result which the legislature, in enacting a system of compensation in place of common law remedies, certainly wished to avoid.

Id. at 451, 69 Ill.Dec. at 959, 448 N.E.2d at 871. See also Hicks v. Board of Education for School District 189, 177 Ill.App.3d 974, 33 Ill.Dec. 683, 397 N.E.2d 16 (5th Dist.1979) (exclusive remedy for malicious delay is complaint to IIC pursuant to § 138.19(k)).

Defendants argue that under the above-cited sections of the Act, plaintiff should have returned to the IIC with his charges, reopened his claim, and received his statutory penalties, if merited. Under the exclusivity clauses of the Act, his only remedy is with the IIC.

We agree that under the Act, plaintiff’s suit is barred. The Act states that no statutory right to damages is available to an employee covered by the Act, and that when an employer or insurer deliberately underpays an employee, as alleged here, the employee’s exclusive remedy is a 50 percent statutory penalty. The Supreme Court of Illinois has confirmed this interpretation of the Act, stating that to allow a remedy outside the statutory penalties of the Act would cause indefinite prolonging of litigation, double recoveries, and inconsistent findings of fact.

The question here is whether RICO preempts the exclusivity clauses of the Act, allowing this suit. To the extent that a state law conflicts with a federal law, the state statute is void under the Supremacy Clause of the Constitution. U.S. Const., art. VI, cl. 2. See Edgar v. Mite Corp., 457 U.S. 624, 631, 102 S.Ct. 2629, 2634, 73 L.Ed.2d 269 (1982). A conflict is found “where compliance with both federal and state regulations is a physical impossibility,” or where the state law “stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.” Id., citing Florida Lime & Avocado Growers, Inc. v. Paul, 373 U.S. 132, 142-143, 83 S.Ct. 1210, 1217, 10 L.Ed.2d 248 (1963); Hines v. Davidowitz, 312 U.S. 52, 67, 61 S.Ct. 399, 404, 85 L.Ed. 581 (1941). Thus, courts find a conflict if the state law’s language is directly contradictory to that of the federal law; if the state law’s effect is to discourage conduct the federal law seeks to encourage; or if comprehensive federal legislation has preempted all state regulations on that subject. See L. Tribe, American Constitutional Law, §§ 6-23-25 at 376-86 (1978).

Nothing in the RICO statute’s language or legislative history indicates that Congress meant to vitiate the exclusivity clauses of state and federal compensation statutes. Courts have found that state exclusivity clauses do not violate the Constitution, see A. Larson, Larson’s Workmen’s Compensation Law, § 65.20 at 12-10-12-11 (1983), and that the “exclusiveness rule relieves the employer not only of common-law tort liability, but also of statutory liability under all state and federal statutes.” Id. at § 65.30 at 12-11. The only actions not barred by such exclusivity clauses are those based on a federal constitutional right, as opposed to a common law or statutory right. See Walker v. Rowe, 535 F.Supp. 55, 57 (N.D.Ill.1982). See also Rosa v. Cantrell, 705 F.2d 1208 (10th Cir. 1982), cert. denied, 464 U.S. 821, 104 S.Ct. 85, 78 L.Ed.2d 94 (1983).

On the other hand, pragmatically, RICO would allow a claim here which the state act bars, resulting in a limitation, if not a conflict. The RICO statute states that nothing in it supersedes other federal or state law affording civil remedies in addition to RICO remedies, Pub.L. 91-452, § 1, reprinted in 18 U.S.C.A. § 1961 note at 233, indicating that RICO was meant to supplement and enhance other actions. The treble damage remedy, along with the predicate offense nature of the RICO cause of action, reinforce this enhancement nature of a RICO claim. Therefore, one could argue that since Congress’ purpose was to provide an additional and enhanced cause of action based upon certain criminal predicate offenses, this purpose would be undermined by a ruling preventing access to this separate remedy.

Weighing these considerations, we believe federal policy dictates that plaintiff’s action be barred. Congress has passed numerous federal compensation laws with exclusivity clauses, such as the Longshoremen’s and Harbor Worker’s Compensation Act, 33 U.S.C. § 905. Federal courts have enforced such clauses numerous times, see Larson, § 65.31 at 12-12. When an injury is covered by a federal or state worker’s compensation statute, federal courts have held that actions based upon the Federal Torts Claims Act are barred. Id. at § 65.32. See Griffin v. United States, 703 F.2d 321 (8th Cir.1983). These laws and cases construing such laws make it clear that Congress approves of the policy of protecting the employer from multiple claims in return for the employer’s automatic liability under such statutes. In the absence of any clear indication that RICO was designed to supersede the purpose of the exclusivity clauses in these numerous federal and state statutes, we will not find such a purpose and a conflict between RICO and these statutes. In the instant case, after allegedly being defrauded and learning that he would not be reemployed, plaintiff could easily have returned to the IIC and reopened his claim. By failing to return to the IIC, he is attempting the duplicative litigation condemned in Robertson and implicitly disapproved in the exclusivity clauses of state and federal statutes. Because the federal policies behind the RICO statute do not appear to conflict with those other federal policies encouraging the exclusive settlement of employment compensation disputes under compensation statutes, we find no conflict between Illinois’ Worker’s Compensation Act and RICO. The Supremacy Clause does not call for preemption of the Illinois Act, and plaintiff’s claim is barred under the Act.

CONCLUSION

Defendants’ motions to dismiss are granted, and plaintiff’s claim is dismissed with prejudice.

      . Plaintiffs amended complaint does allege at least two mailings in furtherance of a scheme to defraud. We have already held that one mailing alleged in the original complaint and realleged here, the mailing of plaintiff's check, can form the basis of a mail fraud claim, since the alleged scheme did not reach fruition until he received his money. Tellis, Memorandum Op. at 3; see United States v. Maze, 414 U.S. 395, 403, 94 S.Ct. 645, 650, 38 L.Ed.2d 603 (1973). In his amended complaint, plaintiff added several other mailings preceding the date the check was mailed. At least one of these mailings, notice to plaintiff to attend the IIC hearing, is sufficiently related to the alleged scheme to form the basis of another mail fraud claim. Parker argues that this notice mailing is too "tenuous” to. support a mail fraud charge. Memorandum in Support of Motion to Dismiss Amended Complaint at 5. In order to form the basis of a mail fraud action, however, a mailing need only be made for the purpose of executing the scheme to defraud. The mailing itself need not be essential to the scheme. United States v. Clark, 649 F.2d 534, 540 (7th Cir.1981). All that is required is that the mailing be a "natural concomitant of a transaction that is essential to the fraudulent scheme.” United States v. Lea, 618 F.2d 426, 430 (7th Cir.), cert. denied, 449 U.S. 832, 101 S.Ct. 82, 66 L.Ed.2d 25 (1980). Here, the IIC hearing was an event essential to the scheme, and notice to plaintiff to attend the hearing was foreseeable. Therefore, the mailing can support a mail fraud action, plaintiff has alleged two connected mail frauds, and the "pattern” requirement of § 1961(5) is met in plaintiffs amended complaint.
      Parker also argues that the mailings all concerned USF & G, not Parker. The amended complaint does not state that Parker mailed, received or caused to be mailed any relevant material. Memorandum in Support at 5. Plaintiff has alleged, however, that Parker and USF & G jointly participated in the scheme to defraud. Therefore, Parker can be held accountable for USF & G’s mailings. See United States v. Dick, 744 F.2d 546, 552 (7th Cir.1984).


author: JOYCE HENS GREEN, District Judge.

text:
    SECURITIES AND EXCHANGE COMMISSION, Petitioner, v. David P. WHITMAN and Lowell R. Allen, Respondents.
    Misc. No. 85-0083.
    United States District Court, District of Columbia.
    Sept. 11, 1985.
    Alexia Morrison, Joseph Goldstein, William Donnelly, Thomas Karol, S.E.C., Washington, D.C., for petitioner.
    Philip A. Lacovara, Geoffrey P. Aronow, William L. Webber, Hughes, Hubbard & Reed, Washington, D.C., and John S. Martin, Jr., Catherine Samuels, Schulte, Roth & Zabel, New York City, for respondents.
   ON MOTION FOR RECONSIDERATION

JOYCE HENS GREEN, District Judge.

Before the Court is the motion of petitioner Securities and Exchange Commission (“SEC”), pursuant to Federal Rule of Civil Procedure 59(e), for reconsideration of the April 15, 1985 Order in this case. Both petitioner’s motion and respondents’ opposition thereto have been fully reviewed in light of the standards for relief under Rule 59(e). See Grumman Aircraft Eng’g Corp. v. Renegotiation Bd., 482 F.2d 710, 721 (D.C.Cir.1973), rev’d on other grounds, 421 U.S. 168, 95 S.Ct. 1491, 44 L.Ed.2d 57 (1975); Murnane v. American Airlines, Inc., 482 F.Supp. 135, 152 (D.D.C.1979), aff'd, 667 F.2d 98 (D.C.Cir.1981), cert. denied, 456 U.S. 915, 102 S.Ct. 1770, 72 L.Ed.2d 174 (1982).

Respondents in this matter have been called to testify as witnesses before the SEC in connection with a private investigation. The Order of April 15, 1985 held only that the SEC may not refuse to permit the presence of a nonlawyer technical adviser to respondents’ counsel during the actual taking of testimony in those investigative proceedings. Petitioner now advocates reconsideration of that Order on the ground that the Court improperly substituted its own preference in place of a rationally-based agency policy.

To the extent that the claimed “rational basis” of the policy set aside by this Court derived from the agency vision of the contours of the APA-based right to counsel in compulsory investigative proceedings, see SEC v. Csapo, 533 F.2d 7 (D.C.Cir.1976), petitioner’s present arguments (at Part II-C of its memorandum) simply restate those previously voiced and rejected. The resurrected predictions of a tide of abusive tactics by counsel find only very weak support in the record; the SEC’s misplaced linkage between this matter and United States v. Paul Thayer and Billy Bob Harris, Criminal No. 85-0066 (D.D.C. Mar. 4, 1985), a case involving criminal obstruction of justice, is curious at best.

The litany of proffered reasons why the April 15, 1985 Order is “unworkable”, see petitioner’s memorandum at Part III, was carefully weighed in the Court’s original decision, as the language of the Order will attest. The blanket exclusion advocated by petitioner would of course be easier to ad-minster, but at the cost of a meaningful right to counsel in this case. Conversely, a limitless right to nonlawyer extensions of counsel in agency proceedings — which this Court did not proclaim — could well cause the chaos petitioner foresees. The Order of April 15, 1985 was designed to strike a balance between extremes.

Finally, petitioner’s objections to the particular individual selected to advise counsel in this ease — another partner in the accounting firm which links respondents to this investigation — do not support the exclusion of that adviser from the agency proceedings. Petitioner specifically declines to allege misconduct on the part of either counsel or the adviser. See petitioner’s memorandum at 16. Furthermore, the same adviser could be stationed and available for consultation just outside the room where the proceedings take place, even under past agency practice. Moving him inside the door will not measurably increase potential conflicts of interest such that he should be barred from the room.

For the foregoing reasons, and upon careful review of the Order of April 15, 1985, it is by the Court this 10th day of September, 1985.

ORDERED that the Order of April 15, 1985 will be neither vacated nor changed in any way and petitioner’s motion is accordingly denied.

      . Having acquiesced to petitioner's request for an enlargement of time to brief its motion, respondents cannot seriously contend that the motion is untimely due to the delayed filing of petitioner’s memorandum of points and authorities.

      . As a partner and employee of the accounting firm, respondents were responsible for auditing the corporation now under investigation. See April 15, 1985 Order at 1.


author: RICE, District Judge.

text:
    Earl SOWERS, SS# [ XXX-XX-XXXX ], Plaintiff, v. SECRETARY OF HEALTH AND HUMAN SERVICES, Defendant.
    No. C-3-82-783.
    United States District Court, S.D. Ohio, W.D.
    Sept. 18, 1985.

      John A. Cervay, Dayton, Ohio, for plaintiff.
    James E. Rattan, Asst. U.S. Atty., Columbus, Ohio, for defendant.
   DECISION AND ENTRY OVERRULING DEFENDANT’S MOTION TO ALTER OR AMEND

RICE, District Judge.

This case is before the Court on Defendant’s Motion to Alter or Amend. Doc. # 23. In this motion, Defendant moves under Rule 59(e), Fed.R.Civ.P., for an order from the Court altering or amending this Court’s Decision and Entry of April 17, 1985 (Doc. # 22) in which the Court overruled the Defendant’s motion for relief from judgment. With the present motion to alter or amend, the Secretary argues that this Court erred in not remanding this case to her pursuant to § 2(d)(2) of the Social Security Disability Benefits Reform Act of 1984 (“Reform Act”), P.L. 98-460, 98 Stat. 1794. In her motion for relief from judgment, the Secretary raised a similar argument which this Court rejected for alternative, independent reasons. First, the Court construed § 2(d)(2) of the Reform Act as not requiring a remand under the facts of this case. Second, the Court concluded that a motion for relief from judgment under Rule 60(b) was not available to challenge this Court’s judgment which adopted the Report and Recomméndation of the United States Magistrate and ordered judgment be entered for the Plaintiff herein. For reasons that follow, this Court agrees with the Secretary that it erred in not applying the plain meaning of § 2(d)(2). However, the Court reaffirms its conclusion that Rule 60(b) could not be used under the circumstances presented herein to challenge the Court’s judgment. Accordingly, the Court overrules Defendant’s motion to alter or amend (Doc. # 23).

Recently in Henry T. Patterson Trust v. United States, 729 F.2d 1089, 1094 (6th Cir.1984), the Sixth Circuit succinctly summarized the rules of statutory construction which are applicable herein:

“[I]n determining the scope of a statute, one is to look first at its language.” Dickerson v. New Banner Institute, Inc., 460 U.S. 103, 103 S.Ct. 986, 990, 74 L.Ed.2d 845 (1983). See North Dakota v. United States, 460 U.S. 300, 103 S.Ct. 1095, 1103, 75 L.Ed.2d 77 (1983); Transamerica Mortgage Advisors, Inc. v. Lewis, 444 U.S. 11, 19, 100 S.Ct. 242, 246, 62 L.Ed.2d 146 (1979). “Absent a clearly expressed legislative intention to the contrary, that language must ordinarily be regarded as conclusive.” Consumer Product Safety Comm’n v. GTE Sylvania, Inc., 447 U.S. 102, 108, 100 S.Ct. 2051, 2056, 64 L.Ed.2d 766 (1980). Further, “[i]t is axiomatic that where a statute is clear and unambiguous on its face, a court will not look to legislative history to alter the application of the statute except in rare and exception circumstances.” Pope v. Rollins Protective Services Co., 703 F.2d 197, 206 (5th Cir.1983). See Rubin v. United States, 449 U.S. 424, 430, 101 S.Ct. 698, 701, 66 L.Ed.2d 633 (1981); TVA v. Hill, 437 U.S. 153, 187 n. 33, 98 S.Ct. 2279, 2298 n. 33, 57 L.Ed.2d 117 (1978); Crooks v. Harrel son, 282 U.S. 55, 60, 51 S.Ct. 49, 50, 75 L.Ed. 156 (1930). Finally, “Congress is presumed to use words in their ordinary sense unless it expressly indicates the contrary.” Davis Bros., Inc. v. Donovan, 700 F.2d 1368, 1370 (11th Cir.1983), reh. and reh. en banc denied (Eleventh Circuit refused to allow the Secretary of Labor to interpret “customarily furnished” meals as meaning “voluntarily accepted” meals for purposes of wage provisions in Fair Labor Standards Act). See Addison v. Holly Hill Fruit Products, 322 U.S. 607, 617-18, 64 S.Ct. 1215, 1221-22, 88 L.Ed. 1488 (1944).

Section 2(d)(2) of the Reform Act requires courts to remand to the Secretary those cases, which were pending on September 19, 1984, in which a person was seeking judicial review of a decision by the Secretary to terminate disability benefits so that the Secretary could apply the medical improvements standard. The clear and unambiguous language of § 2(d)(2) of the Reform Act prevents this Court from construing § 2(d)(2) of the Reform Act by reference to the legislative history to reach a conclusion that is contrary to the clear and unambiguous language. Therefore, the Court hereby amends its Decision and Entry of April 17, 1985 (Doc. # 22) so that the Court now will apply the plain meaning of § 2(d)(2) of the Reform Act and decline to interpret it in the manner interpreted therein.

As stated above, the Court based its decision to overrule Defendant’s Rule 60(b) motion on the alternative, independent ground that Rule 60(b) was not available to challenge the Court’s Decision and Entry of October 17, 1984 (Doc. # 18), adopting the Report and Recommendation of the United States Magistrate (Doc. # 16) and directing that judgment be entered for the Plaintiff. In the present motion, the Defendant has not convinced the Court that its conclusion on this issue was wrong.

In her motion for relief from judgment (Doc. # 20) under Rule 60(b), the Defendant did nothing more than argue that this Court committed error by adopting the Report and Recommendation of the United States Magistrate and directing that judgment be entered for the Plaintiff rather than remanding to the Secretary, as required by § 2(d)(2) of the Reform Act so that she might apply the medical improvements test. However, this Court remains convinced that Rule 60(b) could not be used herein to correct its error.

The majority of circuits which have considered the question have concluded that Rule 60(b) may be used to correct a judicial error, even though the period for filing a motion to alter or amend the judgment under Rule 59(e) has passed, if the motion is filed within the period of time allowed for an appeal. See, e.g., Tarkington v. United States Lines Co., 222 F.2d 358 (2d Cir.1955); Sleek v. J. C. Penney Co., 292 F.2d 256 (3d Cir.1961); Oliver v. Home Indemnity Co., 470 F.2d 329 (5th Cir.1972); Fox v. Brewer, 620 F.2d 177 (8th Cir.1980); Gila River Ranch v. United States, 368 F.2d 354 (9th Cir.1966); Security Mutual Casualty Co. v. Century Casualty Co., 621 F.2d 1062 (10th Cir.1980); D.C. Federation of Civil Associations v. Volpe, 520 F.2d 451 (D.C.Cir.1975). Contra, Silk v. Sandoval, 435 F.2d 1266 (1st Cir.), cert. denied, 402 U.S. 1012, 91 S.Ct. 2189, 29 L.Ed.2d 435 (1971); Swam v. United States, 327 F.2d 431 (7th Cir.)., cert. denied, 379 U.S. 852, 85 S.Ct. 98, 13 L.Ed.2d 55 (1964). Courts have allowed Rule 60(b) to be used to correct judicial errors because its timely use in this manner can avoid unnecessary appeals and thus conserve judicial resources. See, e.g., Oliver, 420 F.2d at 330-31. However, in the present case, no judicial resources would be conserved by using Rule 60(b) to correct an asserted mistake by the Court because Defendant has forfeited her right to appeal by not objecting to the Magistrate’s Report and Recommendation. See, e.g., United States v. Walters, 638 F.2d 947 (6th Cir.1981). Therefore, this Court concludes that, in the absence of objections to a Report and Recommendation of the Magistrate, its judgment adopting same may be challenged only through a timely motion under Rule 59(e). Since such a timely motion was not filed, the Court is powerless to grant the Defendant the relief requested.

Based on the foregoing, the Court overrules Defendant’s Motion to Alter or Amend. (Doc. # 23).

      . The time limitation on the use of Rule 60(b) in this manner is to prevent it from becoming a substitute for an appeal. See, e.g., Fox v. Brewer, 620 F.2d 177, 180 (8th Cir.1980).

        . Thus, the Defendant’s argument that Rule 4(a)(1), Fed.R.App.P., provides her 60 days in which to perfect an appeal is relevant.


author: MATSCH, District Judge.

text:
    Richard H. WINTHER, Plaintiff, v. DEC INTERNATIONAL, INC., a Wisconsin corporation, d/b/a Dairy Equipment Company, Defendant.
    Civ. A. No. 85-M-1510.
    United States District Court, D. Colorado.
    Sept. 18, 1985.
    Thomas G. Gillooly, Anthony F. Renzo, Boulder, Colo., for plaintiff.
    David J. Richman, Denver, Colo., for defendant.
   MEMORANDUM OPINION AND ORDER

MATSCH, District Judge.

This is an action for compensatory and punitive damages brought by the plaintiff Richard Winther against DEC International, Inc. (DEC). DEC, a Wisconsin corporation, manufactures and sells dairy equipment products throughout the United States. Winther, a citizen of Colorado and former salesman for DEC, alleges that he was discharged in 1982 because he refused to enforce an exclusive dealing and full line forcing distribution system in violation of antitrust laws. Winther’s claims for relief are based on federal antitrust law, state antitrust law, the tort of wrongful discharge, and breach of contract. Jurisdiction is asserted under 28 U.S.C. § 1337 and 28 U.S.C. § 1332. On July 11, 1985 DEC moved to dismiss for failure to state a claim for relief.

I

The complaint alleges that DEC and its dealers agreed to exclusive dealing contracts in violation of Section 3 of the Clayton Act. See, e.g., Standard Oil Co. of California v. United States, 337 U.S. 293, 69 S.Ct. 1051, 93 L.Ed. 1371 (1949); Tampa Electric Co. v. Nashville Coal Co., 365 U.S. 320, 81 S.Ct. 623, 5 L.Ed.2d 580 (1961). The defendant challenges the plaintiff’s standing to seek relief for an injury unrelated to the anticompetitive effects of the defendant’s distribution system. Section 4 of the Clayton Act provides that:

Any person who shall be injured in his business or property by reason of anything forbidden in the antitrust laws may sue therefor in any district court of the United States in the district in which the defendant resides or is found or has an agent, without respect to the amount in controversy, and shall recover threefold the damages by him sustained, and the cost of suit, including a reasonable attorney’s fee.

15 U.S.C. § 15. While language of the statute is broad enough to cover every harm directly or indirectly attributable to the consequences of an antitrust violation, the courts have concluded that Congress intended a more limited application. For Winther to maintain an action based on the federal statute he must allege an antitrust injury, an injury of the type the antitrust laws were intended to prevent and which flows from the unlawful aspect of the defendant’s activities. See, Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429 U.S. 477, 489, 97 S.Ct. 690, 697-98, 50 L.Ed.2d 701 (1977). Additionally, his injury must not be too remote from the alleged anticompetitive conduct. See, Illinois Brick Co. v. Illinois, 431 U.S. 720, 726, 97 S.Ct. 2061, 2064-65, 52 L.Ed.2d 707 (1977).

Recent Supreme Court decisions have clarified the standing requirement of § 4. In Blue Shield of Virginia, Inc. v. McCready, 457 U.S. 465, 102 S.Ct. 2540, 73 L.Ed.2d 149 (1982), the plaintiff, a consumer of subsidized psychotherapy services, sued Blue Cross and the Neuropsychiatric Society of Virginia, Inc., for an alleged conspiracy in violation of § 1 of the Sherman Act to refuse payment for the services of psychologists. While noting that Congress did not intend to allow every person tangentially affected by an antitrust violation to maintain an action under § 4, the Court held that the district court erred in granting a motion to dismiss, stating

As a consumer of psychotherapy services entitled to financial benefits under the Blue Shield plan, we think it clear that McCready was “within that area of the economy ... endangered by (that) breakdown of competitive conditions” resulting from Blue Shield’s selective refusal to reimburse. In re Multidistrict Vehicle Air Pollution M.D.L. No. 31, 481 F.2d 122, 129 (CA9 1973).

Id. at 480-81, 102 S.Ct. at 2549. Limiting reimbursements to the services of psychiatrists could be expected to increase the price paid by the consumers of psychotherapeutic services.

In contrast, as an employee of DEC, Winther was not within an area of the economy endangered by the breakdown of competitive conditions as a result of the alleged antitrust violations. In fact Winther would probably have benefited from DEC’s increased revenue resulting from exclusive dealing and forced sales.

The principal standing case is Associated General Contractors v. California State Council of Carpenters, 459 U.S. 519, 103 S.Ct. 897, 74 L.Ed.2d 723 (1983), where the Court held that a labor union had no standing to challenge an alleged conspiracy of certain contractors and landowners to divert business to non-union firms. The Court observed that the Sherman Act was enacted to assure consumers the benefit of price competition and to protect the economic freedom of participants in the relevant market. Id. at 538. Since the Sherman Act was not designed to protect a union in disputes with employers with whom it bargains, the union had not alleged an injury of the type the antitrust statute was intended to prevent.

Similarly, Winther’s injury is unrelated either to the degree of price competition, or to the degree of economic freedom of sellers of dairy equipment. His injuries result from the loss of his job; there is nothing in the language or history of the antitrust laws to suggest that Congress intended to protect employees from wrongful coercion or discharge. Winther has therefore not alleged an injury of the type the antitrust laws are intended to prevent.

The second factor noted in Associated General is the directness or indirectness of the asserted injury. Winther alleges that he was fired by DEC because he refused to implement DEC’s unlawful scheme — a direct result of DEC’s alleged effort to enforce unlawful exclusive dealing contracts. This is unlike the situation in Associated General, where the chain of causation passed from the defendants to the union contractors to the union. The directness of the injury is, however, not enough to overcome the fact that employment is not the area of economic activity sought to be protected.

Results of prior Tenth Circuit cases are entirely consistent with this analysis. In Reibert v. Atlantic Richfield Co., 471 F.2d 727 (10th Cir.) cert. denied, 411 U.S. 938, 93 S.Ct. 1900, 36 L.Ed.2d 399 (1973), the court held that an employee discharged because his job became redundant after a merger of two firms, had no standing to challenge the merger on antitrust grounds. In Associated General terms, the plaintiff did not suffer an antitrust injury because his job loss was not related to price competition or economic freedom of the participants in the oil market.

In Central National Bank v. Rainbolt, 720 F.2d 1183 (10th Cir.1983) the court held that a director of a corporation had no standing under the antitrust laws to challenge a takeover of the corporation. “His ouster is not the result of any anticompetitive act, it is the consequence of his loss of majority control. While Mr. Holton may suffer the loss of his position, that is not cognizable injury under the antitrust laws. It is not the result of any lessening of competition.” Id. at 1186. Again, under the Associated General analysis, the plaintiff did not suffer an antitrust injury because he did not suffer an injury of a type the antitrust laws were designed to remedy; his potential discharge was unrelated to competition or economic freedom in the marketplace.

Winther relies principally on the Ninth Circuit’s decisions in Ostrofe v. H.S. Crocker Co., Inc., 670 F.2d 1378 (1982), vacated and remanded, 460 U.S. 1007, 103 S.Ct. 1244, 75 L.Ed.2d 475 (1983) (Ostrofe I) and Ostrofe v. H.S. Crocker Co., Inc., 740 F.2d 739 (1984), cert. dismissed, — U.S. —, 105 S.Ct. 1155, 84 L.Ed.2d 309 (1985) (Rule 53) (Ostrofe II). In that case the plaintiff was forced to resign because he refused to participate in an alleged scheme to fix prices. A divided panel held that he had standing to bring an antitrust action under Section 4. Ostrofe I was based largely on the belief that because discharged employees are in a good position to enforce antitrust laws, they should have standing to sue. That view was rejected by the Seventh Circuit in a well reasoned opinion in Bichan v. Chemetron Corp., 681 F.2d 514 (1982), cert. denied, 460 U.S. 1016, 103 S.Ct. 1261, 75 L.Ed.2d 487 (1983).

Ostrofe II, was decided after the first decision was vacated and remanded by the Supreme Court in light of its decision in Associated General. In Ostrofe II the circuit court conceded that the plaintiff there was not injured by reason of a reduction of price competition or a restriction of his freedom to operate in the market for paper lithograph labels, but concluded that the plaintiff suffered an injury so integral to the scheme to eliminate competition that he suffered an antitrust injury. Ostrofe II, 740 F.2d at 746. Nothing in Associated General supports this interpretation of the scope of antitrust law.

Alternatively, in Ostrofe II the court relied upon a footnote in Associated General which reserved the question of “whether the direct victim of a boycott, who suffers a type of injury unrelated to antitrust policy, may recover damages when the ultimate purpose of the boycott is to restrain competition in the relevant market.” Associated General, 459 U.S. at 540-41, n. 44, 103 S.Ct. at 910 n. 14. The Ninth Circuit believed that even if the plaintiff had suffered no antitrust injury, he nevertheless had standing because his injury was a direct result of a boycott.

The Ninth Circuit view is in conflict with the Tenth Circuit decision in Reibert v. Atlantic Richfield Co., supra, where the plaintiff suffered a “direct” injury, the loss of his job, unrelated to antitrust policy. Reibert was cited with apparent approval in both Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429 U.S. at 488 n. 13, 97 S.Ct. at 697 n. 13, and Associated General, 459 U.S. at 541 n. 46, 103 S.Ct. at 910 n. 46. The Tenth Circuit view is binding on this court.

II

Plaintiff also seeks relief based on state antitrust, contract, and tort claims. In response, DEC cites Ritter v. Colorado Interstate Gas Company, 593 F.Supp. 1279, 1285 (D.Colo.1984), an ADEA action in which Judge Carrigan refused to exercise pendent jurisdiction over state law claims for wrongful discharge. Ritter is well reasoned but irrelevant since jurisdiction is-premised here upon 28 U.S.C. § 1332. This court has a statutory obligation to decide state law claims within its original jurisdiction.

The Colorado antitrust law provides, in pertinent part:

Every contract or combination in the nature of a trust or conspiracy in restraint of trade or commerce is declared illegal. Every combination, conspiracy, trust, pool, agreement, or contract intended to restrain or prevent competition in the supply or price of any article or commodity constituting a subject of trade or commerce in this state, or every combination, conspiracy, trust, pool, agreement, or contract which controls in any manner the price of any such article or commodity, fixes the price thereof, or limits or fixes the amount or quantity thereof to be manufactured, produced, or sold in this state, or monopolizes or attempts to monopolize any part of the trade or commerce in this state, is declared an illegal restraint of trade.

§ 6-4-101 C.R.S. The civil damages provision, the counterpart of § 4 of the Clayton Act, provides that “Any person, corporation, copartnership, trustee, or association shall also be liable to any person transacting or doing business in this state for any damages he may sustain by reason of the doing of anything declared unlawful in this article.” § 6-4-108 C.R.S.

The Colorado Supreme Court has said that “decisions of federal courts construing the Sherman and Clayton Acts, although not controlling, are entitled to careful scrutiny in resolving issues arising under Colorado’s antitrust statute.” People v. Colorado Springs Board of Realtors, 692 P.2d 1055, 1061 (Colo.1984). Further, the Colorado Supreme Court has explained that the purpose of the state antitrust statute is to preserve free competition and protect the public against the evils of economic agreements in restraint of trade that may be beyond the reach of federal law. People v. North Avenue Furniture & Appliance, 645 P.2d 1291 (Colo.1982). Since the purpose of the state and federal antitrust laws is identical, there is no reason to doubt that the two have similar standing requirements. Therefore, for the reasons already given in the discussion of the federal statute, Winther has not been injured “by reason of” the anticompetitive effect of DEC’S alleged conduct on the market for dairy equipment. He therefore has not suffered an antitrust injury and has no standing to assert the state antitrust claim.

Next Winther asserts a claim based on the tort of wrongful discharge. In general the law of Colorado is that absent special consideration, an indefinite general employment agreement is terminable at will. I believe that confronted with the circumstances of this case, Colorado courts would follow the lead of the California Supreme Court in Tameny v. Atlantic Richfield Co., 27 Ca.3d 167, 164 Cal.Rptr. 839, 610 P.2d 1330 (1980). In Tameny, the court held that a plaintiff discharged for refusing to participate in an alleged illegal price fixing scheme could sue his former employer in tort for wrongful discharge. “We hold that an employer’s authority over its employee does not include the right to demand that the employee commit a criminal act to further its interests, and an employer may not coerce compliance with such unlawful directions by discharging an employee who refuses to follow such an order.” Id., 610 P.2d at 1337. Cf., Lampe v. Presbyterian Medical Center, 41 Colo. App. 465, 590 P.2d 513 (1978) (citing cases which hold that a cause of action exists where an employee is discharged for exercising a statutorily created right.)

Accordingly, while the federal and state antitrust claims should be dismissed for failure to state claims sufficient for relief under those statutes, the claims for wrongful discharge from employment are properly presented under diversity jurisdiction. It is therefore,

ORDERED, that the first and second claims for relief are dismissed under F.R. Civ.P. 12(b)(6).


author: LYNCH, District Judge.

text:
    Milton UTLEY, Plaintiff, v. VARIAN ASSOCIATES, INC., et al, Defendants.
    No. C-85-2128 EFL.
    United States District Court, N.D. California.
    Sept. 26, 1985.

      Herbert Yanowitz, Gerard Hanckley, San Francisco, Cal., for plaintiff.
    Deborah Pell, Bronson, Bronson & McKinnon, San Francisco, Cal., for defendants.
   ORDER GRANTING PARTIAL SUMMARY JUDGMENT AND REMANDING

LYNCH, District Judge.

This action arises from the allegedly wrongful termination of plaintiff Milton Utley by defendant Varían Associates, Inc., EIMAC division. While the underlying facts are relatively unimportant to the disposition of the motions presently before the Court, it is significant that defendant Varían Associates, Inc. is a contractor for the federal government.

Suit was originally brought in San Mateo Superior Court with plaintiff alleging five separate counts arising from the allegedly wrongful termination. Because plaintiff’s first, fourth and fifth counts implicate federal law, the case was removed to this Court. Defendant has moved the Court to dismiss part of the first and all of the fourth and fifth counts and, because such dismissals would eliminate any issues of federal law, to then remand the case to state court. Plaintiff contends that the case should be remanded immediately without any action being taken on the first, fifth, or fourth counts. He argues that removal was improper because none of the five claims “arises under” federal law as required by 28 U.S.C. section 1331.

At hearing both parties stipulated that if the Court were to dismiss the fifth count and that part of the first count implicating federal law, plaintiff would dismiss the fourth count. In light of that stipulation and the conclusions reached here, this order will not address any aspect of the fourth count which alleges misrepresentations by defendant regarding its execution of affirmative action obligations pursuant to Executive Order No. 11246.

This order will first resolve plaintiff’s jurisdictional objections before examining defendant’s arguments for partial summary judgment.

JURISDICTION

By the terms of 28 U.S.C. section 1441(a) this case was properly removed from state court only if this Court would have had jurisdiction over it had it been filed here originally, Guinasso v. Pacific First Fed. Sav. & Loan Ass’n, 656 F.2d 1364, 1365 (9th Cir.1981), cert. denied, 455 U.S. 1020, 102 S.Ct. 1716, 72 L.Ed.2d 138 (1982). Because there is no hint or contention that diversity or any other basis for federal jurisdiction is applicable, this case must satisfy the requirements of 28 U.S.C. section 1331 as a “civil action arising under the Constitution, laws or treaties of the United States” in order to be within this Court’s jurisdiction.

The standard this Court must apply for determining whether a claim in this case “arises under” federal law is that articulated by the Ninth Circuit in Guinasso:

A suit arises under federal law within 28 U.S.C. § 1331 if the complaint, properly pleaded, presents a substantial dispute over the effect of federal law, and the result turns on the federal question____ A substantial proposition of federal law must form ‘a direct and essential element of plaintiff’s cause of action.’

656 F.2d at 1365-66 (citations omitted).

Application of this standard to plaintiff’s case compels the conclusion that jurisdiction is proper. Plaintiff’s first count alleges in part that defendant violated California Government Code section 12940, the California Fair Employment and Housing Act (“CFEHA”), through conduct that violated obligations imposed on it as a federal government contractor under Executive Order No. 11246. Plaintiffs fifth count alleges that defendant violated section 17200 of the California Business and Professions Code (“section 17200”) through the same conduct which is said to violate duties created by Executive Order No. 11246.

Executive Order No. 11246, issued in 1965 by President Johnson, requires federal government contracting agencies to include certain nondiscrimination and affirmative action programs in all contracts they enter into with the federal government. The requirements are detailed in rules found in 41 C.F.R. sections 60-1.1 through 60-60.8 (1984). Thus, resolving count five and part of count one will require the Court to determine whether federal law created a duty, and if it did, the nature of that federal duty and whether defendant’s conduct constituted a breach of that duty. The case is, therefore, a clear example of “a substantial dispute over the effect of federal law” where “the result turns on the federal question,” Guinasso, 656 F.2d at 1365-66.

PARTIAL SUMMARY JUDGMENT

For plaintiff to prevail on count five and on part of count one, the breach of a federal duty to implement affirmative action plans would have to be cognizable as a violation of CFEHA and section 17200. Plaintiff has urged this Court to abstain from deciding whether such an interpretation of California law is warranted so that a California court may first address the issue. Because these motions can be decided without resolving questions of California law, the invitation to abstention is declined. The Court rules that even if breach of a federal duty were cognizable under CFEHA or section 17200, remedies under state law would be preempted by the remedial scheme prescribed by federal law in 41 C.F.R. sections 60-1.20 through 60-1.34 (1984).

Preemption of state law by federal law is authorized by the Supremacy Clause of the Constitution which makes the “Constitution, and the Laws of the United States which shall be made in Pursuance thereof ... the supreme Law of the Land.” U.S. Const. Art. VI, cl. 2. “Federal regulations have no less pre-emptive effect than federal statutes.” Fidelity Fed. Sav. & Loan Ass’n v. De La Cuesta, 458 U.S. 141, 153, 102 S.Ct. 3014, 3022, 73 L.Ed.2d 664 (1981).

Preemption may be compelled either by explicit language in the federal law or by implication from the law’s structure and purpose. Id. at 152-53, 102 S.Ct. at 3021-22 (citing Jones v. Rath Packing Co., 430 U.S. 519, 525, 97 S.Ct. 1305, 1309, 51 L.Ed.2d 604 (1977)). In this case it is the structure and purpose of the law — as manifested by the comprehensive remedial scheme in 41 C.F.R. sections 60-1.20 through 60-1.34 — that compels preemption.

In cases involving the National Labor Relations Act (“NLRA”) the Supreme Court has made clear that a comprehensive federal program of administrative remedies compels preemption of state laws attempting to create additional remedies. In San Diego Unions v. Garmon, 359 U.S. 236, 79 S.Ct. 773, 3 L.Ed.2d 775 (1958), the Court ruled that a state court was precluded by the NLRA from awarding damages under state law to employers for injuries resulting from peaceful picketing. The Court reasoned that allowing the state to grant a remedy withheld from the National Labor Relations Board would “accentuate the danger of conflict [with federal policy].” Id. at 247, 79 S.Ct. at 780. In Motor Coach Employees, etc. v. Lockridge, 403 U.S. 274, 91 S.Ct. 1909, 29 L.Ed.2d 473 (1971) (holding that an employee’s claim against a union for wrongfully interfering with the relationship between him and his employer was preempted by the NLRA) the Court said, “[T]he constitutional principles of preemption, in whatever particular field of law they operate, are designed with a common end in view: to avoid conflicting regulation of conduct by various official bodies which might have some authority over the subject matter.” 403 U.S. at 285-86, 91 S.Ct. at 1917. More recently, Judge Zirpoli wrote for this court that “[t]he purpose of the preemption doctrine, as Lockridge makes clear, is to avoid conflicting remedies, as well as the conflicting application and interpretation of substantive rules of law.” Milk Drivers & Dairy Employees Union v. Vevoda, 587 F.Supp. 483, 485 (N.D.Cal.1984) (emphasis in original).

The question of whether or not a remedy awarding damages to private plaintiffs is compatible with the federal administrative scheme established to enforce Executive Order No. 11246 has already been answered in the negative by this and other courts ruling that there can be no private right of action under Executive Order No. 11246. Judge Renfrew has explained that the order “establishes a plethora of administrative procedures and remedies,” and that “[i]t would be obviously destructive of the administrative scheme to allow it to be short-circuited by implying a private right of action in favor of individuals who feel that they have been injured through noncompliance with Executive Order 11246.” Traylor v. Safeway Stores, Inc., 402 F.Supp. 871, 875, 876 (N.D.Cal.1975); see also Farkas v. Texas Instruments, Inc., 375 F.2d 629, 633 (5th Cir.), cert. denied, 389 U.S. 977, 88 S.Ct. 480, 19 L.Ed.2d 471 (1967).

While technical distinctions between implying a private federal right of action based on an executive order and allowing an executive order to be the basis of a suit for a violation of state law might exist, it would be a distinction without a difference in this context. The effect of either is to allow “short-circuiting” the remedial scheme promulgated under Executive Order No. 11246. The Supremacy Clause makes clear that when the short-circuiting is of a federal law by a state law that state law is preempted.

Plaintiffs citation to Allen-Bradley Local No. 1111 v. Wisconsin Employee Relations Bd., 315 U.S. 740, 62 S.Ct. 820, 86 L.Ed. 1154 (1942) for the proposition that “the existence of comprehensive federal law in the employment-labor relations field does not preclude a state from acting” (Plaintiffs Reply at 3) overlooks more than forty years of developments in the doctrine of preemption. Subsequent decisions such as Garmon and Lockridge indicate that state laws will be preempted when they attempt to provide remedies not provided in a comprehensive federal administrative scheme. The vitality of Allen-Bradley persists as an example of an exception to the preemption doctrine when a state is acting to protect “such traditionally local matters as public safety and order and the use of streets and highways.” Farmer v. Carpenters, 430 U.S. 290, 299, 97 S.Ct. 1056, 1063, 51 L.Ed.2d 338 (1976) (quoting Allen-Bradley, 315 U.S. at 749, 62 S.Ct. at 825). However, this case does not involve a powerful state interest justifying an exception to the preemption doctrine. Here the conduct involved is alleged to be a breach of a federal duty arising from defendant’s status as a contractor with the federal government; the state’s interest in enforcing such a duty is minimal.

The conclusion reached here is consistent with the decisions of California courts that have addressed the question of whether section 17200 can be a springboard for suits when a federal duty is breached. In People ex rel. Dep’t of Trans, v. Naegele Outdoor Advertising Co., 38 Cal.3d 509, 523, 213 Cal.Rptr. 247, 698 P.2d 150 (1985) the court was faced with the contention that the defendants. violated the federal Highway Beautification Act, 23 U.S.C. §§ 131, 135, 136, 319 (1982), and could therefore be enjoined from committing unfair competition in violation of section 17200. The court disallowed the injunction on the grounds of preemption concluding that the federal Department of the Interior rather than the state Department of Transportation was the appropriate agency to enforce the provisions of the Highway Beautification Act. Naegele at 523, 213 Cal.Rptr. 247, 698 P.2d 150.

Similarly, in Diaz v. Kay-Dix Ranch, 9 Cal.App.3d. 588, 88 Cal.Rptr. 443 (1970) migrant farm workers sought an injunction prohibiting ranch owners from knowingly employing illegal aliens. The workers alleged that such conduct was unfair competition in violation of the predecessor of section 17200. The court denied the injunction on grounds of preemption stating that “[i]t is more orderly, more effectual, less burdensome to the effected interests, that the national government redeem its commitment [implied by national immigration policy].” Id. at 599, 88 Cal.Rptr. 443.

While the present case differs from these two California cases in that compensatory rather than injunctive relief is being sought here, the Court believes they support the conclusion that the creation of additional remedies under the broad language of section 17200 is preempted when a detailed federal enforcement mechanism for the breach of an obligation created by federal law exists.

It is ordered, therefore, that the first count be dismissed to the extent that it is based on a breach of federal duty. The fifth count is dismissed in its entirety. Pursuant to the parties’ stipulation in open court, because the fifth count is dismissed, the fourth count is also dismissed. The case is remanded to the San Mateo Superior Court.

IT IS SO ORDERED.

      . The Office of Federal Contract Compliance Programs ("OFCCP") can refer complaints to the Equal Employment Opportunity Commission for processing under Title VII of the Civil Rights Act of 1964, 41 C.F.R. § 60-1.24(a) (1984); "OFFCP may institute an administrative enforcement procedure to enjoin ... violations, to seek appropriate relief (which may include affected class and back pay relief) and to impose appropriate sanctions,” 41 C.F.R. § 60-1.-26(a)(2) (1984); OFFCP may refer a matter to the Department of Justice and the Attorney General "may bring a civil action ... requesting a temporary restraining order, preliminary or permanent injunction, and an order for such additional equitable relief, including back pay, deemed necessary or appropriate to ensure the full enjoyment of the rights secured by ... [Executive Order No. 11246]," 41 C.F.R. § 60-1.-26(e) (1984); the Attorney General may also initiate suit without being referred by OFFCP, 41 C.F.R. § 60 — 1.26(f) (1984).

      . See Note, State Incorporation of Federal Law: A Response to the Demise of Implied Rights of Action, 94 Yale LJ. 1144 (1984) (arguing that where, unlike here, denying a private right of action is based on the "negative implication" that Congress intended no such right since it was silent on the issue, it would be appropriate for state law to incorporate federal law).