author: GARRITY, District Judge.

text:
    Dimitrios AVRAMIDIS et al., Plaintiffs, v. ATLANTIC RICHFIELD COMPANY et al., Defendants.
    Civ. A. No. 85-3972-G.
    United States District Court, D. Massachusetts.
    Nov. 27, 1985.
    Preliminary Injunction Nov. 29, 1985.
    Myles Jacobson, Robert Weiner, Boston, Mass., for plaintiffs.
    Richard Powers, Parker, Coulter, Daley & White, Boston, Mass., for defendants.
    Brian T. Kenner, Nutter, McClennen & Fish, Boston, Mass., for Shell Oil Co.
   MEMORANDUM AND ORDER FOR PRELIMINARY INJUNCTION

GARRITY, District Judge.

This case involves the termination of 29 gas station franchises in Massachusetts. Plaintiffs are 25 individuals and four partnerships who operate these gas stations in accordance with franchise agreements with the Atlantic Richfield Company (“Arco”). They challenge the propriety of Arco’s termination, asserting that it does not conform to the strictures of the Petroleum Marketing Practices Act (“PMPA”), 15 U.S.C. § 2801 et seq. Pursuant to the PMPA, 15 U.S.C. § 2805(b)(2), plaintiffs now seek a preliminary injunction enjoining Arco from terminating their franchises and ordering Arco to provide plaintiffs with the right of first refusal to purchase from Arco the real estate or leasehold upon which their gas stations are located.

On May 21,1985, Arco sent notices to the plaintiffs that it was withdrawing from the gasoline market east of the Mississippi River and terminating its franchise agreements in that market area effective November 30, 1985. Arco’s decision to withdraw was made at an April 28, 1985 Arco Board of Directors meeting, more than a month after Arco had renewed one of plaintiffs’ franchises. A review of the six-month period ending March 1985 revealed that, due to the recent oil glut, Arco’s profits in this market area were at their lowest since 1981 despite an extensive capital improvements plan. In addition, Arco’s withdrawal in this area was part of a larger restructuring plan commenced in April 1985 in an effort to fend off the takeover bids plaguing other major oil companies.

Arco entered into a purchase and sale agreement with the Shell Oil Company (“Shell”) on July 19,1985 for the properties currently leased by the plaintiffs. In early September, 1985 Shell sent each of the plaintiffs a dealer agreement, a motor fuel station lease, and a notice concerning Shell’s Variable Rent Program (“VRP”). The dealer agreement provided for the franchisee’s use of Shell products. The motor fuel station lease set forth the rents Shell would charge the franchisee for the use of the premises over a three-year period. As the accompanying notice on the VRP explained, however, Shell contemplated that it would offer its VRP to the former Arco franchisees after the first six months of their Shell leases. The VRP provides for rent reductions based on a franchisee’s gasoline sales. A letter accompanying these documents informed the plaintiffs that if they did not execute the dealer agreement and motor fuel station lease within fourteen days of receipt, their failure to do so would be construed as a rejection of Shell’s offer. Each plaintiff subsequently signed these agreements.

The PMPA provides the ground rules for the franchisor’s termination of a gas station franchise. The termination at issue here, a termination because of withdrawal from the market, is specifically governed by 15 U.S.C. § 2802(b)(2)(E). This subsection provides that a franchisor may terminate a franchise if it decides to withdraw from the market area as long as that decision was made “in good faith and in the normal course of business”; it was “made after the date such franchise was entered into or renewed”, and it was “based upon the occurrence of changes in relevant facts and circumstancés after such date.” 15 U.S.C. § 2802(b)(2)(E)(i). Furthermore, if, as in this case, the franchisor seeks to sell to a third party, here Shell, its interest in the property upon which the franchise is located, said third party must offer, “in good faith, a franchise to the franchisee on terms and conditions which are not discriminatory to the franchisee as compared to franchises then currently being offered by such other person or franchises then in effect and with respect to which such other person is the franchisor.” 15 U.S.C. § 2802(b)(2)(E)(iii).

Plaintiffs seek to prevent Arco from terminating their franchises, asserting that the termination does not conform to § 2802(b)(2)(E). They have moved for a preliminary injunction pursuant to the PMPA, 15 U.S.C. § 2805(b)(2), under which the court is instructed to grant a preliminary injunction upon the franchisee’s showing that (i) the franchise has been terminated and (ii) “there exist sufficiently serious questions going to the merits to make such questions a fair ground for litigation.” 15 U.S.C. § 2805(b)(2)(A). Before ordering a preliminary injunction, the court must also determine that, on balance, the hardship that the franchisee will suffer if such relief is not granted outweighs the hardship the franchisor will suffer if it is granted. 15 U.S.C. § 2805(b)(2)(B).

It is undisputed that the franchises have been terminated. It remains for plaintiffs to demonstrate that this case raises “sufficiently serious questions” to justify the granting of a preliminary injunction. While somewhat less exacting than the “likelihood of success” standard generally applicable to preliminary injunctions, the PMPA’s standard of “sufficiently serious questions” does require that the plaintiffs demonstrate “a reasonable chance for success on the merits.” Mobil Oil Corp. v. Vachon, D.Mass.1983, 580 F.Supp. 153, 159. Plaintiffs contend that they have raised two issues concerning the propriety of Arco’s termination which satisfy this standard.

First, they argue that Arco’s decision to withdraw from the market was not made in good faith and that it was made before Arco had renewed several of plaintiffs’ franchises. Plaintiffs present scant proof of this charge. Specifically, they note that Arco sent them notices of termination only a few months after it had reached franchise agreements with several of the plaintiffs. Plaintiffs know of no events during this intervening period which would occasion a withdrawal. Furthermore, plaintiffs allege that it is unlikely Arco would have reached such a significant decision in such a short period of time. However, these allegations are offset by the detailed affidavit of Arco’s executive president. The affidavit sets out the circumstances leading to Arco’s decision to withdraw, and it persuades the court that the plaintiffs do not have a reasonable chance of success in proving that Arco’s withdrawal was made in bad faith.

Plaintiffs also challenge Arco’s termination on the grounds that the successor franchisor, Shell, has not offered them a franchise on non-discriminatory terms. This challenge focuses on the VRP. Shell refuses to disclose the terms of the VRP on the ground that it is a trade secret. Plaintiffs contend that the VRP is an integral component of Shell’s offer of a franchise. In fact, plaintiffs assert that if Shell did not offer them the VRP, it would be discriminating against them relative to the other Shell franchisees who enjoy the rent reductions provided by the VRP. However, plaintiffs also assert that since Shell refuses to explain how the VRP is calculated, it has not offered them a franchise on sufficiently definite terms. Given Shell’s lack of specificity, in fact, plaintiffs conclude that it has not made an offer of a franchise.

In response to these arguments, Shell submits that the VRP is an unilateral and voluntary offer on its part and not an amendment to the lease, noting that the lease agreements it sent to plaintiffs provided fixed rental terms, and it is these terms which constitute Shell’s offer, not the VRP. Moreover, it asserts that the agreements it sent to plaintiffs are the same type of agreements currently in force with its dealers nationwide. Therefore, in Shell’s view, it has made a nondiscriminatory offer whose terms are definite and enforceable.

The court concludes that with regard to this issue, plaintiffs have presented a “sufficiently serious question” within the meaning of § 2805(b)(2). On the present record it appears that plaintiffs have a reasonable chance of proving that the VRP constituted a part of Shell’s offer of a franchise. Not only was a notice of the VRP sent to plaintiffs in a packet containing Shell’s dealership and lease agreements, but plaintiffs’ affidavits also establish that oral representations were made to them that the VRP would be employed to calculate their rent. Furthermore, Shell concedes that the VRP has been offered to plaintiffs, albeit unilaterally. Whether the VRP is a modification of the rental term or an independent term seems irrelevant to the central question of whether it constitutes part of Shell’s offer of a franchise. Whether it is a rental term or otherwise, the VRP will have a substantial effect on the amount a franchisee pays for doing business on the franchisor’s premises. Hence, the court considers the VRP to be a part of the franchise offer.

As such, the VRP undermines the offer’s validity. The VRP offers rent reductions on the basis of a franchisee’s gasoline sales, but Shell does not specify how such reductions are to be determined. Absent a “practicable method of determination,” the offer is “too indefinite and uncertain for enforcement.” A. Corbin, Corbin on Contracts, § 97 (1963). That Shell reserves the right to vary the rents it charges in accordance with some type of VRP is not in itself defective, see Corbin on Contracts, § 98, but the failure to specify how the rent will be reduced does appear to render the offer invalid. Cf. Meyer v. Amerada Hess Corp., D.N.J.1982, 541 F.Supp. 321, and Palmieri v. Mobil Oil Corp., D.Conn.1982, 529 F.Supp. 506 (rental formulas disclosed and variable rent program upheld).

Having determined that a “sufficiently serious question” exists, the court must now determine whether a balance of the hardships favors granting the preliminary injunction. As Congress has recognized, “Presumably the imposition of any injunctive relief upon the franchisor imposes a hardship.” S.Rep. No. 731, 95th Cong. 2d Sess. 41, reprinted in 1978 U.S.Code Cong. & Ad.News 873, 899. In the instant case, a preliminary injunction would enjoin Arco from terminating 29 franchises in a market area from which it seeks to withdraw due to lack of profitability. Additionally, although unsupported by affidavit, Arco and Shell contend that a preliminary injunction would disrupt their agreement concerning the sale of 360 Arco stations on the east coast.

Plaintiffs argue that they will suffer hardship if the termination is not enjoined because Shell gasoline is currently more expensive than the Arco gasoline they are now selling. They contend that they will lose substantial business if forced to sell Shell. Yet this is not necessarily the case. Shell’s marketing plan differs from Arco’s and it may increase gasoline sales even at a higher price. The court is unable to determine whether a switch to Shell gasoline will impose hardship on the plaintiffs.

The court does recognize that because of the vague nature of the VRP, denying the preliminary injunction places the plaintiffs in an extremely vulnerable position. True, for the first six months of their leases, plaintiffs’ stated rents will be lower than they were under Arco. But after the first six months, these stated monthly rents become considerably higher, e.g., from $1300 to $2900, from $2000 to $4700, from $2000 to $4500, etc. and plaintiffs contend that such high rents would impose severe hardship. Shell points out that, after the first six months, the VRP will go into effect and reduce the rents stated in plaintiffs’ leases. Because the terms of the VRP have not been specified, however, plaintiffs have no guarantee that it will be applied in a manner that will allow them to continue their operations. Conceivably, without stated standards, Shell could apply the VRP in an arbitrary, or even discriminatory, manner based on plaintiffs’ conformity to Shell’s marketing plans. It is this potential for arbitrary treatment that the PMPA was specifically designed to address. See S.Rep. No. 731, 95th Cong. 2d Sess. 17-19, reprinted in 1978 U.S.Code Cong. & Ad. News 875-77. Accordingly, even though the court recognizes that Arco may suffer hardship, the court concludes that the balance of hardships favors the plaintiffs.

It is ordered, therefore, that plaintiffs’ motion for a preliminary injunction be granted to the extent it enjoins Arco’s termination of their franchises. The motion is denied however to the extent it seeks an order directing Arco to offer plaintiffs an opportunity to purchase Arco’s interest in the franchises’ premises. Such relief would scarcely be preliminary; it would be permanent. Moreover, even assuming invalid termination, the statute does not provide plaintiffs with this remedy.

PRELIMINARY INJUNCTION

After hearing and consideration of plaintiffs’ motion for a preliminary injunction, and on the grounds stated in the memorandum of decision filed November 27, 1985, it is ordered that the defendants Arco Petroleum Products Co. and Shell Oil Company, their officers, agents, servants, employees, attorneys, and all other persons in active concert or participation with them who receive actual notice of this order are enjoined as follows until further order of the court:

(1) that defendant Arco continue to provide gasoline and perform all other terms of the franchise relationship with each plaintiff dealer for the duration of the dealer’s lease period, and conform to the provisions of 15 U.S.C. § 2801 et seq. with regard to any non-renewal; and

(2) that defendant Arco not take any action to alienate its ownership interest in said premises, and that defendant Shell take no action to acquire any such interest except in conformity with the provisions of 15 U.S.C. § 2801 et seq.

      . Plaintiffs also seek to have the court enjoin enforcement of their agreements with Shell Oil Company on the grounds of unconscionability. In light of the disposition of plaintiffs’ motion under the PMPA, the court does not address this question. Moreover, consideration of this question may be precluded by the PMPA itself. See 15 U.S.C. § 2806.

      . The facts stated in this and the next paragraph come from defendants’ affidavits and are found by the court for purposes of the pending motion only.

      . At Arco’s request, Shell also sent each plaintiff a mutual termination agreement. This document set forth an agreement between Arco and the franchisee to terminate their franchise relationship provided that the franchisee's franchise agreement with Shell commenced on or before November 30, 1985. Only four plaintiffs signed this mutual termination agreement.

      . § 2802(b) provides in relevant part:
      (2) For purposes of this subsection, the following are grounds for termination of a franchise relationship—
      (E) In the case of any franchise entered into prior to June 19, 1978, and in ihe case of any franchise entered into or renewed on or after such date (the term of which is 3 years or longer, or with respect to which the franchisee was offered a term of 3 years or longer), a determination made by the franchisor in good faith and in the normal course of business to withdraw from the marketing of motor fuel through retail outlets in the relevant geographic market area in which the marketing premises are located, if—
      (i) such determination—
      (I) was made after the date such franchise was entered into or renewed, and
      (II) was based upon the occurrence of changes in relevant facts and circumstances after such date;
      (ii) the termination or nonrenewal is not for the purpose of converting the premises, which are the subject of the franchise, to operation by employees or agents of the franchisor for such franchisor’s own account; and
      (iii) in the case of leased marketing premises—
      (I) the franchisor, during the 180-day period after notification was given pursuant to section 2804 of this title, either made a bona fide offer to sell, transfer, or assign to the franchisee such franchisor’s interests in such premises, or, if applicable, offered the franchisee a right of first refusal of at least 45 days duration of an offer, made by another, to purchase such franchisor’s interest in such premises; or
      (II) in the case of the sale, transfer, or assignment to another person of the franchisor’s interest in such premises in connection with the sale, transfer, or assignment to such other person of the franchisor’s interest in one or more other marketing premises, if such other person offers, in good faith, a franchise to the franchisee on terms and conditions which are not discriminatory to the franchisee as compared to franchises then currently being offered by such other person or franchises then in effect and with respect to which such other person is the franchisor.

      . § 2805(b) provides in relevant part:
      (2) Except as provided in paragraph (3), in any action under subsection (a) of this section, the court shall grant a preliminary injunction if—
      (A) the franchisee shows—
      (i) the franchise of which he is a party has been terminated or the franchise relationship of which he is a party has not been renewed, and
      (ii) there exist sufficiently serious questions going to the merits to make such questions a fair ground for litigation; and
      (B) the court determines that, on balance, the hardships imposed upon the franchisor by the issuance of such preliminary injunctive relief will be less than the hardship which would be imposed upon such franchisee if such preliminary injunctive relief were not granted.

      . Shell also asserts that it would suffer if the termination were enjoined, but the PMPA directs the court to consider the hardships only of the franchisor and the franchisee, not those of any successor franchisor. See 15 U.S.C. § 2805(b)(2)(B).

      . This order is without prejudice to defendants' seeking reconsideration should Arco offer plaintiffs an opportunity to purchase the premises or should Shell specify the terms of its VRP.
      The court has discretion in ordering plaintiffs to post a bond prior to the issuance of the preliminary injunction. See 15 U.S.C. § 2805(b)(3). In the instant case, defendants have not made an adequate showing regarding such a bond. The preliminary injunction, therefore, is ordered without a requirement that plaintiffs post a bond. This order is made without prejudice to defendants’ seeking reconsideration pursuant to procedural order to be entered.

      . It is not ordered at this time that plaintiffs give security, except that this may be ordered in accordance with the court’s procedural order entered contemporaneously herewith.


source: Caselaw Access Project

author: TERRENCE WILLIAM BOYLE, District Judge.

license: Public Domain

text:
    GLAXO, INC., Plaintiff, v. Margaret HECKLER, Secretary, Health and Human Services, et al., Defendants.
    No. 85-1503-Civ-5.
    United States District Court, E.D. North Carolina, Raleigh Division.
    Nov. 27, 1985.

      Peter W. Safir, Kleinfeld, Kaplan and Becker, Washington, D.C., Randel E. Phillips, Charlotte, N.C., William D. Dannelly, Moore, Van Allen, Allen & Thigpen, Raleigh, N.C., for plaintiff.
    Donald O. Beers, Assoc. Chief Counsel for Enforcement, Sandra I. Barnes, Trial Atty., Food & Drug Admin., Rockville, Md., Joel E. Hoffman and Willard- K. Tom, Sutherland, Asbill & Brennan, Washington, D.C., Eura DuVal Gaskins, Jr. and Robert W. Spearman, Sanford, Adams, McCullough & Beard, Raleigh, N.C., for defendants.
   ORDER

TERRENCE WILLIAM BOYLE, District Judge.

This matter came before the court for hearing on the plaintiff’s motion for preliminary injunction pursuant to Rule 65 of the Federal Rules of Civil Procedure. Plaintiff Glaxo commenced an action in this court on November 14, 1985, for declaratory and injunctive relief against the Secretary of Health and Human Services and the Commissioner of Food and Drugs. Prior to the hearing, Eli Lilly and Company, on motion, was allowed to intervene as a party defendant pursuant to Federal Rule of Civil Procedure 24(a). Jurisdiction is conferred by 28 U.S.C. § 1331, 1337, 1361 and 5 U.S.C. § 704.

Glaxo is a manufacturer of prescription pharmaceutical products. Among the products it produces are antibiotic drugs. Glaxo seeks relief in federal court in anticipation of the Food and Drug Administration (FDA) approving an application by defendant Lilly, a competitor of Glaxo, to market an antibiotic drug named Tazidime. Tazidime is a generic version of Glaxo’s antibiotic drug, Ceftazidime. Ceftazidime is currently being marketed by Glaxo following its approval by the FDA on July 19, 1985. Lilly filed an application with the FDA to market Tazadime on July 19, 1985. That application is currently pending before that agency.

Anticipating that Lilly’s pending application was about to be approved, Glaxo filed with the FDA a Petition for Stay of Action on October 10, 1985. Glaxo urged the agency to withhold approval of Lilly’s application until July 19, 1990. The FDA published a public notice of the Glaxo Petition in the Federal Register. 50 Fed.Reg. 47601 (November 12, 1985). On November 13, 1985, the FDA denied Glaxo’s request for interim relief and announced its intention to grant effective approval of Abbreviated New Drug Applications for generic versions of Ceftazidime. This declaratory action judgment was filed the following day. In its complaint, Glaxo alleges that the FDA’s imminent approval of generic versions of Ceftazidime will be in violation of the Federal Food, Drug and Cosmetic Act (the FDCA), 21 U.S.C. § 301, et seq., the Administrative Procedure Act, 5 U.S.C. §§ 551-59, 701-06, and federal regulations issued by the FDA.

DISCUSSION

A district court may properly consider four factors when evaluating a motion for a preliminary injunction. Those factors are probability of success on the merits, irreparable injury to the plaintiff, harm to other interested parties, and the public interest. Blackwelder Furniture Company v. Seilig Manufacturing Company, 550 F.2d 189, 193 (4th Cir.1977). However, the two most important factors are those of probable irreparable injury to the plaintiff without a decree and of likely harm to the defendant with a decree. In instances in which the plaintiff demonstrates irreparable injury, he need not show a likelihood of success. Id. at 196. However, the importance of probability of success on the merits increases as the probability of irreparable injury diminishes. Id. at 195. The public interest is always to be considered. Id.

With this standard in mind, the court now examines the arguments of the respective parties in this action to determine whether injunctive relief is appropriate at this stage of the proceedings. It is unnecessary for the purposes of this order to specifically address the relationship between Glaxo and Lilly regarding patent rights to cephalosporin products such as Ceftazidime. Instead, the court merely notes that these parties have a long-standing relationship dating back to 1969 which allows Lilly to manufacture cephalosporin products over which Glaxo has the patent right in return for Glaxo’s exercising similar rights under Lilly’s cephalosporin patents outside the United States. Ceftazidime falls within the scope and terms of this non-exclusive licensing agreement.

Plaintiff Glaxo has two grounds upon which it moves for injunctive relief. First, it asserts that the 1984 amendments to the FDCA, i.e., the Drug Price Competition and Patent Term Restoration Act of 1984, Pub.L. No. 98-417, provided manufacturers of pioneer antibiotic drugs such as Ceftazidime with a five year exclusive marketing period during which the FDA cannot approve generic versions of the pioneer antibiotic drug. See 21 U.S.C. § 355(j)(4)(D)(ii) (1985). Second, Glaxo contends that the FDA may not approve Lilly’s generic drug Tazidime because that agency agreed not to release to the public the safety and efficacy data supporting Glaxo’s successful application for Ceftazidime.

Both grounds raise questions of first impression within this circuit, if not nationally. The court will first address Glaxo’s second ground for relief. Simply stated, the court finds this argument to be meritless. Glaxo itself requested that the FDA withhold public dissemination of its scientific data relating to Ceftazidime; the FDA agreed to withhold this information, but not for the purpose of allowing Glaxo to develop a monopoly in marketing Ceftazidime in this country. The FDA’s generous action cannot be construed to bar that agency from approving generic versions of Ceftazidime for marketing in this country. Moreover, FDA regulations do not require that approval of generic versions of antibiotic drugs be based upon public efficacy and safety data.

Therefore, this second ground for equitable relief does not justify imposition of a preliminary injunction. Glaxo cannot show that any injury it suffers without a decree outweighs Lilly’s injury suffered by issuance of such decree. Glaxo has also failed to establish the likelihood of success on the merits regarding its second cause of action. Lastly, the public interest dictates that this ground for equitable relief be rejected: the FDA cannot be enjoined from approving competitive drugs on the basis of proposed regulations never enacted and upon actions totally unrelated to the approval process mandated by Congress in § 355 and § 357.

Glaxo’s major argument is that a 1984 amendment to 21 U.S.C. § 355, in combination with FDA regulations, place antibiotics and all generic versions of them within the statutory scheme enunciated for non-antibiotic drugs, i.e., § 355. After reviewing the statutory scheme for approval of antibiotic and non-antibiotic drugs, as well as pertinent federal regulations, the court finds for the reasons given hereafter that Glaxo has failed to demonstrate a need for issuance of a preliminary injunction.

Traditionally, the FDA approved antibiotic drugs pursuant to 21 U.S.C. § 357; non-antibiotic drugs were approved pursuant to 21 U.S.C. § 355. Prior to a 1984 amendment, data resulting from safety and efficacy testing were required to accompany any application for marketing of a non-antibiotic drug. The FDA would not approve a generic copy of a non-antibiotic drug without safety and efficacy data. The safety and efficacy requirements effectively required the same level of testing and empirical study as would be required for the initial approval of a drug. For this reason, few generic copies of non-antibiotic drugs were approved pursuant to § 355 between the years 1962 and 1984.

However, the FDA routinely approved generic copies of antibiotic drugs pursuant to § 357 of the FDCA. Instead of requiring safety and efficacy tests for each generic version of an antibiotic drug; the FDA created a monograph of a pioneer antibiotic drug once that drug was approved. This monograph for all practical purposes was a recipe containing the chemical composition of the approved pioneer antibiotic drug. Manufacturers of generic versions of a pioneer antibiotic drug would receive approval to market their products provided the generic copies were identical to the previously approved drug as described in the monograph. In short, since the FDA had available on file all safety and efficacy data for a pioneer antibiotic drug, a manufacturer seeking to produce a generic copy of the drug was not required to replicate the scientific data accompanying the pioneer drug’s application.

The 1984 amendment to § 355, contained in Title I of the Drug Price Competition and Patent Term Restoration Act, substantially changed the method by which the FDA approved proposed generic copies of non-antibiotic drugs. Congress created a new form of drug application, i.e., a “New Drug Application.” See § 355(b). Following the 1984 amendment, applications for approval of generic versions of non-antibiotic drug are treated by the FDA in a way similar to that treatment afforded to antibiotic drugs. By using an “Abbreviated New Drug Application,” a manufacturer of a generic version of a non-antibiotic drug may rely on existing data and information on file with the FDA in order to satisfy the safety and efficacy requirements of federal food and drug law.

Congress recognized that this valuable concession to manufacturers of generic non-antibiotic drugs would significantly prejudice those pharmaceutical manufacturers involved in the research and production of pioneer drugs of this sort. Consequently, Congress adopted in § 355© various exclusivity periods during which submission of an Abbreviated New Drug Application pursuant to § 355© is prohibited. In particular, § 355(j)(4)(D)(ii) prohibits the filing of such an application for five years after the first New Drug Application is approved; five years must pass before a generic non-antibiotic drug is approved under § 355(b).

This review of the statutory procedure for approving antibiotic and non-antibiotic drugs demonstrates that many of the traditional distinctions between the two types of drugs were minimized with the passage of the 1984 amendments. Another traditional distinction between the two types of drugs, batch certification, was to a large extent removed in 1982 by federal regulation. Traditionally,- antibiotic drugs subject to approval under § 357 were subject to batch certification requirements because of the peculiar characteristics and nature of these drugs. The FDA is authorized to certify each batch of a pioneer or generic antibiotic drug to assure that each particular batch meets the quality standards enunciated in the pertinent monograph. In 1982, the FDA, because of a history of experience with these drugs, exempted a broad spectrum of them from the requirements of batch certification. See 21 C.F.R. § 433.1 (1982).

The 1982 FDA regulation and 1984 amendments to the FDCA resulted in antibiotic and non-antibiotic drugs being treated in a very similar fashion. Plaintiff Glaxo interprets the 1982 batch certification exemption, in conjunction with § 357(e), as placing all antibiotic drug applications under the auspices of § 355. Thus, Glaxo argues that its application for Ceftazidime, as well as Lilly’s pending application, constitute New Drug Applications as defined in § 355(b). Since Ceftazidime is governed by § 355, so the argument goes, that section’s five year exclusivity period applies.

However, the FDA’s 1982 batch certification regulation did not create a blanket exemption placing all future applications for approval of antibiotic drugs within the confines of § 355. That regulation, 21 C.F.R. § 433.1, specifically states that any exemption from batch certification occurs only following approval of the antibiotic under § 357:

(c) In accordance with the provisions of [§ 357(e)], an antibiotic-containing drug for human use exempt from the requirements for batch certification under this section is subject following its approval to [§ 355]____ (emphasis added)

21 C.F.R. § 433.1(c) (1982).

The language found in the statute and regulations themselves clearly reveals that the FDA’s approval of antibiotic drugs constitutes an exercise of legislatively delegated authority pursuant to 21 U.S.C. § 357. The FDA approved Glaxo’s Ceftazidime application pursuant to § 357, and presumably may soon approve Lilly’s Tazidime application under that same provision. Glaxo did not contest the FDA’s approval of Ceftazidime under § 357 when it was first informed of that approval in July, 1985. This court may not rewrite legislation which Congress expressly considered so as to engraft the exclusivity provisions of § 355 on to antibiotic drugs.

Moreover, the court notes that Glaxo lobbied Congress to include in the 1984 legislation language amending § 357 so as to create exclusivity periods similar to those added to § 355. The arguments Glaxo presents to this court were before the Congress in 1984. Glaxo recognized at that time that the Congress, and not the federal courts, are the proper forum for amending the laws of the United States. Having lost its battle in the proper forum for presenting this petition, Glaxo is now prevented by the separation of powers doctrine from obtaining relief in this judicial forum.

Finally, the court notes that an interpretation of 21 C.F.R. § 433.1 is critical for resolution of this issue. The FDA’s interpretation of its own regulation is entitled to some deference in this instance. The court’s construction of this regulation, in conjunction with §§ 355 and 357, puts to rest the plaintiff’s claim for injunctive relief.

Glaxo has failed to meet the Black-welder standards-for obtaining a preliminary injunction. In considering the probable injury to Glaxo without a decree and the likely harm to the FDA and Lilly with a decree, it is clear that a balance has not been struck in Glaxo’s favor. Moreover, Glaxo has failed to show a likelihood of success on the merits of either of the two grounds it presents for injunctive relief. Finally, the public interest in this case clearly is best served by allowing federal agencies to interpret their own regulations and to operate unimpeded by the courts so long as they operate within their legislatively-delegated authority and within the confines of the Administrative Procedure Act.

Accordingly, Glaxo’s motions for a preliminary injunction and for a temporary restraining order are hereby DENIED.

      . The FDA withheld this information to allow Glaxo to develop foreign markets for the sale of Ceftazidime.

      . 21 U.S.C. § 357(e) states in pertinent part: No drug which is subject to [§ 357] shall be deemed to be subject to any provision of § 355 ... except a new drug exempted from the requirements of this section ... pursuant to regulations promulgated by the Secretary.


author: CARL O. BUE, Jr., District Judge.

text:
    UNITED STATES of America v. Eugene PETAK, Philip Lee Hutchins, Robert A. Rivera, James H. Hutchins, Randall Ray Moore, James Frank Martin.
    Cr. No. H-84-238-S.
    United States District Court, S.D. Texas Houston Division.
    Nov. 27, 1985.
    Philip H. Hilder, Asst. U.S. Atty., Houston, Tex., for the Government.
    Marjorie Meyers, Asst. Federal Public Defender, Houston, Tex., for defendant Petak.
    John Ackerman, Houston, Tex., for defendant Philip Lee Hutchins.
    Scott W. Carpenter, Houston, Tex., for defendant Rivera.
    Stuart Kinard, Austin, Tex., for defendant James H. Hutchins.
    Doug O’Brien, Houston, Tex., for defendant Moore.
    George M. Secrest, Houston, Tex., for defendant Martin.
   ORDER

CARL O. BUE, Jr., District Judge.

Pending before this Court is defendants’ motion to dismiss the indictment based on the government’s alleged violation of the Speedy Trial Act and the Local Speedy Trial Plan. After prudent consideration of the relevant facts and law, including the memoranda filed by the parties, this Court concludes, for the reasons discussed herein, that defendants’ motion to dismiss must be denied.

I. Factual Background

On October 12, 1984, defendants Philip Lee Hutchins, James H. Hutchins, Robert Rivera, Randall Ray Moore and James Frank Martin were arrested by federal and state officers on drug related charges. The first indictment was returned by the Grand Jury on November 15, 1984 in Houston, Texas on the same charges for which defendants were arrested. Since thirty-three (33) days had elapsed between the date of arrest and the return of said indictment, the defendants' motion to dismiss the indictment was granted by this Court, without prejudice, on April 8, 1985, due to the government’s violation of the Speedy Trial Act. 18 U.S.C. § 3161(b). More than fifty (50) days elapsed between the date of the dismissal and May 30, 1985, when the grand jury’s indictment in the above-referenced cause was returned against the defendants charging the same criminal conduct which was the subject of the earlier dismissed indictment. Defendants were arrested, arraigned, and released on bond four days later on June 3, 1985. At a pre-trial conference held on August 26, 1985, defendants urged this Court to dismiss the superseding indictment based upon alleged violations of the Speedy Trial Act and the Local Speedy Trial Plan. This Court deferred ruling upon defendants’ motion to dismiss in order to make a careful assessment of the facts and the law in this case, and directed the parties to file supplemental memoranda.

II. Legal Background

Before arriving at a conclusion, this Court was required to consider the purpose and legislative history of the Speedy Trial Act, as well as the applicability of the Local Speedy Trial Plan to the facts in this case.

The purpose of the Speedy Trial Act is to implement the right to a speedy trial which is guaranteed by the Sixth Amendment to the Constitution of the United States. See S.Rep. No. 1021, 93d Cong.2d Sess. 1 (1974). This right is designed to limit the time during which criminal charges are. hanging over a person’s head unresolved. See United States v. Marion, 404 U.S. 307, 317-18, 92 S.Ct. 455, 462, 30 L.Ed.2d 468 (1971). Thus, the Sixth Amendment right to a speedy trial does not arise until charges are pending against the accused. See United States v. MacDonald, 456 U.S. 1, 7, 102 S.Ct. 1497, 1501, 71 L.Ed.2d 696 (1982). After a person is arrested and before he is arraigned, criminal charges are hanging over him in a palpable sense even if he is free on bond. See, e.g., United States v. Marion, supra, 404 U.S. at 319— 21, 92 S.Ct. at 462-63. In determining whether a speedy trial has been denied, the length of delay is therefore measured from the time the defendant was accused. See id.

Although the legislative history of the Speedy Trial Act provides little insight into the purpose behind the thirty day arrest to indictment time limit, it must be assumed that Congress intended to establish an objective standard which eschews the need for a case by case analysis applied in the Sixth Amendment context. See Barker v. Wingo, 407 U.S. 514, 92 S.Ct. 2182, 33 L.Ed.2d 101 (1972), and its progeny.

In the case before this Court, the original indictment was dismissed upon the defendants’ motion because the government’s preindictment delay was fatal under the Speedy Trial Act. After considering the relevant factors outlined in 18 U.S.C. § 3162, this Court determined that defendants’ motion to dismiss should be granted without prejudice. Defendants now urge three grounds in support of their motion to dismiss the superseding indictment including the following: (1) the time limit of § 3161(b) should be measured from the date of the original arrest, or (2) the time limit should be measured from the date of the dismissal of the first indictment, and (3) the local rules require dismissal due to the government’s violation of Part II, section 3(6)(a) of the Local Speedy Trial Plan for the Southern District of Texas. This Court is compelled to reject the defendants’ arguments on all three points.

First, the defendants rely on faulty dicta in United States v. Peters, 587 F.2d 1267 (D.C.Cir.1978). The reasoning of the Peters court, and the defendants’ arguments premised thereon, must be criticized for reliance on a Senate Report prepared when the draft of the Speedy Trial Act did not permit reprosecution after dismissal based on Speedy Trial grounds. See United States v. Abernathy, 688 F.2d 576, 579-80 (8th Cir.1982). The final version of the Speedy Trial Act clearly allows reprosecution after a dismissal without prejudice based upon the government’s violation of the Act. Thus, the Speedy Trial Act provisions that defendants now attempt to use to dismiss the superseding indictment are no longer applicable.

After dismissal of an indictment under § 3161(d)(1), the time limits imposed by § 3161(b) begin to run anew from the date of the subsequent arrest. Although § 3161(d)(1) is not a model of legislative clarity, this Court, like other courts which have considered the issue, interprets the language of this section to mean that “where the indictment is dismissed upon motion of the defendant, the slate is wiped clean, and any subsequent step toward prosecution of the defendant causes the time period to begin running anew.” United States v. McCown, 711 F.2d 1441 (9th Cir.1983) (see also cases cited therein).

This Court rejects the defendants’ “tacking argument” for three reasons. First, defendants’ interpretation would nullify the provisions of § 3162(a)(1). Since the applicable time limits already have been violated by the government, a dismissal without prejudice based on Speedy Trial Act grounds would be meaningless because any superseding indictment would be void ab initio. Second, the defendants’ interpretation would similarly nullify the provisions of § 3161(d)(1). In considering the interrelationship of § 3161(b) and § 3161(d)(1), as it relates to defendants’ argument raised herein, the Puett court stated as follows:

A contrary interpretation would render section 361(d)(1) superfluous because section 3161(b) already places a thirty-day limit on the period between arrest or issuance of summons and indictment. Were we to read section 3161(d)(1) as Puett maintains, section 3161(b) alone would be sufficient to require dismissal of an indictment returned more than thirty days after the filing of a previously dismissed complaint. Congress drafted section 3161(d)(1) precisely to preclude such interpretation.

United States v. Puett, 735 F.2d 1331, 1334 (11th Cir.1984).

Third, the defendants’ argument is faulty because the resulting per se rule would impose a stricter burden on the government than is required by the Sixth Amendment. In other words, to obtain a dismissal based on constitutional grounds, the burden is on the accused to make some showing of prejudice which was caused by the delay of his trial. The interests to be considered in determining prejudice to the defendant are: (1) prevention of oppressive pretrial incarceration; (2) minimizing anxiety and concern of the accused, and (3) limiting the possibility that the defense will be impaired. See Barker v. Wingo, supra, 407 U.S. at 532, 92 S.Ct. at 2192-93. In considering the reasons for the pretrial delay, the Supreme Court has said that different weights should be assigned to different reasons resulting in delay. Thus, a deliberate attempt to delay the trial in order to hamper the defense would be weighed heavily against the government. A more neutral reason such as. negligence should be weighed less heavily, but nevertheless should be considered since the ultimate responsibility for such circumstances must rest with the government rather than the defendant. See Strunk v. United States, 412 U.S. 434, 93 S.Ct. 2260, 37 L.Ed.2d 56 (1973).

It is significant to note that a dismissal based upon constitutional grounds is always with prejudice as a constitutional violation cannot be cured by the government. See, e.g., United States v. Marion, supra; United States v. Abernathy, supra at 580. On the other hand, since the provisions of the Speedy Trial Act clearly allow reprosecution, Congress has determined that the government’s violation of § 3161(b) does not rise to the level of a constitutional deprivation. Yet, defendants here are arguing that an automatic dismissal of the superseding indictment is mandated, without assuming the burden of showing prejudice as is required in the Sixth Amendment context, when this Court has already determined that the original indictment should be properly dismissed without prejudice. It is the opinion of this Court that Congress could not have intended such a result when it provided for the possibility of re-prosecution after a violation of the Speedy Trial Act.

The defendants’ second argument is that the relevant time limits should be measured from the date of the dismissal of the first indictment. In response, the government asserts that once the charges were dismissed, the defendants became “free men.” See United States v. MacDonald, supra, 102 S.Ct. at 1502. (Once the charges against the defendants have been dismissed, “a citizen suffers no restraint on his liberty and is no longer the subject of public accusation. His situation does not compare with that of a defendant who has been arrested and held to answer.”) Although this Court does not wholeheartedly endorse the argument raised by the government, common sense, as well as the express statutory language of § 3161(b), dictates against this Court’s adoption of the defendants’ argument on this point. For obvious reasons, the dismissal of an indictment does not trigger the running of the Speedy Trial Act because no statutorily specified event has occurred which implicates the applicable time limits.

Finally, the provisions of the Local Speedy Trial Plan for the Southern District of Texas relied on by the defendants are inapplicable here, but are properly addressed to the government’s violation of the Speedy Trial Act which resulted in the dismissal of the first indictment. Instead, the applicable provision of the local rules is Part II § 4(d), which is clearly consistent with the federal Speedy Trial Act. Furthermore, unlike the ambiguous language of section 3161(d), the local Speedy Trial Plan clearly contemplates reprosecution and states that the time periods begin to run anew after a superseding indictment is filed.

This Court holds only that the Speedy Trial Act provisions relied on by defendants do not support a motion to dismiss the superseding indictment in this case. This Court agrees with the defendants to the extent that the government should not be permitted to conduct a mere paper shuffle which violates the spirit of the law since the filing of superseding charges is entirely within the control of the government. However, in circumstances such as the present, an accused must shoulder the burden mandated by Barker v. Wingo, supra, 407 U.S. at 530, 92 S.Ct. at 2191-92, and prevail upon the balancing test set forth therein. This Court disagrees with the defendants to the extent that this holding places an accused at the mercy of the government. The defendants are protected by the constitutional restraints imposed by the Fifth and Sixth Amendments, as well as by applicable statutes of limitation. Additionally, in appropriate circumstances, an accused may assert a motion pursuant to Rule 48(b), Federal Rules of Criminal Procedure.

Accordingly, the defendants’ motion to dismiss the superseding indictment must be DENIED.

It is so ORDERED.

      . Section 3161(b) provides in pertinent part as follows:
      Any information or indictment charging an individual with the commission of an offense shall be filed within thirty days from the date on which such individual was arrested or served with summons in connection with such charges.
      18 U.S.C. § 3161(b).

        . In determining whether to dismiss a case with or without prejudice, section 3162(a)(1) provides that the court shall consider, “among others, each of the following factors: the seriousness of the offense; the facts and circumstances of the case which led to the dismissal; and the impact of a reprosecution on the administration of this Chapter and on the administration of justice.” 18 U.S.C. § 3162(a)(1).

      . Section 3161(d)(1) provides in pertinent part as follows:
      If any indictment or information is dismissed upon motion of the defendant, or any charge contained in a complaint filed against an individual is dismissed or otherwise dropped, and thereafter a complaint is filed against such defendant or individual charging him with the same offense or an offense based on the same conduct or arising from the same criminal episode, or an information or indictment is filed charging such defendant with the same offense or an offense based on the same conduct or arising from the same criminal episode, the provisions of subsections (b) and (c) of this section shall be applicable with respect to such subsequent complaint, indictment, or information, as the case may be.
      18 U.S.C. § 3161(d)(1).

      . The Local Speedy Trial Plan tracks the language of 18 U.S.C. § 3161(d)(1) and provides that the time limits applicable to superseding charges will be determined as follows:
      (1) If the original indictment was dismissed on motion of the defendant before the filing of the subsequent charge, the time limit shall be determined without regard to the existence of the original charge.
      Local Speedy Trial Plan of the Southern District of Texas, Part II § 4(d)(1).

      . Rule 48(b) is a restatement of the inherent power of the court to dismiss a case for want of prosecution and provides in pertinent part as follows:
      (b) By Court. If there is unnecessary delay in presenting the charge to a grand jury or in filing an information against a defendant who has been held to answer to the district court, or if there is unnecessary delay in bringing a defendant to trial, the court may dismiss the indictment, information or complaint.
      Rule 48(b), Federal Rules of Criminal Procedure.


author: LOUGHLIN, District Judge.

text:
    Roy A. FULFORD, Jr. v. BURNDY CORPORATION.
    No. 85-499-L.
    United States District Court, D. New Hampshire.
    Dec. 2, 1985.
    David B. Shepatin, Littleton, N.H., for plaintiff.
    David Wolowitz, Sanders & McDermott, P.A., Hampton, N.H., Thomas Royall Smith, Siegel, O’Connor, Schiff, Zangari & Kainen, P.C., Boston, Mass., for defendant.
   ORDER ON MOTION TO DISMISS

LOUGHLIN, District Judge.

Plaintiff commenced suit by a writ returnable the first Tuesday of September, 1985 in Grafton County Superior Court. The defendant had the case removed to this court. This is a 28 U.S.G. §§ 1332(a)(1), 1441(a) and (b) diversity action.

Plaintiff has sued in five counts, three counts in assumpsit and two counts in case.

The gist of his actions are as follows. The plaintiff entered into an employment contract with the defendant on or about March 28, 1979.

On June 12, 1982 plaintiff’s minor son was bitten by a dog and injured while on the property of Gerald Fenner. The dog was owned by Claude Burgess and Helen Burgess.

On February 27, 1985 plaintiff through counsel, wrote to Gerald Fenner, Claude Burgess and Helen Burgess advising them that the plaintiff considered them liable for the dog-bite injuries that his son had received. At this time Gerald Fenner was employed by the defendants as plaintiff’s supervisor.

The plaintiff further alleges that:
On March 1, 1985 the plaintiff was confronted by the defendant, its agents and employees, with the letter sent to Gerald Fenner by the plaintiff, and was advised that the defendant was terminating the plaintiff’s employment immediately;
The plaintiff alleges that the termination of his contract by the defendant for employment was motivated by bad faith or malice and/or was based on retaliation for making a claim against his supervisor on behalf of his minor son;
That the termination of plaintiff’s contract by the defendant constitutes a breach of said contract;

A motion to dismiss is one of limited inquiry. The standard for granting a motion to dismiss is not the likelihood of success on the merits, but whether the plaintiff is entitled to offer evidence to support his claim. Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 1686, 40 L.Ed.2d 90 (1974). The complaint should not be dismissed unless it appears that appellant could “prove no set of facts in support of his claim which would entitle him to relief”. Jenkins v. McKeithen, 395 U.S. 411, 421-22, 89 S.Ct. 1843, 1848-49, 23 L.Ed.2d 404 (1969), reh’g. denied 396 U.S. 869 (1969).

The material facts alleged in the complaint are to be construed in the light most favorable to the (non-moving party), and taken as admitted with dismissal ordered only if the (non-moving party) is not entitled to relief under any set of facts they could prove. Jenkins v. McKeithen, 395 U.S. 411, 421, 89 S.Ct. 1843, 1848, 23 L.Ed.2d 404 (1969) reh’g. denied 396 U.S. 869, 90 S.Ct. 35, 24 L.Ed.2d 123 (1969); Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 101-02, 2 L.Ed.2d 80 (1957); Harper v. Cserr, 544 F.2d 1121, 1122 (1st Cir. 1976). Upon review of a complaint before receipt of any evidence, the issue is not whether the (non-moving) party will ultimately prevail or is likely to prevail, but is whether the (non-moving) party is entitled to offer evidence to support the claims. Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 1686, 40 L.Ed.2d 90 (1974).

The New Hampshire Supreme Court in Monge v. Beebe Rubber Co., 114 N.H. 130, 316 A.2d 549 (1974) tackled the issue of wrongful termination of an employment at will which deviated from what was considered up to then the prevailing law. In commenting on this at pages 132 and 133, 316 A.2d 549, the court stated the the following quite emphatically.

Plaintiff sued for breach of an employment contract for an indefinite period of time. The employer has long ruled the workplace with an iron hand by reason of the prevailing common-law rule that such a hiring is presumed to be at will and terminable at any time by either party. 53 Am.Jur.2d Master and Servant § 43 (1970); 9 S. Willison, Contracts § 1017 (W. Jaeger ed. 1967); Restatement (Second) Agency § 442 (1958); see Blumrosen Seniority and Equal Employment, 23 Rutgers L.Rev. 270 (1969). When asked to reexamine the long-standing common-law rule of property based on an ancient feudal system which fostered in a tenancy at will a relationship heavily weighted in favor of the landlord, this court did not hesitate to modify that rule to conform to modern circumstances. Kline v. Burns, 111 N.H. 87, 90, 276 A.2d 248, 250 (1971); Sargent v. Ross, 113 N.H. 388, 308 A.2d 528 (1973).

The law governing the relations between employer and employee has similarly evolved over the years to reflect changing legal, social and economic conditions. 3A A. Corbin, Contracts § 674, at 205, 206 (1960). In this area “[w]e are in the midst of a period in which the pot boils the hardest and the process of change the fastest.” Id. Although many of these changes have resulted from the activity and influence of labor unions, the courts cannot ignore the new climate prevailing generally in the relationship of employer and employee. See Comment, Contracts — Termination of Employment at Will — Public Policy May Modify Employer’s Right to Discharge, 14 Rutgers L.Rev. 624 (1960); Blumrosen, Employee Discipline, 18 Rutgers L.Rev. 428, 431-33 (1964).

In all employment contracts, whether at will or for a definite term, the employer’s interest in running his business as he sees fit must be balanced against the interest of the employee in maintaining his employment, and the public’s interest in maintaining a proper balance between the two. See note, California’s Controls On Employer Abuse of Employee Rights, 22 Stanford L.Rev. 1015 (1970). We hold that a termination by the employer of a contract of employment at will which is motivated by bad faith or malice or based on retaliation is not in the best interest of the economic system or the public good and constitutes a breach of the employment contract. Frampton v. Central Indiana Gas Co. [260 Ind. 249], 297 N.E.2d 425 (Ind.1973); see Petermann v. Teamsters Local 396, 174 Cal.App.2d 184, 189, 344 P.2d 25, 27 (1959); Blades, Employment At Will v. Individual Freedom: On Limiting the Abusive Exercise of Employer Power, 67 Colum.L.Rev. 1404, 1418 (1967); Such a rule affords the employee a certain stability of employment and does not interfere with the employer’s normal exercise of his right to discharge, which is necessary to permit him to operate his business efficiently and profitably.

The sole question on appeal is whether there was sufficient evidence to support the jury’s finding that defendant, through its agents, acted maliciously in terminating plaintiff’s employment. It is the function of the jury to resolve conflicts in the testimony, Kilfoyle v. Malatesta, 101 N.H. 473, 475, 147 A.2d 111, 113 (1958); and the law is settled that a jury verdict will not be disturbed on appeal if there is evidence to support it. See O’Brien v. Public Service Co., 95 N.H. 79, 58 A.2d 507 (1948); Benoit v. Perkins, 79 N.H. 11, 104 A. 254 (1918).

In Howard v. Dorr Woolen Co., 120 N.H. 295, 414 A.2d 1273 (1980) the court stated,

[W]e construe Monge to apply only to a situation where an employee is discharged because he performed an act that public policy would encourage, or refused to do that which public policy would condemn. See, e.g., Ness \Nees ] v. Hocks, 272 Ore. 210, 536 P.2d 512 (1975) (employee discharged for accepting jury duty);

As recently as June, 1984 the New Hampshire Supreme Court in Bergeron v. Travelers Ins. Co., 125 N.H. 107, 480 A.2d 42 commented that the language in Howard v. Dorr Woolen Co. clarified and construed Monge. It did not create a new rule of law or significantly depart from Monge.

Mellitt v. Schrafft Candy Co., 115 LRRM 4195, 4198 (D.N.H.1981) was cited in defendant’s motion to dismiss.

This involved a firing of an employee because of an argument about a proposed merger of the defendant company and another company. The court stated.

The right of an employer to discharge an at-will employee in order to promote the best interests of his business is undisturbed by New Hampshire law, Monge v. Beebe Rubber, supra [114 N.H.] at 122, 316 A.2d at 552, absent a showing that the discharge implicates a question of public policy. Cloutier, supra. The factual dispute herein centers on the question of misconduct, but misconduct is not the salient issue. An employer is at liberty to determine that the continued employment of an individual who has expressed a sincere and good faith disagreement with a company policy is not in the best interests of his or her business. Under the circumstances, it is not the province of the Court to examine the wisdom of the employer’s business practices. In some cases such a discharge may be harsh or unfair, but unless there is a sufficient showing to support a factual finding that the management decision in question is contrary to a statutory or non-statutory public policy, a discharge for business reasons is not actionable. See, Cloutier, supra, slip op. at 6-8.
At best, there are facts in dispute which could support a finding that plaintiff was discharged without good cause. These facts do not sustain a cause of action under New Hampshire law, however. Accordingly, the Court finds and rules that there are no material facts in dispute and that defendant is entitled to summary judgment as a matter of law.

Mellitt, 115 LRRM 4198.

The factual situation in this case is different from Mellitt. In this case, the plaintiff is being penalized because he took steps to insure a right guaranteed by the New Hampshire Constitution, Part I, Article 14 which guarantees every citizen,

a certain remedy, by having recourse to the laws, for all injuries he may receive in his person, property, or character: to obtain right and justice freely, without being obliged to purchase it: completely, and without any denial; promptly, and without delay; conformably to the laws.

Estabrook Adm’x v. American Hoist & Derrick, Inc., 498 A.2d 741, 746 (N.H. 1985).

A tort had allegedly been committed against his minor son for whom he had the responsibility of nurturing and protecting. In attempting to exercise that right due to the fortuitous circumstances of involving Gerald Fenner, his supervisor, he was fired.

The plaintiff apparently was retaliated against by the defendant through its agent. The letter of representation was mailed on February 27, 1985. Presumably, it took at least one day for it to be delivered. It appears that the defendant acted with celerity as the plaintiff was fired on March 1, 1985 evidently on the day that Fenner received the letter.

Motion to dismiss is denied.


author: NANGLE, Chief Judge.

text:
    UNITED STATES of America, Plaintiff, v. MANSION HOUSE CENTER REDEVELOPMENT COMPANY, et al., Defendants.
    Nos. 79-616C(1) to 79-618C(1).
    United States District Court, E.D. Missouri, E.D.
    Dec. 2, 1985.
    As Amended Dec. 5,1985.
    Joseph B. Moore, Asst. U.S. Atty., Donald F. Flint, Area Counsel, Dept, of Housing and Urban Development, St. Louis, Mo., J. Christopher Kohn, and James G. Bruen, Jr., Attys., Civil Div., Dept, of Justice, Washington, D.C., for plaintiff.

      James F. Gunn, Gunn & Gunn, Charles Alan Seigel, Stolar, Heitzmann, Eder, Seigel & Harris, John Michael Clear, Michael E. Kohn, Bryan, Cave, MePheeters & McRoberts, St. Louis, Mo., for defendants.
   MEMORANDUM

NANGLE, Chief Judge.

The United States, on behalf of the Secretary of Housing and Urban Redevelopment (HUD), filed these three actions for foreclosure of what is collectively known as the Mansion House Center.

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

The Mansion House litigation spans numerous years and has resulted in a number of decisions from both this Court and the Eighth Circuit Court of Appeals. While many of the prior decisions involved complex issues and hard fought battles in the courtroom, the underlying facts and issues in this proceeding are relatively simple and straightforward. The parties have stipulated to all the necessary facts upon which this Court renders its decision. They are briefly reiterated here for purposes of information and clarity.

The Mansion House Center consists of three 28-story towers in downtown St. Louis, Missouri. The three towers are respectively owned by three separate limited partnerships (the Owner Partnerships), namely Mansion House Center Redevelopment Company (Center Tower), Mansion House Center North Redevelopment Company (North Tower) and Mansion House Center South Redevelopment Company (South Tower). The towers were constructed with proceeds from three mortgage loans made in 1964 to the respective Owner Partnerships. These loans totaled over $85 million and were insured by HUD pursuant to Section 220 of the National Housing Act. 12 U.S.C. § 1715K (1976). The projects soon began to experience financial difficulties and several modifications of the mortgage obligations were required. In 1971, however, additional modifications proposed by the Owner Partnerships were refused by the private lenders and the notes went into default. The private lenders subsequently assigned the notes, deeds of trust and security agreements to HUD. In return, HUD was required to pay mortgage insurance claims totaling approximately $35.3 million.

Following the assignment of the notes to HUD, a modification of each of the mortgages was agreed upon between HUD and the Owner Partnerships. A number of events occurred in the subsequent years, including the conversion of the South Tower to a motor hotel and the appointment of a receiver at the request of the United States. These events, while adding to the complexity of the situation, are not relevant to this decision. What is relevant and the parties have stipulated to, is that as of May, 1979 payments on the mortgage were not current. HUD rejected a financing program offered by the Owner Partnerships and in May, 1979, filed these three foreclosure actions. The uncontested evidence introduced at trial by the Government indicated that as of August 12, 1985 the amounts due on the mortgages were as follows: North Tower (FHA No. 085-32008) $16,196,724.30; Center Tower (FHA No. 085-32009) $18,159,863.33; and South Tower (FHA No. 085-32010) $18,069,-574.47. The parties stipulated that the Government properly declared due and payable, the entire principal sum and accrued interest as provided in each note, deed of trust and security agreement. Finally, the parties stipulated that the United States is entitled to a separate judgment in each of the foreclosure cases, subject to the defendants’ defense that HUD should be compelled to settle these cases under the terms contained in the August 18, 1982 settlement agreement, as amended.

The Secretary of HUD has very broad discretions to exercise in deciding whether to foreclose an insured mortgage upon default. This exercise of discretion is subject to judicial review under § 702 of the Administrative Procedures Act (APA), 5 U.S.C. § 701 et seq. United States v. Victory Highway Village, 662 F.2d 488, 494 (8th Cir.1981). The party resisting foreclosure has the burden of introducing evidence of arbitrary or capricious action, abuse of discretion or failure to comply with applicable law. Id. The parties have stipulated that the notes are in default. Accordingly, this Court finds, based on the stipulations filed by the parties and the evidence adduced at trial that HUD’s decision to foreclose on the properties is consistent with the national housing objectives which are stated in § 2 of the Housing Act, 42 U.S.C. § 1441 (1976).

Defendants have elected not to challenge the propriety of the Government’s decision to foreclose on the Mansion House Towers. The Owner Partnerships have produced no evidence that HUD’s action to foreclose is arbitrary, capricious, an abuse of discretion or a failure to comply with the applicable law. Instead, the Owner Partnerships assert the affirmative defense that HUD should be compelled to effectuate the settlement agreement, entered into by the respective parties on August 18, 1982. On April 4, 1985, this Court denied a motion filed on behalf of the Owner Partnerships to compel HUD to accept the terms of that settlement agreement. Defendants’ appeal of the order was dismissed for lack of jurisdiction by the Eighth Circuit. United States v. Mansion House Center North Redevelopment Company, No. 85-1469-EM (May 23, 1985). This Court again rejects this affirmative defense for the reasons stated in the April 4, 1985 order.

The Owner Partnerships have also attempted to demonstrate that much of the litigation surrounding the Mansion House Properties has come to a close. As a result, the Owner Partnerships contend that HUD should now be forced to accept the terms of the settlement agreement. This Court disagrees. As this Court previously stated, the inquiry as to whether the titles were unmarketable must be made as of the time HUD decided to exercise its option to refuse to consummate the settlement agreement. Therefore, subsequent developments that allegedly remove some of the title problems associated with the properties in question are now irrelevant to the affirmative defense asserted by the defendants. Having rejected the sole defense asserted by the Owner Partnerships, this Court directs that the three towers collectively known as the Mansion House Center be sold according to the terms of the attached Order of this Court.

ORDER

Pursuant to the memorandum filed herein this day,

IT IS HEREBY ORDERED that a judgment be and is entered in favor of the plaintiff in each of these three causes of action.

IT IS FURTHER ORDERED that the United States Marshal is authorized and directed to sell at public vendue between the hours of 9:00 a.m. and 5:00 p.m. at the east front door of the Court House (Civil Courts Building, Eleventh and Market Streets) in the City of St. Louis, Missouri, on such date as he shall determine but as expeditiously as practicable, all of the realty described in the Deeds of Trust for FHA No. 085-32008 (North Tower), FHA No. 085-32009 (Center Tower) and FHA No. 085-32010 (South Tower), to the highest bidder for cash. The following procedure shall be followed in selling said realty:

1. Said realty shall be offered for sale in bulk (as one unit).

2. Said realty shall then be offered for sale as three separate parcels. The higher of the total amounts bid under 1 and 2 above shall be the successful bid (or bids). Said sales shall be conducted on the date and time determined by the United States Marshal.

A sale shall be deemed to be for cash if the successful bidder or bidders shall deposit with the Marshal not later than 24 hours after the sale shall have been concluded, cashier(s) or certified check(s) payable to the Marshal in an amount not less than $300,000.00 for a bulk sale or $100,-000.00 per parcel in separate sales and shall within 30 days after the conclusion of the sale have deposited with the Marshal cashiers) or certified check(s) payable to the Marshal for the balance of the bid price.

The United States Marshal is authorized and directed to effect notice of the sale by publication once a week for at least four weeks prior to the sale in a newspaper regularly issued and of general circulation in the City of St. Louis, Missouri. HUD, at its discretion, may direct additional publication in other newspapers outside the St. Louis area.

Within five working days following conclusion of the sale, the Marshal shall file his report of the sale with this Court who will sua sponte and upon such notice as this Court deems appropriate, set the matter for confirmation of the sale. Upon confirmation of the sale and receipt by the Marshal of the full purchase price from the successful bidder the Marshal shall issue his certificate of sale and shall cause to be paid over to the Secretary of Housing and Urban Development, after deduction of all his costs and expenses of sale, such sum as shall be necessary to pay in full the aggregate of the mortgage hereinbefore determined by this Court and any excess funds shall be held by the Marshal subject to further order of this Court.

Should the net proceeds of the sale be insufficient to satisfy in full the aggregate mortgage indebtedness due and owing the United States of America, such net proceeds shall be paid to the Secretary of Housing and Urban Development and shall be applied by him in accordance with such further order as this Court may enter.

Upon receipt by the Secretary of payment of the sale proceeds he shall discharge the aggregate non-recourse mortgage indebtedness, subject only to the rights reserved to the Secretary under paragraph 17 of the Regulatory Agreements.

The Marshal shall make no representation as to title to the realty subject to the sale, but the quality and condition of title shall be at the sole risk of the successful bidder.


author: NICHOL, Senior District Judge.

text:
    FIREMEN’S INSURANCE COMPANY OF NEWARK, Plaintiff, v. BAUER DENTAL STUDIO, INC., and Dailey Dental, Inc., Defendants.
    No. CIV 84-4284.
    United States District Court, D. South Dakota, S.D.
    Dec. 3, 1985.

      Edwin E. Evans and Mary J. Hertz, of Davenport, Evans, Hurwitz & Smith, Sioux Falls, S.D., for plaintiff.
    John L. Morgan, of Morgan, Fuller, Theeler & Cogley, Mitchell, S.D., for defendant Bauer Dental Studio, Inc.
   MEMORANDUM OPINION

NICHOL, Senior District Judge.

Plaintiff, Firemen’s Insurance Company of Newark (Company) brought this diversity action against its insured, Bauer Dental Studio, Inc. (Bauer), and Dailey Dental, Inc. (Dailey), seeking a declaration of no coverage under a comprehensive general liability insurance policy issued by the Company to Bauer. Plaintiff is an insurance company incorporated under the laws of a state other than South Dakota and licensed to sell insurance in South Dakota. Defendants Bauer and Dailey are corporations incorporated under the laws of South Dakota with their principal places of business in Mitchell, South Dakota. Bauer manufactures dental prostheses, including dental crowns, the subject of this litigation. Dailey is a professional dental corporation providing dental services to patients. The amount in controversy exceeds $10,000, exclusive of interest and costs.

Production of the dental crowns occurred in three stages. First, Dailey took impressions of a patient’s tooth, produced a mold, and prescribed the specifications of a crown for that patient. The mold and prescription were then sent to Bauer and used to manufacture the crown. During the period in question, Bauer utilized a metal alloy known as Biocast to construct the crowns, covering the metal with a porcelain veneer. Finally, Dailey inserted the crown in the patient’s mouth after fitting, grinding and polishing it to achieve the correct bite and proper fit.

On April 6, 1980, the Company issued to Bauer a comprehensive general liability insurance policy effective through April 16, 1983. Beginning in late 1981, Dailey received complaints from patients that numerous dental crowns, manufactured and sold to Dailey by Bauer, were fracturing and cracking. Bauer reported a claim to its local insurance agent on May 11, 1982. The claim was submitted to the Company’s Minneapolis office, which denied coverage based upon exclusions (n), (o), and (p) of the insurance policy. These provisions excluded from coverage property damage stemming from the insured’s work product, and read as follows:

This insurance does not apply:
(n) to property damage to the named insured’s products arising out of such products or any part of such products;
(o) to property damage to work performed by or on behalf of the named insured arising out of the work or any portion thereof, or out of materials, parts or equipment furnished in connection therewith;
(p) to damages claimed for the withdrawal, inspection, repair, replacement, or loss of use of the named insured’s products or work completed by or for the named insured or of any property of which such products or work form a part, if such products, work or property are withdrawn from the market or from use because of any known or suspected defect or deficiency therein.

The Company’s local insurance agent and the insured’s attorney disputed this finding of no coverage. While it was conceded that Bauer’s costs of manufacturing new crowns to replace the cracked ones were not covered, they contended that Dailey’s costs of removing the old crowns and purchasing and installing the new ones were covered.

Because its decision was disputed, the Minneapolis office submitted the question to the regional supervisor’s office in Chicago pursuant to company policy. The regional office determined on October 22, 1982, that Dailey’s costs were indeed covered by the policy, and the Company’s home office in New Jersey confirmed that decision. Bauer was informed of this decision on February 1,1983; the Company then set up a reserve fund for the claim, and commenced an investigation and settlement negotiations with Dailey.

Negotiations were unsuccessful, and in November of 1984 Dailey filed suit in state court against Bauer. Dailey’s complaint alleged that the fracturing of the Biocast metal alloy from which the dental crowns had been manufactured had caused lines and stains on the porcelain veneer, and that Bauer had breached its implied warranty of fitness and had negligently misrepresented the suitability and safety of its product. Dailey sought damages for the cost of replacement as well as for injured reputation.

Bauer advised the Company of Dailey’s lawsuit and requested that the Company defend against it as provided in the insurance policy. The Company, however, reversed its position, asserted that the policy did not cover Dailey’s claim, and filed this action seeking a declaratory judgment to that effect. The case was tried to the Court on September 19 and 20, 1985, and the parties have submitted post-trial briefs.

The policy’s insuring clause provides:

The company will pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of
A. bodily injury or
B. property damage
to which this insurance applies, caused by an occurrence, and the company shall have the right and duty to defend any suit against the insured seeking damages on account of such bodily injury or property damage, even if any allegations of the suit are groundless, false or fraudulent____

“Bodily injury” is defined in the policy as “bodily injury, sickness or disease, sustained by any person which occurs during the policy period, including death at any time resulting therefrom.” “Property damage” is defined as

(1) physical injury to or destruction of tangible property which occurs during the policy period, including the loss of use thereof at any time resulting therefrom, or (2) loss of use of tangible property which has not been physically injured or destroyed provided such loss of use is caused by an occurrence during the policy period.

Finally, an “occurrence” is defined as “an accident, including continuous or repeated exposure to conditions, which results in bodily injury or property damage neither expected nor intended from the standpoint of the insured.”

The Company argues that the Dailey claim is not covered because the damages alleged in the complaint, cost of replacement and loss of reputation, do not constitute property damage within the meaning of the insuring clause. Even if there is property damage, the Company argues alternatively that the policy does not apply to such damage under exclusions (n), (o), and (p) because the damage was to the insured’s work product — the dental crowns.

The Company conceded at trial that the cracking of the crowns was an “occurrence.” It is contended, however, that coverage is afforded only for further damage, resulting from the “occurrence,” to property other than the insured’s product. Since the only damage here was to the dental crowns, which were Bauer’s work product, the Company maintains there can be no coverage under the policy. The Company cites no cases in support of its theory and relies on the language of the policy.

The Court agrees that the policy requires some further property damage resulting from the cracked crowns manufactured by Bauer before coverage is triggered. However, as the Company acknowledged at trial, the finished product in this case did not consist solely of Bauer’s work but included the additional services and workmanship of Dailey in grinding, fitting, polishing and bonding the dental crown. The Court finds that the completed product — a fully and properly installed crown — was distinct from the initial product manufactured by Bauer. Thus, the insured’s defective product caused further property damage in the form of diminished value of the completed product. This property damage, measured by Dailey’s cost of replacement, is covered by the insuring clause of the policy because it is “physical injury to ... tangible property,” and is not excluded under clauses (n), (o), and (p) because it is not strictly the work product of the insured.

While the Court has found no cases involving dental or medical prostheses, cases dealing with the construction of buildings present substantially similar considerations. In Hauenstein v. Saint Paul Mercury Indemnity Co., 242 Minn. 354, 65 N.W.2d 122 (1954), the insured produced plaster and sold it to a contractor for use in the construction of a hospital. After application, the plaster shrank and cracked, making it necessary for the contractor to remove it and replaster the walls and ceilings. Construing policy language similar to that in the case at bar, the court held that while the plaster was excluded as the product of the insured, the use of the plaster had caused a reduction in value of the building which constituted property damage distinct from the damaged plaster itself. Id. at 125-26.

The Hauenstein ruling was adopted by the South Dakota Supreme Court in Dakota Block Co. v. Western Casualty & Surety Co., 81 S.D. 213, 132 N.W.2d 826 (1965). There, the insured manufactured a type of block on which a colored polyester glaze had been baked. The insured sold the block to a contractor for use in constructing the walls of a school building. Sometime after completion of the building, the colored glaze became faded and discolored causing the building to take on a mottled and unsightly appearance. Following Hauenstein, the South Dakota court held that the completed school building was a separate product from the colored blocks manufactured by the insured, and that therefore the reduced value of the building caused by the defective glaze constituted property damage covered by the insured’s policy. Id. at 830. Cf. Haugan v. Home Indemnity Co., 86 S.D. 406, 197 N.W.2d 18 (1972) (insured constructed building with defective foundation; damage held to be excluded from policy because completed building was entirely the work product of the insured).

The Court finds Hauenstein and Dakota Block to be controlling. The completed product in this case consisted of not only the dental crown as manufactured by Bauer but also the professional services of Dailey in properly inserting the crown. The integration of Bauer’s product and Dailey’s workmanship created, for purposes of the insurance policy in question, a product separate and distinct from the crowns initially manufactured by Bauer. The reduced value of this final product constitutes “property damage” caused by the fracturing of the crowns. Because the final product was not solely the work of the insured, the property damage is not excluded under clauses (n), (o), and (p). Thus, the Court holds that Dailey’s cost of replacing the crowns is covered by Bauer’s policy. The Company is accordingly liable for such costs and is under a duty to defend Bauer in the action against it by Dailey.

This opinion constitutes the Court’s findings of fact and conclusions of law as required by Fed.R.Civ.P. 52(a).


author: GERALD J. WEBER, District Judge.

text:
    ALOE COAL COMPANY and Commercial Union Insurance Co. v. CLARK EQUIPMENT COMPANY.
    Civ. A. No. 83-1329.
    United States District Court, W.D. Pennsylvania.
    Dec. 5, 1985.
    David Groth, Philadelphia, Pa., and Richard Dorfzaun, Pittsburgh, Pa., for plaintiffs.
    Arthur R. Gorr, Pittsburgh, Pa., for defendant.
   OPINION

GERALD J. WEBER, District Judge.

Plaintiffs have moved for partial summary judgment in this products liability action. They seek to establish, by reason of offensive collateral estoppel, that the 475-B tractor shovel at issue here was defectively designed. Plaintiffs have provided along with their motion a brief and supporting materials. Defendant has opposed this motion with a brief and supporting evidentiary materials to which plaintiffs have replied.

Plaintiffs cite two prior cases in which federal judges determined without a jury that defendant’s 475-B tractor shovel was defectively designed.

In these cases the defect consisted of a design which permitted leaking fluid from a ruptured high-pressure hydraulic base or pump to spray or to be drawn by the tractor’s airflow into the engine compartment where it could contact ignition sources.

Defendant relies on three arguments in opposition. Defendant urges that collateral estoppel should not be applied here because:

1) prior judgments on the subject are in conflict;

2) there is no mutuality; i.e. since plaintiffs were not parties to the prior cases they would not be bound by the earlier decision;

3) the cases do not involve the same subject matter or issues; defendant has not had a full opportunity to litigate the issues.

Our decision requires a determination of whether non-mutual offensive issue preclusion would be unfair to the defendant. We conclude that it would be and will deny the preclusive effect for the following reasons. Defendant has cited us to three cases in which defendant represents other plaintiffs asserted the same theory of defect. Nonetheless in each of those cases, a verdict in favor of Clark Equipment Company was rendered. In one of those cases, the Fireman’s Fund ease, the lack of a defect was established by the jury’s negative response to a special interrogatory. In another, the Tower Resources case, the judge tried the case non-jury making a specific finding that no defect was established. Defendant further attempts to discredit the plaintiffs’ reliance on the Rudd case by arguing that the appellate court decision rendered the district court’s finding of defect moot. (See, n. 1.)

Plaintiffs counter these arguments by explaining that the cases cited by the defendant are not in fact inconsistent. Plaintiffs represent that the theory of liability in the Mulzer Crushed Stone case was not the same as that in the present case and no special interrogatory was submitted to the jury in that case. No final judgment has been rendered in the Fireman’s Fund case which is presently on appeal, and the defect alleged there was not the same as the defect in design alleged in the present case. The Tower Resources opinion is distinguishable in that the finding was based on a Kentucky statute that altered 402A liability and created a presumption in favor of the manufacturer that the product was not defective under certain conditions there applicable.

Given the arguments of both sides, we do not believe that this is a strong case for the use of non-mutual collateral estoppel. In addition to the arguments that the findings of defect were not essential to the judgments in the cases cited, and the argument that, however distinguishable, there are prior inconsistent judgments, we believe that there is not that much to be gained by estopping defendant from relitigating this issue. Some testimony regarding the defect would be necessarily taken at trial if for nothing more than to provide a necessary background to proving causation.

For these reasons, we will deny plaintiff’s motion for partial summary judgment.

      . Rudd Construction Equipment Company, Inc. v. Clark Equipment Co., No. C79-0314L(A), slip, op. (W.D.Ky., March 30, 1982), aff'd, 735 F.2d 974 (6th Cir.1984); C & S Fuel Inc. v. Clark Equipment Co., 552 F.Supp. 340 (E.D.Ky.1982), aff'd per curiam, 727 F.2d 1108 (6th Cir.1984).
      We note that in the C & S Fuel case, the court ultimately decided for the defendant based on a finding of substantial change in condition. The specific finding of defective design was therefore not necessary to support the judgment entered in that action. Also in the Rudd case, the Appellate Court questioned the validity of the district court’s awarding damages based on a tort theory of strict liability. The Appellate Court after considering damages under tort and contract theories, based its decision of the proper damage figure solely on the breach of warranty claim, concluding that a tort recovery would entitle the plaintiff to no more than that claim was worth on the contract cause of action.

      . Tower Resources v. Clark Equipment Co., No. 81-CI-641, slip op. at 4. (Hopkins Cir.Ct. KY, June 14, 1984); Mulzer Crushed Stone v. Clark Equipment Co., No. IP-81-927-C (S.D.Ind. March 24, 1984); Fireman’s Fund Insurance Co. v. Clark Equipment Co., No. 21294 (Ct. of Common Pleas, OH June 1985).


author: COHILL, Chief Judge.

text:
    Donald R. BOMBERGER, Plaintiff, v. CONSOLIDATED COAL COMPANY and Conoco, Inc., Defendants.
    Civ. A. No. 84-895.
    United States District Court, W.D. Pennsylvania.
    Dec. 7, 1985.

      James H. Logan, Pittsburgh, Pa., for plaintiff.
    Richard J. Klein and D.L. Fassio, Consolidated Coal Co., Pittsburgh, Pa., for defendants.
   MEMORANDUM OPINION

COHILL, Chief Judge.

Presently before us is Defendants’ Motion for Summary Judgment on the Plaintiff's age discrimination claim brought under the Age Discrimination in Employment Act, 29 U.S.C. §§ 621-634 (1982) (hereinafter “ADEA”). Plaintiff’s complaint also alleges one count of breach of contract under Pennsylvania Common Law.

Plaintiff was hired by Defendants in October of 1957 as Supervisor of the Analytical Systems Laboratory and continued in that capacity until 1967 at which time he was promoted to Manager of Technical Services. Plaintiff remained in that position until 1975 when he was moved to the Patent Department as an Associate Chemist. In the fall of 1981, Plaintiff was transferred back to the Technical Services Department where he remained until December 31, 1982. Plaintiff alleges that he was forced to resign or retire effective December 31, 1982.

Defendants state, and Plaintiff admits, that Plaintiff was given oral notice of termination on or before January 25, 1982 by E.O. Obermiller, Plaintiff’s supervisor. However, Plaintiff alleges that Obermiller told him that he would be granted a “stay of termination until December 31, 1982” if he would complete and submit a “Request for early retirement” form. See Deposition of Donald R. Bomberger, at PP. 37-38. On or about February 22, 1982, Plaintiff in fact sent such a form to Obermiller. Id. at P. 34.

On February 1, 1983, Plaintiff filed a charge of age discrimination with the Equal Employment Opportunity Commission (hereinafter “EEOC”). Some 372 days thus passed between Plaintiff’s oral notice of termination and the filing of his charge with the EEOC. Defendants argue that Plaintiff failed to timely file his charge with the EEOC.

Plaintiff does not assert that the alleged unlawful employment practice occurred on some date later than January 25, 1982 or dispute the fact that he did not timely file his charge. Rather, he argues only that the doctrine of equitable tolling should apply since no notice of his rights under the ADEA was posted in the area in which he worked from the time he was notified of his impending termination until his last day of work. Affidavit of Plaintiff in Opposition to Defendants’ Motion for Summary Judgment, at ¶ 3.

When considering a motion for summary judgment, the Court must determine if there are material facts in dispute. In so doing, the Court must view all facts in the light most favorable to the non-moving party. Sun Refining and Marketing Co. v. Rago, 741 F.2d 670, 673 (3d Cir.1984). The burden is on the moving party to show that no genuine issue of material fact exists. Fed.R.Civ.P. 56; Wolk v. Saks Fifth Avenue, Inc., 728 F.2d 221 (3d Cir.1984).

A charge of discrimination must be timely filed with the EEOC prior to the initiation of an action in federal court. Love v. Pullman, 404 U.S. 522, 523, 92 S.Ct. 616, 617, 30 L.Ed.2d 679 (1972). Under the ADEA, two different time limits are applied to determine when the charge must be filed with the EEOC depending on whether or not the unlawful practice occurred in a deferral state: If the unlawful practice occurred in a nondeferral state, the complainant must file within 180 days; but if it occurred in a deferral state, the time limit is extended to 300 days. 29 U.S.C. § 626(d). Pennsylvania is a deferral state. See Seredinski v. Clifton Precision Products Co., 776 F.2d 56 (3d Cir.1985); Butz v. Hertz Corp., 554 F.Supp. 1178, 1180 (W.D.Pa.1983) (Cohill, J.); Cutwright v. General Motors Corp., 486 F.Supp. 590, 592-93 (W.D.Pa.1980).

The 300-day period begins to run on the date when the unlawful employment practice occurred. In this case, the alleged unlawful employment practice occurred on January 25, 1982 when Obermiller informed Plaintiff that his services were no longer required. See Slenkamp v. Borough of Brentwood, 603 F.Supp. 1298, 1303 (W.D.Pa.1985) (Cohill, J.) (citing Chardon v. Fernandez, 454 U.S. 6, 102 S.Ct. 28, 70 L.Ed.2d 6 (1980) (per curiam); Delaware State College v. Ricks, 449 U.S. 250, 101 S.Ct. 498, 66 L.Ed.2d 431 (1978). Since a charge was not filed with the EEOC until February 1, 1983, this case is clearly barred by the 300-day time limit absent some equitable consideration.

Equitable tolling may be applied in appropriate circumstances to preserve a claim which otherwise would be time-barred since the filing requirement of the ADEA has been characterized as a statute of limitations rather than a jurisdictional requirement. Bonham v. Dresser Industries, 569 F.2d 187,193 (3d Cir.1977); Butz, 554 F.Supp. at 1180-81. The burden of proving facts to justify application of the doctrine of equitable tolling rests with the Plaintiff. Byers v. Follmer Trucking Co., 763 F.2d 599, 600-01 (3d Cir.1985) (per curiam ) (citing Swietlowich v. County of Bucks, 610 F.2d 1157, 1162 (3d Cir.1979)); Butz, 554 F.Supp. at 1181.

An employer’s failure to post notice of an individual’s rights as required by 29 U.S.C. § 627 will toll the running of the 300-day period “at least until such time as the aggrieved person seeks out an attorney or acquires actual knowledge of his rights under the ADEA.” Bonham, 569 F.2d at 193; Slenkamp, 603 F.Supp. at 1303. Section 627 provides as follows:

Every employer, employment agency, and labor organization shall post and keep posted in conspicuous places upon its premises a notice to be prepared or approved by the Equal Employment Opportunity Commission setting forth information as the Commission deems appropriate to effectuate the purposes of this chapter.

29 U.S.C. § 627.

Plaintiff filed an affidavit stating as follows:

1. When I was first given oral notification of the termination of my employment,

I was unaware of any rights I might have to challenge the termination on the basis of age discrimination, or on any other basis.

2. None of my superiors ever informed me orally or in writing of any rights I might have to challenge my termination on the basis of age discrimination, before, at, or after the time of oral notification of my termination and leading up to my last effective day of employment, i.e., December 31, 1982.

3. During the last period of my employment, beginning in approximately August or September, 1981, my work assignment changed and I was moved from the main building (Building No. 6) into a trailer located apart from such building and apart from the building where Mr. Obermiller worked (Building No. 1), and I was assigned to the trailer until December 31, 1982. During such period I was isolated from other employees. No one else was permanently assigned to work in this trailer. I had no phone in the trailer for a substantial portion of the time. When I was not in the trailer, I would primarily be at the patent library or technical library. In none of those places was there posted any notice informing employees of their rights to file employment discrimination charges.

Plaintiff does not state that notice was not posted anywhere, only that no notice was posted in the. patent or technical library or in the trailer. Based on Plaintiff’s affidavit, it appears that the trailer served as Plaintiff’s personal office. The library is located in the main building.

At the argument, Defendants submitted a counteraffidavit from the Supervisor of Personnel who is the person responsible for compliance with the ADEA at Plaintiff’s place of employment. That affidavit states that the required notice has been posted at that facility since at least 1976. Affidavit of J.P. Vandagriff.

The ADEA does not require that notice be posted in every individual office or work room. Notice is sufficient if it is posted conspicuously so that employees have a “meaningful opportunity of becoming aware of their ADEA rights.” McClinton v. Alabama By-Products Corp., 574 F.Supp. 43, 47, (N.D.Ala.1983) aff'd, 743 F.2d 1483 (11th Cir.1984) (citing Charlier v. Johnson, 556 F.2d 761, 764 (5th Cir.1977), reh’g denied, 559 F.2d 1217 (5th Cir.1977)). A single posting of notice is sufficient to satisfy § 627, if that posting is in a centrally located area which employees are likely to pass by for various reasons. Keitz v. Lever Brothers Co., 563 F.Supp. 230, 232-33 (N.D.Ind.1983).

The fact that Plaintiff was unaware of his rights under the ADEA until some time after his final day of work cannot be construed to imply that no notice was posted. Plaintiff must allege more than an inability to recall seeing ADEA information posted in order to raise a question of equitable tolling. Vaught v. R.R. Donnelley & Sons Co., 745 F.2d 407, 412 (7th Cir. 1984); Bonham, 569 F.2d at 193 n. 7.

Plaintiff, at oral argument, cited Aronsen v. Crown Zellerbach, 662 F.2d 584, 595 (9th Cir.1981), cert. denied, 459 U.S. 1200, 103 S.Ct. 1183, 75 L.Ed.2d 431 (1983) for the proposition that equitable tolling issues are generally inappropriate for disposition by summary judgment. Aronsen, however, applies only in situations where equitable tolling is actually “in issue” because, in such cases, credibility of witnesses is critical. Id.

Unlike Aronsen, which dealt with an employee’s alleged fear of retaliation as a grounds for equitable tolling, the Plaintiff in this case has failed to allege facts which place equitable tolling “in issue.” Likewise, credibility here is not a problem since neither side contradicts what the other states. As indicated above, Plaintiff does not dispute that notice was posted somewhere at the facility. He states only that no notice was posted in his individual work area, a fact which Defendants do not deny.

We find, as a matter of law, that § 627 does not require posting in every room of each building. Thus, Plaintiff’s allegations are insufficient to satisfy his burden of proof on the question of equitable tolling. Without tolling, Plaintiff’s ADEA claim is clearly time-barred. Consequently, summary judgment will be granted for the Defendants on that claim.

In light of our grant of summary judgment on the federal question, we find the federal forum inappropriate for determination of the remaining state claim. Therefore, we decline to exercise pendent jurisdiction over Count 2. United Mine Workers v. Gibbs, 383 U.S. 715, 86 S.Ct. 1130, 16 L.Ed.2d 218 (1966); Walck v. American Stock Exchange, Inc., 687 F.2d 778, 792 (3d Cir.1982), cert. denied, 461 U.S. 942, 103 S.Ct. 2118, 77 L.Ed.2d 1300 (1983); fully v. Mott Supermarkets, Inc., 540 F.2d 187, 195-96 (3d Cir.1976). Accordingly, we dismiss Count 2 with leave for Plaintiff to effect transfer pursuant to the provisions of 42 Pa.C.S.A. § 5103(b) (Purdon Supp. 1983) and in accordance with Weaver v. Marine Bank, 683 F.2d 744 (3d Cir.1982). See McLaughlin v. ARCO Polymers, Inc., 721 F.2d 426, 430 (3d Cir.1983).

An appropriate written order will be entered.