author: THOMAS F. HOGAN, District Judge.

text:
    UNITED STATES of America, Plaintiff, v. SEARS, ROEBUCK AND CO., Defendant.
    Civ. A. No. 83-3679.
    United States District Court, District of Columbia.
    Aug. 10, 1984.
    Charles L. Schlumberger, U.S. Dept, of Justice, Civ. Div., Washington, D.C., for plaintiff.
    Owen Goldbloom, Maureen E. Mahoney, Latham, Watkins & Hills, Washington, D.C., for defendant.
   MEMORANDUM OPINION AND ORDER

THOMAS F. HOGAN, District Judge.

This case is before the Court on cross motions for summary judgment. At the hearing held on this matter the Court issued a bench ruling granting defendant’s motion for summary judgment. This opinion supplements the bench ruling.

The principal question presented in this case is whether Sears should be credited with interest for the period between May 9, 1980 and August 8, 1983 for $5.4 million it paid November 21, 1978 on an assessment for dumping TV receivers imported from Japan on the American market. The dispute arises out of a settlement contract finalized on April 28, 1980. Under the settlement terms, Sears agreed to pay the United States Departments of Commerce, Treasury and Customs Service a total of $19.8 million, $5.4 million of which was to be paid out of a refund Sears was to have received from the government for the 1978 payment. On May 9, 1980, a federal court enjoined the implementation of the settlement agreement. On November 6, 1980, Roderick M. Hills, counsel for Sears, wrote a letter to Lynn J. Barden, Assistant General Counsel for Import Administration of the Department of Commerce, confirming a phone conversation he had had with Bar-den. According to the letter, Hills and Barden agreed that the amount Sears owed the Department of Commerce was to be reduced by the amount of interest which had accrued between May 9, 1980, and the date the injunction was to be lifted. Bar-den consulted Homer Moyer, the General Counsel of the Department of Commerce, and countersigned the Hills’ letter on November 7, 1980.

In its motion for summary judgment, the United States contends that the April 1980 settlement agreement determines Sears’ liability and that the parol evidence rule requires the exclusion of whatever prior or side agreements Sears claims to have been made between the parties. In its cross-motion for summary judgment, Sears presents several arguments to justify the extension of interest credit on the $5.4 million payment. Significantly, Sears contends that notwithstanding an integration clause the April 1980 agreement was only partially integrated. A collateral term to the agreement was allegedly the interest formula set out in a draft of the agreement. The formula was to be used to determine the amount by which interest was to accrue during the injunction period on the $5.4 million payment. In the alternative, Sears contends that the November 1980 letter represents an effective modification of the April 1980 agreement permitting the accural of interest until the termination of the injunction.

The Law

1. The April, 1980 Settlement Agreement and the Parol Evidence Rule

Under the parol evidence rule, “when the parties to a contract have reduced their entire agreement to writing, the court will disregard and treat as inoperative parol evidence of the prior negotiations and oral agreements.” Giotis v. Lampkin, 145 A.2d 779, 781 (D.C.1958). There are, however, exceptions to the parol evidence rule. For example, when the parties have not intended that the written document cover all of the subjects of negotiation or when there is a “collateral contract” in which the oral contract sought to be proved is separate from and independent of the written contract, the court may consider parol evidence. Id. Furthermore, when there is ambiguity in the language of the agreement, parol evidence may be admitted to clarify the intent of the parties. Dixon v. Wilson, 192 A.2d 289, 291 (D.C.1963).

While it is presumed that all of the terms of an agreement are embodied in a contract, the court must examine the intent of the parties to determine whether the contract represents a complete integration of the understanding of the parties. Stamenich v. Markovic, 462 A.2d 452, 456 (D.C. 1983); Luther Williams, Jr., Inc. v. Johnson, 229 A.2d 163, 165 (D.C.1967). In measuring intent, the court looks to “the written contract, and the conduct and language of the parties and the surrounding circumstances.” Standley v. Egbert, 267 A.2d 365, 367 (D.C.1970) (citations omitted). Courts focus on a number of factors, including whether the contract appears to be comprehensive or simply devoted to a few issues and whether attorneys aided in the preparation of the document. Giotis v. Lampkin, supra, 145 A.2d 782. The presence of an integration clause strengthens the presumption that the written contract is the repository of the agreement between the parties. Luther Williams, Jr., Inc. v. Johnson, supra, 229 A.2d at 165.

Examining the settlement agreement and the circumstances surrounding its execution, the Court concludes that it is a fully integrated contract. The contract itself is comprehensive. It provides for the terms and conditions of payment and stipulates what is to occur in the event that the agreement is subject to litigation. Paragraph 10 of the agreement is an integration clause which states that the agreement “represents the entire understanding and agreement between the Company ... and the United States ... and supersedes any prior negotiation, letter or understanding relating to the subject matter hereof.” (Settlement Agreement of April 28, 1980, Brief in Support of Plaintiffs Motion for Summary Judgment, Exh. A at 11.) In addition, the parties were fully represented by counsel. Sears’ ability to negotiate a reduction for the interest which had accrued between 1978 and the April 1980 settlement date indicates that the representation was effective. All of these factors support the conclusion that the settlement agreement was fully integrated.

Turning to the issue of whether the contract is ambiguous, it is well settled that in the absence of ambiguity the meaning of the contract is to be determined from the face of the contract “without resort to parol evidence or extrinsic circumstances.” Appalachian Power Co. v. Federal Power Commission, 529 F.2d 342, 347-48 (D.C. Cir.1976) (footnote omitted) (quoting Simpson Bros. Inc. v. District of Columbia, 179 F.2d 430, 434 (D.C.Cir.1949), cert. denied, 338 U.S. 911, 70 S.Ct. 350, 94 L.Ed. 561

(1950)). A contract is not ambiguous “simply because the parties disagree on its interpretation.” dayman v. Goodman Properties, Inc., 518 F.2d 1026, 1034 (D.C. Cir.1973), citing Dixon v. Wilson, supra, 192 A.2d at 291. The standard used by American courts for determining ambiguity in a contract is “ ‘reasonably susceptible of different constructions or interpretations.’ ” Lee v. Flintkote Co., 593 F.2d 1275, 1282 (D.C.Cir.1979) (quoting 1901 Wyoming Coop. Ass’n v. Lee, 345 A.2d 456, 461 n. 7 (D.C.1975)). See Papago Tribal Utility Authority v. Federal Enerqy Regulatory Commission, 723 F.2d 950, 955 (D.C.Cir.1983).

Examining the April 1980 agreement, it is manifest that it is unambiguous on its face. The terms of settlement are clear. Paragraph 2 of the agreement states that Sears owed a total of $19.8 million, with $14.3 million payable within 15 days of the contract, and the remainder, $5.4 million, was payable within 10 days of.the receipt of the refund of the $5.4 million Sears paid in November 1978. There is no oblique reference to additional terms or conditions for the payment.

Sears contends that the lack of clarity of paragraph 7 of the agreement renders paragraph 2 ambiguous. Paragraph 7 of the contract states:

To the extent that this agreement is the subject of litigation contesting its validity during the pendency of which litigation of entries which are subject to this agreement are enjoined, the time limits for payments in paragraph 2 will be tolled, with continued accumulation of interest on any unpaid balance pending a final judicial decision. (Emphasis added.)

(Settlement Agreement of April 28, 1980, Br. in Support of PI. Motion for S.J., Exh. A at 10.) It is not clear from the wording of this clause whether the time limits alone will toll or whether the accumulation of interest on any unpaid balance will also toll. This lack of clarity, however, does not have implications for Sears’ contention that paragraph 2 of the agreement provides for the accumulation of interest on the $5.4 million payment after the settlement date of August 28, 1980. Thus, there is no ambiguity calling for the examination of extrinsic evidence to interpret the contract.

Even when the Court examines such extrinsic evidence as the November 1980 letter, there is no basis for imparting ambiguity into the contract. In that letter, the discussion of the tolling of the interest due and date for payment is distinct from the discussion of the accrual of interest on the $5.4 million payment. The issues are not tied together. Since the agreement was fully integrated and unambiguous with respect to an injunction period interest credit, the Court declines to consider parol evidence.

2. The Effect of the November 1980 Letter on the Settlement Agreement

The November 1980 letter written by Hills to Barden states that “the amount to be paid the Department of Commerce under the Agreement [is to be] further reduced by the amount of interest ... which has accrued on the $5,447,419.76 payment between May 9, 1980, and the date the injunction is lifted.” (The Hills Letter, Supplement to Defendant’s Cross-Motion for Summary Judgment, Exh. # 2, Attach. C.) Sears contends that the November 1980 letter serves as an effective modification of the April 1980 contract. The government counters that Barden and Moyer did not have the authority to bind the government to this new agreement and that even if they did the next contract fails for lack of consideration.

The Court concludes that the November 1980 letter effectively granted Sears an injunction period interest credit on the $5.4 million 1978 payment for the period from May 9, 1980 to August 8, 1983 for the reason that either the November 1980 letter represents an agreed upon interpretation of the settlement agreement, or in the alternative, the letter represents a modification of the April 1980 settlement agreement.

Moyer clearly had the authority to bind the government to the terms in the November letter. In an announcement published in the Federal Register in May 1980, Secretary of Commerce Klutznick states that he retains the authority to decide the compromise of claims under T.D. 71-76. 45 Fed. Reg. 29623 (May 5, 1980). In paragraph 3 of that announcement, Klutznick authorizes the counsel of the Department of Commerce “to take any actions necessary to implement any decision by [him] on the compromise of claims under T.D. 71-76, including the signing and execution of any settlement documents and making any corrections or changes that may be necessary therein.” Id. It is clear from the language of the announcement that once the Secretary had made the decision to settle with the importers, the General Counsel (Moyer in this case) is responsible for ensuring the implementation of the terms of the agreement. The exercise of this broad authority by Moyer is well documented in materials submitted by defendant. (See Deposition of Homer Moyer in Zenith Radio Corp. v. United States, Suppl. to Def. Cross Motion for S.J., Exh. # 17, at 546; Declaration of Homer Moyer, Suppl. to Def. Cross Motion for S.J., Exh. # 16, at ¶ 3.)

Barden’s responsibility as Acting General Counsel for Import Administration entailed his participation in negotiations leading to the settlement of agreements. He also resolved questions concerning the interpretation of the language of the settlement agreements. (Declaration of Lynn Barden in Zenith Radio Corp. v. United States, Suppl. to Def. Cross Motion, Exh. # 13, at ¶ 1.) Acting in that capacity in this case, Barden interpreted or modified the terms of the agreement between Sears and the government with respect to the amount owed by Sears. Barden had the authority in his own right to interpret the terms of the agreement. And, under the authority granted to him by Moyer, Barden had the power to modify the terms of the agreement.

In finding that the November 1980 letter was an interpretation of the April 1980 contract, the Court concludes that the April agreement provides for an interest credit on the $5.4 million assessed in 1978 for the period between November 21, 1978 and April 28, 1980, the date of the written settlement agreement. (Declaration of Homer Moyer, Plaintiff's Reply, Attach. F, at 11 3.) The purpose of this interest credit was to place Sears in the same position as other settling importers. Id. Upon receiving the November 1980 letter, Barden consulted with Moyer, who confirmed Barden’s interpretation that the interest credit for the injunction period was consistent with the rationale for the presettlement interest credit provided for in the settlement agreement between Sears and the government. (Declaration of Lynn J. Barden, Plaintiff’s Reply, Attach. D, at f 5.) Acting in his capacity as an interpreter, Barden read the language of 112 of the settlement agreement to extend the accrual of interest on the $5.4 million payment through the injunction period. There is no need to determine whether or not Sears provided consideration, for under this approach no consideration is required.

Under a modification of contract approach, however, a prior contract is effectively modified only if the new agreement satisfies all of the essential elements of a valid contract including consideration. Nyhus v. Travel Management Corp., 466 F.2d 440, 445-46 (D.C.Cir.1972). Contract law provides that forbearance from the exercise of the rights of one of the parties and the receipt of benefits by the other party function as consideration. See Mel Dar Corporation v. Commissioner of Internal Revenue, 309 F.2d 525, 531 (9th Cir.1962), cert. denied, 372 U.S. 941, 83 S.Ct. 933, 9 L.Ed.2d 967 (1963); Nyhus v. Travel Management Corp., supra, 466 F.2d at 446 (dicta). Here, Sears requested an extension of the interest credit. Moyer accepted Hills’ proposal and had Barden countersign the November 1980 letter. Sears’ consideration was its forbearance to repudiate the agreement in light of the continuing injunction and the treatment of the other importers. The effect of the collapse of the agreement would have been to divert government resources from enforcing the existing agreements to defending past actions. (See Appellee’s Motion to Dissolve Injunction Pending Appeal, The Committee to Preserve American Color Television v. G. William Miller (Appellee), C.A. No. 17-1948, at 46.) Clearly, then, the government benefited from the modification extending the interest credit through the injunction period.

Based on either the interpretation or modification theory, Sears is not liable for the $2.8 million the government claims Sears owes. In addition, Sears tendered the total amount owed under the agreement before the August 8, 1983 due date, so it is not liable for interest which accrued between that date and December 9, 1983, when the government accepted the checks previously tendered by Sears. Since this opinion disposes of the controversy, there is no need to address the related issues developed by the parties.

Conclusion

Accordingly, for the reasons stated in this Opinion and upon consideration of the cross motions for summary judgment, the oppositions thereto and the entire record herein, and in accordance with the Court’s bench ruling, it is by the Court this 6th day of August, 1984,

ORDERED that plaintiff’s motion for summary judgment is hereby denied with respect to all counts; and it is

FURTHER ORDERED that defendant’s motion for summary judgment is hereby granted; and it is

FURTHER ORDERED that judgment is hereby entered for the defendant.

      . While a written contract, even one containing an integration clause, “may be conditioned on an oral agreement that the contract shall not become binding until some condition precedent resting in parol shall have been performed," Luther Williams, Jr., Inc. v. Johnson, supra, 229 A.2d at 164, there is no showing that the parties had agreed to stay the execution of the contract pending the termination of an injunction.


source: Caselaw Access Project

author: McGLYNN, District Judge.

license: Public Domain

text:
    SPRAGUE, LEVINSON & THALL v. ADVEST, INC.
    Civ. A. No. 84-2849.
    United States District Court, E.D. Pennsylvania.
    April 9, 1985.

      Sheldon L. Albert, Sprague, Levinson & Thrall, Philadelphia, Pa., for plaintiff.
    William H. Ewing, Philadelphia, Pa., for defendant.
   MEMORANDUM OF DECISION

McGLYNN, District Judge.

In August of 1983 the plaintiff, a lawyer, received as a fee from a client a properly assigned certificate for 10,625 shares of Patlex stock. On August 19, 1983 the certificate was forwarded to the defendant, a securities broker, with instructions to open an account and to “take whatever action is necessary to transfer the registration of the stock into this firm’s name.” In spite of these specific instructions the certificate was forwarded by the defendant to the transfer agent with instructions to transfer the stock to Cede & Co., a “street name.” The name of Sprague & Rubenstone which had been inserted into the assignment on the reverse side of the certificate was crossed out and the name “Cede & Co.” was substituted. Thereafter the certificate was sent to Depository Trust Company, New York City for “safekeeping.”

On Thursday, December 8, 1983 a lawyer in the Sprague firm called Advest and requested the stock certificate because it was going to be pledged to the Commerce Bank of New Jersey as collateral for a $25,000 loan to one of Sprague’s clients which was to be closed on the following Monday, December 12, 1983.

Because they could not produce the certificate on such short notice Advest agreed to provide a certified check in the amount of $25,000 to be used as collateral until the stock certificate became available. This arrangement was satisfactory to all concerned and the check was delivered in time for the closing of the loan on December 12.

The stock certificate properly made out in the name of Sprague and Rubenstone was delivered on December 19, 1983. At that point, instead of immediately substituting the certificate of stock, the Sprague firm and the Commerce Bank entered into protracted negotiations over the language of the hypothecation agreement which was not resolved until around February 13, 1984. On that date the stock was substituted as collateral and the certified check was retrieved and returned to Advest.

Because he believed he was injured by the defendant’s conduct, Sprague filed this action claiming damages based on five distinct theories, three of which were submitted to the jury as follows:

1. Unlawful conversion by Advest of the shares of stock by causing the shares to be registered in a name other than Sprague & Rubenstone.
2. Breach of contract by failing to carry out the contract to have the stock transferred to the name of Sprague and Rubenstone, and
3. Breach of a fiduciary duty which arose as a result of the relationship of stock broker and client.

In essence, the damages claimed were the loss of the client’s goodwill as a source of business and the loss of lawyers’ billable time which could have been devoted to other matters instead of working on the loan problems. With respect to the client’s goodwill, the client testified that he had had some business subsequent to that time which he referred to other lawyers but it had always been his practice to spread legal work around. He also testified that the failure to produce the stock certificate did not affect the closing of the loan since the certified check was an adequate substitute. His testimony did suggest, however, that he was annoyed by the temporary mix-up with respect to the collateral, but he viewed it simply as further evidence of his preconceived notion that other lawyers in the Sprague firm were actively resisting the firm’s involvement in the loan transaction.

With regard to the loss of the lawyers’ time, except for the period between December 8 and December 12, all time spent by the lawyers would have been expended even if the certificate had been delivered when demanded. The time between December 8 and 12 was de minimus consisting of several telephone conversations with Commerce Bank and Advest personnel making arrangements for substituting the collateral.

The jury in response to special interrogatories found that Advest had improperly converted the stock and breached the contract as well as its fiduciary duty but concluded also that the Sprague firm suffered no compensatory damages, and refused to award even nominal damages. Nevertheless, the jury awarded punitive damages in the amount of $15,000. (See Appendix.)

Citing Hilbert v. Roth, 395 Pa. 270, 276, 149 A.2d 648 (1959), Advest contends that in the absence of actual or compensatory damages an award of punitive damages cannot be sustained. In Hilbert the Pennsylvania Supreme Court held that the satisfaction of a judgment for compensatory damages against one tortfeasor precludes an action against a joint tortfeasor for punitive damages. The court’s analysis is as follows:

Finally, plaintiff contends that he is entitled to proceed against Roth for his punitive damages even though precluded on his claim for compensatory damages. It is well recognized that no award for punitive damages may be made where actual damage has not been suffered. Hygenic Fleeced Underwear Co. v. Way, 35 Pa.Super. 229, 235; Benson v. Pennsylvania R. Co., 1917, 66 Pittsb.Leg.J. 350; Restatement, Torts, Sec. 908, Comment (c). In this case actual damage has been suffered but none for which plaintiff can now bring action against Roth. The right to punitive damages is a mere incident to a cause of action — an element which the jury may consider in making its determination— and not the subject of an action in itself. Hygenic Fleeced Underwear Co. v. Way, supra; 25 C.J.S. Damages § 118, pp. 713-714 and cases cited therein. See MacHolme v. Cochenour, 1933, 109 Pa.Super. 563, 167 A. 647; Stridden v. Pearson Construction Co., 1918, 185 Iowa 95, 169 N.W. 628. Hence, since plaintiff no longer has a cause of action of which his claim for punitive damages may be an element, that claim must fail.

395 Pa. at 276, 149 A.2d 648. (emphasis added).

The Third Circuit, applying Pennsylvania law, and citing Hilbert as its authority held that an owner who recovered the value of the chattel from the original converter could not claim either compensatory or punitive damages from subsequent converters. Baram v. Farugia, 606 F.2d 42, 46 (3d Cir.1979). Similarly, in an action against a finance company for inducing a refusal to deal where no pecuniary loss was shown, the court held that plaintiff cannot recover punitive damages even though the defendant acted in an obnoxious manner. Bruce Lincoln-Mercury v. Universal C.I.T. Credit Corp, 325 F.2d 2, 22 (3d Cir.1963). See, generally, Basista v. Weir, 340 F.2d 74, 86 n. 11 (3d Cir.1965). Other cases which have held, that a finding of compensatory damages is a prerequisite to an award of punitive damages include Thomas v. American Cystoscope Makers, Inc., 414 F.Supp. 255, 264 (E.D.Pa.1976); Certified Laboratories of Texas, Inc. v. Rubinson, 303 F.Supp. 1014, 1029 (E.D.Pa.1969); Weider v. Hoffman, 238 F.Supp. 437, 444-45 (M.D.Pa.1965).

Despite its lineage, however, two recent panel decisions by the Superior Court of Pennsylvania have cast doubt on the traditional interpretation of Hilbert by the Third Circuit. In Laniecki v. Polish Army Veterans Assn., 331 Pa.Superior 413, 480 A.2d 1101 (1984) and in Rhoads v. Heberling, 306 Pa.Superior 35, 451 A.2d 1378 (1982) the court, relying on comment c to § 908 of the RESTATEMENT OF TORTS, let stand an award of punitive damages despite the absence of an award for actual damages. The court’s analysis in these two cases is compelling but there are several factors which dissuade me from adopting it. In both cases the court found that harm, in fact, had occurred (mental distress, humiliation in Laniecki, mental anguish in Rhoads). Here the jury found that the plaintiff suffered no harm. Secondly, the damages in Laniecki and Rhoads stemmed from unliquidated personal injuries whereas in the instant case the damages claimed were economic losses. Finally, and most important, I am bound by the Third Circuit’s interpretation of the law of Pennsylvania and its predictions as to how the Pennsylvania Supreme Court would rule with respect to a given case. As recently as December 13, 1984, the Third Circuit cited Hilbert for the proposition that plaintiffs “were not entitled to submit the issue of punitive damages to the jury [in a bifurcated trial] until they first established [defendant’s] liability for compensatory damages.” Emerick v. U.S. Suzuki Motor Corp., 750 F.2d 19, 22 (3d Cir.1984).

Decisions of an intermediate appellate court are entitled to considerable weight but in the absence of a clear pronouncement by the Supreme Court of Pennsylvania, I believe I must follow Baram v. Farugia, supra, and Bruce Lincoln-Mercury v. Universal C.I.T. Credit Corp., supra. Accordingly, the award of punitive damages will be set aside. Since the jury found there was no pecuniary loss, the verdict will be molded as a finding for the defendant.

Judgment will be entered in favor of the defendant.

APPENDIX

INTERROGATORIES

1. Do you find that the defendant converted the plaintiff’s Patlex stock and seriously interfered with the plaintiff’s dominion, custody and control over it?

YES _X_ NO_

2. Do you find that the defendant breached a contract with the plaintiff?

YES X NO_

3. Do you find that the defendant violated its fiduciary duty to the plaintiff?

YES X NO_

If your answer to any or all of Questions 1, 2, or 3, was “Yes,” go on to Question 4. If your answer to all three was “No,” go no further.

4. Do you find that any of the defendant’s acts described above caused harm to the plaintiff?

YES_ NO X

5. If your answer to Question 4 is “Yes,” what amount do you award the plaintiff as compensation?

$ N/A

6. If your answer to Question 4 is “No,” do you award the plaintiff nominal damages of $1.00?

YES_ NO X

7. If your answer to Question 1 or 3 is “Yes,” do you award punitive damages to the plaintiff?

YES X NO_

8. If your answer to Question 7 is “Yes,”, what amount do you award the plaintiff as punitive damages?

Fifteen Thousand Dollars $15,000.00


author: BRITT, Chief Judge.

text:
    EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Plaintiff, v. E.I. DuPONT de NEMOURS & COMPANY, Defendant.
    No. 84-41-CIV-7.
    United States District Court, E.D. North Carolina, Wilmington Division.
    May 17, 1985.
    Humphrey S. Cummings, Michael H. McGee, E.E.O.C., Charlotte, N.C., for plaintiff.
    A. Bruce Clarke, Gardner G. Courson, Ogletree, Deakins, Nash, Smoak & Stewart, Raleigh, N.C., Atlanta, Ga., for defendant.
   ORDER

BRITT, Chief Judge.

Plaintiff, the Equal Employment Opportunity Commission [EEOC], brings this action' on behalf of Reverend Carl M. Reaves against Reaves’ former employer, E.I. DuPont de Nemours & Company [DuPont], alleging that DuPont discriminated against Reaves on the basis of his religious beliefs and practices, in violation of Title VII of the Civil Rights Act of 1964. 42 U.S.C. § 2000e-2(a) (1982). More particularly, plaintiff contends that defendant failed to reasonably accommodate Reaves’ religious practices to the extent that it would not place an undue hardship on the conduct of its business, as it was required to do. Wren v. T.I.M.E.-D.C., Inc., 595 F.2d 441 (8th Cir.1979). See, 42 U.S.C. § 2000e(j) (1982).

This matter is now before the court on defendant’s motion for summary judgment. Defendant claims that summary judgment is appropriate for two reasons: (1) the undisputed facts in this case establish as a matter of law that DuPont “reasonably accommodated” Reverend Reaves’ religious practices and that further accommodation would have placed undue hardship on its business; and (2) the “reasonable accommodation” requirement of 42 U.S.C. § 2000e(j) and its interpretative guidelines are unconstitutional.

I. Reasonable Accommodation and Undue Hardship.

Defendant has set forth at great length for the court the circumstances surrounding Reaves’ discharge. Although many material facts are undisputed, the court finds that genuine issues of material fact still remain in dispute. In particular, the parties disagree about whether there were further “reasonable accommodations” which could have been made without undue hardship to the employer. Resolution of this issue is a material factual question which the court must decide upon the basis of evidence presented.

II. Unconstitutionality of 42 U.S.C. § 2000e(j).

Defendant also argues that summary judgment should be granted because the “reasonable accommodation” requirement of 42 U.S.C. § 2000e(j) and its interpretative guidelines are unconstitutional. Defendant contends that (1) section 2000e(j) violates the first amendment’s prohibition against governmental establishment of religion; (2) the EEOC interpretative guidelines for section 2000e(j), 29 C.F.R. §§ 1605.1-1605.3, also represent an unconstitutional attempt by the government to establish religion; and (3) the EEOC interpretative guideline embodied in 29 C.F.R. § 1605.2(e)(1) is unconstitutionally vague.

Every appellate court which has considered the constitutionality of the “reasonable accommodation” requirement of 42 U.S.C. § 2000e(j) has held that it does not violate the establishment clause of the first amendment.- McDaniel v. Essex International, Inc., 696 F.2d 34 (6th Cir.1982); Nottleson v. Smith Steel Workers, 643 F.2d 445 (7th Cir.1981), cert. denied, 454 U.S. 1046, 102 S.Ct. 587, 70 L.Ed.2d 488 (1982); Anderson v. General Dynamics Convair Aerospace Div., 648 F.2d 1247 (9th Cir.1981), cert. denied, 454 U.S. 1145, 102 S.Ct. 1006, 71 L.Ed.2d 297 (1982); Tooley v. Martin-Marietta Corp., 648 F.2d 1239 (9th Cir.), cert. denied, 454 U.S. 1098, 102 S.Ct. 671, 70 L.Ed.2d 639 (1981); Cummins v. Parker Seal Co., 516 F.2d 544 (6th Cir.1975), aff'd by an equally divided court, 429 U.S. 65, 97 S.Ct. 342, 50 L.Ed.2d 223 (1976). These circuit courts have held that section 2000e(j) passes the three-prong test established by the Supreme Court in Committee for Public Education v. Nyquist, 413 U.S. 756, 93 S.Ct. 2955, 37 L.Ed.2d 948 (1973), for determining whether a law represents an unconstitutional governmental establishment of religion. See, e.g., Tooley, 648 F.2d at 1244. The court finds these opinions to be persuasive.

To meet the requirements of the establishment clause, the Nyquist court held that a law must: (1) reflect a clearly secular purpose; (2) have a primary effect that neither inhibits nor advances religion; and (3) avoid excessive government entanglement with religion. 413 U.S. at 772-73, 93 S.Ct. at 2965. Section 2000e(j) clearly meets this test.

The purpose of section 2000e(j) is to prevent employers from discriminating against citizens because of their religious beliefs or practices. Tooley, 648 F.2d at 1245. This purpose is clearly a secular one. Id. Although section 2000e(j) was clearly designed to resolve conflicts stemming from religious beliefs, a law need not be devoid of all religious purpose whatsoever as long as its primary purpose is secular. McGowan v. Maryland, 366 U.S. 420, 445, 81 S.Ct. 1101, 1115, 6 L.Ed.2d 393 (1961); Tooley, 648 F.2d at 1245.

The primary effect of section 2000e(j) is to restrain employers from enforcing uniform work requirements that, although neutral in appearance, discriminate in effect against employees holding certain religious convictions. Cummins, 516 F.2d at 553. Although section 2000e(j) may indeed confer an incidental benefit upon some religious faiths, these incidental benefits are not the “primary effect” of the legislation. See Nyquist, 413 U.S. at 771-72, 93 S.Ct. at 2964-65.

Finally, enforcement of section 2000e(j) does not result in excessive government entanglement with religion. Section 2000e(j) requires little or no contact with religious institutions and governmental entities. Cummins, 516 F.2d at 553-54. This does not necessitate any governmental entanglement with religion. Id.

Section 2000e(j) passes the three-pronged Nyquist test. It does not represent an unconstitutional governmental establishment of religion. As it reflects a clearly secular purpose, its primary effect neither inhibits nor advances religion and it avoids excessive governmental entanglement with religion.

In light of the above finding, this court finds it unnecessary to consider defendant’s arguments that the EEOC interpretative guidelines for section 2000e(j) found in 29 C.F.R. §§ 1605.1-1605.3 represent an unconstitutional governmental establishment of religion, and that the interpretative guideline in 29 C.F.R. § 1605.2(e)(1) is unconstitutionally vague. Unlike regulations issued by federal agencies, EEOC interpretative guidelines do not have the force of law because they are promulgated pursuant to statutory authority or according to the rulemaking process dictated by the EEOC Administrative Procedure Act. General Electric Co. v. Gilbert, 429 U.S. 125, 141, 97 S.Ct. 401, 410, 50 L.Ed.2d 343 (1976). Though they are often entitled to a strong degree of deference, Albemarle Paper Co. v. Moody, 422 U.S. 405, 431, 95 S.Ct. 2362, 2378, 45 L.Ed.2d 280 (1975), the interpretative guidelines are not dispositive of Title VII issues and not binding upon courts, as are federal regulations. Gilbert, 429 U.S. at 141, 97 S.Ct. at 410.

Defendant’s motion for summary judgment on the grounds that 42 U.S.C. § 2000e(j) and the EEOC interpretative guidelines found at 29 C.F.R. §§ 1605.1-1605.3 are unconstitutional is denied. Defendant’s motion for summary judgment on the grounds that no genuine issues of material fact remain in this case is also denied.


author: CASTAGNA, District Judge.

text:
    Ragnar OLSEN, Plaintiff, v. PAINE WEBBER, JACKSON & CURTIS, INC. and Dean Martens, Defendants.
    No. 84-864-Civ-T-15.
    United States District Court, M.D. Florida, Tampa Division.
    June 3, 1985.

      William W. Chastain, Trapp & Chastain, Tampa, Fla., for plaintiff.
    Edward W. Gerecke, Carlton, Fields, Ward, Emmanuel, Smith & Cutler, P.A., Tampa, Fla., for defendants.
   ORDER

CASTAGNA, District Judge.

The Court has before it the status of the above-styled case. Both Defendants have filed identical Motions to Dismiss. The Plaintiff has responded, and the Motions are now ripe for determination.

The Defendants first argue that this case should be dismissed due to the pend-ency of a similar state case, which is substantially identical to the instant case save for an absence of federal securities claims. Faced with this issue, the Ninth Circuit has determined that due to the exclusive jurisdiction of federal courts over Rule 10b-5 claims, it was an abuse of discretion to stay federal proceedings containing such a claim pending the outcome of parallel state proceedings. Silberkleit v. Kantrowitz, 713 F.2d 433, 436 (9th Cir.1983). Inasmuch as this case also contains a Rule 10b-5 claim, dismissal would be inappropriate.

The Defendants next urge that the state claims are really paramount here, and that it would be “inappropriate” to adjudicate the federal and pendent claims together due to potential jury confusion, variances in the burdens of proof, and differing remedies. While Stowell v. Ted S. Finkel Inc. Serv., 489 F.Supp. 1209 (S.D.Fla.1980), aff'd on other grounds, 641 F.2d 323 (5th Cir.1981), does support such reasoning, that position is clearly in the minority among Florida federal district courts. This Court perceives no undue complexity, nor any other reason, to preclude the exercise of pendent jurisdiction here.

As to Count VI, brought under section 15(c)(1) of the 1934 Act, the Defendants’ authority does in fact hold that no private action rests under that provision. See, e.g., Admiralty Fund v. Hugh Johnson & Co., 677 F.2d 1301, 1313-14 (9th Cir.1982); Pierson v. Dean, Witter, Reynolds, Inc., 551 F.Supp. 497, 502-503 (C.D. Ill.1982). The Plaintiff has not responded to this argument at all. Therefore, on the strength of the Defendants’ authority, Count VI will be dismissed.

Finally, the Court notes that the Defendant urges that the Plaintiff’s churning claim does not state a claim due to the Complaint’s failure to plead with sufficient particularity as required by Fed.R.Civ.P. 9(b). This Court agrees that more particularity than has been plead here is required to put the Defendants on adequate notice of the “churning” they have been accused of undertaking. Although this Court might well view the pleading requirements in a churning case with a less demanding eye than Judge Gonzalez of the Southern District, his recitation of those requirements as set forth in Viscomi v. Paine, Webber, Jackson & Curtis, Inc., 596 F.Supp. 1537, 1984 CCH Fed.Sec.L.Rep. ¶ 91,846, at 90,230 (S.D.Fla.1984), will provide helpful guidance to Plaintiff as to what this Court will look for in the Amended Complaint. The Court would only add that the Plaintiff contends that his Complaint was patterned after the pleadings in Arceneaux v. Merrill Lynch, Case No. 83-241 Civ-T-15 (M.D.Fla.1983) and Starkenstein v. Merrill Lynch, Case No. 81-298 Orl (M.D.Fla.1982), which were “upheld as asserting sufficient causes of action.” While this Court is not familiar with Starkenstein, that statement is not accurate as to Arceneaux. In that case, the pleadings were not challenged by a motion to dismiss or otherwise, and therefore nothing in that case stands as an impediment to this decision. Having found both the federal claims under Rule 10b-5 and Section 15(c)(1) deficient, the entire Complaint must be dismissed. See Viscomi, supra, 1537, 1984 CCH Fed.See.L.Rep. ¶ 91,846 at 90,230.

Based upon the foregoing, it is accordingly

ORDERED:

1. The Defendants’ respective Motions to Dismiss are granted. Count VI is dismissed with prejudice. The remainder of the Complaint is dismissed without prejudice, and the Plaintiff has until June 17, 1985 to file an amended complaint, failing which the remainder of the Complaint will stand dismissed.

2. The Defendants’ respective Motions to Strike are denied, the Court having found the punitive damages allegations sufficient at this stage of the litigation.


author: ELFVIN, District Judge.

text:
    Robert N. DAVIS, Individually and on behalf of all others similarly situated, Plaintiff, v. BUFFALO PSYCHIATRIC CENTER; the New York State Office of Mental Health; the New York State Department of Mental Hygiene; and the New York State Office of Civil Service, Defendants.
    No. CIV-81-458E.
    United States District Court, W.D. New York.
    June 6, 1985.
    Memorandum and Order Sept. 30, 1985.
    Lewis Steele, Buffalo, N.Y., for plaintiff.
    Patrick O. McCormack, Asst. Atty. Gen., Buffalo, N.Y., for defendants.
   ORDER

ELFVIN, District Judge.

In this employment discrimination action plaintiff’s motion for class action certification had been denied by this Court February 20, 1985 as untimely under rule 8(c) of the Local Rules of Practice of this Court, 613 F.Supp. 462. Plaintiff now has moved for reconsideration of such decision. Having considered plaintiff’s motion, counsel for defendants’ acknowledgement June 3, 1984 that the prior motion had been timely made under said rule, and having reviewed the Complaint, Amended Complaint and class certification motion in question, it is hereby

ORDERED that this Court’s Memorandum and Order in this action filed February 20, 1985 is vacated with respect to the denial of plaintiff's motion for class action certification and that plaintiff shall have twenty (20) days from the entry of this Order in which to renew his motion for such certification.

MEMORANDUM AND ORDER

In this action alleging discrimination in employment due to race and sex in violation of Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq., the Civil Rights Act of 1866, 42 U.S.C. § 1981 and the “equal protection” clauses of the Federal and New York State Constitutions, plaintiff has moved for reconsideration of that aspect of this Court’s February 20, 1985 Memorandum and Order which had dismissed his constitutional claims as well as his claim brought under 42 U.S.C. § 1981, 613 F.Supp. 462. His constitutional claims had been dismissed due to the defendant state agencies’ immunity to suit in federal court pursuant to the Eleventh Amendment to the United States Constitution, which immunity had not been expressly waived regarding such claims. Plaintiff’s section 1981 claim had been dismissed due to my finding that defendants had not been “persons” amenable to suit under such statute.

In seeking reconsideration of the dismissal of his claim under section 1981 plaintiff has submitted persuasive authority that, unlike under section 1983, a defendant state agency need not be found to be a “person” in order to be subject to suit under section 1981. See Yarbrough v. Illinois Dept. of Mental Health, 538 F.Supp. 414, 417 (N.D.Ill.1982); Skyers v. Port Authority of N.Y. & N.J., 431 F.Supp. 79, 83-84 (S.D.N.Y.1976). “The reference to ‘persons’ contained in § 1981 describes those protected by the statute, and not those proscribed from its violation, as in § 1983.” Id. at 83. However, such contention does not warrant reinstatement of plaintiff’s claim under section 1981 inasmuch as a state and its agencies remain immune from suit premised upon such statute in federal court due to the Eleventh Amendment. See Daisemia v. State of N.Y., 582 F.Supp. 792, 799-803 (N.D.N.Y. 1984); Manning v. Pennsylvania Bureau of Correction, 559 F.Supp. 220, 222 (M.D. Pa.1983); Henry v. Texas Tech University, 466 F.Supp. 141, 146 (N.D.Tex.1979); Gill v. Monroe County Dept. of Social Services, 79 F.R.D. 316, 335 (W.D.N.Y.1978). Although plaintiff properly has argued that there is some indication that Congress had intended section 1981 to apply to state conduct — see Daisemia v. State of N.Y., supra, at 801-802 — , the United States Supreme Court has held that unless Congress has indicated “in some way by clear language that the constitutional immunity was swept away” it would be improper to infer that Congress desired silently to deprive states of Eleventh Amendment immunity. Employees v. Missouri Public Health Dept., 411 U.S. 279, 285, 93 S.Ct. 1614, 1618, 36 L.Ed.2d 251 (1973). Quern v. Jordan, 440 U.S. 332, 345, 99 S.Ct. 1139, 1147, 59 L.Ed.2d 358 (1979), held that in order to override state immunity Congress must have evidenced an unequivocal intent to do so in either the language of a statute or plainly evident legislative history.

Section 1981, like section 1983, had been enacted by Congress at a time when a restrictive view of federal power had prevailed. See Daisemia v. State of N.Y., supra, at 802-803. In the absence of any clear language or legislative history addressing the issue of Eleventh Amendment immunity this Court shall not find that Congress had intended to abrogate such privilege. See also Rucker v. Higher Educational Aids Bd., 669 F.2d 1179, 1184 (7th Cir.1982); Sessions v. Rusk State Hospital, 648 F.2d 1066, 1069 (5th Cir.1981) (state agencies are immune from suit under section 1981 due to the Eleventh Amendment).

Finally, this Court has considered plaintiff’s contentions regarding the dismissal of his federal and state constitutional claims and does not find that there exists any basis for alteration of my prior decision. Plaintiff has not adequately shown that Eleventh Amendment immunity has been overridden or that the State of New York has waived its immunity and has consented to be subject to suit in federal court regarding claims premised upon section 1981 or the “equal protection” clause of the Federal or New York Constitutions. As recently explained in Atascadero State Hosp. v. Scanlon,—U.S.-, 105 S.Ct. 3142, 87 L.Ed.2d 171 (1985), “a State will be deemed to have waived its immunity ‘only where stated “by the most express language or by such overwhelming implication from the text as [will] leave no room for any other reasonable construction.” ’ ” Id, at 3146 (quoting from Edelman v. Jordan, 415 U.S. 651, 673, 94 S.Ct. 1347, 1360, 39 L.Ed.2d 662 (1974)). In the instant action plaintiff simply has not established the state’s waiver of its Eleventh Amendment protection or the abrogation of such immunity by appropriate legislation enacted by Congress pursuant to the enabling provision of the Fourteenth Amendment.

Accordingly, it is hereby ORDERED that plaintiff’s motion for reconsideration of this Court’s dismissal of his claims under 42 U.S.C. § 1981 and under the Federal and New York State Constitutions is denied.

      . In opposition to plaintiffs motion defendants had submitted a brief entitled "Memorandum of Law in Opposition to Plaintiffs Motion to Amend and/or Alter the Order of This Court of February 20, 1985 and In Support of Defendant’s [sic] Renewed Motion to Dismiss the Amended Complaint.” Inasmuch as no such “Renewed Motion to Dismiss” or any other motion for reconsideration actually had been filed by defendants, the arguments set forth in such memorandum seeking dismissal of claims not addressed by plaintiffs motion have not been considered by this Court. Likewise, plaintiffs request to amend his Complaint to add certain persons as defendants in this individual and/or official capacities may be considered only upon the filing of a proper motion.


author: HARDY, District Judge.

text:
    FUDDRUCKERS, INC., a Texas corporation, Plaintiff, v. DOC’S B.R. OTHERS, INC., an Arizona corporation; Douglas J. Koppes and Mary F. Koppes, his wife; Dr. Gerald M. Koppes; and Steven N. Koppes, Defendants.
    No. CIV 84-1155 PHX CLH.
    United States District Court, D. Arizona.
    June 18, 1985.
   MEMORANDUM OPINION AND ORDER

HARDY, District Judge.

Plaintiff brought this action under Section 43(a) of thé Lanham Act, 15 U.S.C. § 1125(a). There was a lengthy jury trial. Before trial, plaintiff dismissed its claim against the defendant Mary Koppes insofar as it sought to impose liability on her as a principal. A directed verdict was entered in favor of the defendant Steven N. Koppes. The jury returned a verdict in favor of the other defendants. The defendants have applied for an award of attorney’s fees. The application will be granted.

Section 35 of the Lanham Act, 15 U.S.C. § 1117, authorizes attorney’s fees in “exceptional cases,” but Section 43(a), 15 U.S.C. § 1125(a), makes no mention of attorney’s fees. However, in Rickard v. Auto Publisher, Inc., 735 F.2d 450 (11th Cir.1984), after investigating the legislative history of the Act and analyzing its purpose and intent, the 11th Circuit held that Section 35 relief is available in Section 43(a) actions. Accord, Metric and Multistandard Components v. Metric’s, Inc., 635 F.2d 710 (8th Cir.1980).

This case is an exceptional case that entitles the defendants to an award of attorneys’ fees. In Mennen Co. v. Gillette Co., 565 F.Supp. 648, 657 (S.D.N.Y.1983), aff'd, 742 F.2d 1437 (2d Cir.1984), the court held that “[tjhere is a substantial overtone in this case to warrant an inference that this case was initiated as a competitive ploy and that assessment of attorney’s fees was appropriate.” A number of aspects of this case point to the same conclusion. First, this case would never have been submitted to the jury had there not been circumstantial evidence that the defendants deliberately copied plaintiff’s trade dress, which per mitted inferences of likelihood of confusion and secondary meaning. See Brooks Shoe Mfg. Co. v. Suave Shoe Corp., 716 F.2d 854, 859-60 (11th Cir.1983). Second, there was evidence that Fuddruckers had brought numerous lawsuits against other restaurant operators who had adopted restaurant and trade dress concepts similar to that of Fuddruckers. Third, and most damning, there is evidence that Phillip Romano, the president of Fuddruckers, said “We are going after any and everybody who’s anywhere like us until we are the dominant one in the market place and then we won’t care any more.”

Additionally, plaintiff’s claim that the defendants had infringed a registered trademark was established to be groundless. Plaintiff’s claims against two of the individual defendants, Mary Koppes and Steven Koppes, were also groundless. Mrs. Koppes was joined as a defendant simply becaac° she was the wife of Douglas Koppes. The <>omplamt alleged that she participated as a principal in all of the underlying alleged unlawful actions. The same allegations were made against Steven Koppes, the brother of Douglas and Gerald Koppes. There was no evidence that Mrs. Koppes or Steven Koppes participated in any way in the allegedly illegal actions of the other defendants. A week before trial plaintiff dismissed its claims against Mrs. Koppes. A directed verdict at the close of plaintiffs case was granted in favor of Steven Koppes. It can reasonably be concluded that the allegations against Mrs. Koppes and Steven Koppes were not made in good faith and were simply a form of harassment. The existence of bad faith may establish an exceptional case. See Burger King Corp: v. Mason, 710 F.2d 1480, 1495 (11th Cir.1983).

A court in exercise of its equitable powers may also award attorney’s fees to a successful party when the interests of justice so require such as when his opponent has acted in bad faith, vexatiously, wantonly, or for oppressive circumstances. F. D. Rich Co. v. Industrial Lumber Co., 417 U.S. 116, 129-30, 94 S.Ct. 2157, 2165, 40 L.Ed.2d 703 (1974); Hall v. Cole, 412 U.S. 1, 5, 93 S.Ct. 1943, 1946, 36 L.Ed.2d 702 (1973). The foregoing circumstances would also justify an award of attorney’s fees pursuant to this principle.

The defendants also base their claim for an award of attorney’s fees on the provisions of A.R.S. § 12-341.01, which authorizes an award of reasonable attorney’s fees to the successful party “in any contested action arising out of a contract, express or implied.” This case does not arise out of a contract.

In Johnson v. Georgia Highway Express, Inc., 488 F.2d 714, 717-19 (5th Cir.1974) the court enunciated twelve guidelines for fixing attorney’s fee. They were adopted by the Ninth Circuit in Kerr v. Screen Extras Guild, Inc., 526 F.2d 67, 69-70 (9th Cir.1975), cert. denied, 425 U.S. 951, 96 S.Ct. 1726, 48 L.Ed.2d 195 (1976). To the extent that it is applicable, each of these guidelines will be discussed.

1. The novelty and difficulty of the questions. There were numerous novel and difficult questions in this ease that required considerable expenditure of time and research and preparation. Among them were the applicability of the Lanham Act to trade dress, the applicability of the doctrine of functionality, the determination of secondary meaning, the inferences permitted by evidence of deliberate copying of trade dress, and the measure of damages for such infringement.

2. The skill requisite to perform the legal services properly. The preparation and presentation of this case by counsel for both sides was exceptional. They were invariably well prepared on both the facts and the law. Their advocacy was of the highest order.

3. The preclusion of other employment by the attorney due to the acceptance of this case. This guideline is significant only in a contingent fee ease. Here, the attorneys for the defendants were being compensated for their services.

4. The customary fee. No evidence of the customary fee for similar work in the community has been presented.

5. Whether the fee is fixed or contingent. This guideline has little application in this case. The Johnson court noted that it was “helpful in demonstrating the attorney’s fee expectations when he accepted the case.” 488 F.2d at 718.

6. Time limitations imposed by the client or the circumstances. Time limitations were imposed upon defense counsel by the acceleration of this case for trial and by the fact that there was a lengthy trial.

7. The amount involved and the results obtained. Counsel for the defendants successfully defended them. Had plaintiff prevailed, the defendants could well have been put out of business.

8. The experienced, reputation, and ability of the attorneys. The law firms representing both sides enjoy excellent reputations. Lead counsel for both sides are experienced trial lawyers. As has already been noted, their performance in this case was exceptional.

9. The “undesirability” of the case. This case was not an undesirable case.

10. The nature and length of the professional relationship with the client. The relationship of the defendants and their attorneys appears to have commenced with this case.

11. Awards in similar cases. No evidence has been presented of awards in similar cases. In all likelihood, there are few, if any, similar cases.

12. The time and labor required. Actually, this is the first guideline enunciated in Johnson. “The most useful starting point for determining the amount of a reasonable fee is the number of hours reasonably expended on the litigation multiplied by a reasonable hourly rate.” Hensley v. Eckerhart, 461 U.S. 424, 433, 103 S.Ct. 1933, 1939, 76 L.Ed.2d 40 (1983). An application for attorney’s fees must be sufficiently detailed to permit the court to make an independent determination of whether the hours claimed are justified. National Ass’n of Concerned Veterans v. Secretary of Defense, 675 F.2d 1319 (D.C. Cir.1982). The judge must be able to “make a fair evaluation of the time expended, the nature and need for the service, and the reasonable fees to be allowed.” Hensley, 461 U.S. at 441, 103 S.Ct. at 1943 (Burger, C.J., concurring). “Where the documentation of hours is inadequate, the district court may reduce the award accordingly.” Id. at 433, 103 S.Ct. at 1939.

If more than one attorney is involved, the trial judge must consider the possibility of duplication of effort. Johnson, 488 F.2d at 717. The attorneys seeking an award of attorney’s fees have the burden of establishing that duplication of effort had not occurred. Jones v. Amalgamated Warbasse Houses, Inc., 97 F.R.D. 355, (1982), aff'd 721 F.2d 881 (2nd Cir.1983), cert. denied, 466 U.S. 944, 104 S.Ct. 1929, 80 L.Ed.2d 474 (1984).

The trial judge is not required to accept an attorney’s valuation of his own time. Chrapliwy v. Uniroyal, Inc., 670 F.2d 760, 767 (7th Cir.1982), cert. denied, 461 U.S. 956, 103 S.Ct. 2428, 77 L.Ed.2d 1315, nor is he obligated to adopt the rate and hours claimed merely because his affidavit was not challenged by the attorney on the other side. Wojtkowski v. Cade, 725 F.2d 127, 130 (1st Cir.1984). Different hourly rates may be set for different types of litigation tasks. Capozzi v. City of Albany, 565 F.Supp. 771, 773 (N.D.N.Y.1983).

The hourly rates at which various lawyers for the defendants billed their services are reasonable.

The defendants’ application for attorney’s fees suffers from a number of deficiencies. Two are more vexatious than substantive. First, they did not even bother to total the amounts claimed for various services, and their schedule of various services performed, which comprises 25 pages, has the first day’s services on the last page and the last day’s service on the first page.

Second, many entries are not sufficiently detailed to permit a determination of whether the time claimed is justified. One type of entry that falls within this category records simply legal research without identifying the question being researched. A deduction of $1,778.50 is being made for such entries. Other entries lump together a number of services. For example an entry may consist of preparation for argument, argument and conference with client. One cannot determine how much time was spent in preparation, in argument or in conference. A total of $5,634.50 is being deducted for such entries. In addition, any slight inaccuracies in the figures discussed below result from these indefinite entries.

The attorneys for the defendants prepared and filed a motion for summary judgment, a reply to plaintiff’s response to the motion and a supplemental reply to plaintiff’s supplemental response. A total of 31.20 hours for which defendants seek $3,130 was spent in preparation of the motion. A total of 67.40 hours for which defendants seek $6,545 was spent in preparation of the reply and a total of 15.30 hours for which defendants seek an award of $994.50 was spent in preparation of the reply to the supplemental response. After reviewing the various motion papers, the Court concludes that an excessive amount of time was spent in their preparation. In addition there appears to have been a considerable duplication of effort. A total of $240 is being deducted from the amount claimed for preparation of the motion for summary judgment and $4,045 is being deducted from the amount claimed for the reply.

The amount claimed for preparing and arguing the motion for summary judgment and motion for sanctions also appears to be excessive. The Court is reducing this amount by $250.

There appears to be some duplication of effort and excessive time in connection with the preparation and drafting of a counterclaim. The amount claimed there will be reduced by $200.

Defendants seek $2,560.50 for 41.20 hours logged in the preparation of jury instructions. This amount appears to be excessive. Most of the requested jury instructions prepared by defendants were taken from various published pattern instructions. The amount claimed will be reduced by $1,280.

A total of 14.60 hours were logged in the preparation of photographic exhibits, for which defendants claim $1,216.50. This is work which could have been done by a non-lawyer. The court is deducting $690.

A total of 13.80 hours was spent on research regarding views of the premises and defendants claim $941. This amount appears to be excessive. The Court is reducing it by $341.

One of defendants’ attorneys spent 1.60 hours on “analysis re memorandum to court on intent to cause confusion” and “analysis re jury instructions and directed verdict on intent to cause confusion.” The Court has no idea what is meant by “analysis” and therefore is deducting the amount claimed of $104.

There are several time entries for telephone conferences with persons who appear to have been lawyers representing other persons involved in litigation with Fuddruckers. All of these telephone conferences occurred after trial. There has been no showing how they contributed to the outcome of the case. The sum of $336.50 will be deducted.

Finally, the Court is deducting $936 for time spent by attorneys for defendants with relation to a motion to strike plaintiff’s motion for a judgment notwithstanding the verdict. Counsel for plaintiff had prepared a memorandum of points and authorities that did not comply with the requirement of Local Rule 11(h) that such memorandum shall not exceed 15 pages. A copy of the memorandum was mailed to the attorneys for defendants before the memorandum was filed with the clerk. When the memorandum was presented to the clerk, he refused to accept it, and counsel for plaintiff had to make some quick deletions. When counsel for defendants learned of this, he created a tempest in a teapot by darkly suggesting that opposing counsel had acted egregiously and that in fact no proper motion had been filed. The motion was eventually denied on its merits.

The defendants also seek an award totaling $2,031.89 for various expenses that are not the usual taxable costs. Such expenses are not authorized by the Lanham Act. See 15 U.S.C. § 1117.

Defendants seek a total of $116,-869.26 in attorney’s fees and expenses. This amount will be reduced by $17,867.39, and they will be awarded $99,001.87 as attorney’s fees.

IT IS ORDERED granting defendants’ application for award of attorney’s fees and awarding defendants $99,001.87 as a reasonable attorney’s fee.


author: McGOVERN, Chief Judge.

text:
    Larry J. WEST and Mariis K. West, husband and wife, Plaintiffs, v. DREXEL BURNHAM LAMBERT, INC., a Washington corporation, et al., Defendants.
    No. C85-582M.
    United States District Court, W.D. Washington.
    Aug. 15, 1985.
    Steve W. Berman, W. Keith Fendrick, Shidler, McBroom & Gates, Seattle, Wash., for plaintiffs.
    Jeffrey B. Van Duzer, Davis Wright Todd Riese & Joens, Seattle, Wash., for defendants.
   McGOVERN, Chief Judge.

Plaintiff Larry West sues Defendants Drexel Burnham Lambert, Inc., a brokerage house, and Dominick Viscardi, an account executive, for churning his accounts and inappropriate investments. The accounts are governed by two agreements between Plaintiff and Defendant which provide for arbitration of all disputes. Therefore, Defendant Drexel moves, pursuant to the Federal Arbitration Act, 9 U.S.C. § 2 (1982), to stay this action and to compel arbitration.

In response to the motion to compel arbitration, Plaintiff first notes that the arbitration agreement provides that it does not constitute a waiver of any rights Plaintiff “may have under any Federal Securities laws.” The agreement also states that “certain.. .federal courts have held that” claims under the 1933 Securities Act and 1934 Securities Exchange Act are not arbitrable even in the presence of an otherwise valid arbitration clause. Plaintiff, therefore, contends that he was told any claim he may have under the 1934 Act was not arbitrable.

The agreement, however, merely advises Plaintiff of the then state of the law and his rights. It does not purport to do anything but state that the arbitration agreement is governed by federal securities law. Therefore, the quoted portions of the arbitration clause are irrelevant and this Court must look to and be bound by the federal securities laws regarding whether or not Plaintiff’s claims are arbitrable pursuant to his agreement with Defendant.

Plaintiff next contends that his sections 10(b) and 20 claims under the 1934 Securities and Exchange Act, 15 U.S.C. §§ 78j(b) and 78t (1982), his Rule 10b-5 claim, 17 C.F.R. § 240.10b-5 (1985), his claims under The Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. §§ 1961-64 (1982) and his pendent state law claims under the Washington State Securities Act, R.C.W. §§ 21.10.010, et seq. (1984) are not subject to arbitration and therefore Defendant’s motion should be denied.

1. 1934 Exchange Act and Rule 10(b)-5.

Plaintiffs’ authority for disregarding a straight forward arbitration agreement regarding these claims arises from Wilko v. Swan, 346 U.S. 427, 74 S.Ct. 182, 98 L.Ed. 168 (1953). In Wilko, Plaintiff sued under § 12(2) of the 1933 Act (not the 1934 Act). The Supreme Court held the claim to be nonarbitrable because § 14 of the 1933 Act declares void any contractual “stipulation” requiring a security purchaser to waive compliance with any “provision” of the 1933 Act. 15 U.S.C. § 77n. The Court held that the arbitration clause required Plaintiff to waive his right to a judicial determination of his claim “in any court of competent jurisdiction.” 15 U.S.C. § 77v. Moreover, the 1933 Act specifically granted a defrauded purchaser a “special right” of action broader than any common law claim. The Court found this express statement of Congressional policy to outweigh the competing policy of the Arbitration Act.

While Wilko is still good law as to claims arising under the 1933 Act, the Supreme Court has expressed doubt that its reasoning can be transferred to claims arising under the 1934 Act. In Scherk v. Alberto-Culver Co., 417 U.S. 506, 513-14, 94 S.Ct. 2449, 2454-55, 41 L.Ed.2d 270 (1974), the Court noted that the 1933 Act expressly grants an individual a “special right” of action. In light of this Congressionally created special right, the Wilko Court found it easier to ignore the important policy in the Arbitration Act favoring arbitration agreements. The 1934 Act, however, has no such statement of Congressional intent. The courts have read into the 1934 Act its private right of action. Thus, the command of the Arbitration Act should prevail.

Moreover, the Scherk Court noted that the 1933 Act expressly allows Plaintiff to bring an action “in an court of competent jurisdiction — federal or state — and removal from a state court is prohibited.” 15 U.S.C. § 77v. The Wilko Court found this broad grant of jurisdiction to be a significant “provision” under § 77n which no “stipulation” could waive. The Scherk Court distinguished the 1934 Act noting that it merely provided for suit in the federal district courts that have “exclusive jurisdiction.” Plaintiffs under the 1934 Act already have their choice of forum strictly limited. Therefore, this is not the type of significant “provision” which no “stipulation” may waive.

More recently, in Dean Witter Reynolds, Inc. v. Byrd,—U.S.-, 105 S.Ct. 1238, 84 L.Ed.2d 158 (1985), the Court enforced an arbitration clause as to pendant state security claims (the parties had not sought arbitration of the 1934 Act claims). The Court noted in dicta the problems with trying to apply Wilko to 1934 Act claims. 105 S.Ct. at 1240 and n. 1. In his concurring opinion, Justice White again expressed doubt that the reasoning of the Wilko decision could be transferred to 1934 Act claims. Id., 105 S.Ct. at 1244. It is plain that all of the signs from the Supreme Court indicate that 1934 Act claims are arbitrablé.

The Ninth Circuit has not held to the contrary, as Plaintiff suggests. In DeLancie v. Birr, Wilson & Co., 648 F.2d 1255 (9th Cir.1981), plaintiff sued for securities violations. Defendant moved to compel arbitration because a Pacific Stock Exchange rule required arbitration of all disputes. The court held the rule inapplicable because Plaintiffs claims arose before he joined the exchange and became subject to its rules. In the present case, Plaintiffs claims arose after he entered into the arbitration agreement.

In Byrd v. Dean Witter Reynolds, Inc., 726 F.2d 552 (9th Cir.1984), rev’d,—U.S.-, 105 S.Ct. 1238, 84 L.Ed.2d 158 (1985), the court’s statement that § 10(b) claims are not arbitrable is merely dicta. As the Supreme Court noted on appeal, Dean Witter did not seek to compel arbitration of the 1934 Act claims. Therefore, the issue was not properly before the Ninth Circuit. 105 S.Ct. at 1240 and n. 1.

In light of the above, Defendant’s motion to remand the 1934 Act and Rule 10b-5 claims to arbitration is GRANTED.

2. RICO

Plaintiff also contends that his RICO claims are not arbitrable. Whether RICO claims are arbitrable is a new question covered in relatively few reported decisions. The leading case, S.A. Mineracao da Trindade-Samitri v. Utah Internad, Inc., 576 F.Supp. 566 (S.D.N.Y.1983), amended, 579 F.Supp. 1049, aff'd, 745 F.2d 190 (2d Cir.1984), held that RICO claims are not arbitrable. The court reasoned that, like antitrust laws, RICO enforcement not only affects the individuals involved, but it also impacts important societal policies. The most important policy underlying RICO being the eradication of organized crime. 576 F.Supp. at 575. Because of this strong public interest, Congress is assumed to have intended that Such important issues not be decided by arbitrators. 576 F.Supp. at 574-76. In affirming, the Second Circuit did not discuss the issue and merely assumed that the RICO claims were not arbitrable. 745 F.2d at 196.

Four other lower courts have likewise found that RICO claims are not arbitrable. Witt v. Merrill Lynch, Inc., 602 F.Supp. 867, 870 (W.D.Pa.1985); Jacobson v. Merrill Lynch, Inc., 605 F.Supp. 510, 512 (W.D.Pa.1984); Universal Marine Ins. Co. v. Beacon Ins. Co., 588 F.Supp. 735, 738 (W.D.N.C.1984); Wilcox v. Ho-Wing Sit, 586 F.Supp. 561, 567 (N.D.Cal.1984). In Wilcox, the court, in addition to noting the public interest argument upon which the Mineracao court relied, held that RICO law was “sufficiently embryonic that its development [is] better left to courts than to arbitrators.” 586 F.Supp. at 567. Finally, the court held that because RICO claims are often predicated on violations of the securities laws, the fact that federal securities violations are not arbitrable militates against compelled arbitration in RICO cases.

At least one district court has held that RICO claims are arbitrable. In Finn v. Davis, 610 F.Supp. 1079 (S.D.Fla.1985), the court first noted the strong federal policy in favor of arbitration. Id. at 1082. The court then held that the RICO claims could easily fit within the broadly worded arbitration clause at issue in that case. Since the parties agreed to arbitrate such claims, the court enforced the agreement.

The decision of whether RICO claims are arbitrable basically comes down to balancing two conflicting federal policies; the enforcement of arbitration agreements and the eradication of organized crime. This Court holds that the policy in favor of arbitration should prevail for two reasons. First, after Byrd, it is clear that 1934 Act claims are indeed arbitrable. Therefore, the reasoning of Wilcox is now the converse; since the predicate acts upon which a RICO claim is based are now arbitrable, there is no reason why RICO claims should not also be arbitrable.

Second, the important societal policy of eradicating organized crime that RICO was designed to promote, and upon which Mineracao and the others rely, is completely irrelevant to this case and the vast majority of other RICO cases. The Supreme Court recently enunciated what has been all too obvious during the recent explosion of civil RICO cases; “in its private civil version, RICO is evolving into something quite different from the original conception of its enactors.” Sedima, S.P.R.L. v. Imrex Co.,—U.S.-, 105 S.Ct. 3275, 87 L.Ed.2d 346 (1985). The Supreme Court recognized that “private civil actions under the statute are being brought almost solely against [respected and legitimate enterprises], rather than the archetypal, intimidating mobster.” Id. While it is true that “legitimate” businesses are not inherently incapable of performing those acts RICO defines as “racketeering activity,” neither are they organized criminals of the type Congress designed RICO to stop. Because of the breadth of RICO’s language, it has essentially become a federal business tort statute. The Sedima Court held that only Congress, not the courts, can change the statute and make it comport with its original purpose. But until Congress does so, if it does, there is no reason to pay lip service to a policy that justifies only a tiny minority of RICO cases. Therefore, since this RICO claim touches upon no great societal or public interest, the policy of enforcing arbitration agreements should prevail. Plaintiff’s RICO claim shall be remanded for arbitration.

3. State Claims

Plaintiff also opposes arbitration contending that his state securities claims are not arbitrable. The Washington State Securities Act, RCW § 21.20.010, et seq. (1984), however, is to be construed consistently with the similar Federal Acts. Burgess v. Premier Corp., 727 F.2d 826, 832 (9th Cir.1984); Kittilson v. Ford, 93 Wash.2d 223, 608 P.2d 264 (1980); R.C.W. § 21.20.900 (1984). Since 1934 Act claims are arbitrable, so are Plaintiff’s state claims.

Moreover, the Washington Supreme Court recently held that the Supremacy Clause combined with the Arbitration Act require that arbitration clauses be enforced with respect to state securities claims. Garmo v. Dean, Witter, Reynolds, Inc., 101 Wash.2d 585, 590, 681 P.2d 253 (1984).

Therefore, it is hereby ORDERED:

(1) Plaintiff’s claims are remanded to arbitration and this case is dismissed; and

(2) The Clerk of the Court shall direct uncertified copies of this Order to counsel of record.


author: MacLAUGHLIN, District Judge.

text:
    EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Plaintiff, v. COUNTY OF HENNEPIN, Defendant.
    Misc. No. 4-85-18.
    United States District Court, D. Minnesota, Fourth Division.
    Aug. 28, 1985.

      Lloyd Zimmerman, E.E.O.C., Minneapolis, Minn., for plaintiff.
    Thomas L. Johnson, Hennepin Co. Atty., and Joyce Y. Miyamoto, Asst. Co. Atty., Minneapolis, Minn., for defendant.
   MEMORANDUM AND ORDER

MacLAUGHLIN, District Judge.

This matter is before the Court on plaintiff’s application for enforcement of an administrative subpoena, plaintiffs motion for attorneys’ fees, and defendant’s motion for a protective order. The Court will grant plaintiff’s application for enforcement of the administrative subpoena, but will deny plaintiff's motion for attorneys’ fees and defendant’s motion for a protective order.

FACTS

Plaintiff in this action is the Equal Employment Opportunity Commission (EEOC). The EEOC is in the process of investigating a charge of sex discrimination against the Hennepin County Sheriffs Department. Constance Leaf claims that she was fired from her position as a deputy sheriff prior to completing her probationary period because of her sex. As a part of its investigation, the EEOC is seeking to examine the personnel files of 16 deputy sheriffs who, like Leaf, were on probationary status. The EEOC issued an administrative subpoena to defendant Hennepin County (County) in order to obtain these personnel files.

Defendant does not question the relevancy of the information plaintiff has requested, but defendant will not respond to the subpoena absent a court order. Defendant’s position is that the Minnesota Government Data Practices Act (Data Practices Act), Minn.Stat. §§ 13.01-.88, requires defendant to provide such information only upon a court order. See Minn.Stat. § 13.-43, subd. 4. Defendant states that it offered to provide plaintiff the 16 personnel files with the names of the individuals deleted. Defendant also offered to enter into a stipulation with plaintiff whereby both parties would request that the Court issue an order requiring defendant to produce the files.

Plaintiff rejected both these proposals. Plaintiff points out that the EEOC and the County have previously litigated the same issue, i.e., whether the Data Practices Act prohibits the County from responding to an EEOC subpoena without a court order. In a case involving a different underlying investigation, the United States Magistrate ordered the County to comply with an EEOC subpoena. EEOC v. County of Hennepin, MISC. 4-84-32, 35 EPD (CCH) 1134, 797 (D.Minn. Nov. 8, 1984). The Magistrate found that Title VII preempts the Data Practices Act, and that notwithstanding the Data Practices Act, disclosure was compelled by the Magistrate’s order. 35 EPD at 35,459.

Plaintiff asserts that the Magistrate’s decision has collateral estoppel effect (i.e., issue preclusion) against defendant. Plaintiff further states that defendant’s contesting the same issue before this Court entitles plaintiff to attorneys’ fees. Defendant responds that plaintiff is not entitled to attorneys’ fees, and that if the Court orders defendant to produce the personnel files, the Court should also issue a protective order. Defendant requests a protective order prohibiting plaintiff from disclosing information from the personnel files to the public, including the charging party and her attorney or representatives. DISCUSSION

The EEOC has the power to issue administrative subpoenas in conjunction with its investigations of allegations of discrimination, 42 U.S.C. § 2000e-9; 29 U.S.C. § 161(1), and the EEOC can apply to a federal district court to enforce such subpoenas. 42 U.S.C. § 2000e-8, 29 U.S.C. § 161(2). A district court reviewing an EEOC application for a subpoena shall enforce the subpoena if it seeks information material and relevant to an investigation of a potential violation. EEOC v. Chrysler Corp., 567 F.2d 754, 755 (8th Cir.1977); see also EEOC v. Shell Oil Co., 466 U.S. 54, 104 S.Ct. 1621, 1632-33 n. 26, 80 L.Ed.2d 41 (1984).

Defendant does not challenge the materiality or the relevancy of the information plaintiff requests. Rather, defendant states that the Data Practices Act, Minn. Stat. § 13.43, subd. 4, dictates that it produce the information only in response to a court order. Defendant believes that producing the information on the basis of an administrative subpoena would not satisfy the requirements of the Data Practices Act. Defendant fears that disclosing the information without a court order would expose defendant to civil and criminal penalties. See Minn.Stat. §§ 13.08-09. Failure to Exhaust Administrative Remedies

Plaintiff initially argues that defendant must comply with the subpoena because defendant has not exhausted administrative remedies. Any recipient of an EEOC subpoena who does not intend to comply must petition the EEOC general counsel to revoke or modify the subpoena. 29 C.F.R. § 1601.16(b). A party’s failure to attempt this administrative appeal procedure prevents the party from challenging the subpoena, except on constitutional grounds. E.g., EEOC v. Cuzzens of Georgia, Inc., 608 F.2d 1062, 1063-64 (5th Cir.1979) (per curiam). Here, defendant never petitioned the EEOC general counsel for revocation or modification of the subpoena. Neither is the defendant resisting the subpoena on constitutional grounds. On the basis of failure to exhaust administrative remedies alone, defendant must comply with the subpoena.

Preemption

Plaintiff’s second major argument for enforcement of the subpoena is that Title VII preempts the Data Practices Act. Even though Congress does not explicitly preempt a state law, the state law will be preempted if it would frustrate the scheme established by federal law. E.g., Allis-Chalmers Corp. v. Lueck,—U.S.-, 105 S.Ct. 1904, 1910, 85 L.Ed.2d 206 (1985); Malone v. White Motor Corp., 435 U.S. 497, 504, 98 S.Ct. 1185, 1189, 55 L.Ed.2d 443 (1978). The federal scheme concerning the EEOC involves the agency investigating allegations of discrimination. In conducting these investigations, the EEOC is entitled to have access to relevant evidence. 42 U.S.C. § 2000e-8(a). The EEOC, moreover, is supposed to conduct its investigations expeditiously. See 42 U.S.C. § 2000e-5(b) (EEOC to make charging decision as promptly as possible, and not later than 120 days from filing of charge). See also Ford Motor Co. v. EEOC, 458 U.S. 219, 221, 102 S.Ct. 3057, 3060, 73 L.Ed.2d 721 (1982); EEOC v. K-Mart Corp., 694 F.2d 1055, 1067 (6th Cir.1982).

Plaintiff indicates that its investigations will be significantly delayed if it must seek district court enforcement for its administrative subpoenas. See Bloyer aff. ¶¶ 5-6. Plaintiff, therefore, concludes that having to obtain a district court order each time it seeks information covered under the Data Practices Act would frustrate the federal scheme of having the EEOC investigate claims quickly. Defendant never responds to this argument, and the Court concludes that the federal scheme would be frustrated if the EEOC had to seek court orders to enforce EEOC subpoenas seeking information covered under the Data Practices Act.

Defendant’s only rebuttal is that it is faced with conflicting responsibilities from the EEOC subpoena and the Data Practices Act. Defendant is concerned that if it produces personnel information in response to anything less than a court order, defendant will be exposed to civil and criminal penalties. The Data Practices Act, Minn.Stat. § 13.43, subd. 4, does allow disclosure of personnel information only pursuant to a valid court order. The Data Practices Act requiring a court order for production of personnel information assures that such information will not be given out freely. Similarly, defendant supplying information in response to an administrative subpoena is not an example of freely giving out personnel information. Such a production is in response to an administrative order. This Court believes that a Minnesota state court should not conclude that a defendant has violated the Data Practices Act by producing personnel information in response to an EEOC subpoena.

The Data Practices Act frustrates the federal scheme embodied in Title VII. Title VII, therefore, preempts the Data Practices Act’s requirement that personnel information be provided only in response to a court order. See EEOC v. County of Hennepin, 35 EPD at 35,459.

Protective Order

In the event the Court elects to enforce the EEOC subpoena, defendant requests a protective order under Fed.R. Civ.P. 26(c). Defendant seeks an order prohibiting plaintiff from disclosing to the public, including the claimant and her representatives, any information obtained pursuant to the subpoena.

The Supreme Court, however, has declared that individuals filing discrimination charges are entitled to access to information concerning their charges which the EEOC obtained by subpoena. EEOC v. Associated Dry Goods Corp., 449 U.S. 590, 599, 101 S.Ct. 817, 822, 66 L.Ed.2d 762 (1981). Defendant, moreover, does not need a protective order to prohibit the EEOC from disclosing confidential information to other individuals. The EEOC is already obligated by statute not to disclose to the public any information obtained during its investigation. 42 U.S.C. § 2000e-8(e), Associated Dry Goods Corp., 449 U.S. at 596, 101 S.Ct. at 821. Any EEOC employee who violates this prohibition commits a misdemeanor and is subject to a fine up to $1,000 or imprisonment up to one year. 42 U.S.C. § 2000e-8(e). Defendant has made no showing that these procedures are inadequate to insure the confidentiality of the subpoenaed information; therefore, defendant is not entitled to a protective order. Valley Industrial Services, Inc. v. EEOC, 570 F.Supp. 902, 907 (N.D.Cal. 1983).

Attorneys’ Fees

Plaintiff requests that the Court grant it attorneys’ fees under either Fed.R. Civ.P. 11 or 28 U.S.C. § 1927. Plaintiff argues that defendant’s refusal to respond to the administrative subpoena is unreasonable and vexatious. The Court does not fault defendant for not accepting the Magistrate’s ruling as the final word on the issue of whether defendant must comply with EEOC subpoenas absent a court order. In the future, however, attorneys’ fees will be appropriate if defendant resists EEOC subpoenas on the basis of the Data Practices Act’s requirement that personnel information be provided only in response to a court order.

Based on the foregoing, IT IS ORDERED that:

1. plaintiff’s application for enforcement of an administrative subpoena is granted;

2. within 30 days from the filing of this order, defendant shall provide plaintiff all the information requested in Equal Employment Opportunity Commission Subpoena No. MK-85-001, dated March 12, 1985;

3. defendant’s motion for a protective order is denied;

4. plaintiff’s motion for attorneys’ fees is denied.

      . Because the Court has found for the plaintiff on the basis of preemption and defendant’s failure to exhaust administrative remedies, the Court will not address plaintiffs collateral estoppel argument.

      . Any charging party obtaining confidential information from the EEOC must sign an agreement not to disclose the information to anyone, except as part of the normal process of litigation after a suit is commenced. Associated Dry Goods Corp., 449 U.S. at 597-98, 101 S.Ct. at 821-22, citing EEOC Compliance Manual § 83.-3(b).


author: HAND, Chief Judge.

text:
    James B. CLARK, et al., Plaintiffs, v. MARENGO COUNTY, et al., Defendants. UNITED STATES of America, Plaintiff, v. MARENGO COUNTY COMMISSION, et al., Defendants.
    Civ. A. Nos. 77-445-H, 78-474-H.
    United States District Court, S.D. Alabama, N.D.
    Sept. 5, 1985.

      J.L. Chestnut, Jr., Selma, Ala., and Larry T. Menefee, Mobile, Ala., for individual plaintiffs.
    Cartledge W. Blackwell, Jr., Selma, Ala., for Marengo County, et al.
    J. Gerald Hebert, Christopher G. Lehmann, Dept, of Justice, Civil Rights Div., Washington, D.C., for United States.
    Hugh A. Lloyd, Demopolis, Ala., for Marengo County Bd. of Educ., et al.
    W.W. Dinning, Demopolis, Ala., for Joseph C. Camp, etc.
    Edward S. Allen, Birmingham, Ala., for J. Marks Abernathy, etc.
   FINDINGS OF FACT AND CONCLUSIONS OF LAW

HAND, Chief Judge.

This cause came on before the Court in March, 1985 on a post-remand hearing. The ordered purpose of the hearing was to determine whether conditions in Marengo County had sufficiently changed since 1978 to affect the Court of Appeals’ finding of discriminatory results as they related to election procedures for the Marengo County Commission and the Marengo County School Board. United States v. Marengo County Commission, 731 F.2d 1546, 1574 (11th Cir.1984). Based upon the evidence produced at the hearing, briefs and arguments of counsel, the Court determines that pursuant to its directions no significant changes have occurred since 1978 that affect the Eleventh Circuit Court of Appeals’ finding of a Section 2 violation.

In making this determination the Court notes that it does so in order to comply with the mandate. This Court’s original findings were contrary to those of the Eleventh Circuit Court of Appeals and were reversed, despite this Court’s opportunity to view the witnesses, judge their credibility, and draw rational and logical inferences from that testimony. This Court still adheres to its previous findings, nevertheless, given the decision and mandate this Court’s function has in its essentials been reduced to the merely ministerial. Under the law of this case, there is nothing left to do but ratify the Eleventh Circuit’s decision.

Accordingly, the Court concludes that the plaintiffs are entitled to injunctive relief, that Marengo County’s at-large method of electing members to the County Commission and the School Board must be abolished, and that a plan for electing members to those boards based upon single member districts must be formulated, established and implemented.

In this litigation, the United States and private plaintiffs challenged the at-large method of electing the Marengo County Commission and the Marengo County Board of Education as violative of Section 2 of the Voting Rights Act, as amended, 42 U.S.C. § 1973, and the Fourteenth and Fifteenth Amendments. The United States Court of Appeals for the Eleventh Circuit, United States v. Marengo County Commission, 731 F.2d 1546. (1984), directed this Court to supplement the record with any evidence that might tend to effect the appellate court’s findings of a violation of Section 2 of the Voting Rights Act as of 1978.

This cause was originally filed by the United States on August 25, 1978. The case was consolidated with a private class action filed in 1977 by black voters. A four-day trial was held on October 23-25, 1978 and January 4, 1979. On April 23, 1979, this Court issued an opinion and entered judgment for the defendants. This Court determined that while intentional discrimination could be inferred from an aggregate of factors articulated in Zimmer v. McKeithen, 485 F.2d 1297 (5th Cir.1978 en banc), aff'd on other grounds sub nom East Carroll Parish School Board v. Marshall, 424 U.S. 636, 96 S.Ct. 1083, 47 L.Ed.2d 296 (1976) per curiam, such an inference was not warranted here. The Court further concluded that plaintiffs had not proved that the at-large system was enacted or being maintained with a racially discriminatory purpose, a finding to which this Court still steadfastly adheres.

Thereafter, the United States appealed the decision of this Court. While the appeal was pending, the United States Supreme Court decided City of Mobile v. Bolden, 446 U.S. 55, 100 S.Ct. 1490, 64 L.Ed.2d 47 (1980), in which a plurality of the Court concluded that a showing of purposeful discrimination is a necessary ingredient of a violation of the Fifteenth Amendment and a majority of the Court held that the factors used in the Zimmer analysis were insufficient to show a. violation of the Constitution. Thereafter, the court of appeals in this case, upon motion of the United States, vacated this Court’s judgment and remanded for further proceedings “including the presentation of such additional evidence as is appropriate, in light of the decision of the Supreme Court in City of Mobile v. Bolden.”

While this case was pending on remand, the Fifth Circuit decided Lodge v. Buxton, 639 F.2d 1358 (1981), aff'd sub nom Rogers v. Lodge, 458 U.S. 613, 102 S.Ct. 3272, 73 L.Ed.2d 1012 (1982), holding that the United States Supreme Court’s decision in Mobile did not require direct evidence of discriminatory intent, but stating, “an essential element of a ‘prima facie’ case of [unconstitutional vote dilution] is proof of unresponsiveness by the public body in question to the group claiming injury.” 639 F.2d at 1375. Following the decision in Lodge v. Buxton, this Court, on July 30, 1981, again ordered judgment for defendants on the grounds that this Court had previously concluded that plaintiffs had failed to prove defendants’ unresponsiveness to the particularized needs and interests of Marengo County’s black citizens.

The United States again appealed and the Eleventh Circuit Court of Appeals granted the Government’s motion to hold the appeal in abeyance pending the United States Supreme Court’s review of Lodge v. Buxton. One year later, on July 1, 1982, the United States Supreme Court affirmed the results in Lodge, but contrary to the court of appeals’ decision in Lodge, the Supreme Court found that unresponsiveness is not an essential element of the claim of unconstitutional dilution. Rodgers v. Lodge, supra, 458 U.S. at 625 n. 9, 102 S.Ct. at 3280 n. 9.

In addition, two days prior to the Supreme Court’s decision in Rodgers v. Lodge, Congress amended Section 2 of the Voting Rights Act. In amending Section 2 “Congress redefined the scope of Section 2 of the Act to forbid not only those voting practices directly prohibited by the Fifteenth Amendment, but also any practice imposed or applied ... in a manner which results in a denial or abridgement of the right ... to vote on account of race----” United States v. Marengo County, supra, 731 F.2d at 1553.

On May 14, 1984, the court of appeals decided this case, applying amended Section 2 of the Voting Rights Act and concluded that there was a violation of Section 2. United States v. Marengo County Commission, supra, at 1574. The Court of Appeals held that Marengo County’s at-large election system had the proscribed racially discriminatory “result” as of the time of the 1978 trial. 731 F.2d at 1574-1575. The Court of Appeals also concluded that in view of the convoluted procedural history of the case, as well as the five years that had elapsed since trial, the case should be remanded to determine whether the current conditions in Marengo County had changed since 1978. The court of appeals therefore remanded the case to this Court “to allow the parties to update the record and to supplement the record with evidence that might tend to affect our finding of discriminatory results.” 731 F.2d at 1574. That Court further noted that “the defendants bear the burden of establishing that circumstances have changed sufficiently to make our findings of discriminatory results in 1978 inapplicable in 1984.” 731 F.2d at 1575.

Evidentiary hearings were held in August 1984 for the purpose of determining “whether or not to grant the United States’ motion for a preliminary injunction enjoining the defendants from holding at-large elections [in September 1984] for positions on the Marengo County Commission and the Marengo County Board of School Commissioners”, which was granted and in March 1985 on the merits of the remand order. On the basis of the evidence offered at these hearings, the Court now concludes there is no particular change of circumstance from that prevailing in 1978 except in regard to the School Board, but since value assessments by this Court are of no weight, it would be useless to catalog these.

CONCLUSIONS OF LAW

1. Section 2 of the Voting Rights Act, 42 U.S.C. § 1973, provides as follows:

(a) No voting qualification or prerequisite to voting or standard, practice, or procedure shall be imposed or applied by any State or political subdivision in a manner which results in a denial or abridgement of the right of any citizen of the United States to vote on account of race or color, or in contravention of the guarantees set forth in section 4(f)(2) of this title, as provided in subsection (b).
(b) A violation of subsection (a) is established if, based on the totality of circumstances, it is shown that the political processes leading to nomination or election in the State or political subdivision are not equally open to participation by members of a class of citizens protected by subsection (a) in that its members have less opportunity than other members of the electorate to participate in the political process and to elect representatives of their choice. The extent to which members of a protected class have been elected to office in the State or political subdivision is one circumstance which may be considered: Provided, That nothing in this section establishes a right to have members of a protected class elected in numbers equal to their proportion in the population.

2. The Eleventh Circuit Court of Appeals determined that “the record shows a clear violation of the results test adopted by Congress in Section 2 of the Voting Rights Act”. 731 F.2d at 1574. That determination was based on the conditions that prevailed in Marengo County in 1978 when this case was originally tried. Under the court of appeals’ decision, “the defendants bear the burden of establishing that circumstances have changed sufficiently to make [the] finding of discriminatory results in 1978 inapplicable in 1984”. 731 F.2d at 1575. In accordance with that mandate, this Court has evaluated the political opportunities for Marengo County’s black citizens as of today and renders these conclusions of law.

3. In determining whether black voters in Marengo County “have less opportunity than other members of the electorate to participate in the political process and to elect representatives of their choice,” 42 U.S.C. § 1973, the Court is required to consider and has considered the “totality of circumstances” in Marengo County. The Court has given attention to the following issues: (1) racial bloc voting; (2) the appointment of qualified black persons to work at the polls on election day; and (3) socioeconomic conditions such as education, employment, housing and health, and the impact of these effects on the current political opportunities of minority voters. In compliance with the mandate, this Court did not conduct “a retrial of any issues already tried and reviewed by [the court of appeals].” 731 F.2d at 1574.

4. In view of these conclusions, the Court holds that the defendants have failed to show that the “circumstances have changed” since 1978, therefore the at-large method of electing the Marengo County Commission and the Marengo County School Board violates Section 2 of the Voting Rights Act, 42 U.S.C. § 1973. See United States .v. Marengo County, supra.

5. Because the at-large election schemes have been found violative of section 2, it is unnecessary for the Court to reach the constitutional claims presented. Indeed, that inquiry appears to be precluded by the mandate of the Eleventh Circuit when it stated, “[t]he purpose of the remand is to allow the parties to update the record and to supplement the record with evidence that might tend to effect [the] finding of discriminatory results. United States v. Marengo County Commission, 731 F.2d at 1574 (emphasis added).

ORDER

1. The defendants shall immediately prepare fair election plans for the County Commission and the County School Board and file those plans with the Court. The plans shall provide for the election of members of the County Commission and School Board by single member districts. These filings shall be made no later than 45 days from the entry of this decision. Simultaneous with defendants’ filings in this Court, defendants shall seek preclearance of said plans under Section 5 of the Voting Rights Act, 42 U.S.C. § 1973c. See McDaniel v. Sanchez, 452 U.S. 130, 101 S.Ct. 2224, 68 L.Ed.2d 724 (1981). Once the Section 5 process has been completed, this Court will then undertake its review of said plans.

2. As previously noted, the defendants were enjoined in 1984 by this Court from holding scheduled elections under the at-large system, terms. The defendant shall also prepare a schedule for holding elections at the earliest possible date under the proposed plans and shall submit the proposed election schedule for Section 5 preclearance at the same time said plans are submitted.

The Court retains jurisdiction of this matter for purposes of issuing additional orders as may be appropriate.

      . Although this Court has considerable concerns about the constitutionality of placing the burden of proof on the defendants, this Court must adhere to the mandate of the Eleventh Circuit.

      . As previously noted, the Court has doubts as to the constitutional propriety of placing the burden of proof and persuasion on the defendants. As repeatedly noted, however, that procedure was mandated by the Eleventh Circuit’s opinion in United States v. Marengo County Commission, supra.

      . Although the record contains evidence from which to find a discriminatory result under the totality of circumstances test, the Court would be hard pressed to find intentional discrimination in violation of the Fourteenth and Fifteenth Amendments to the United States Constitution.