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    The SUPERIOR OIL COMPANY v. TRANSCO ENERGY COMPANY, et al.
    Civ. A. No. 84-2138 L.
    United States District Court, W.D. Louisiana, Lafayette-Opelousas Division.
    Feb. 11, 1985.
    On Rehearing March 25, 1985.

      Dan A. Spencer, Houston, Tex., for plaintiff.
    Lawrence E. Donohoe, Jr., Edward C. Abell, Jr., Lafayette, La.; Alfred H. Ebert, Taylor M. Hicks, Houston, Tex., for defendants.
   MEMORANDUM RULING

DUHE, District Judge.

This matter involves an action by plaintiff, Superior Oil Company (“Superior”), against defendants Transcontinental Gas Pipe Line Corporation (“Pipe Line”), Transco Exploration Company (“TXC”), TXP Operating Company (“TXPO”), Transco Exploration Partners, Ltd. (“Partners”), and the Transco Energy Company (“TEC”), for injunctive relief and damages for alleged violations of the Natural Gas Policy Act of 1978 (NGPA), 15 U.S.C. 3301 et seq., and the Sherman Anti-Trust Act, 15 U.S.C. § 1 et seq. In addition, through § 1349 of the Outer Continental Shelf Lands Act (OCS-LA), 43 U.S.C. § 1331 et seq., and the pendent jurisdiction of this Court, there are state law claims for damages and specific performance for the alleged breach of six contracts for the sale of natural gas from onshore and offshore fields of Louisiana and Texas. Presently before the Court are various motions:

(1) A motion by the defendants to stay certain elements of this action and refer them to the Federal Energy Regulatory Commission (FERC);
(2) A motion by defendant Pipe Line to stay certain elements of this action pending arbitration;
(3) A motion by plaintiff for partial summary judgment;

Each of these will be considered in turn. As a preliminary inquiry, however, this Court will review its jurisdiction over this matter.

JURISDICTION

Superior is seeking relief for the breach of six contracts for the sale of natural gas. Four of these contracts—the Eugene Island, West Cameron, Brazos and Vermilion—are for production fields on the Outer Continental Shelf (OCS) of Louisiana and Texas. The two remaining contracts— the Schwarz and Raccourci Island—are for onshore fields in Texas and Louisiana, respectively.

43 U.S.C. § 1349(b)(1) provides, in pertinent part, that:

(1) ... [T ]he district courts of the United States shall have jurisdiction of cases and controversies arising out of, or in connection with (A) any operation conducted on the Outer Continental Shelf which involves exploration, development, or production of minerals, of the subsoil and seabed of the Outer Continental Shelf ... (emphasis added).

This Court has little difficulty in concluding that a contract for the sale of natural gas produced on the OCS arises out of and is connected with the “exploration, development, or production of the minerals” of the Outer Continental Shelf. Hence this Court has original jurisdiction over the four OCS contacts at issue in this matter.

This Court has no such independent jurisdiction over plaintiff’s claims arising out of the two onshore contracts. However, Superior has also alleged in its amended complaint that defendants’ breach of these two contracts is part of a larger violation of the Federal antitrust laws, 15 U.S.C. § 1 and 2 (Sherman Act), and 15 U.S.C. § 14 (Clayton Act). Since Superior’s state-law claims for breach of the two onshore contracts derive from a common nucleus of operative fact with its federal antitrust claims, this Court has pendent jurisdiction over the former. Transource International, Inc., v. Trinity Industries, Inc., 725 F.2d 274 (5th Cir.1984). In the interests of judicial economy, this Court will exercise its discretionary pendent jurisdiction over the Schwarz and Raccourci Island contract claims in this matter.

I. DEFENDANTS’ MOTION TO STAY AND REFER TO FERC

The defendants have moved on the grounds of the “primary jurisdiction” doctrine that certain issues in this matter be stayed and referred to FERC. Those issues are:

(a) Whether any of the defendants have violated § 315 of NGPA, 15 U.S.C. § 3375, 18 C.F.R. § 277.101, by participating in short-term sales of new or high cost natural gas from the Outer Continental Shelf temporarily released from long-term contracts; and
(b) Whether maximum lawful price ceilings established under Title I of the NGPA would be exceeded if Superior were to receive “take or pay” payments for natural gas, whether or not such payments may be recouped or made up by Pipe Line.

In weighing this motion, this Court is guided by the principles enunciated by the Fifth Circuit in Mississippi Power and Light Co. v. United Gas Pipe Line Co., 532 F.2d 412 (5th Cir.1976).

In M P & L the Court declared:

“No fixed formula exists for applying the doctrine of primary jurisdiction. In every case the question is whether the reasons for the existence of the doctrine are present and whether the purposes it serves will be aided by its application in the particular litigation.” Id. at 419.

However,

“there are a few general situations in which referral is often unwarranted ... when the agency’s position is sufficiently clear or nontechnical or when the issue is peripheral to the main litigation, Court should be very reluctant to refer [citations omitted ]. Finally, the Court must always balance the benefits of seeking the agency’s aid with the need to resolve disputes fairly yet as expeditiously as possible [citations omitted ].” Id.

There are two questions that defendants seek to refer to FERC. The first—whether or not the short-term special marketing programs of defendants violate the NGPA of 1978—is peripheral to the central litigation, that is, the question of defendants’ non-performance of their obligations. Hence, this Court has little difficulty in denying the defendants’ motion as to this issue.

The second candidate for referral is the defendants’ affirmative defense that the price ceilings of the NGPA of 1978 void their obligation to pay in the absence of taking, regardless of whether those payments are ultimately recoupable. Defendants contend that the technical nature of this question, and the fact that its resolution has industry-wide implications, augurs in favor of referral.

Various other district courts have wrestled with this question, and while at least one court has referred the issue to FERC— see Post v. Perry Gas Transmission, Inc., 616 F.Supp. 1 (N.D.Tex.1983)—the weight of authority stands for the proposition that denial of the referral motion is proper. Cf. Exxon Corp. v. Tenneco, Inc. # 83-1640 (W.D.La.1983); Southport Exploration, Inc. v. Producers Gas Co., # 83-C-550-BT (N.D.Okl.1983); Sampson Resources v. Northern Natural Gas Company, # 83-C-1214E (N.D.Okl.1982).

The FERC has taken the position that questions of this nature should not be referred to it. See the Amicus Curiae brief of the FERC, dated June 18, 1984, to the U.S. Court of Appeals for the Fifth Circuit, Koch Industries, Inc. v. Columbia Gas Transmission Corp., # 83-990 (M.D.La. 1983). The FERC has failed to initiate proceedings on this question, even though some Courts have referred the question to it. Indeed, the FERC is unwilling to commit itself to taking action at some point in the future.

When this Court weighs “the benefits of seeking the agency’s aid with the need to resolve disputes fairly yet as expeditiously as possible,” the scales are tipped in favor of denying referral by the simple fact that FERC is unable and unwilling to offer any assistance for the foreseeable future. It is perhaps true that in the long run the FERC might eventually initiate proceedings and decide the question. But, in the apt words of Professor Keynes, “in the long run, we’re all dead.” The fact that FERC has shown a disinclination to even have this question referred to it, much less initiate proceedings, destroys the raison d’etre of the primary jurisdiction doctrine in this instance.

Accordingly, this Court hereby denies defendants’ motion to stay and refer the above mentioned issues to the FERC.

II. DEFENDANT PIPE LINE’S MOTION TO STAY PENDING ARBITRATION

All six contracts in this matter contain arbitration clauses. The two onshore contracts—the Raccourci Island Field (Louisiana) and the Schwarz Field (Texas) contain identical arbitration clauses with sweeping language:

“1. Any controversy between the parties hereto arising under this agreement and not resolved by agreement shall be determined by a board of arbitration ...
2. The decision of the arbitrators, or the majority thereof, made in writing shall be final and binding upon the parties ...” (emphasis added)

The four remaining contracts (all offshore) at issue—the Brazos (Texas), the Vermilion 58 (Louisiana), the Eugene Island 105 (Louisiana), and the West Cameron 494/498 (Louisiana) fields—contain arbitration clauses much narrower in scope.

The Brazos contract provides:

“Any controversy between the parties hereto arising under Article XI ‘Price’, of this agreement and not resolved by agreement shall be determined by a board of arbitration ...”

The Louisiana contracts all provide:

“Any controversy between the parties hereto arising under Section 5 of Article XI, ‘Price’, of this agreement and not resolved by agreement shall be determined by a board of arbitration ...”

There is no dispute between the parties arising under Section 5 of Article XI, “Price”, of the offshore Louisiana contracts. However, Count IV of plaintiff’s complaint does arise under the price provisions of the Brazos contract.

On the basis of the arbitration clauses in question, defendant Pipe Line has moved pursuant to 9 U.S.C. § 3 that this Court stay:

(1) All claims arising out of the Schwarz Field contract (with the exception of the issue of whether “take or pay” payments would violate the NGPA, which it contends should be referred to FERC);
(2) All claims arising out of the Raccouri Island Field contract; and
(3) Count IV of Superior’s complaint regarding the price to be paid under the Brazos Field contract.

§ 3 of the Federal Arbitration Act, 9 U.S.C. § 1 et seq., provides:

If any suit or proceeding be brought in any of the courts of the United States upon any issue referable to arbitration under an agreement in writing for such arbitration, the court in which such suit is pending, upon being satisfied that the issue involved in such suit or proceeding is referable to arbitration under such an agreement, shall on application of one of the parties stay the trial of the action until such arbitration has been had in accordance with the terms of the agreement, providing the applicant for the stay is not in default in proceeding with such arbitration.

At the outset, this Court notes that under the Federal Arbitration Act there is a very strong national policy in favor of arbitration. Southland Corporation v. Keating, 465 U.S. 1, 104 S.Ct. 852, 79 L.Ed.2d 1 (1984); Life of America Insurance Co. v. Aetna Life Insurance Co., 744 F.2d 409 (5th Cir.1984); Fund Administration Services, Inc. v. Jackson, 518 F.Supp. 783 (W.D.La.1981).

This policy is so strong that the relevant Federal law “requires" piecemeal resolution or duplication of effort when necessary to give effect to an arbitration agreement. Moses H. Cone Memorial Hospital v. Mercury Construction Corp., 460 U.S. 1, 103 S.Ct. 927, 939, 74 L.Ed.2d 765 (1983); Tai Ping Insurance Co., Ltd. v. M/V. Warschau, 731 F.2d 1141, 1146 (5th Cir. 1984). (emphasis in the original).

A. THE SCHWARZ FIELD

Superior contends that Pipe Line’s motion to stay all claims arising out of the Schwarz contract (with the exception of the legality of the take or pay issue, which Pipe Line moves should be referred to FERC) should be denied on two grounds. Superior argues that Pipe Line has waived or repudiated its right to arbitration, and that in addition a stay pending arbitration is precluded by the doctrine of “intertwining.”

It is clear that “a defendant can waive arbitration by actions which it takes during determination in the legal forum of the threshhold issue of existence of an arbitration contract, if those actions are sufficiently inconsistent with the right to arbitrate.” General Guaranty Insurance Company v. New Orleans General Agency, Inc., 427 F.2d 924, 929 (5th Cir.1970). But “where as here the party seeking arbitration has made a timely demand for arbitration at or before the commencement of judicial proceedings in the Trial Court, the burden of proving waiver falls even more heavily on the shoulders of the party seeking to prove waiver.” Southwest Industrial Import and Export, Inc. v. Wilmod Company, 524 F.2d 468, 470 (5th Cir.1975).

“There is no set rule, however, as to what constitutes a waiver or abandonment of the arbitration agreement. The question depends upon the facts of each case and usually must be determined by the trier of facts.” Burton Dixie Corp. v. Timothy McCarthy Construction Company, 436 F.2d 405, 408 (5th Cir.1971).

There is persuasive authority for the proposition that in order for the moving party’s actions to have constituted an effective waiver or repudiation of the arbitration clause, there must be a showing of prejudice to the party opposing the stay. Carcich v. Rederi A/B Nordie, 389 F.2d 692 (2d Cir.1968). “It is not ‘inconsistency,’ but the presence or absence of prejudice which is determinative of the issue [of waiver].” Id at 696. This approach has been followed by at least three district courts in this circuit. See American Dairy Queen v. Tantillo, 536 F.Supp. 718, 722 (M.D.La. 1982); Trade Arbed, Inc. v. S/S Ellispontos, 482 F.Supp. 991, 999-1000 (S.D.Tex. 1980); and Gulf Central Pipeline Company v. M/V Lake Placid, 315 F.Supp. 974, 976 (E.D.La.1970). This Court concludes that this proposition is ultimately controlling because of the language of the court in E.C. Ernst, Inc. v. Manhattan Construction Co. of Texas, 559 F.2d 268 (5th Cir. 1977), wherein the court declared that “[Prejudice ... is the essence of waiver,” and cited Carcich as authority. 559 F.2d at 269.

Superior argues that Pipe Line waived or repudiated the arbitration clause in question by moving to stay only certain aspects of the dispute arising from the Schwarz Field. Pipe Line moved that the remainder of the dispute—the question of whether the payment in lieu of taking provisions of this contract violate the NGPA of 1978—be stayed and referred to FERC. While it may be inconsistent to request a partial stay on the basis of an arbitration clause which declares that “any controversy” shall be resolved by arbitration, Superi- or has failed to carry its burden of showing how it has been prejudiced by this inconsistent request. Indeed, this Court concludes, Superior could not have carried this burden because it was not prejudiced. Hence, the request for the referral of an arbitrable issue to FERC did not constitute a waiver of the arbitration clause by Pipe Line.

Superior argues that Pipe Line has also waived its arbitration rights because of actions it has taken with other producers in arbitration proceedings, or the actions it might take in future arbitration proceedings with Superior. The former is simply immaterial, while the latter is speculative at best. If, during the course of the arbitration proceedings, Superior is unsatisfied with Pipe Line’s performance or cooperation, there are appropriate remedies that the Federal Arbitration Act provides and Superior could invoke.

Finally, Superior urges that Pipe Line has waived its right to arbitration by requesting the production of thousands of documents and engaging in discovery. This argument is frivolous. Discovery was necessary in order to establish if venue was proper and to defend against Superior’s request for a preliminary injunction. All of Pipe Line’s discovery activities “were consistent with orderly participation in the lawsuit. They are things which had [Pipe Line] failed to do the court might well have directed it to do in the interests of the case.” General Guaranty Insurance Co., supra, 427 F.2d at 929. Participation in discovery, motions challenging venue and counterclaims might constitute a waiver of arbitration, if the demand for a stay was untimely. In sum, this Court does not find the “substantial invocation of the litigation process necessary to support waiver of arbitration rights in this case.” American Dairy Queen Corporation, supra, 536 F.Supp. at 722.

Superior’s second ground for opposing a stay is that the doctrine of intertwining is applicable to this case. But, as the 5th Circuit recently declared in Tai Ping Insurance Co., Ltd., supra:

“This argument rests on a fundamental misapprehension of the intertwining doctrine, which is triggered when a party asserts several causes of action, at least one of which falls within the exclusive jurisdiction of the federal courts. In such a case, notwithstanding the existence of .an arbitration clause, the entire dispute must remain in federal court to avoid encroachment by the arbitrator into an area that Congress has deemed to be within the Federal courts’ exclusive jurisdiction ... [citations omitted] Thus, the areas to which the doctrine applies are, in effect, inherently non-arbitrable. Because it constitutes an exception to the broad pro-arbitration policy embodied in the Arbitration Act, however, the intertwining doctrine is strictly limited to those areas, such as the Federal securities and anti-trust laws, for which Congress has provided that such an exception is appropriate.” 731 F.2d at 1146.

Although the case at bar does contain the inherently non-arbitrable issue of antitrust, Superior concedes that because the ultimate facts of the antitrust claim are neither identical nor similar to the arbitrable claims, a stay in this suit is not precluded by Superior’s antitrust claims. Since there is no other claim in this matter based on an area of exclusive federal jurisdiction, the intertwining doctrine has no bearing here.

THE RACCOURCI ISLAND FIELD CONTRACT

Superior objects to a stay of all claims arising out of the Raccourci Island contract on the same grounds it objected to a stay of the Schwarz contract claims (except that there is no FERC referral and inconsistency issue here). Those arguments fail here for the same reasons assigned above.

THE BRAZOS FIELD CONTRACT

Superior objects to a stay of its claims arising out of the “Price” section of the contract, as stipulated by the arbitration clause, on the same grounds it objected to a stay of the Raceourci Island contract claims. Those arguments fail here as well.

Superior also argues that the Texas arbitration statute, Ver.Ann.Civ.Stat. Art. 224, voids the arbitration clause in this contract. This argument, however, ignores the fact that the Brazos Field is on the outer continental shelf. § 1331 of the OCSLA provides that the law of the adjoining state applies insofar that it is not inconsistent with federal law. And since “§ 2 [of the Federal Arbitration Act] is a congressional declaration of the liberal federal policy favoring arbitration agreements, notwithstanding any state substantive or procedural policies to the contrary,” Moses H. Cone Memorial Hospital, supra, 103 S.Ct. at 941, Federal law prevails over the Texas statute.

CONCLUSION

Having found that the defendant Pipe Line has not waived its right to arbitration, and that the doctrine of intertwining does not preclude the issuance of a stay pending arbitration, this Court notes the language of the Supreme Court in the analogous context of the enforceability of forum selection clauses:

The choice of that forum was made in an arm’s length negotiation by experienced and sophisticated businessmen, and absent some compelling and countervailing reason it should be honored by the parties and enforced by the courts. The Bremen v. Zapata Offshore Company, 407 U.S. 1, 12, 92 S.Ct. 1907, 1914, 32 L.Ed.2d 513 (1972), cited by the court in Tai Ping Insurance Co., Ltd., supra, 731 F.2d at 1145.

Accordingly, this Court is compelled to stay all claims arising from the Schwarz and Raccourci Island Field contracts, and all claims arising under the “Price” provision of the Brazos Field contract.

III. PLAINTIFF’S MOTION FOR PARTIAL SUMMARY JUDGMENT

Superior has moved pursuant to Rule 56 of the Federal Rules of Civil Procedure that this Court render a summary judgment in its favor against Pipe Line as to the latter’s liability to take the contraetedfor quantities of natural gas from the Vermilion and West Cameron fields. Superior asserts that Pipe Line’s affirmative defenses, even assuming the alleged facts underlying them for purposes of this motion, are insufficient as a matter of law to excuse the failure to take contracted-for quantities of natural gas. The first inquiry for this Court, however, is that of choice of law.

A. CHOICE OF LAW

As noted earlier in this opinion, § 1333 of the OCSLA prescribes that the law of the adjoining state—to the extent it is not inconsistent with federal law—governs questions arising out of the activities on the Outer Continental Shelf. Since both the West Cameron and Vermilion Fields are on the Louisiana OCS; Louisiana conflicts law will govern the resolution of these disputes.

Both of these contracts were executed in Houston, Texas. Yet both have “effect” in Louisiana, in the sense that the gas is produced on the Louisiana OCS, and delivery is through pipelines which run from onshore Louisiana to the Louisiana OCS. Superior argues that Louisiana substantive law applies, while Pipe Line counters that Louisiana conflicts rules require the application of Texas substantive law.

At the outset, this Court notes the language of Louisiana Civil Code Article 10:

The form and effect of public and private written instruments are governed by the laws and usages of the places where they are passed or executed.
But the effect of acts passed in one country to have effect in another country, is regulated by the laws of the country where such acts are to have effect.

This Court has no doubt that the West Cameron and Vermilion contracts “have effect” in Louisiana for purposes of Article 10. The gas is delivered to pipelines which lead from the Louisiana OCS to onshore Louisiana. The local offices of the parties physically administer the sales. And, under the OCSLA, Louisiana law is extended seaward (to the extent that it is not inconsistent with federal law) so that the Louisiana OCS is part of Louisiana for our purposes. Accordingly, a strict application of Article 10 would result in Louisiana substantive law governing these contracts.

Pipe Line argues vigorously, however, that Article 10 has essentially been abandoned by Louisiana courts in favor of the “interests analysis” of the 2d Restatement of Conflicts of Laws (1971). See Jagers v. Royal Indemnity Company, 276 So.2d 309 (La.1973); Sutton v. Langley, 330 So.2d 321 (La.App.2d Cir.1976); Burns v. Holiday Travels, Inc., 459 So.2d 666 (La.App. 4th Cir.1984). In addition, Pipe Line notes, the Fifth Circuit has stated:

“(1) that the current approach to the choice of law in Louisiana is that embodied in the Restatement, and
(2) that under that approach the interest analysis of the second paragraph of the Restatement is to be applied in all cases, regardless of the literal reach of Article 10.” (emphasis added)

Lee v. Hunt, 631 F.2d 1171, 1176 (5th Cir. 1980).

This Court, however, has grave doubts as to whether the summation of the law in Lee is true today, well over four years later. In Shaw v. Ferguson, 437 So.2d 319 (La.App.2d Cir.1983), the Court declared:

It is our view that Jagers mandates the application of the modern interest analysis in those circumstances where the choice of law is not specifically governed by statute. Jagers dealt with a tort, and there is no civil code article or revised statute which stipulates what law is to be applied in the case of a tort. Thus, the holding of Jagers, when properly confined to its underlying facts, is that the modern interest analysis will be applied to choose the governing law in a tort suit. A broader and rationally justifiable interpretation of Jagers is that it mandates the application of a modern interest analysis in the absence of a statute which stipulates the applicable law. However, we do not believe that Jagers held that the modern interest analysis is to be applied when such an application would effectively nullify a statute which specifically governs the conflicts issue presented. As Judge Edwards noted in his dissent in Wickham [v. Prudential Insurance Co., 366 So.2d 951 (La.App. 1st Cir.1978)], ‘the two cases cited in support of the interest analysis theory [Jagers and Sutton] do not address [a directly applicable] codal provision.’ ” Id. at 322 (emphasis in the original).

See also Scott Truck and Tractor Company v. Daniels, 401 So.2d 590 (La.App.3d Cir.1981), where contract was intended to have effect in Texas, Article 10 mandated application of Texas law; Wilson v. Gulf Insurance Company, 431 So.2d 1095 (La. App.3d Cir.1983), “A Court, subject to constitutional restrictions, will follow a statutory directive of its own state on choice of law [citing Restatement 2d, § 611],” Id. at 1097; and Laubie v. Sonesta International Hotel Corporation, 752 F.2d 165 (5th Cir. 1985), “In Louisiana, a civil law jurisdiction, the legislative will, as expressed in the articles of the [Civil] Code, is supreme. Case law, although valuable, is of secondary importance.”

But even if the Restatement supercedes (especially in the realm of contract) Article 10, this Court concludes that the interests analysis of the Restatement supports the application of Louisiana law. § 188(2) of the Restatement provides:

(2) In the absence of an effective choice-of-law by the parties, the contacts to be taken into account in applying the principies of § 6 to determine the law applicable to the issue include:
(a) The place of contracting.
(b) The place of negotiation of the contract.
(c) The place of performance.
(d) The location of the subject matter of the contracts; and
(e) The domicile, residence, nationality, place of incorporation and place of business of the parties.
These contracts are to be evaluated according to their relative importance with respect to the particular issue. (Emphasis added).

Factors (a) and (b) clearly augur in favor of Texas Law, since Houston was the place of negotiation and execution of the contracts.

Factors (c) and (d) likewise clearly augur in favor of the application of Louisiana law, since the place of performance (taking) and the subject matter of the contracts are both located in Louisiana or on its OCS.

Factor (e) is of no help because of countervailing elements. Although the principal places of business of the parties are in Houston, Texas, both parties have significant Louisiana offices and enterprises as well.

What is decisive for this Court is that Superior seeks the remedy of specific performance of Pipe Line’s obligation to take contracted-for quantities of natural gas. Since the place of this performance will be on the Louisiana OCS, this Court concludes Louisiana’s interest is considerably greater than that of Texas, the situs of the negotiation and execution of the contracts in question.

In addition to Article 10 and the “interest analysis” of the Restatement, this Court concludes that application of Louisiana law is warranted by a third factor: the fact that the parties stipulated in these contracts that the senior district judge in the Western District of Louisiana would name the third arbitrator to the arbitration panels under the contracts. This evidences an intent that the contracts would have effect in Louisiana and be governed by Louisiana law.

Finally, even if this Court has erred and Louisiana conflicts law would apply Texas law, Texas law would send the question straight back to Louisiana. It is clear in the Texas jurisprudence that “where the contract is made in one jurisdiction but to be performed in another the presumption arises that the parties contracted with reference to the place of performance [citations omitted].” New York Life Insurance Company v. Baum, 700 F.2d 928 (5th Cir. 1983).

B. ALTERNATIVE OBLIGATIONS

Before considering the merits of Pipe Line’s affirmative defenses, it is critical to understand the precise nature of the obligations in question and the requested relief. What is at issue in this motion is the enforcement of one item of performance of an alternative obligation.

Louisiana Civil Code Article 1808 (1985) declares that:

An obligation is alternative when an obligor is bound to render only one of two or more items of performance.

Some of the comments to Article 1808 are enlightening:

(b) ... One obligation admits of only one performance, but that performance may consist of a number of different ‘items of performance’. In the case of an alternative obligation, the items of performance are specified in the alternative.
(d) The distinction between an alternative obligation and a penal clause is that the former is a primary obligation which may be satisfied in one of several ways while the latter is a secondary obligation which can be enforced only if there is also a valid primary obligation which the obligor fails to perform without lawful excuse. In the penal clause, the obligor has no real ‘choice’ as such; he cannot simply elect to pay the penalty rather than perform the primary obligation. If he does, the creditor may still sue for specific performance of the primary obligation.

Other pertinent articles of the 1984 revision are:

Art. 1809. When an obligation is alternative, the choice of the item of performance belongs to the obligor unless it has been expressly or impliedly granted to the obligee.
Art. 1810. When the party who has the choice does not exercise it after a demand to do so, the other party may choose the item of performance, (emphasis added)
Art. 1811. An obligor may not perform an alternative obligation by rendering as performance a part of one item and a part of another.
Art. 1812. (1) When the choice belongs to the obligor and one of the items of performance contemplated in the alternative obligation becomes impossible or unlawful, regardless of the fault of the obligor, he must render one of those that remain.

Applying the foregoing articles of the Civil Code to the facts at bar, it is apparent that the take or pay provisions of the Vermilion and West Cameron contracts are alternative obligations. Thus, regardless of the legality or enforceability of the payment provisions, the first item of performance—taking—is still available.

Pipe Line has refused to choose its item of performance, and thus that choice has fallen to the obligee, Superior. Superior, in its motion for summary judgment, has requested specific performance of Pipe Line’s item of performance by taking the contraeted-for minimum quantities of natural gas from the West Cameron and Vermilion Fields. This Court, then, must consider Pipe Line’s affirmative defenses to performance by taking.

1. FORCE MAJEURE

Defendants’ first affirmative defense to its obligation to take is that of force majeure. Article V of Exhibit “B” to both the Vermilion 58 and West Cameron 498 contracts provide:

1. The provisions of this agreement shall not be applicable nor shall the parties to this agreement be liable for damages to the other for any act, ommission, or circumstances occasioned by, or in connection with or as a consequence of, any acts of God, strikes, lockouts, or other industrial disturbances, acts of the public enemy, sabotage, wars, blockades, insurrections, riots ... or any other cause, whether of the kind herein enumerated or otherwise, not within the control of the party claiming suspension and which, by the exercise of due diligence, such party is unable to prevent or overcome ...
2. Such causes or contingencies affecting the performance of this agreement by any party hereto, however, shall not relieve such party of liability in the event of its concurring negligence or in the event of its failure to use due diligence to remedy the situation and remove the cause in an adequate manner and with all reasonable dispatch, nor shall such causes or contingencies affecting the performance of this agreement relieve any party hereto from its obligations to make payments of amounts then due nor shall such causes or contingencies relieve any party of liability unless such party give notice and full particulars of the same in writing or by telegraph to the other party as soon as possible after the occurrence relied on, and like notice shall be given upon termination of such Force Majeure conditions (emphasis added).

Pipe Line argues that due to various force majeure events outside of its control, it is relieved of its liability to take the contracted-for quantities of natural gas.

Without determining whether the events Pipe Line cites are encompassed by the force majeure clauses of the parties’ contracts, this Court concludes that Pipe Line is barred from asserting a force majeure defense because it failed to properly invoke the force majeure clause. The clause provides that “nor shall such causes or contingencies relieve any party of liability unless such party give notice and full particulars of the same in writing or by telegraph to the other party as soon as possible after the occurrence relied on.” Pipe Line has not complied with this requirement. Hence, there is no issue of material fact for this Court to try on the affirmative defense of force majeure. Under the very terms of the force majeure clause, Pipe Line is not relieved of its liability to take even if those events it cites did constitute force majeure.

2. ERROR/FAILURE OF CAUSE

Although these arguments are primarily asserted as affirmative defenses to the item of performance by paying, it is possible through liberal construction to apply them to performance by taking. ' This Court, however, is unconvinced. As Professor Litvinoff has ably stated:

Cause—or end—is distinguishable from the motive that prompts the debtor to bind himself. The motive is the accidental reason that induces a person to enter into a contract. It is subjective, and therefore, it varies with each individual ... the purchaser may buy because he moved to that locality, or thinks that the purchase is the best investment for his capital, or just to gain prestige.
The motive bears a decisive influence upon the party’s will. However, an error in motive does not nullify the obligation. 1 Litvinoff § 220 (La.Civil Law Treatise, 1969).

Undoubtedly, Pipe Line was in error as to its motive for entering into this obligation. The market has simply not evolved in the manner anticipated. But this error is far from an error in the obligation itself. And Pipe Line has failed to establish an issue of fact as to whether there was error as to the principal cause of the contract, i.e., a certain price for a certain quantity of natural gas.

3. COMMERCIAL IMPRACTICABILITY

This Court rejects this argument on the grounds that no court in Louisiana has unequivocally embraced this common law doctrine.

CONCLUSION

Pipe Line has failed to establish a genuine issue of material fact as to its liability to take certain minimum quantities of natural gas under the Vermilion and West Cameron contracts. Accordingly, Superior is entitled to a partial summary judgment compelling Pipe Line to take its contracted-for minimum quantities of natural gas.

The Court declines at this time to consider Pipe Line’s affirmative defenses to the item of performance by paying, since those issues are immaterial for purposes of this motion.

SUMMARY

To recapitulate, this Court:

(1) Hereby denys defendants’ motion to stay certain claims and refer them to FERC.

(2) Hereby stays all claims (save antitrust) arising out of the Schwarz and Raccourci Island contracts, as well as the “Price” Provision of the Brazos contract.

(3) Grants Superior’s motion for a partial summary judgment on Pipe Line’s liability to take.

ON REHEARING

Defendant Transcontinental Gas Pipe Line Corporation (Pipe Line) has moved for a new trial, or alternatively to alter or amend the Judgment and Order of this Court of February 13, 1985.

The contracts in question provide that in order for force majeure to relieve a party of its obligations, the party is required to (1) give notice, and (2) the full particulars of the force majeure event(s) in writing to the other party. While some of the letters Pipe Line relies upon (plaintiff’s exhibits 10B1 through 10B10 from the preliminary injunction hearing, as well as the attachment to Pipe Line’s motion) did discuss, in varying detail, two of the force majeure conditions Pipe Line alleges (e.g., the mild winter of 1982-1983 and the drop in the relative price of competing fuels), none gave notice that Pipe Line considered itself relieved of its obligations due to the occurrence of force majeure conditions.

Pipe Line also asserts that it is uncertain what “increased quantities of gas” it will have to take from the two fields “to prevent waste or loss of reserves,” to comply with this Court’s order. Pipe Line is simply reminded that it is bound to perform its obligations in good faith, and that entails protecting Superior from such losses.

Accordingly, Pipe Line's motion is denied.


source: Caselaw Access Project

author: EDWARD WEINFELD, District Judge.

license: Public Domain

text:
    Vincent J. ROKUS, Plaintiff, v. AMERICAN BROADCASTING COMPANY, INC., Defendant.
    No. 84 Civ. 4361 (EW).
    United States District Court, S.D. New York.
    Nov. 6, 1984.

      Vincent J. Rokus, plaintiff pro se.
    Hawkins, Delafield & Wood, New York City (Thomas W. Pippert, New York City, of counsel), for defendant.
   OPINION

EDWARD WEINFELD, District Judge.

The defendant, the American Broadcasting Company, Inc. (“ABC”), moves pursuant to Fed.R.Civ.P. 12(b)(6) to dismiss the complaint upon the ground that the plaintiff, Vincent Rokus, has failed to state claims upon which relief can be granted. For the reasons stated below, the motion is granted and the complaint is dismissed in its entirety.

According to the allegations of the complaint, which are taken as admitted for the purposes of this motion, plaintiff is the author of a copyrighted musical recording that he seeks to advertise for sale to the public. He produced a television commercial incorporating the recording, submitted to ABC an order for a test run of the commercial on ABC’s local New York station, and paid ABC an advance toward expenses. This action arose when ABC refused to broadcast the commercial for editorial reasons, despite plaintiff’s consent to delete portions of the commercial as requested by ABC. Thereupon, plaintiff, appearing pro se commenced this action in which he seeks an order directing defendant to broadcast the commercial with no deletions and an award of compensatory and punitive damages. He asserts various federal claims purportedly arising under the Copyright Act of 1976, Title Fifteen of the United States Code, the First Amendment to the Constitution, and the Communications Act of 1934. He also asserts claims arising under state law. As will be shown, each of plaintiffs federal claims fails to state a cause of action upon which relief can be granted and must be dismissed. Consequently, his state law claims, whether valid or not, must be dismissed for lack of subject matter jurisdiction.

As to the Copyright Act, plaintiff alleges that ABC coerced him into agreeing to delete the name of his copyrighted musical recording from the commercial and that broadcasting the commercial without the name would have infringed upon his copyright. To state a valid claim of copyright infringement, plaintiff must allege that defendant copied from his copyrighted work and that the copying (assuming it to be proved) went so far as to constitute improper appropriation. Plaintiff, however, does not allege that ABC copied or made any use of his commercial or his copyrighted recording. Indeed, the gravamen of his complaint is that ABC refused to broadcast the commercial. Consequently, plaintiff has failed to state a claim of copyright infringement. Nor, as he contends, has he stated a claim of threatened copyright infringement, for he has not alleged that ABC is “ ‘about to infringe or take some action which is prejudicial’ to the rights of a copyright owner.” Whether or not defendant at one time intended to broadcast the commercial without the name of the recording, there is no allegation that that intention is now present. Therefore, injunctive relief cannot now be granted. The Court need not consider whether such a broadcast would infringe upon plaintiff’s alleged copyright in the recording.

As to Title Fifteen, plaintiff alleges that defendant sought to restrain him from advertising and marketing his product in interstate commerce in violation of “the commercial laws of the United States, including Title 15 of the U.S. Code and public policy.” Plaintiff states that he does not rely upon the federal antitrust laws but fails to state, not only in his complaint and his brief but upon questioning at oral argument, upon which provision of federal law he does rely. His contention in his brief that ABC may have used “unfair and deceptive trade practices” may not be regarded as a statement of a claim under the Federal Trade Commission Act, which prohibits “unfair or deceptive acts or practices in or affecting commerce,” because the provisions of the Act may be enforced only by the Federal Trade Commission. The Act gives neither competitors nor consumers standing to enforce its provisions. Although plaintiff need not set out the legal theory on which the claim is based, his statement of the claim must show that he is entitled to relief. Insofar as this claim is concerned, plaintiff has failed to identify any legal basis upon which the Court can grant relief, and the claim is dismissed.

As to the First Amendment, plaintiff essentially claims that defendant violated his constitutionally guaranteed rights of freedom of expression by attempting to censor his work. The “cases are legion that the First Amendment’s prohibition against restrictions upon speech and the press ‘is a restraint on governmental action, not that of private persons.’ ” Plaintiff alleges no facts, other than ABC’s status as a broadcaster licensed and regulated by the Federal Communications Commission (“FCC”), to support his contention that ABC’s alleged attempt to censor his commercial constituted “federal action.” However, ABC’s status as a federally licensed and regulated broadcaster does not transform its conduct into governmental action for purposes of the First Amendment unless the FCC either expressly approved or campaigned for the challenged conduct of the broadcaster. There is no allegation of any action, direct or indirect, involving the FCC in the matters that are at the core of plaintiff’s claims. It is not alleged that the FCC either approved or disapproved of the defendant’s challenged conduct. The Supreme Court has not directly decided whether the FCC’s statutory authority to license and regulate broadcasting companies is sufficient, without more, to convert their action into governmental action. However, the Court’s decision in Jackson v. Metropolitan Edison Co. supports the conclusion that the FCC’s statutory authority by itself is not sufficient to make ABC’s alleged attempt at censorship attributable to the federal government for purposes of the First Amendment. On the facts alleged here, there has been no nexus between the FCC and the challenged conduct on the part of the defendant.

As to the Communications Act, plaintiff alleges that ABC, as a federally licensed broadcaster, violated its commitment to serve the public interest and the “ ‘public interest’ requirement” of sections 307(d) and 309(a) of the Act. To the extent that plaintiff seeks to enforce provisions of the Act, a function that Congress vested in the FCC, he fails to state a valid claim. Neither section 309(a) nor the Act in general provides a private right of action. To the extent that plaintiff asserts a private right of access to the broadcast media for the purpose of making an editorial advertisement, his claim must also be dismissed. Neither the Act nor the First Amendment requires ABC to sell commercial time to persons wishing to discuss controversial issues.

In view of plaintiffs failure to state a valid claim under federal law, his state law claims, whether for breach of contract, unfair competition, prima facie tort, tortious interference with precontractual negotiations, or otherwise, must be dismissed for lack of subject matter jurisdiction to dispose of them. Plaintiff has not alleged diversity of citizenship of the parties and, since his federal claims are dismissed before trial, the Court declines to exercise pendent jurisdiction over the state law claims. Accordingly, the defendant’s motion to dismiss the complaint in its entirety is granted.

So ordered.

      . Jenkins v. McKeithen, 395 U.S. 411, 421-22, 89 S.Ct. 1843, 1848-49, 23 L.Ed.2d 404 (1969).

      . It appeared to this Court that the complaint had been drawn by an attorney. When questioned upon the matter at oral argument, plaintiff acknowledged that he had had the assistance of an attorney. In any event, see generally Morpurgo v. Board of Higher Educ., 423 F.Supp. 704, 713-14 (S.D.N.Y.1976) ("Although pro se civil rights complaints must be viewed with some latitude, liberal construction of pleadings should not be permitted to override completely the rights of defendants.”).

      . 17 U.S.C. § 101 et seq. (1983).

      . 47 U.S.C. § 151 et seq. (1983).

      . Hoehting v. Universal City Studios, Inc., 618 F.2d 972, 977 (2d Cir.), cert. denied, 449 U.S. 841, 101 S.Ct. 121, 66 L.Ed.2d 49 (1980); Arnstein v. Porter, 154 F.2d 464, 468 (2d Cir.1946); Giangrasso v. CBS, Inc., 534 F.Supp. 472, 475 (E.D.N.Y.1982).

      . Southern Publishing Co. v. C & C Films, Inc., 171 F.Supp. 832, 833 (S.D.N.Y.1959) (quoting Borchard, Declaratory Judgments 807 (2d ed. 1941)).

      . See id.

      . 15 U.S.C. § 45(a)(1) (1983).

      . See Alfred Dunhill Ltd. v. Interstate Cigar Co., 499 F.2d 232, 237 (2d Cir. 1974); Bailey Employment System, Inc. v. Hahn, 545 F.Supp. 62, 72 (D.Conn.1982), aff'd, 723 F.2d 895 (2d Cir.1983) (mem.).

      . See Siegelman v. Cunard White Star Ltd., 221 F.2d 189, 196 (2d Cir.1955); see also Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 101-02, 2 L.Ed.2d 80 (1957); Michael v. Clark Equip. Co., 380 F.2d 351, 352 (2d Cir.1967).

      . Levitch v. CBS, Inc., 495 F.Supp. 649, 656 (S.D.N.Y.1980) (quoting CBS, Inc. v. Democratic Nat’l Comm., 412 U.S. 94, 114, 93 S.Ct. 2080, 36 L.Ed.2d 772 (1973)), aff'd, 697 F.2d 495 (2d Cir.1983) (per curiam); see Kuczo v. Western Conn. Broadcasting Co., 566 F.2d 384, 387 (2d Cir.1977).

      . See Levitch, 495 F.Supp. at 656-58; Gemini Enters., Inc. v. WFMY Television Corp., 470 F.Supp. 559, 567 (M.D.N.C.1979); Post v. Payton, 323 F.Supp. 799, 803-04 (E.D.N.Y.1971); see also Belluso v. Turner Communications Corp., 633 F.2d 393, 399 (5th Cir.1980); Kuczo, 566 F.2d at 387-88.

      . In Democratic Nat’l Comm., 412 U.S. 94, 93 S.Ct. 2080, 36 L.Ed.2d 772, which involved a broadcast licensee’s refusal to accept editorial advertisements, the Chief Justice and three Justices found there was no governmental action, two Justices found there was, and three Justices declined to reach the issue.

      . 419 U.S. 345, 95 S.Ct. 449, 42 L.Ed.2d 477 (1974). The respondent in Jackson was a privately owned and operated utility company that held a certificate of public convenience issued by the Pennsylvania Public Utility Commission. Under a provision of its general tariff filed with the Commission, the respondent had the right to discontinue service to any customer on reasonable notice of nonpayment of bills. Regarding this practice, the Court stated;
      The mere fact that a business is subject to state regulation does not by itself convert its action into that of the State for purposes of the Fourteenth Amendment____ Approval by a state utility commission of such a request from a regulated utility, where the commission has not put its own weight on the side of the proposed practice by ordering it, does not transmute a practice initiated by the utility and approved by the commission into "state action.” At most, the Commission’s failure to overturn this practice amounted to no more than a determination that a Pennsylvania utility was authorized to employ such a practice if it so desired. Respondent's exercise of the choice allowed by state law where the initiative comes from it and not from the State, does not make its action in doing so “state action” for purposes of the Fourteenth Amendment.

        Id. at 350, 357, 95 S.Ct. at 453, 456 (footnotes omitted).

      . See Schnapper v. Foley, 667 F.2d 102, 116 (D.C.Cir.1981) (no private right of action under § 309(a)), cert. denied, 455 U.S. 948, 102 S.Ct. 1448, 71 L.Ed.2d 661 (1982); Daly v. CBS, Inc., 309 F.2d 83, 85 (7th Cir.1962); Post, 323 F.Supp. at 801-02; Ackerman v. CBS, Inc., 301 F.Supp. 628, 631 (S.D.N.Y.1969); Gordon v. NBC, 287 F.Supp. 452, 455 (S.D.N.Y.1968); see also Lechtner v. Brownyard, 679 F.2d 322, 326-27 (3d Cir.1982) (Personal Attack Rule, 47 C.F.R. § 73.1920); Belluso, 633 F.2d at 396-97 (§ 315(a)).

      . See Democratic Nat'l Comm., 412 U.S. 94, 93 S.Ct. 2080, 36 L.Ed.2d 772; Gemini Enters., 470 F.Supp. at 568.

      . See United Mine Workers v. Gibbs, 383 U.S. 715, 726, 86 S.Ct. 1130, 1139, 16 L.Ed.2d 218 (1966); Brontel, Ltd. v. City of New York, 571 F.Supp. 1065, 1073 (S.D.N.Y.1983).


text:
    NATIONAL PATENT DEVELOPMENT CORPORATION, and NPDC Epic Systems, Inc., Plaintiffs, v. AMERICAN HOSPITAL SUPPLY CORPORATION, Defendant.
    No. 84 Civ. 3411 (EW).
    United States District Court, S.D. New York.
    Nov. 21, 1984.

      Winer, Neuburger & Sive, P.C., New York City, for plaintiffs; Mark A. Chertok, New York City, of counsel.
    Walsh & Frisch, New York City, for defendant; Jerome K. Walsh, New York City, of counsel.

      . The contract was entered into by American through its American McGaw division and by National through its subsidiary, Burron Medical Products, Inc. ("Burron”). Burron was later renamed NPDC Epic Systems, Inc. For convenience, the plaintiff corporations, as well as Burron, are referred to as "National” or "National Patent.”

   OPINION

EDWARD WEINFELD, District Judge.

This is another case where an inquiry propounded by this Court more than thirty years ago is still appropriate: “must the race necessarily be to the swift in a matter so involved and requiring extensive activity on the part of the respective parties?” This action was commenced on May 15, 1984 by National Patent Development Corporation and its wholly owned subsidiary, NPDC Epic Systems, Inc., (collectively “National Patent” or “National”) against American Hospital Supply Corporation (“American Hospital” or “American”). Several days earlier, American Hospital had instituted an action against National Patent in the Superior Court of the State of California for the County of Orange, which was removed to the United States District Court, Central District of California (the California action). American Hospital now moves to stay this action pending determination of its California action or, alternatively, to transfer this action pursuant to 28 U.S.C. § 1404(a) to the District Court of California. National Patent cross-moves to stay the California action pending determination of this action, opposes American Hospital’s section 1404(a) motion, and moves for partial summary judgment.

The plaintiffs herein are both Delaware corporations having their principal places of business in New York County, in the Southern District of New York. The defendant, American Hospital, is an Illinois corporation with its principal place of business in Evanston, Illinois, but much of its business is conducted through separately organized divisions, including McGaw Laboratories Division (“American McGaw”). American McGaw is engaged in manufacturing and distributing parenteral solutions, medical devices, and biomedical equipment, and its principal offices are located in Irvine, Orange County, California.

The claims advanced by both parties in their respective actions arise under a distribution and licensing agreement that they or their affiliated or predecessor companies entered into on October 5, 1979. In part, that agreement concerned the EpicR I.V. Flow Controller (the “Flow Controller”), a patented and trademarked device designed to control electronically the flow of fluids injected intravenously into patients. An important and integral part of the Flow Controller’s design is an alarm system designed to signal when the flow rate of the fluid is too low or too high. The Flow Controller is also designed for portable use on intravenous poles and may be operated on battery as well as direct current. The Flow Controller, together with certain patented ancillary equipment used to administer the fluid (the “Administration Set”), comprise the “Epic System.” Under the agreement, National granted American the exclusive right to sell the Flow Controller, the nondisposable hardware component of the Epic System, as well as the exclusive right to manufacture and distribute the Administration Set, the disposable component of the system. In return, American agreed to purchase a minimum of 4,000 Flow Controllers within a five-year period commencing when the product was first made available to it.

Shipments of Flow Controllers by National to American commenced in early 1980. After some initial difficulties, hereafter discussed in greater detail, full-scale marketing was undertaken by American in about July 1980. However, soon thereafter, American suspended sales for a period allegedly because of complaints by various hospitals about malfunctioning alarm systems and other defects in the Flow Controllers. These alleged shortcomings were to be corrected by National either by a design modification or by retrofitting the Flow Controllers with additional components. American continued, despite continued problems with the product, to order and market the product in reliance upon National’s assurances. In all, the total number of Flow Controllers shipped to and purchased by American up to December 1983 was 2,784. At that time, American advised National that it refused to purchase the additional 1,216 Flow Controllers as required under the contract. The parties then endeavored but failed to compromise their differences, following which the race to the courthouses began.

On May 11, 1984, American filed its summons and complaint in the Superior Court of California, Orange County. Copies were airmailed on May 14 to National’s designated statutory agent for service who received them on May 17 and then forwarded the process to National, which did not receive it until May 21, 1984. In the meantime, on May 15, National commenced this action by filing its summons and complaint, personal service of which was made upon American on May 18 at its principal office in Evans-ton, Illinois.

There can be no doubt that whatever the parties’ contentions under their variously pleaded claims, counterclaims, and defenses in their respective actions, all issues center about their distribution and license agreement. The essence of American’s claim is that the Flow Controllers it received from National and later sold to hospitals as a component of the Epic System were defective; that National, when notified of the alleged deficiencies, undertook to correct and render marketable the Flow Controllers, upon which American relied in making further sales; that in fact National failed to remedy the defects in the Flow Controllers so as to render them marketable and has refused to do so; and that National was given timely notice by American of the breach of .the agreement, which justified American’s refusal to accept the balance of the Flow Controllers.

National, on the other hand, contends that it manufactured the Flow Controllers pursuant to specifications approved by American; that American manufactured the Administration Sets, which were sold for use with the Flow Controllers; and that any failure of the complete Epic System to function properly was caused solely by American’s failure to exercise reasonable care in manufacturing the Administration sets and testing the system as a whole, or by American’s failure to give proper instructions as to the care and usage of the system. National further contends that despite American’s current allegations of defects in the Flow Controllers, American did not give due notice of any claimed breach of warranty, express or implied; and that, with one exception noted hereafter, American did not assert any claims until December 1983, when National charged American with repudiating the agreement by failing to accept the balance of the 4,000 Flow Controllers. National asserts that until this time, the only notice of any claimed defect in the Flow Controllers it received from American was in early 1980; that this defect involved an electronic “chip” that was corrected at no cost to American; and that American approved the resultant modification in about July 1980 when it undertook full-scale marketing of the product.

Thus, the basic issues are whether the Flow Controllers delivered to American McGaw were defective in design and manufacture; whether the alleged defects rendered them unmarketable and unfit for their intended use; whether National represented that the claimed defects could be cured and American continued to order and market the Flow Controllers in reliance upon that representation; whether the defects constituted a breach of National’s obligation under the agreement, thereby relieving American of its obligations under the agreement; and whether American gave timely notice of the claimed defects to National or first advanced its claims in December 1983, when National charged that American had repudiated the agreement by failing to accept the balance of the 4,000 Flow Controllers. It is not open to dispute that all issues, whether advanced as claims, counterclaims, or affirmative defenses, can be resolved in either this or the California action or that a final judgment in either action would be conclusive upon all litigants. The evidence, testimonial and documentary, in support of the parties’ respective claims cannot differ from action to action.

Initially, each party argues that its action was commenced first and therefore the second action, that of its adversary, should be stayed pending the disposition of its, the first, action. Each relies upon the general policy that where two actions embrace the same issues, as a matter of sound judicial administration, the first action should have priority absent special circumstances supporting a different result. The parties appear to recognize that more important than the claimed temporal priority of their respective actions is whether special circumstances displace the general rule.

American presses upon the Court that its California action, filed on May 11, is the “first filed” and thus is entitled to priority and a stay of this action. National, while perforce acknowledging that in point of time American’s lawsuit was filed prior to this action, disputes that the California suit legally is the “first filed.” It contends that American’s filing was defective because American’s complaint referred to exhibits that were not attached and that National did not receive until June 4, 1984, and that in personam jurisdiction in the California action initially was not acquired over it. Specifically, National asserts that mail service upon its statutory agent was ineffective because the agent did not execute the essential acknowledgement of receipt and that the agent’s lack of acknowledgement was proper in view of the missing exhibits. National further asserts that even if its receipt of the summons and complaint from the agent on May 21 is deemed effective service upon it, it had already filed its complaint in this Court on May 15 and effected service upon American on May 18, whereupon this Court became the first court to acquire personal jurisdiction in this litigation. Accordingly, National urges that it is entitled not only to remain in this district but to an order enjoining American from proceeding with its California action.

These highly technical positions with respect to the “first filing” must yield to the realities of the situation in terms of the interests of the parties and effective and sound judicial administration. First, the contention that the omission of exhibits referred to in a complaint voids the commencement of the action is dubious to say the least. This view would exalt substance over form. So, too, whether the “first filed” action is determined by the date of filing of the complaint or by the date of actual service of process, temporal precedence is but a factor to consider and is not controlling. It is clear that in our circuit the “first filed” rule “is not to be applied in a mechanical way regardless of other considerations.” And the Supreme Court has observed that “[w]ise judicial administration, giving regard to conservation of judicial resources and comprehensive disposition of litigation, does not counsel rigid mechanical solution of such problems” but is left to the sound discretion of trial judges. In the instant situation where each side, after a breakdown in settlement negotiations, engages in a race to the courthouse to achieve “first filed” status, the courts should be concerned with what the interests of justice require and not with who won the race.

Essentially the same factors that are of significance on a motion to stay a “second filed” action come into play on a motion to transfer under section 1404(a).- Thus, the instant motions to stay the action and to transfer it to California may be considered together. Among the factors to be considered are the convenience of the parties; the convenience of their witnesses; whether nonparty witnesses are subject to the subpoena power of the court insofar as their live testimony is more desirable than their deposition testimony; the availability of documentary evidence; the relative burdens of expenses on the parties; and the degree of interruption with executives’ functions insofar as their testimony is required or desirable upon the trial proper. Each party contends that regardless of the “first filed” issue, the balance of these and other factors sustains its claim to remain in the district where it filed suit and to stay the action filed by its adversary. In urging its position, each side engages in head-counting of party and nonparty witnesses and emphasizes document availability, the burden of travel, hotel, and other expenses, and, finally, the interruption of its executives’ daily functions.

At the outset American urges that although National maintains its corporate headquarters in New York City, in fact, there is little or no connection between the issues arising under these actions and the State of New York and notes that the contracts were signed by the parties in Evanston, Illinois, where American has its principal place of business. In response, National emphasizes that the distribution and licensing agreement provides that New York law “shall govern this agreement.” This provision recites only the parties’ choice of governing law and may not be read as a forum-selection clause. As such, it is of minor importance on this motion. Although a court’s familiarity with the governing law is one factor to be considered on a motion to change venue, that factor is by no means controlling and is entitled to little weight in cases where, as here, the governing law presents no complex legal questions and has not been shown to be unclear, unsettled, or difficult. Whether New York or California law applies, this case will be decided primarily under the Uniform Commercial Code, which has been adopted in both states. Furthermore, the force of the parties’ distribution and license agreement that New York law shall govern is attenuated by their simultaneously executed guaranty agreement which provides that the latter shall be governed by Illinois law. More important than the weight to be given to the governing law under the separate agreements are the factors already referred to, which we now consider.

A prime issue is whether, as American alleges and National denies, the Flow Controllers delivered to American for use as a component of the Epic System and thereafter sold to hospitals were defective and unfit for their intended use. The Flow Controllers were manufactured and assembled by National in plants located in New Jersey, Pennsylvania, and Connecticut and delivered to American’s McGaw division in Irvine, California (with the exception of some that were shipped directly to hospitals) where American’s personnel tested and found the defects complained of and made efforts to correct them. American asserts that the records which note the defects, as well as customers’ complaints of defects and malfunctioning of the delivered product, are maintained in California; and that its witnesses who have knowledge of the test results, design and manufacturing defects, and efforts to correct them include current officers and employees, as well as three former employees, all of whom reside in the area of the California court. As to current officers and employees, it is not disputed that their testimony will be available no matter where the trial is conducted, but American argues that to bring these witnesses and the documents reflecting customer satisfaction and the results of its testing of the Flow Controllers to New York would involve substantial expense for transportation, hotels, and meals and loss of time from the witnesses’ normal duties. As to the three former employees, American asserts it has no assurance they will voluntarily appear at a trial in this district and hence their testimony is available only by way of deposition. In sum, recognizing that one side or the other will suffer greater inconvenience depending upon where the trial is conducted, American urges that the relative inconvenience upon it would be greater in this district because a trial here “will require almost all witnesses to be away from home overnight, while in California at least American’s employees will be within easy reach of the courthouse.”

National contends, on the other hand, that it will be unduly burdened if the trial is conducted in California whereas a lesser burden will be cast upon American if the trial is conducted in this district—a contention based primarily upon the location of party and nonparty witnesses and their availability to testify at a trial in this district.

National asserts that practically all its witnesses, party and nonparty, as to negotiations leading to the contract, as to the issue of design, engineering, and marketing of the Flow Controllers in 1981 and 1982, and thereafter as to complaints received from hospitals and the correction of defects, are located in the Northeast area, in the states of New Jersey, Pennsylvania, and Connecticut, within reasonable proximity to this Court; and that most nonparty witnesses are subject to the subpoena power of this Court. National also emphasizes that it maintains facilities in New Brunswick, New Jersey and Dayville, Connecticut where tests were performed and where records pertinent to the issues to be tried are maintained, as they are at its office in New York City. Further, National asserts that as to nonparty material witnesses, it has no assurance they will voluntarily travel to California and, even if they agreed to do so, such travel would involve undue expense for their transportation and maintenance; that as to its current officers and employees, a trial in California would not only involve additional expense but would seriously interfere with their daily activities at the three locations referred to above. Two nonparty witnesses who reside in the Northeast area have submitted affidavits indicating their reluctance to travel to California and as for the others there is no indication they will voluntarily appear at a trial in California. The subject of their testimony, relevant to the basic issues adverted to above, also is pertinent to National’s claims under its motion for summary judgment, hereafter denied, whereas there is no indication that American’s nonparty witnesses have information deemed necessary to support American’s opposition to those claims.

National stresses that the complaints as to the malfunctioning of the Epic System were received from hospitals throughout the country but mostly from those in the Northeast, and that more than fifty percent of the total came from Maimonedes Hospital located in New York City. To give force to its position, National points out that only 2.5% of the complaints came from hospitals in California. Both sides agree upon the desirability of the live testimony of hospital officers and employees on this important issue. As to documents reflecting hospital complaints and the results of tests, both sides have overemphasized their relative importance and the inconvenience that would result if production were requested at a trial or in pretrial discovery-proceedings. The documents can readily be reproduced by one or more well-known processes.

The foregoing claims that each party has advanced in support of its own, and in opposition to the other’s, position cannot be quantified with exactitude. While the issue is close, upon a consideration of the applicable criteria and bearing in mind that the burden is upon the movant to make a clear showing that the proposed transferee district is a more convenient one and that the interests of justice would be better served by a trial there, I am persuaded that the balance tilts in favor of National. Accordingly, American’s motion to stay this action pending final determination of its California action is denied, as is its alternative motion to transfer this action to California. National’s cross-motion to stay the California action is granted.

We now address National’s motion for partial summary judgment upon its first claim and for dismissal of American’s defenses thereto and related counterclaim. Here, National seeks judgment against American in the sum of $260,000. representing damages for its failure to purchase 2,784 Flow Controllers, the balance of the 4,000 it contracted to buy. National argues that American acknowledged its liability to purchase these units even after it knew what is now asserted were defects in those previously delivered and distributed to hospitals; that the only time American ever claimed a breach of warranty was in March 1980 following which National corrected the product and American agreed to the specification that resulted in the correction; that thereafter American continued its normal marketing campaign of the Epic System; and that except for the March 1980 notice, no other notice of alleged defects or claims of breach of warranty was given by American to National until the onset of this litigation. National makes the further argument that the communications, written and oral, by American merely presented “problems” with delivered units and did not constitute notice of any claimed breach of warranty. Accordingly, National asserts that American cannot maintain an action for breach of warranty, express or implied.

American in opposition asserts that it gave notice to National of defects in the delivered Flow Controllers which violated National’s express warranty under the distribution and license agreement that the product would comply with specifications; that such notice indicated a breach by National of its warranty; and, further, that National undertook to make corrections to satisfy the warranty and gave assurances that the defects had been corrected and the Flow Controllers rendered marketable, and that upon such assurances American distributed the product with the administrative component only to have customer hospitals return it as defective. Affidavits submitted on behalf of American give support to this position. Whether the notification given to National merely presented a “problem” or was timely and sufficient to inform it that American was asserting a breach is clearly an issue of fact that precludes summary judgment under Rule 56. So, too, National’s additional ground for judgment without a trial must fail. This ground is based upon a contention that American had tested the Flow Controllers prior to entering into the contract and was responsible, together with National, for the specifications pursuant to which the units were manufactured. The issue is not American’s knowledge in the area of medical devices and biomedical supplies or its pretesting of the product during the developmental stage but whether the delivered units conformed to the specifications set forth in a schedule attached to the contract, which National warranted. If they did not conform, American had the right to return deliveries for full credit. In view of the conflicting affidavits, this issue cannot be decided under the summary judgment rule. Accordingly, National’s motion for summary judgment is denied.

So ordered.

      . Caldwell-Clements, Inc. v. McGraw-Hill Pub. Co., 11 F.R.D. 156, 158 (S.D.N.Y.1951); cf. Kerotest Mfg. Co. v. C-O-Two Fire Equip. Co., 342 U.S. 180, 185, 72 S.Ct. 219, 222, 96 L.Ed. 200 (1952).

      . 28 U.S.C. § 1441 (1983).

      . The "First Contract Year” was defined as beginning "when the product is made available to the entire McGaw sales force.”

      . Meeropol v. Nizer, 505 F.2d 232, 235 (2d Cir. 1974); William Gluckin & Co. v. International Playtex Corp., 407 F.2d 177, 178 (2d Cir.1969); Mattel, Inc. v. Louis Marx & Co., 353 F.2d 421, 423 (2d Cir. 1965), petition for certiorari dismissed, 384 U.S. 948, 86 S.Ct. 1475, 16 L.Ed.2d 546 (1966); Remington Prods. Corp. v. American Aerovap, Inc., 192 F.2d 872, 873 (2d Cir.1951).

      . National concedes that American eventually effected proper service on June 22, 1984, after learning that National had moved to dismiss the California action upon the ground that initial service had not been properly made.

      . There is some support for National’s position that jurisdiction over the person rather than the filing of the complaint is controlling for purposes of determining priority, but this issue has not been definitively decided in this circuit. The Third Circuit appears to be unequivocal in its adherence to the rule that jurisdiction must be acquired over the parties before a case may be considered "first filed.” See Crosley Corp. v. Westinghouse Elec. &Mfg. Co., 130 F.2d 474, 475 (3rd Cir.), cert. denied, 317 U.S. 681, 63 S.Ct. 202, 87 L.Ed. 546 (1942); Omni-Exploration, Inc. v. McGookey, 520 F.Supp. 36, 37 (E.D.Pa. 1981); Berkshire Int’l Corp. v. Marquez, 69 F.R.D. 583, 586 (E.D.Pa. 1976); cf. Jefferson Ward Stores, Inc. v. Doody Co., 560 F.Supp. 35, 37 (E.D.Pa. 1983) (citing Omni-Exploration). The Ninth Circuit takes the opposite view. Pacesetter Systems, Inc. v. Medtronic, Inc. 678 F.2d 93, 96 n. 3 (9th Cir. 1982). The Second Circuit has ambiguously stated the rule as follows:
      The bulk of authority supports the position that when a case is brought in one federal district court, and the case so brought embraces essentially the same transactions as those in a case pending in another federal district court, the latter court may enjoin the suitor in the more recently commenced case from taking any further action in the prosecution of that case____ This necessarily follows from the basic proposition that the first court to obtain jurisdiction of the parties and of the issues should have priority over a second court to do so.

        National Equip. Rental, Ltd. v. Fowler, 287 F.2d 43, 45 (2d Cir.1961) (citations omitted). The district courts of this circuit have stated that "[ajbsent exceptional circumstances, the federal court first seized of an action should be the one to adjudicate it,” Commerce & Indus. Ins. Co. v. Cablewave, Ltd., 412 F.Supp. 204, 207 (S.D.N.Y. 1976) (Frankel, L), and that "service of process” is at least a fact of “slight relevancy,” Brierwood Shoe Corp. v. Sears, Roebuck & Co., 479 F.Supp. 563, 568 (S.D.N.Y.1979); see also Columbia Pictures Indus., Inc. v. Schneider, 435 F.Supp. 742, 748 (S.D.N.Y.1977) (doubts concerning lack of personal jurisdiction in first filed action require stay of that action), aff’d, 573 F.2d 1288 (2d Cir. 1978) (mem.).

      . Hammet v. Warner Bros. Pictures, Inc., 176 F.2d 145, 150 (2d Cir.1949); see also International Playtex, 407 F.2d at 179 (an "inflexible" approach is to be avoided); National Equip. Rental, 287 F.2d at 47 (Lumbard, C.J., concurring in part and dissenting in part).

      . Kerotest Mfg., 342 U.S. at 183, 72 S.Ct. at 221.

      . See International Playtex, 407 F.2d at 178; Louis Marx, 353 F.2d at 424; National Equip. Rental, 287 F.2d at 47 (Lumbard, C.J., concurring in part and dissenting in part).

      . See Schneider v. Sears, 265 F.Supp. 257, 263 (S.D.N.Y.1967).

      . See id.

      . Compare Coface v. Optique Du Monde, Ltd., 521 F.Supp. 500, 506 (S.D.N.Y.1980) (contractual provision stating that defendants “consent to the jurisdiction of the State and Federal courts sitting in New York” construed as consent to both personal jurisdiction and venue).

      . See Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 509, 67 S.Ct. 839, 843, 91 L.Ed. 1055 (1947) (forum non conveniens); Allied Int’l Prods., Ltd. v. Textron Indus., Inc. 382 F.Supp. 210, 213 (S.D.N.Y.1974).

      . See Busch v. Sea World of Ohio, 95 F.R.D. 336, 341 (W.D.Pa.1982); Dow Jones & Co. v. Board of Trade, 539 F.Supp. 190, 192 (S.D.N.Y. 1982); Vasallo v. Niedermeyer, 495 F.Supp. 757, 760 (S.D.N.Y.1980); see also Van Dusen v. Barrack, 376 U.S. 612, 645, 84 S.Ct. 805, 823, 11 L.Ed.2d 945 (1964) ("[T]o the extent that Pennsylvania laws are difficult or unclear and might not defer to Massachusetts laws, it may be advantageous to retain the actions in Pennsylvania where the judges possess a more ready familiarity with the local laws.”); AMP, Inc. v. Computer Automation, Inc., 532 F.Supp. 1335, 1346-48 (S.D.Ohio 1982) (applicability of California law does not require transfer where movant failed to demonstrate that law is unclear, unsettled, or difficult).

      . See Schneider, 265 F.Supp. at 263; see also, EMI, Ltd. v. Picker Int’l, Inc., 565 F.Supp. 905, 906 (S.D.N.Y.1983).

      . Patrick v. LeFevre, 745 F.2d 153, 159 (2d Cir.1984); Heyman v. Commerce & Indus. Ins. Co., 524 F.2d 1317, 1319-20 (2d Cir. 1975).


author: McDONALD, District Judge.

text:
    Mary Jayne IVANHOE, Plaintiff, v. Kenneth GABY, et al., Defendants.
    Civ. A. No. H-84-2816.
    United States District Court, S.D. Texas, Houston Division.
    Feb. 12, 1985.
    David T. Lopez, Houston, Tex., for plaintiff.
    George M. Kirk, Jr., David M. Feldman, Keith Orlando Edward Wyatt, Houston, Tex., for defendants.
   ORDER

McDONALD, District Judge.

Pending before the Court is the Motion to Dismiss of Defendants Kenneth Gaby, James T. McBride, and John V. Sheehan. Having considered the arguments of the parties and the applicable law, the Court is of the opinion that the Motion should be DENIED.

Defendants advance two arguments in support of their Motion. The Court will discuss each argument individually.

Initially, Defendants contend that Plaintiff has pled an employment discrimination claim and draw two conclusions that they argue warrant dismissal. First, Defendants argue that Brown v. General Services Administration, 425 U.S. 820, 835, 96 S.Ct. 1961, 1969, 48 L.Ed.2d 402 (1976) precludes Plaintiff from maintaining an employment discrimination action under any law other than Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e. Second, Defendants aver that, in order to maintain such a Title VII action, Plaintiff must sue the head of the allegedly discriminating department or agency. See Hall v. Small Business Administration, 695 F.2d 175, 180 (5th Cir.1983), citing 42 U.S.C. § 2000e-16(c). The Court disagrees with both of these conclusions for the same reason, i.e., that Brown does not require Plaintiff to sue under Title VII for the wrongs for which she seeks redress in the case at bar. Brown does not require Plaintiff to sue under Title VII because Brown applies only to claims that could be litigated under Title VII. See, e.g., Kizas v. Webster, 707 F.2d 524, 542-43 (D.C.Cir. 1983), cert. denied, 464 U.S. 1042, 104 S.Ct. 709, 79 L.Ed.2d 173 (1984) (plaintiff may not sue on constitutional grounds on matter that could be subject of lawsuit under Title VII). The claims Plaintiff presses in the case at bar deal with matters beyond simple employment discrimination, i.e., invasion of privacy, deprivation of liberty and property interests, conspiracy to deprive of civil rights, and infliction of emotional distress. Courts interpreting Brown have frequently allowed plaintiffs to lodge claims related to matters covered by Title VII, but for which Title VII would not compensate. See, e.g., Ray v. Nimmo, 704 F.2d 1480, 1485 (11th Cir.1983) (plaintiff may maintain constitutional claim for agency’s failure to follow merit promotion rules, for which Title VII provided no remedy); Stewart v. Thomas, 538 F.Supp. 891, 897 (D.D.C.1982) (Title VII does not compensate for assault and battery entailed in sexual harrassment, and plaintiff therefore may sue on those torts).

Defendants also argue that they are absolutely from liability under Barr v. Matteo, 360 U.S. 564, 79 S.Ct. 1335, 3 L.Ed.2d 1434 (1959). Barr “protects an official from trial for actions which, even though tortious, nevertheless can be said to be within the outer bounds of the official’s authority.” Williams v. Collins, 728 F.2d 721, 727 (5th Cir.1984) (citation omitted); accord, Claus v. Gyorkey, 674 F.2d 427, 431 (5th Cir.1982). In order to avail himself of immunity under Barr, an official need only show that

“ ‘the action of the federal official bear some reasonable relation to and connection with his duties and responsibilities ...,’” Claus v. Gyorkey, 674 F.2d at 431, quoting Scherer v. Brennan, 379 F.2d 609, 611 (7th Cir.1967), cert. denied, 389 U.S. 1021, 88 S.Ct. 592, 19 L.Ed.2d 666 (1967), and that the action of the official is connected with a “discretionary function.” Norton v. McShane, 332 F.2d 855 (5th Cir.1964), cert. denied, 380 U.S. 981, 85 S.Ct. 1345, 14 L.Ed.2d 274 (1965). As is evident from the earlier description of their jobs, all of the defendants were federal officials exercising discretionary functions, from Williams’ immediate supervisor to officials higher in the chain of command.

Williams, 728 F.2d at 727. Defendants at the outset have made no showing that the actions of which Plaintiff complains arguably lay within the pale of Defendants’ duties, or that those duties were discretionary in nature. Thus, the existence of allegations of denial of due process and equal protection prevents the Court from altogether dismissing the claims at bar.

Accordingly, it is ORDERED, ADJUDGED, and DECREED that the Motion be and hereby is DENIED.

The Clerk shall file this Order and provide a true copy to counsel for all parties.

      . Defendants have failed, for example, to disclose to the Court what those duties were, much less how the duties related to the course of events Plaintiff describes in her Complaint.


author: SENTER, Chief Judge.

text:
    Harold WILKINS, et al., Plaintiffs, v. Gale SWIFT, Defendant.
    No. EC84-253-LS-D.
    United States District Court, N.D. Mississippi, E.D.
    April 5, 1985.

      T. Robert Hill, Hill, Boren & Strickland, P.C., Jackson, Tenn., for plaintiffs.
    Herbert S. Sanger, Jr., Gen. Counsel, Charles W. Van Beke, Asst. Gen. Counsel, D. Mark Hastings, Ralph E. Rodgers, Tennessee Valley Authority,' Knoxville, Tenn., for defendant.
   OPINION

SENTER, Chief Judge.

This personal injury action arises from an injury incurred by Plaintiff Harold Wilkins, a Tennessee Valley Authority (hereinafter TVA) employee, on March 20, 1979, while a passenger in a TVA vehicle. The accident occurred while the vehicle was being driven on an electric power transmission line access road near Burnsville, Mississippi, by Defendant Gale Swift, plaintiff’s immediate supervisor. At the time of the accident, plaintiff was performing his duties as a TVA groundman. Plaintiff subsequently applied for and was awarded compensation for his injury under the Federal Employee’s Compensation Act (hereinafter FECA), 5 U.S.C. §§ 8101, et seq. (1982).

Thereafter, plaintiff instituted the present action against Defendant Swift in the Circuit Court of Tishomingo County, Mississippi. The action was subsequently removed to this court pursuant to 28 U.S.C. § 1442(a)(1). Defendant then filed the motion for summary judgment presently before this court. Defendant asserts that summary judgment is appropriate because as a matter of Mississippi law, plaintiff’s receipt of benefits under the FECA bars this action. Having fully considered the memoranda submitted by the parties and being otherwise fully advised in the premises, the court is now in a position to address the merits of defendant’s motion.

A threshold issue which must be addressed by the court is whether federal or state laws control an action removed from state court pursuant to 28 U.S.C. § 1442. Section 1442(a)(1) grants to federal officers who face litigation in state court as a result of actions taken in the course of their official duties a right of removal to federal court. However, the consequences of removal are circumscribed by the scope of the jurisdiction granted the federal courts by section 1442(a)(1). See City of Aurora v. Erwin, 706 F.2d 295 (10th Cir. 1983). In Arizona v. Manypenny, 451 U.S. 232, 101 S.Ct. 1657, 68 L.Ed.2d 58 (1981), the Supreme Court explained that section 1442(a)(1) is intended to provide a forum free from local interests and prejudice in which a federal officer can assert immunity defenses based on official conduct. 451 U.S. at 241-42, 101 S.Ct. at 1664-65, 68 L.Ed.2d at 68. Invocation of removal jurisdiction by a federal officer, according to the Court, merely provides an impartial federal forum. It does not revise or alter the underlying law to be applied. 451 U.S. at 242, 101 S.Ct. at 1664, 68 L.Ed.2d at 69. “Thus, a federal court exercising jurisdiction under section 1442(a)(1) serves as an alternative forum in a manner roughly analogous to its role in diversity cases, applying state law through the mechanism of its own procedural rules.” (Footnote omitted.) Erwin, 706 F.2d at 297. It follows that in the action sub judice, all matters of a substantive nature are controlled by state law. The question regarding the effect of the payments received by plaintiff under the FECA is clearly substantive in nature. As a result, state law is controlling on this point.

FECA BENEFITS AS A BAR TO PLAINTIFF’S ACTION

It is well settled that the Mississippi Workmen’s Compensation Law supplants the Mississippi common law remedies which an injured employee would otherwise have against his employer and/or co-employees. Thus, under Mississippi law, when an employee receives workmen’s compensation benefits for an injury which occurred in Mississippi, his or her employer and co-employees are immune from tort liability. Brown v. Estess, 374 So.2d 241, 242 (Miss.1979); McCluskey v. Thompson, 363 So.2d 256, 264 (Miss.1978). This result follows logically from the fact that:

Workmen’s compensation laws are in derogation of the common law in that they replace traditional negligence actions for a no-fault system of payment to employees and their families for job-related injuries. By the exchange, the remedy of workmen’s compensation benefits, insofar as the rights of the employee against certain classes of persons are concerned, is exclusive and the common law remedy is abrogated.

Doubleday v. Boyd Construction Co., 418 So.2d 823, 825 (Miss.1982).

In the action sub judice, defendant contends that plaintiff’s receipt of FECA benefits is the equivalent of the payment of Mississippi Workmen’s Compensation benefits. Thus, according to defendant, plaintiff’s action against defendant, a co-employee, is barred under Mississippi law. Plaintiff, on the .other hand, contends that FECA benefits are not equivalent to benefits under the Mississippi Workmen’s Compensation Act. MISS.CODE ANN. §§ 71-3-5, et seq. Thus, according to plaintiff, since FECA benefits do not come within the coverage of the Mississippi Workmen’s Compensation Act and no other law in Mississippi prevents a person receiving FECA benefits from suing a co-employee for negligence, Mississippi law poses no bar to the present action.

The Mississippi Supreme Court has repeatedly held that “any construction given to the workmen’s compensation act must be sensible as well as liberal,” and “the intent of the legislature must be determined by the total language of the statute and not from a segment considered apart from the remainder.” Doubleday v. Boyd Construction Co., 418 So.2d 823, 826 (Miss.1982), (quoting McCluskey v. Thompson, 363 So.2d 256, 259 (Miss.1978)). Furthermore, the Act and decisions interpreting it are to be applied with an equal hand, both where coverage is asserted and where the exclusive remedy provisions of the statute are involved. Stubbs v. Green Brothers Gravel Co., Inc., 206 So.2d 323, 325 (Miss.1968).

As previously stated, the Mississippi Workmen’s Compensation Act was intended to provide workers with a no-fault compensation system for work related injuries. The FECA is clearly similar in purpose for it provides employees of the federal government with a no-fault system of compensation for work related injuries. The receipt of FECA thus clearly comports with the public policy expressed by the Mississippi Workmen’s Compensation Act. The Mississippi Supreme Court has consistently stated that those cases which fall within that public policy must be decided in accordance with it, regardless of whether the specific statutory rules are themselves directly applicable. Brown v. Estess, 374 So.2d 241 (Miss.1979); McCluskey v. Thompson, 363 So.2d 256 (Miss.1978). Thus, in the action sub judice, the fact that the benefits received by plaintiff were paid under the FECA is of no import. The FECA is the government’s answer to workmen’s compensation and embodies a policy similar to that of the state workmen’s compensation law. Additionally, the status of the federal government and/or TVA under the FECA is clearly analogous to that of a compensation paying employer under the Mississippi Workmen’s Compensation Act. Furthermore, the payments received by the employee under the FECA serve the same purpose as do payments under the Mississippi Act—providing more immediate no-fault payments for work related injuries. As a result, FECA clearly complies with the public policy expressed by the Mississippi Workmen’s Compensation Law. Thus, in conformity with that policy and the decisions interpreting that policy, the immunity accorded to employers and co-employees by that public policy are equally applicable to persons receiving benefits under the FECA, even though the specific statutory rules are not themselves directly applicable.

In the action sub judice, plaintiff’s receipt of benefits under the FECA bars the present action against defendant, a co-employee, as a matter of Mississippi law. As a result, no genuine issues of material fact having been found to exist for resolution at a trial of this matter, defendant is entitled to summary judgment as a matter of law.

An order in conformity with this opinion shall issue.

      . Manypenny addressed the question in the context of a criminal prosecution removed to federal court pursuant to 28 U.S.C. § 1442(a)(1). No case has been found which addresses this question in the civil arena. However, the court is of the opinion that the reasoning applied by the Court in Manypenny is equally applicable to civil actions removed to federal court pursuant to 28 U.S.C. § 1442(a)(1).

      . The defendant cites several cases wherein suits brought under the Federal Tort Claims Act were held to be barred by state workmen’s compensation statutes. See Giannuzzi v. Doninger Metal Products, 585 F.Supp. 1306 (W.D.Pa.1984); In re All Maine Asbestos Litigation, 589 F.Supp. 1571 (D.Me.1984). Although these cases are analogous to the situation presented in the action sub judice, they are clearly not controlling.

      . Plaintiff also asserts that the FECA does not bar co-employee suits. This has never been made an issue by defendant. Furthermore, it is well established in this circuit that the FECA poses no bar to such an action. Allman v. Hanley, 302 F.2d 559 (5th Cir.1962).

      . The Mississippi Workmen’s Compensation Act does not include either the federal government or the TVA in its definition of employer, nor could it, for a state has no power to require the federal government, or its agencies, to participate in a workmen's compensation program. However, the Act does not exclude the federal government or its agencies from the coverage of the Act. See MISS.CODE ANN. §§ 71-3-3 (1984, as amended); 71-3-5 (1983, as amended). The sole employers specifically excluded under the Act are transportation and maritime employments for which a rule of liability is provided by the laws of the United States. See MISS. CODE ANN. § 71-3-5.