author: DEBEVOISE, District Judge.

text:
    JEHOVAH’S WITNESSES ASSEMBLY HALLS OF NEW JERSEY, INC. and Watchtower Bible and Tract Society of New York, Inc., Plaintiffs, v. CITY OF JERSEY CITY, a Municipal Corporation; Gerald McCann, Individually and as Mayor of the City of Jersey City; Mark T. Munley, Individually, as Zoning Officer, as Director of the City of Jersey City Department of Housing & Economic Development and as Agent and Employee of the City of Jersey City; Robert R. Shortell, Individually, as Construction Official and as Agent and Employee of the City of Jersey City; Anthony Lambiase, Individually and as Agent and Employee of the City of Jersey City; Michael Regan, Individually and as Agent and Employee of the City of Jersey City; Louis Hampton, Individually and as Agent and Employee of the City of Jersey City; John Doe, a Fictitious Name; and Richard Roe, a Fictitious Name, Defendants.
    Civ. A. No. 84-3634.
    United States District Court, D. New Jersey.
    Oct. 10, 1984.
    Krieger, Ferrara, Flynn & Catalina by Harold Krieger, Frank E. Catalina, Jersey City, N.J., William R. Bell, Blackwood, N.J., Leslie R. Long, Brooklyn, N.Y., for plaintiffs.
    Joseph Healy, Corp. Counsel by Eugene P. O’Connell, Asst. Corp. Counsel, Law Dept., Jersey City, N.J., for defendant City of Jersey City.
    Schumann, Hession, Kennedy & Dorment by Francis DeStefano, Jersey City, N.J., for defendant Gerald McCann.
    Edward J. Nowakoski, Bayonne, N.J., for defendants Robert Shortell and Louis Hampton.

      Baer & Arbeiter by Benjamin D. Leibowitz, Metuchen, N.J., for defendant Anthony Lambíase.
    Deutsch & Mulvaney by Thomas M. De-Luca, Morristown, N.J., for defendant Michael Regan.
   DEBEVOISE, District Judge.

I. The Proceedings.

Plaintiffs are Jehovah’s Witnesses Assembly Halls of New Jersey, Inc., a New Jersey nonprofit corporation, referred to as “New Jersey Witnesses” herein, and Watchtower Bible and Tract Society of New York, Inc., a New York nonprofit corporation referred to herein as “Watchtower.”

Defendants are Jersey City, its Mayor, Gerald McCann, and various Jersey City officials and employees performing duties relating to zoning, planning and the administration of the zoning, planning and construction ordinances.

Plaintiffs seek preliminary and final injunctive relief, a declaratory judgment and damages. Their basic grievance arises out of the refusal of the City authorities to permit them to repair and renovate the. Stanley Theater and ultimately to use it for their religious purposes. Plaintiffs seek preliminary injunctive relief confined to their request to undertake initial repairs and maintenance of the structure, deferring any request for relief relating to their ultimate use of the theater to a later date. A hearing was held on the application for preliminary injunctive relief.

Each side presented witnesses and offered exhibits. The testimony concerned the present condition of the Stanley Theater and the extent to which the New Jersey Witnesses’ June 21, 1984 application for permits for repairs and maintenance seeks authorization of electrical and plumbing features going beyond existing equipment and facilities.

II. The Facts.

Jehovah’s Witnesses consider the study of God’s word, as contained in the Bible, to be central to their religion. They accept a mandate “of Jehovah to preach and spread the good news of Jehovah’s Kingdom with Jesus seated as king.” (Plaintiffs’ post-hearing memorandum at p. 6.)

As part of their religious practices Jehovah’s Witnesses meet in homes and as congregations of Witnesses in church-like buildings known as Kingdom Halls. Groups of congregations are known as circuits. These circuits meet periodically in assemblies drawing 8,000 to 4,000 persons. Attendance at circuit assemblies and the conduct of such assemblies is part of the religious practice and discipline of this religious body. Because of the growth of Jehovah’s Witnesses in Jersey City, Newark and the New York metropolitan area generally, there is a need to have a facility which can accommodate groups of several thousand persons. Larger national assemblies of Witnesses drawing 150,000 to 250,-000 persons are held. Participants in these national assemblies have been quiet, orderly and disciplined.

Besides weekly meetings at their Kingdom Halls, Jehovah’s Witnesses regularly attend three larger religious assemblies each year — primarily the circuit assemblies. Circuit assemblies which are two days in duration and are held on weekends to accommodate those who work during the week, are held in theaters, convention halls, arenas and auditoriums year round. A typical circuit assembly program might include musical presentations, live dramatic presentations, slide shows and movies, all of a religious nature. Such features of circuit assemblies, together with the large number of people in attendance, are designed to give Jehovah’s Witnesses a sense of brotherhood and unity in their worship.

One of Plaintiffs’ primary uses of the Stanley Theater would be to hold circuit assemblies there on weekends throughout the year. Circuits of congregations of Jehovah’s Witnesses from the Jersey City/New York City area and environs will attend the circuit assemblies held at the Stanley Theater. The Stanley Theater will also be used for other large gatherings of Jehovah’s Witnesses for various special events throughout the year, including graduation exercises for Jehovah’s Witnesses’ missionary school and special presentations about Jehovah’s Witnesses in foreign countries and the religious work going on there.

The Stanley Theater is located in the Journal Square area of Jersey City, an area which plays an important part in the City’s long-range planning.

Pursuant to the requirements of law in the State of New Jersey, the City of Jersey City has had prepared for it a Master Plan Review. This Master Plan Review was completed in January of 1984.

This Master Plan Review specifically addresses commercial development in the Journal Square area. Examples of this in the Review are as follows: At page (iii):

“Marketing studies have been done to encourage private investment in the back office development of Journal Square, including a fiber optics cable, which is being run from Downtown New York through Downtown Jersey City and terminating in Journal Square.”

At page 8, the Master Plan Policy recommendations show in the Journal Square area:

“... the creation of a viable mixed-use center through regional offices, additional housing, and preservation of community shopping.”

Page 24 of the Review deals specifically with commercial uses. It states that:

“... commercial land uses comprise both retail activities and office activities.”

Page 25 of the Review reflects the fact that:

“Journal Square is a key commercial zone of the City of Jersey City.”

Page 26 states that:

“... the merchants in the area are experiencing slight slumps in sales which are attributable to the overall recession. Further, the primary office center in Jersey City is- Journal Square, which is the center for financial institutions, legal offices and business services. The orientation of these offices is primarily local rather than regional. However, the recent movement of Citibank computer operations to the PATH Center building, as well as similar proposals by other firms, indicates that the character of the Square’s office activities may be changing.”

Page 28 of the Master Plan Review shows the volume of existing transportation facilities in the Journal Square area, demonstrated by the chart on page 42. Page 53 further highlights the commercial and office use in the Journal Square area of Jersey City.

In 1968 the Journal Square Bowl Blight Study was approved by the Municipal Council of the City of Jersey City. Pursuant to that blight study, the Journal Square Bowl Redevelopment Plan was adopted by the Municipal Council of the City in July 1974. This redevelopment plan, which encompasses an area directly west of the Stanley Theater, has resulted in the construction of a 50,000 square foot office building completed in 1984.

More recently, in June of 1984, the Journal Square Study Area Blight Report and Journal Square Redevelopment Plan was approved by the Planning Board of the City. This redevelopment plan takes in a portion of Journal Square, which is directly southwest of the Stanley Theater. According to an article in the Jersey Journal, there is a proposed development for this area on which is now located the Loew’s Theater and C.H. Martin Department Store. This project contains a 40-story office tower.

Additionally, the City has seen the construction or rehabilitation of several buildings in the Journal Square area; for example, the Port Authority Trans Hudson Transportation Center, which is directly south of the Stanley Theater; the Plaza Hotel conversion into a Senior Citizens’ building, completed in 1984; the AIDS Equity office building, completed in 1984, which is located on the southwesterly side of Journal Square; and the rehabilitation of 26 Journal Square, a 16-story office building, which is being rehabilitated with the benefit of an $800,000 Urban Development Action Grant.

All of these projects have been augmented by a concentrated effort of the various departments of the City. These departments include the Jersey City Redevelopment Agency, the Jersey City Department of Housing and Economic Development, the Jersey City Division of Urban Research and Design, and the Jersey City Economic Development Corporation.

The Stanley Theater was built in 1928, and since its construction it has been used primarily as a movie and vaudeville theater. It is located, as previously stated, in the Journal Square area of Jersey City. Under the present zoning ordinance, adopted after the construction of the theater, the theater is located in an area zoned “C-l Central Business District.”

The purpose of the C-l Central Business District is set forth in Section 1405 of the Zoning Ordinance to be: “The purpose of this district is to recognize the unique merging of mass transit facilities in Journal Square, the established commercial pattern, and the development intensity. The C-l District expands the present Journal Square boundaries to encourage higher density residential and commercial uses around the mass transit facilities. It also allows a mixture of uses in high-rise structures, requires off-street loading and requires a reduced level of required off-street parking in view of mass transit services plus parking garages being permitted as a principal use.”

Permitted uses include retail sales of goods and services, offices and financial institutions, medium and high-rise apartments, restaurants, hotels, government facilities, recreation and athletic facilities, parking garages and lots and, most significant to this case, theaters and convention halls. Use of the Stanley Theater as a theater or convention hall is thus a permitted use under the Zoning Ordinance.

Houses of worship are not designated as permitted uses, permitted accessory uses or conditional uses in the C-l zone. Nor are houses of worship permitted in the following zones: C-2 Office and Retail; C-3 Shopping Center; C-4 Finance and Business District; C-5 Neighborhood Commercial revitalization; 1-1 Automotive Construction Office; 1-2 Intensive Industrial; 1-3 Industrial Park.

A house of worship is defined in the ordinance as, “A building for the assembly of members of a designated faith for religious instruction and worship of a diety such as a church, synagogue or temple.”

Houses of worship are Permitted Uses in R-1, R-2, R-3 and R-3A residential zones. They are a conditional use in R-4 High Density Residential Zones.

Section 104 of the Zoning Ordinance provides that: “All uses not expressly permitted in any given use district are expressly prohibited in such use district. No structure or addition thereto shall hereafter be built, moved or remodeled, and no land shall hereafter be used, occupied, reoccupied, designed or improved for use or occupancy except for a use that is permitted within the zone in which the structure or land is located.”

It is quite clear, therefore, that the Jersey City Zoning Ordinance prohibits houses of worship in C-l zones and forbids the remodeling of any structure in a C-l zone for use as a house of worship.

On June 13, 1983, New Jersey Witnesses was incorporated for the purpose of holding' title to the Stanley Theater property. On November 9th New Jersey Witnesses purchased the theater property. At the time it was in very poor condition. The roof and plumbing leaked, there was extensive water damage, the electrical wiring was defective, the boiler required replacement. While New Jersey Witnesses has legal title to the. theater property, it would appear Watchtower has at least an equitable interest in the premises.

On February 14, 1984, representatives of the New Jersey Witnesses met with representatives of Jersey City’s Building and Planning Departments to discuss New Jersey Witnesses’ proposed use of the Stanley Theater. The New Jersey Witnesses explained that they wished to renovate the building and rearrange the seating facilities. It was their intent to continue existing uses such as showing movies and putting dramas on stage. In addition, they planned to install a baptismal pool. The City representatives took the position that the proposed use would convert the theater into a house of worship and would thus violate the Zoning Ordinance.

The New Jersey Witnesses representatives contended that their proposed use was permitted under the theater-convention hall provision of the Zoning Ordinance but that in any event they had a Constitutional right to use the theater in the manner they propose.

On March 2, 1984, New Jersey Witnesses applied to the Jersey City Building Department for a construction permit to renovate the Stanley Theater to be used as a theater and convention hall by Jehovah’s Witnesses. The plans which accompanied the application showed extensive remodeling and improvement to the building, but it was still essentially a theater-type facility with the addition of a baptismal pool and several residential apartments.

On April 19, 1984, the zoning officer, Mark T. Munley, denied the application on the ground that “While the district does allow for Convention Halls, the intended use is specifically religious prorogation. Religious use such as specified, is allowed in Residentially Zoned Areas of the City.”

On May 14, 1984 the New Jersey Witnesses filed an appeal with the Board of Adjustment. A hearing was held on July 19, 1984. At that time zoning officer Munley filed an opinion setting forth his reasons for the denial of the permit. The opinion read as follows:

“The decision of the Zoning Officer of the City of Jersey City denying the request of the Jehovah’s Witnesses Assembly Halls of New Jersey Incorporated for a building permanent is a correct and accurate interpretation of the City’s Zoning Ordinance.

“The subject property is located within the City’s Central Business District (C-l). Such zoning district does not allow houses of worship as a permitted principal use. The applicant has appealed the Zoning Officer’s decision contending that- their proposed use is a convention hall and not a house of worship. Convention halls are a permitted use within the C-l district.

“The Zoning Officer’s contention that the proposed use is a religious use qualifying as a House of Worship and not a convention hall is based upon information collected relative to the proposed use. Primary among these are the results of a meeting involving representatives of the Jehovah’s Witnesses and representatives of the City of Jersey City. At such meeting the following facts were revealed by the Jehovah’s Witnesses representatives:

“1) That the Stanley Theater will be used primarily on weekends as a gathering place for persons from regional Kingdom Halls for religious propogation including prayer, study, and meetings.

“2) That the main level will contain a Baptismal pool as indicated on the submitted building plan.

“3) That although movies-and stage productions are foreseen activities, these events will promulgate the Jehovah’s Witnesses religion.

“4) That the Jehovah’s Witnesses will disseminate their beliefs through written and verbal communication.

“5) That the Jehovah’s Witnesses will have available and distribute publications which are religious in nature.

“Furthermore, the Zoning Ordinance of the City of Jersey City defines a house of worship as ‘A building for the assembly of members of a designated faith for religious instruction and worship of a diety such as a church, synagogue, or temple.’.

“The title block of the submitted building plan refers to the project as the Jersey City assembly hall and not as a convention hall or theater. The applicant and owner is listed as the Jehovah’s Witnesses Assembly Halls of New Jersey, Incorporated.

“A review of such information would indicate the proposed use by the Jehovah’s Witnesses is a house of worship as defined in the Jersey City Zoning Ordinance. There is an obvious inclination toward religion and religious instruction, as well as an’ obvious assembly of members of a religious organization of which the Jehovah’s Witnesses certainly qualify.

“The City of Jersey City given, its zoning ordinance, does allow houses of worship as a permitted principal use within its residential zones; R-l, R-2, R-3 and R-3a districts and as a conditional use within the R-4 district. The majority of the City is zoned for one of these residential districts.

“It is desirable to allow houses of worship within the residential districts, rather then in the commercial or industrial districts. The restriction against houses of worship in the City’s C-l district is simply good planning practice. There is only one C-l district in the City, that being the Journal Square Central Business District. Journal Square is the heart of the City. It is the City’s commercial and retail center and, as such, its land values are among the highest in the City. Development should reflect the role Journal Square plays in the overall welfare. The Zoning Ordinance identifies the purpose of the C-l (Journal Square) district as being ‘to recognize the unique merging of mass transit facilities in Journal Square, the established commercial pattern, and the development intensity. The C-l district expands the present Journal Square boundaries to encourage higher density residential and commercial uses around the mass transit facilities ... ’ The establishment of a use that will primarily attract users on weekends does not fulfill the intensity of use desirable at the heart of the City nor does it recognize and take advantage of the tremendous mass transit facilities located herein. Further, there is limited benefit or contribution to the vitali-. ty of Journal Square from a use which will remain predominantly unused for the majority of the week. Such use will not provide the permanent employment opportunities or contributions to the existing retail establishments or return expected revenues to the City as one one would desire and expect from such a location.”

The Board of Adjustment hearing was adjourned until August 16, 1984 to give citizen objectors time to obtain legal counsel. On that date there was testimony; the New Jersey Witnesses’ attorney moved for an order requiring issuance of a permit; the matter was adjourned to September 20, 1984. The appeal was then dismissed. The plaintiffs in the present case point to N.J.S.A. 40:55D-73 which provides that: “(a) The Board of Adjustment shall render a decision not later than 120 days after the, (1) date an appeal is taken from the decision of an administrative officer ...” and “(b) failure of the Board to render a decision within such 120-day period or within such further time as may be consented to by the applicant, shall constitute a decision favorable to the applicant.”

Based on these provisions plaintiffs claim that under the New Jersey law they are entitled to the issuance of the permit. The defendants have not yet responded satisfactorily to that contention.

In any event, while New Jersey Witnesses was proceeding with its application for a permit it filed other applications of a less extensive nature.

On May 21 and May 23, 1984, New Jersey Witnesses filed two construction permit applications, one for roofing and one for plumbing to replace the furnace. These applications were granted and permits were issued. The defendant Robert Shorten, Chief Construction Official of the City, believed these permits were authorized by Section 406D of the Zoning Ordinance, which provides:

“Such repairs and maintenance work as required to keep a structure in sound and safe condition may be made to a non-conforming structure containing a non-conforming use, providing the repairs and maintenance work do not change the use, expand the building or the functional use of the building or increase the non-conformity in any manner.”

A non-conforming use is defined as “A use occupying a building, structure or lot which does not conform to the use regulations' of the district in which it is located.”

As it now stands, the Stanley Theater is not a non-conforming use, since its use as a theater is unambiguously permitted in a C — 1 zone. Only if it were actually being used as a house of worship would it be a non-conforming use, and that is the use which the City officials will not permit.

Thus Shortell’s need to rely on Section 406D of the Zoning Ordinance relating to repairs of non-conforming uses is open to question, but that is not a critical issue at this juncture of the case.

On June 21, 1984 the plaintiffs filed three separate applications with the Building Department of the City of Jersey City. The first application was for a plumbing permit. The second application was for an electrical permit. The third permit application was to install a 400-ton air conditioning unit. These applications were accepted by the Building Department and treated as amendments to their plan which was filed on March 2, 1984. Shortell, the Chief Construction Official of the City, reasoned that he could not grant permits at that time because there was no prior approval by the Chief Zoning Officer of the City. He further reasoned that the plaintiffs had appealed Munley’s decision and the matter was before the City’s Board of Adjustment.

On July 11, 1984, the plaintiffs appealed the denial of the plumbing permit, the denial of the electrical permit, and the denial of the air conditioning permit-to the Construction Board of. Appeals. The Construction Board of' Appeals declined to act on the appeal by the plaintiffs concluding that the requested permits involve the same subject matter as the appeal before the Board of Adjustment.

The testimony and other evidence at the hearing on plaintiffs’ application for a preliminary injunction establish that the electrical wiring panels and switches throughout the building are very old, most of it dating back to 1928, when the theater was built. General deterioration and exposure to water has rendered some of the wiring and related equipment dangerous. There was testimony that there had been a fire in one electrical panel caused by water penetration.

The plumbing is also in a badly deteriorated condition. The pipes and valves are old and rusted. The toilet facilities aré broken and leaking. It would be difficult to effect spot repairs, since disturbances of one portion of the plumbing would cause leaks and damage to other portions. Water damage is evident in the deterioration of the walls and ceilings.

There was a conflict in the testimony about how dangerous the electrical system is. Plaintiffs’ architect testified as to a continuing danger of short circuits and fire. Jersey City’s electrical sub-code officer minimized the danger, asserting that existing deficiencies could be cured by relatively minor steps such as covering open splice boxes, correcting drainage and the like.

The force of his testimony was weakened by the fact that the City has posted the premises with a notice that the wiring is not approved and by the fact that the pink slips detailing the violations set forth an extensive list of deficiencies.

I conclude that both the electrical and plumbing system are seriously deteriorated, that they are a continuing hazard and should be attended to promptly both as a safety measure and as a prudent step to prevent general decay of the property.

It is also apparent that the application for the electrical and plumbing permits called for equipment and capabilities which exceed significantly those needed for the mere replacement of existing equipment and capabilities. For example, there are shown on the plans submitted as a part of the permit application 20 electrical panels, of which 12 are new; stronger lighting is called for in some areas; substantially increased toilet facilities are provided. These additional items would constitute a step towards implementing the overall conversion plan which was before the Board of Adjustment.

There is nothing called for in the permit application which is not in strict conformity with applicable electrical or building codes, and all of the additional items would be completely lawful under the Zoning Ordinance were the building used for commercial theater and convention hall purposes.

It must be concluded that the overall construction work for which New Jersey Witnesses sought approval in its March 2nd application and the repairs, renovations and partial improvements for which it sought permits in June were lawful and permitted under the Zoning Ordinance and building codes were it not for the fact that it was intended that the structure be used in connection with religious activities.

It must also be concluded that apart from the religious nature of the activities which plaintiffs proposed to conduct in the restructured building, these activities were permitted uses in a C-l zone.

The proposed use called for production of movies and shows. These activities clearly come within the permitted theater use. It was intended that there be large gatherings of people. This kind of activity clearly comes within permitted convention hall use. It was intended that there be several apartments within the building. The Zoning Ordinance permits medium and high-rise apartments, hotels and motels in a C-l zone. It was also intended that food be served.' The C-l zone permits retail sales of goods and services and restaurants, night clubs and bars. Were there any question whether all of these uses could be contained under one roof, the ordinance resolves that doubt, stating, “More than one use may be designed in any building.”

Thus, the basis for denying New Jersey Witnesses’ March and June applications is simply that these otherwise permitted uses will be conducted as part of the ongoing activities of a religious organization in the course of teaching, observing and propa-gating its faith.

This raises the substantive question whether a municipality may, consistent with the First Amendment of the United. States Constitution, create a commercial zone and prohibit the use of a structure within the zone by a religious organization, the activities of which would otherwise be permitted by the Zoning Ordinance.

III. Conclusions of Law.

The Court has jurisdiction of this case under 28 U.S.C. Section 1331 and 28 U.S.C. Section 1343. The action is brought pursuant to 42 U.S.C. Section 1983 against defendants acting under color of state law.

The initial question which must be faced is whether I should abstain. Proceedings before a Board of Adjustment do not qualify as a judicial proceeding, and, therefore, Younger abstention is inappropriate. Younger v. Harris, 401 U.S. 37, 91 S.Ct. 746, 27 L.Ed.2d 669 (1971); compare Middlesex Ethics Committee v. Garden State Bar Association, 457 U.S. 423, 102 S.Ct. 2515, 73 L.Ed.2d 116 (1982).

Proceedings before a Board of Adjustment are not the kind of complex state regulation which would call for a Burford abstention. Burford v. Sun Oil Company, 319 U.S. 315, 63 S.Ct. 1098, 87 L.Ed. 1424 (1943).

My original reaction to this case was that there might be unsettled questions of state law; namely, the meaning of the Zoning Ordinance and that; therefore, Pullman abstention would be called for. Railroad Commission of Texas v. Pullman Co., 312 U.S. 496, 61 S.Ct. 643, 85 L.Ed. 971 (1941); see also England v. Medical Examiners, 375 U.S. 411, 84 S.Ct. 461, 11 L.Ed.2d 440 (1964).

It is the defendants’ contention that the use to which plaintiff proposed to put the Stanley Theater would render it a house of worship as defined in the ordinance. Use of a structure as a house of worship is not permitted in a C-l zone and consequently under the terms of Section 104 of the Ordinance, such use is prohibited in that zone.

New Jersey Witnesses would be required to obtain a certificate of occupancy before use of the theater, and if the theater were to be used as a house of worship, application of Sections 801 and 803 of the Zoning Ordinance would require that the Superintendent of Buildings refuse to grant such a certificate.

As to building permits, as distinguished from certificates of occupancy, Section 801 provides that “p]n no case shall a building permit be issued for the ... alteration of any structure ... until the proposed .... alteration conforms to the provisions of this, ordinance.”

The defendants have taken the position in this case that the alterations sought in New Jersey Witnesses’ March and June applications do not conform to the provisions of the ordinance because it was intended to put them to a use not permitted under the ordinance. This position was taken even though the very same alterations would be permitted if it were intended to continue the Stanley Theater’s use as a commercial theater and convention hall.

In any event, defendants have taken the unambiguous position that the Stanley Theater as plaintiffs propose to use it is a house of worship and thus forbidden in .the C-l zone.

Plaintiffs advance the argument, which is not totally implausible, that the proposed use of the Stanley Theater does not convert it into a house of worship as defined by the Zoning Ordinance. Houses of worship are permitted in residential zones. They are defined as buildings for the assembly of members of a designated faith for religious instruction and worship of a deity. The definition contains examples, -namely, a church, synagogue or temple. These examples suggest the kinds of structures which would be deemed houses of worship, each of which would be compatible with nearby residential use. A structure such as the Stanley Theater is not like the typical church, synagogue or temple. It would hardly be compatible with the neighboring residential use. If one were to accept defendants’ interpretation of the ordinance, that the Stanley Theater as plaintiffs propose to use it is a house of worship, one might conclude that the Zoning Ordinance would permit a building having a 4,000-person capacity to be erected in any of Jersey City’s residential zones.

While present building regulations might prevent the construction of a Stanley Theater in residential districts, the defendants point to other structures of a different design which have been built in residential districts and which can accommodate thousands of persons in convention-like conclaves.

While the defendants’ interpretation of the ordinance seems eminently reasonable, plaintiffs’ contentions raise the possibility at least that defendants’ interpretation may not be the last word on the subject. That being the case, it might well be that a Pullman abstention will be in order before proceeding to a final hearing.

In the present posture of the case, however, I do not think Pullman abstention is justified. Plaintiffs seek very limited injunctive relief, namely, the issuance of permits to enable them to effect repairs and maintenance required to eliminate safety hazards and to preserve from deterioration and possible total loss a facility which they need to carry on various of their religious activities. Similar constitutional issues will have to be faced whether the Zoning Ordinance is interpreted to forbid plaintiffs’ use of the building because it is a house of worship or whether the Zoning Ordinance is interpreted to forbid plaintiffs’ use of the building not because it is a house of worship but because plaintiffs’ use is. of a religious nature.

Of course, if the municipal body or a State Court should conclude that the theater as used by the plaintiffs is not a house of worship and that plaintiffs may use it as they propose, the constitutional issues will be moot. However, if, in the meantime, plaintiffs’ religious liberties are being infringed, this Court would have the obligation to provide protection pending a decision by the Board of Adjustment or the New Jersey Courts. New Jersey-Philadelphia, etc., v. New Jersey State Board, 654 F.2d 868, 885-886 (3d Cir.1981).

When passing upon an application for preliminary injunctive relief a court must consider (i) the probability of the moving party ultimately prevailing on the merits, (ii) the likelihood of irreparable injury absent such relief, (iii) the harm to the non-moving party and third parties if relief were granted and, (iv) if relevant, the possibility of harm to the public, e.g., Delaware River Port Authority v. TransAmerican Trailer Transport, Inc., 501 F.2d 917 (3d Cir.1974).

The last three factors require only limited discussion. Plaintiffs are threatened with irreparable injury if the requested relief is denied. High in the pantheon of civil rights guaranteed by the United States Constitution is the right to be free of laws prohibiting the free exercise of religion or abridging freedom of speech. The degree of protection to which these rights are protected is spelled out in detail in Wisconsin v. Yoder, 406 U.S. 205 (1972). Here plaintiffs seek to practice, teach and proclaim their religious beliefs using a facility they consider to be well adapted to that purpose. The Zoning Ordinance, as implemented by municipal officials, prohibits them from doing so. Absent a compelling state interest, in this particular land use regulation, plaintiffs would be unlawfully deprived of an important liberty interest, a deprivation which constitutes irreparable injury.

Granting the limited relief plaintiffs now seek would in no way harm the defendants. Were the New Jersey Witnesses allowed to effect the intermediate electrical and plumbing repairs and improvements sought in the June applications, neither defendants nor third parties would be harmed in any way. The repairs and improvements do not convert the building itself to a non-conforming use. It remains a theater capable of use as a theater. The only differences are that deteriorated and dangerous equipment and materials are replaced with new conforming and safe equipment and materials, and additional electrical capabilities and plumbing fixtures will be installed. The risk lies with plaintiffs in that if they are wrong in their legal conclusions, they may never be permitted to use the theater for religious purposes and their expenditures for repairs may have been for naught.

Insofar as third párties and the public are concerned, it is in their interest that the repairs and renovations be made as soon as possible. The existing hazards are a continuing danger to the public and their removal would remove a threat to property and person.

Disposition of plaintiffs’ application for preliminary injunctive relief must turn, therefore, on a consideration of plaintiffs’ likelihood of succeeding on the merits.

Jehovah’s Witnesses’ practice of gathering in large groups for religious instruction and worship is in performance of their religious beliefs. This practice is protected by the First Amendment’s free exercise clause made applicable to the states by the 14th Amendment. Indisputably, application of Jersey City’s Zoning Ordinance prevents plaintiffs from freely exercising their religious beliefs. It is equally indisputable that not every governmental interference with religious practices is unconstitutional.

The permissible bounds of municipal zoning ordinances are set forth in Schad v. Mt. Ephraim, 452 U.S. 61, 101 S.Ct. 2176, 68 L.Ed.2d 671 (1981). The Court stated:

“Where property interests are adversely affected by zoning, the courts generally have emphasized the breadth of municipal power to control land use and have sustained the regulation if it is rationally related to legitimate state concerns and does not deprive the owner of economically viable use of his property.” At page 68, 101 S.Ct. at page 2182.

However, the present case does not involve property , interests. It involves important First Amendment rights. As to such rights the Supreme Court ruled:

“... when a zoning law infringes upon a protected liberty, it must be narrowly drawn and must further a sufficiently substantial government interest.” At page 68, 101 S.Ct. at page 2182.

In such a case “the Court must not only assess the substantiality of the governmental interests asserted but also determine whether those interests could be served by means that would be less instrusive on activity protected by the First Amendment.” Ibid at page 70, 101 S.Ct. at page 2183.

Applying these criteria here, I conclude that plaintiffs are likely to establish at a final hearing that Jersey City’s interpretation and application of its Zoning Ordinance unconstitutionally infringes plaintiffs’ religious liberty interests in that such enforcement is not rationally related to legitimate state concerns and does not serve a substantial governmental interest.

There may well be circumstances in which a compelling public interest would justify prohibiting church construction in a particular zone. Perhaps such use would be incompatible with residential use in some situations, Lakewood, Ohio Congregation of Jehovah’s Witnesses, Inc., v. City of Lakewood, 699 F.2d 303 (6th Cir.1983), but see Diocese of Rochester v. Planning Board, 1 N.Y.2d 508, 136 N.E.2d 827, 154 N.Y.S.2d 849 (1956). Perhaps the danger to worshipers would be so great in a heavy industry zone that there would be a compelling state interest in preventing construction of houses of worship there. However, in the present case there is no factor of zoning significance which justifies prohibiting plaintiffs’ proposed use of. the Stanley Theater. The proposed physical appearance and physical structure of the theater is permitted by existing ordinance. Every use contemplated by plaintiffs is a use which the Zoning Ordinance would permit a commercial enterprise to engage in. The goal of Jersey City’s master plan is to draw people from a wide area to the Journal Square area using the existing transportation facilities and providing customers for local merchants and other businesses. Plaintiffs’ proposed use of the theater contributes to this goal. Not only persons from Jersey City but also people from surrounding areas would be drawn to the facility. They would undoubtedly make use of public transportation which serves Journal Square and they would undoubtedly patronize local merchants, hotels and other facilities while they were there. The fact that their presence was religiously rather than secularly motivated would seem to have absolutely no significance for zoning purposes.

While defendants’ plans to rejuvenate the Journal Square area represents a compelling public interest, there is nothing to show that plaintiffs’ proposed use of the theater would in any way interfere with implementation of - the plan. Defendants suggest two reasons why allowing the use of the Stanley Theater for religious purposes would cause such interference.

First, the plaintiffs’ use of the building would prevent acquisition of the site for an office building, high-rise apartment or other commercial use. However, there has been no showing either that there are no available sites in the C-l zone for such uses or that any potential developer is unable or unwilling to proceed with the project in the C-l zone by reason of plaintiffs’ proposed use of the theater. Second, defendants assert the City will lose real estate taxes if the theater were converted to religious uses. This may be true, but it is questionable whether this is a proper zoning reason to forbid religious use of. property. Further, even if it were to be considered there surely are other means to build the City’s tax base so as to avoid impinging on activity protected'by the First Amendment.

Generally, the cases upon which defendants rely support the imposition of reasonable regulations on the use of land and buildings by religious bodies, e.g., First Assembly of God against the City of Alexandria, Virginia, 739 F.2d 942 (4th Cir.1984.) That is a far cry from absolute prohibition of religious use in a given zone, cf. St. John’s Evangelical Lutheran Church v. Hoboken, 195 N.J.Super. 414, 479 A.2d 935 (Law Div.1983).

On the basis .of the evidence before me now, I conclude that it is unlikely that defendants will be able to meet either standard for evaluating a zoning ordinance. Plaintiffs’ proposed use of the theater being precisely the kind of use contemplated in a C-l zone, to forbid such use is not rationally related to legitimate municipal zoning concern. A fortiori forbidding plaintiffs’ proposed religious use of the theater serves no substantial government interest. For a suggested different method of analysis leading, I believe, to the same result which I have reached in this case, see Note, Land Use Regulation and the Free Exercise Clause, 84 Col.L.Rev. 1562 (1984).

Plaintiffs urge that Schad suggests one further reason why plaintiffs are likely to prevail on the merits. The Zoning Ordinance under review in that case was found to be defective because it did not permit live entertainment, a form of expression protected by the First Amendment, in any part of the borough. Plaintiffs argue that in the present case the effect of Jersey City’s interpretation of its Zoning Ordinance is to preclude Jehovah’s Witnesses from conducting anywhere in the City circuit assemblies, a form of exercise of religion protected by the First Amendment.

The City authorities have ruled that the Stanley Theater, which was designed to accommodate gatherings of that size, may not be so used because buildings used for religious purposes are not allowed in any zone other than a residential zone. Further, it appears that the applicable ordinances would not permit a structure such as the Stanley Theater to be built and used in a residential zone. From this plaintiffs argue that there is no place in Jersey City where plaintiffs can acquire or erect a building in which they can carry on the religious activities proposed for the Stanley Theater. I do not believe that this argument is tenable. Even though a building having the physical configuration of the Stanley Theater could not be built in a residential zone, it appears that differently designed buildings in which plaintiffs’ assemblies could be conducted may lawfully be built in residential zones under applicable ordinances.

Having concluded, however, that the plaintiffs have met the requirements for preliminary injunctive relief, an order will be entered requiring the plumbing and electrical permits' be issued for the work described in the applications which the New Jersey Witnesses filed on June 21, 1984.

Plaintiffs seek no further relief at this time and I believe no further relief is appropriate now. If any party is of a view that any pending motions retain vitality in spite of today’s rulings, the party may set such motion for- hearing on the November 13th regular motion day.

Except for such motions, further proceedings in the action will be stayed on Pullman principles. This will give'the Jersey City Board of Adjustment and the New Jersey courts an opportunity to determine the effect of the Board’s failure to rule on plaintiffs’ application to it and to construe the applicable provisions of the Jersey City Zoning Ordinance. Upon resolution of any viable pending motions the action will be administratively terminated with the right of any party to move to reopen for good cause.


source: Caselaw Access Project

author: BATTISTI, Chief Judge.

license: Public Domain

text:
    INNOVATIVE DIGITAL EQUIPMENT, INC., Plaintiff, v. QUANTUM TECHNOLOGY, INC., et al., Defendants.
    No. C83-3675.
    United States District Court, N.D. Ohio, E.D.
    Oct. 19, 1984.

      James F. Koehler, Koehler & Fulton, Cleveland, Ohio, for plaintiff.
    Patrick D. Quinn, Euclid, Ohio, for defendant.
   MEMORANDUM OPINION AND ORDER .

BATTISTI, Chief Judge.

This matter comes before the Court on Defendants’ Motion to Dismiss under Federal Rule of Civil Procedure 12(b). For the reasons outlined below, this Court denies Defendants’ Motion. In addition, Defendants’ Motion for More Definite Statement is denied.

I.

On September 9, 1983, Plaintiff Innovative Digital Equipment Inc. (“IDE”), an Ohio corporation, filed suit against Defendants Quantum Technology, Inc. (“Quantum”), a Michigan corporation, and Defendant Alfred C. Manfroni (“Manfroni”), a resident of the state of Michigan. IDE sells computer interface cables and other computer products. In its complaint, Plaintiff alleged that Defendant Manfroni was an employee in the sales division of IDE between March 1982 and September 1982. Plaintiff additionally alleged that Manfroni executed a secrecy and no-competition agreement with IDE at the inception of his employment; Plaintiff alleges that upon his departure from IDE, Manfroni “was instrumental in the formation of Quantum Technology, Inc.” The complaint claims that Manfroni and Quantum copied “the products designed by IDE and [also] copied IDE’s catalogue utilizing the identical model numbers, pictures and product descriptions which IDE had assigned to said products. Hence, Plaintiff IDE claims Defendants converted and copied confidential and proprietary information belonging to IDE. Plaintiff seeks $12,000 in compensatory damages for the cost of having to produce a new catalogue of its products, $500,000 in compensatory damages for the loss of sales and damage to its business reputation and an additional $500,000 in punitive damages for Defendants’ alleged conversion of property and interference in Plaintiffs’ contractual relationship with a supplier. Furthermore, Plaintiff seeks a preliminary and permanent injunction ordering Defendants to cease and desist from utilizing customer lists, product and catalogue information belonging to Plaintiff. On November 8, 1983, Defendants filed a Motion to Dismiss and For More Definite Statement. On April 9, 1984, Plaintiffs filed a Brief in Opposition to the Motion to Dismiss.

II.

A. 12(b)(1), 12(b)(2): Lack of jurisdiction.

Defendants move for dismissal on several grounds, among them the assertion that this Court lacks both subject matter and personal jurisdiction and therefore the case should be dismissed pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(2). The Court will consider the jurisdiction challenges first because if jurisdiction is lacking, the Court cannot address the merits or sufficiency of the claim. See, Holman v. Bd. of Education, 388 F.Supp. 792 (E.D.Mich.1975).

As to the 12(b)(1) motion, Defendants mount a facial attack, alleging that the actual amount in controversy is less than the $10,000 jurisdictional amount. There is no attack made on the diversity of the parties. Although a party must satisfy the jurisdictional amount in controversy requirement, Johnson v. Ford Motor Co., 354 F.Supp. 645 (N.D.Miss.1973), the complaint will not be dismissed (where the claim is made in good faith) unless it is a “legal certainty” that the claim is actually for less than the minimum amount. Johnson, 354 F.Supp. at 645; Murray v. Vaughn, 300 F.Supp. 688 (D.C.R.I.1969); Sun Oil Co. v. Pfeiffer, 1 F.R.D. 119 (D.C.Oklah.1939).

Plaintiffs have claimed $512,000 in compensatory damages and another $500,-000 in punitive damages. In determining the amount in controversy, the courts have used the “plaintiff-viewpoint” rule. This rule states that a claim’s value is “the value to the plaintiff of the right which he in good faith asserts in his pleading that sets forth the operative facts which constitute his cause of action.” Dobie, Jurisdictional Amount in the United States District Court, 38 Harv.L.Rev. 733 (1925). Specifically, this rule was adopted in a case very similar to the instant one. In that case, plaintiff sought to enjoin the activities of a competing business which it is claimed was interfering with it. Glenwood Light & Water Co. v. Mutual Light, Heat & Power Co., 239 U.S. 121, 36 S.Ct. 30, 60 L.Ed. 174 (1915). Hence, the value to Plaintiff of this action is at least $500,000 for the loss of sales and damage to its business reputation, without considering punitive damages. Furthermore, Plaintiffs seek to recover $12,000 as compensatory damages for the cost of their new catalogue. In sum, Plaintiffs allege a claim whose value exceeds the jurisdictional amount.

In a challenge to personal jurisdiction, the plaintiff has the burden of making a threshold showing of jurisdiction. Fisher v. First Nat. Bank, 338 F.Supp. 525 (S.D.Iowa 1972), app. dismissed, 466 F.2d 511 (8th Cir.1972). Specifically, the plaintiff must establish prima facie an act by defendant which is within the ambit of the particular long-arm statute, Ghazoul v. International Management Services, Inc., 398 F.Supp. 307 (S.D.N.Y.1975).

Ohio’s long-arm statute is set out at Ohio Revised Code § 2307.382. The statute reads in pertinent part:

(A) A court may exercise personal jurisdiction over a person who acts directly or by an agent, as to a cause of action arising from the person’s:

(1) Transacting any business in this state;
(2) Contracting to supply services or goods in this state;
* * * * * *
(4) Causing tortious injury in this state by an act or omission outside this state if he regularly does or solicits business, or engages in any other persistent course of conduct, or derives substantial revenues from goods used or consumed or services rendered in this state.'
* * * * * *
Causing tortious injury in this state to any person by an act outside this state committed with the purpose of injuring persons, when he might reasonably have expected that some person would be injured thereby in this state.

Once again viewing the pleadings in the light most favorable to the non-moving party, Plaintiff IDE has established a prima facie case for jurisdiction. Plaintiffs allege that the theft and conversion of their catalogue and customer lists occurred upon defendant Manfroni’s departure from IDE in Ohio. Furthermore, the contract at issue here was executed in Ohio. Additionally, IDE claims Quantum and Manfroni tortiously interfered with their business relationship with an Illinois supplier and customer. Given Manfroni's previous relationship with Plaintiffs and the thrust of the letter between Dennis Deal, Executive Vice President of Quantum, to Mr. Jerry Baker of IDE, Defendants can reasonably be expected to know that their actions might injure IDE. At the very least, this Court deems Defendants to have sufficient minimum contacts such that it does not offend “traditional motions of fair play and substantial justice,” International Shoe v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945), to assert jurisdiction over Defendants. Since a state may assert jurisdiction over a nonresident who engages in a single isolated transaction in a state out of which a tort arises, Eyerly Aircraft Co. v. Killian, 414 F.2d 591 (5th Cir.1969), it is not manifestly unfair and unreasonable to expect Defendants to defend themselves in Ohio given Defendant Manfroni’s past relationship and Quantum’s business relationship with IDE.

B. 12(b)(6): Failure to state a claim.

Defendants’ third ground for dismissal is that under Federal Rule of Civil Procedure 12(b)(6), Plaintiff has failed to state a claim upon which relief can be granted. In determining a 12(b)(6) motion, the court will look principally at the pleading. Bowman v. Grolsche, Bierbrouwerij B.V., 474 F.Supp. 725 (D.C. t. 1979). The standard for a well-pleaded complaint, as stated in Federal Rule of Civil Procedure 8(a)(2) is that the pleading “shall contain a short and plain statement of the claim showing that the pleader is entitled to relief and whether relief can be granted on such a claim.” Davis v. Pasman, 442 U.S. 228, 99 S.Ct. 2264, 60 L.Ed.2d 846 (1979). More pointedly, the question is whether the Complaint with all the well-pleaded material facts taken as true and construed in the light most favorable to the plaintiff sets forth facts sufficient to state a legal, claim. Mackenzie v. International Union of Operating Engineers, 472 F.Supp. 1025 (N.D.Miss.1979).

In the instant case, Plaintiff alleges that Defendant Manfroni, a former employee, breached an agreement protecting confidential information and subsequently went into business to compete against his former employer. Defendants copied the designs, customer lists and catalogues of the plaintiffs. Plaintiff notes in his Reply Brief to the Motion to Dismiss that such activities, assuming the facts pleaded by plaintiff are true, constitute violations of Ohio’s deceptive trade practices act as set forth in Ohio Revised Code §§ 4165.01-4165.03. At paragraph 10 of its complaint, Plaintiff states that a product manager for an Illinois computer supply corporation was confused when presented a Quantum catalogue and asked the Quantum representative present about the catalogue’s similarility to IDE’s catalogue. This incident if true would indicate that Defendants’ activities did cause confusion in the minds of the public. Plaintiff is also correct that unauthorized use of customer lists and sales information has been a long-standing action in common law in Ohio. See, e.g. John T. Lloyd Laboratories v. Lloyd Bros. Pharamacists, 131 F.2d 703 (6th Cir.1943).

Indeed, Plaintiff did not cite the Ohio Revised Code sections or the common law unfair trade practices action in his original Complaint. However, dismissal is not warranted simply because of failure to cite a particular legal theory. See Bramlet v. Wilson, 495 F.2d 714 (8th Cir.1974); Thomas W. Garland, Inc. v. St. Louis, 596 F.2d 784 (8th Cir.1979), cert. den. 444 U.S. 899, 100 S.Ct. 208, 62 L.Ed.2d 135. Instead, the Court is under a duty to examine whether any legal theory exists for recovery. Garland, 596 F.2d at 784. Furthermore, the Court may consider documents attached or submitted with the complaint, O’Brien v. DiGrazia, 544 F.2d 543 (1st Cir.1976), cert. denied, 431 U.S. 914, 97 S.Ct. 2173, 53 L.Ed.2d 223, legal arguments in briefs, United States General, Inc. v. Schroeder, 400 F.Supp. 713 (E.D.Wisc.1975), and state statutes Schwartz v. Commonwealth Land Title Ins. Co., 374 F.Supp. 564 (E.D.Pa.1974). In that light, this Court takes notice of the Ohio Revised Code sections in Plaintiffs Reply Brief and the arguments made therein. In addition, this Court’s examination of the copies of the Quantum catalogue (Exhibit “A”) and the IDE catalogue (Exhibit “B”) attached to Plaintiff’s Complaint leads to a finding that the Quantum catalogue could reasonably be confused in the mind of the public and is likely to confuse. Specifically, there is sufficient similarity in the pictures, descriptions of the products, layout of the catalogues and products themselves between the two catalogues. Hence, the Complaint is sufficient on its face to state a cause of action at least under ORC § 4165.02.

Motions to dismiss are not easily granted. Pessin v. Keeneland Assoc., 45 F.R.D. 10 (E.D.Ky.1968). Courts disfavor 12(b)(6) motions because they deny a. plaintiff an opportunity to press the merits of his claim. Beeken v. Chicago & N.R. Co., 367 F.Supp. 1337 (N.D.Iowa 1973). In the instant case, this Court is reluctant to dismiss, given the inferences that can be fairly drawn from Plaintiff’s complaint. At the very least, Plaintiff has sufficiently outlined the time, place and circumstances of Defendants’ alleged conduct which could lead to a cause of action; the complaint is not so vague that a claim cannot be discerned from it. Dack v. Shanman, 227 F.Supp. 26 (S.D.N.Y.1964).

For the foregoing reasons, Defendants’ Motion to Dismiss under Federal Rule of Civil Procedure 12(b)(6) is denied.

III.

Defendants move for an order directing Plaintiff to file a more definite statement, specifically explaining the duration and scope of the terms of the no-competition clause in the employment agreement Manfroni signed with IDE and a copy of Plaintiff's Exhibit “C,” the letter from Dennis Deal to Jerry Baker. Plaintiffs have already sent a copy of Exhibit “C” (which Plaintiffs failed to attach to Defendants’ copy of the Complaint) to Defendants in their Reply Brief so the Court no longer need address this item. As to the terms of Manfroni’s employment contract, this Court is compelled to deny Defendants’ Motion for More Definite Statement. Under Federal Rule of Civil Procedure 12(e), a motion for more definite statement is only proper when a party is unable to determine the issues he must meet. Fischer & Porter Co. v. Sheffield Corp., 31 F.R.D. 534 (D.C.Del.1962). This Court finds it ironic that on the one hand Defendant claims that Plaintiff’s Complaint “is so vague and ambiguous with respect to the aforementioned matters that defendants cannot reasonably be required to frame an answer" and on the other, files a motion to dismiss in the very same pleading. See United States v. Metro Development Corp., 61 F.R.D. 83 (D.C.Ga.1973). At the very least, Defendants were able to discern enough from Plaintiff’s complaint to assert that no legal claim was stated therein. Defendant should have filed, a motion for more definite statement under Federal Rule of Civil Procedure 12(e) and only upon receiving and reviewing the requested statements filed a 12(b)(6) motion to dismiss. See Porter v. Prentice, 155 F.2d 967 (7th Cir.1946).

Furthermore, Rule 12(e) motions for more definite statement are not to be used as a substitute for discovery. McClanahan v. Mathews, 292 F.Supp. 737 (E.D.Ky.1968). In the instant case, Defendant seeks an employment agreement. If, as Defendants allege, this document is in the sole possession of Plaintiff, Defendant can use the discovery rules (Federal Rules of Civil Procedure 26-37) to obtain that material. However, Defendants do not need to know the “duration and scope of that agreement” to file an answer with regard to the conversion and tortious interference claims.

Since motions for a more definite statement are not favored by the courts, see Usery v. International Brotherhood of Teamsters, 72 F.R.D. 581 (W.D.Okla.1976), and this Court finds no inherent vagueness in Plaintiff’s complaint such that Defendant cannot file an answer, Defendants’ Motion for More Definite Statement is denied.

IV.

For the foregoing reasons, this Court denies Defendants’ Motion to Dismiss and Motion for More Definite Statement.

IT IS SO ORDERED.

      . It is true, as Plaintiffs assert, that Defendants have not complied with Local Rule 3.01 requiring a brief written statement of reasons in support of the motion and a list of the authorities on which he relies. Indeed, Defendants’ Motion is so brief as to only make assertions with no case authorities at all and no development of arguments. While Defendants’ brief treatment of the Local Rule requirement is not grounds for denying Defendants’ motion as Plaintiffs suggest, the cursory nature of Defendants’ pleading made it difficult for this Court to assess Defendants’ arguments or make other determinations such as the level of contacts Defendant had in the state of Ohio.

      . Ohio Revised Code § 4165.02 states in pertinent part:
      A person engages in a deceptive trade practice when in the course of his business, vocation, or occupation, he:
      (A) Passes off goods or services as those of another:
      (B) Causes likelihood of confusion or misunderstanding as to the source, sponsorship, approval, or certification of goods and services;
      (C) Causes likelihood of confusion or misunderstanding as to affiliation, connection or association with, or certification by, another;
      (H) Disparages the goods, services, or business of another by false representation of fact.


author: MYRON L. GORDON, Senior District Judge.

text:
    Dorce HOUSTON, Plaintiff, v. NEWARK BOXBOARD COMPANY, a foreign corporation, d/b/a Wisconsin Paperboard Corp., Liberty Mutual Insurance Co., a foreign corporation, and Eaton Corporation/Cutler Hammer, a foreign corporation, Defendants.
    No. 84-C-987.
    United States District Court, E.D. Wisconsin.
    Oct. 22, 1984.

      Padway & Padway by M. Nicol Padway, Milwaukee, Wis., for plaintiff.
    Kasdorf, Dali, Lewis & Swietlik by Joseph J. Ferris, Milwaukee, Wis., for Liberty Mut.
    Quarles & Brady by Frank J. Daily, Michael J. Gonring, Milwaukee, Wis., and Timothy Atkin, for Eaton/Cutler Hammer.
   DECISION and ORDER

MYRON L. GORDON, Senior District Judge.

The plaintiff originally brought this four-count tort action in state court on June 27, 1984, seeking damages for injuries sustained in an industrial accident. On July 26, 1984, one of the defendants, Eaton Corporation, removed the action to federal court pursuant to 28 U.S.C. § 1441. The plaintiff and the remaining defendants, Newark Boxboard Corporation and Liberty Mutual Insurance Company, now move to remand the action to the state court. The motion will be denied.

Section 1441 provides for removal of any action brought in state court of which the federal courts have original jurisdiction. Defendant Eaton stated in its removal petition that the action is between citizens of different states and involves a claim for more than $10,000 and is, therefore, within the original diversity jurisdiction of the federal courts pursuant to 28 U.S.C. § 1332. Generally, removal requires the agreement of all defendants. Chicago Rock Island v. Martin, 178 U.S. 245, 248, 20 S.Ct. 854, 855, 44 L.Ed. 1055 (1900). Removal does not, however, require the consent of nominal defendants. Ryan v. State Board of Elections, 661 F.2d 1130 (7th Cir.1981).

My reading of the complaint persuades me that the two defendants seeking remand, Liberty Mutual and Newark Box-board, are nominal parties. Count one alleges that Eaton negligently manufactured a laminating machine which injured the plaintiff. Count two alleges that Eaton manufactured the machine in violation of state and federal codes. Count three alleges that Eaton manufactured, sold, and installed “an unreasonably dangerous and defective product.” It is thus apparent that the gravamen of the complaint is a tort claim against Eaton.

Count four of the complaint purports to be an “independent action” against Newark Boxboard “for the purpose of obtaining access to documents, material and things and entrance upon the land of said defendant for the purpose of prosecuting this case____”

Regarding Liberty Mutual, the complaint states only that it provided workmen’s compensation insurance to Newark Boxboard. Since the plaintiff neither alleges a cause of action against nor seeks relief from Liberty Mutual, that defendant must be considered nominal. Newark Boxboard is also a nominal defendant because no cause of action is alleged against it. The complaint demonstrates that the plaintiff’s sole purpose in naming it as a defendant was to obtain discovery. I venture no opinion at this time regarding the propriety of the plaintiff’s technique, except to note that, other than the entrance onto land, all discovery desired by the plaintiff would appear to be available to the plaintiff without naming Newark Boxboard as a defendant. Rule 34, Federal Rules of Civil Procedure; Wis.Stats. § 804.05.

The movants contend that the action must be remanded because it was non-removable under 28 U.S.C. § 1445(c), which provides that a “civil action in any State court arising under the workmen’s compensation laws of such State may not be removed to any district court of the United States.” Specifically, the movants argue that the plaintiffs action arises under Wis.Stats. § 102.29. Section 102.29 provides that an employee who claims workmen’s compensation from his employer or an insurer retains the right to bring a tort action against third parties. The same right is accorded to employers and insurers who have paid compensation. Section 102.29 also requires those entitled to bring such an action to furnish each other with notice and provides for joint litigation and the allocation of proceeds.

While § 102.29 may regulate the prosecution of the plaintiff’s claims, those claims do not “arise under” the state workmen’s compensation laws, but rather under the common law of tort. The proper construction of “arising under” for purposes of 28 U.S.C. § 1445(c) is indicated by the Supreme Court’s interpretation of 28 U.S.C. § 1441, where the same words occur: “The right or immunity must be such that it will be supported if the Constitution or laws of the United States are given one construction or effect, and defeated if they receive another.” Gully v. First National Bank, 299 U.S. 109, 112, 57 S.Ct. 96, 97, 81 L.Ed. 70 (1936). In the case at bar, construction of the state workmen’s compensation laws will play no role in determining whether the plaintiff will prevail.

In another, formulation of the “arising under” concept, Justice Holmes has stated that a “suit arises under the law that creates the cause of action.” American Well Works v. Layne, 241 U.S. 257, 36 S.Ct. 585, 60 L.Ed. 987 (1916). The plaintiff’s three causes of action were created by the law of tort. The complaint makes no mention of Wis.Stats. § 102.29 or any other workmen’s compensation statute. I make no ruling with regard to the applicability of Wis.Stats. § 102.29 in this action; rather, I hold that the requirements of 28 U.S.C. § 1441 were met and that this action was properly removed to federal court.

Therefore, IT IS ORDERED that the motion to remand be and hereby is denied.


author: GILES, .District Judge.

text:
    Edward WAHSNER, et al. v. AMERICAN MOTORS SALES CORP., et al.
    Civ. A. No. 83-1216.
    United States District Court, E.D. Pennsylvania.
    Oct. 23, 1984.

      Michael O’S. Floyd and James C. Ingram, Drinker, Biddle & Reath, Philadelphia, Pa., for defendants.
    Anthony J. Sciolla, Jr., Philadelphia, Pa., for plaintiffs.
   MEMORANDUM

GILES, .District Judge.

Edward Wahsner and Stevin Novin filed this action against American Motors Sales Corporation (AMSC) and Rich Will, an AMSC Zone Manager, under the Automobile Dealers’ Day in Court Act, 15 U.S.C. §§ 1221-1225 (Dealers’ Day Act). They allege AMSC terminated them in bad faith in violation of the Dealers’ Day Act. They also allege that Will induced AMSC to breach its franchise agreement with plaintiffs. AMSC and Rich Will have filed a motion for summary judgment asserting that Wahsner and Novin signed releases in which they relinquished all claims against defendants. For the reasons which follow, this motion shall be denied.

FACTS

On April 15, 1978, Wahsner and Novin were installed as co-investors/operators of the dealership, Economy AMC/Jeep, Inc. (Economy) as part of AMSC’s dealership investment program. Wahsner and Novin each invested $25,000 for a total of $50,000. AMSC invested $75,000. First Pennsylvania Bank provided the remainder of Economy’s capital in the form of a loan in the amount of $125,000 guaranteed by AMSC. Wahsner and Novin each signed an employment agreement. These agreements provided that AMSC employed Wahsner as president and general manager of Economy and Novin as vice-president and co-manager of Economy. Both employment agreements were terminable at will at any time by the board of directors or by voluntary resignation. Wahsner and Novin also each signed a stock agreement which provided that AMSC owned 750 shares (all of the issued and outstanding shares) of preferred stock and that Wahsner and Novin each owned 250 shares of the common stock. An addendum to the stock agreement provided that in the event Novin and/or Wahsner ceased to be officers of Economy,' AMSC had the right to purchase their stock at book value or to liquidate the dealership. According to the investment plan, profits clear of all encumbrances were to be applied to the redemption of outstanding preferred stock. If all worked well, all of the outstanding preferred stock eventually would be redeemed and Wahsner and Novin would become the sole owners of the dealership. The document entitled “Dealer Franchise Provisions” allowed AMSC to terminate the dealer for failure to conduct business in accordance with each of the requirements set forth earlier in the document by giving written notice at least ninety days prior to the date of termination.

Wahsner and Novin operated Economy for approximately three years. At some point or points during these three years, Economy was listed in AMSC’s top ten dealer list. After operating at a profit for the first six months, Economy began to operate at a loss and this loss trend was never reversed. In February, 1980, W.R. Crawford, who was responsible for running AMSC’s dealership investment program and was Economy’s first vice president, recommended that Economy’s loan be recapitalized. This recapitalization increased First Pennsylvania Bank’s loan to $150,-000 and required AMSC to provide a new capital loan guarantee to the First Pennsylvania Bank. In July, 1980, Crawford recommended another recapitalization of Economy, this time in the amount of $124,-000. Because First Pennsylvania Bank had participated in the February, 1980 recapitalization of Economy, Crawford proposed that the July, 1980 recapitalization be totally funded by AMSC, and so it was.

In intracompany correspondence to Crawford, M.P. Mauricio, the Northeast Branch Manager of the Dealer Investment Department, diagnosed Economy’s problems as including (1) ineffective management of employees, (2) a decrease in departmental sales while departmental expenses increased, (3) frozen capital and (4) poor documentation of costs. On March 10, 1981, Crawford recommended, in intracompany correspondence that Wahsner and Novin be removed as officers of Economy and that their stock interest be dissolved. He stated that “[t]he primary reason for this recommended course of action is excessive and escalating losses of the dealership due to the continued lack of management action to coordinate and improve the overall operation.” He also stated that there had been numerous meetings to work with Wahsner .and Novin to improve operation of Economy. However, these attempts to reverse the loss trend had proven unsuccessful. Crawford included “a chronology of the attached dealership contact reports, intercompany memos, audits and letters substantiating this request for removal.” Wahsner and Novin had invested $50,000 in common stock in 1978. Between April, 1978 and January, 1981, the dealership accumulated losses amounting to $104,880. Thus the decision was made to remove Wahsner and Novin from the Economy dealership.

On March 15, 1981, Crawford sent mail-grams to Wahsner and Novin which read in pertinent part:

You are hereby notified that, at the request of Mr. H.C. Cleary and myself as director of Economy AMC Jeep, Inc., a special meeting of the board of directors of that- corporation will be held on Wednesday, March 18, 1981 ... for the purpose of reviewing continuing losses and to implement appropriate actions with respect to the future management of Economy.....

On March 18, 1981, Novin drove both himself and Wahsner to the meeting in a car owned by the dealership. On the way to the meeting, they stopped by Economy where they discovered that the locks were being changed.' Although they found the changing of the locks strange, neither this nor the mailgram indicated to them that their resignations would be requested at the meeting.

Present at the meeting were Crawford, Will, Herbert C. Cleary, the new branch manager, Wahsner and Novin. Once the meeting began, Crawford informed Wahsner and Novin that the board was requesting their resignations because it was not satisfied with their' operation of Economy. Both Wahsner and Novin were flabbergasted by the request and refused to resign. Upon their refusal, Crawford told them that if they did not resign, the board would remove them and they would leave the meeting with absolutely nothing. They still refused to resign. The board then offered them $5,000.00 cash settlement, two weeks severance pay, two weeks vacation and use of the company car. After they refused this offer, Crawford recommended to Wahsner and Novin that they talk it over. Crawford and the others present left the room so that Wahsner and Novin could talk privately. During their private discussion, Wahsner and Novin decided they should resign. In deposition testimony Wahsner and Novin stated they interpreted Crawford’s statement that they would leave with, absolutely nothing if they did not resign as meaning that they would have to walk home because they had arrived in a company car. Novin also claimed during deposition that he felt under great pressure and powerless to fight the board. He believed that if they did not resign, it would be difficult to find work elsewhere. He also stated during his deposition that he could not risk losing whatever security was being offered because he had a family to support and a child with a heart ailment requiring medical attention and hospitalization. Before actually resigning, however, they agreed that they would make sure that they would each receive the $5,000.00, letters of recommendation and continued hospitalization.

After about twenty minutes, Crawford and the others rejoined Wahsner and Novin. Crawford reassured them that they would each receive $5,000.00 and agreed to the letters of recommendation and continued hospital coverage. Wahsner and Novin then tendered their resignations. Wahsner refused to sign his release until after he had received his check. Both Wahsner and Novin returned with Crawford and Cleary to the dealership to obtain their checks. Each received checks in the amount of $8,184.58 (two weeks severance pay plus $5,000.00 less withholding taxes), two weeks plus three days of vacation pay, continuation of medical insurance until March 31, use of the company cars until April 30 and a letter of recommendation. In return, Wahsner and Novin executed letters of resignation, assignments of stock, waivers of certain rights under the stock agreements and general releases. Neither Wahsner nor Novin returned any of the consideration they received from defendants.

After Wahsner and Novin resigned, Dick Gorham took over the dealership. Later, Rich Will took over and the dealership was given a new name.

SUMMARY JUDGMENT STANDARD

Fed.R.Civ.P. 56 allows summary judgment to be granted,

if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.

Hollinger v. Wagner Mining Equipment Co., 667 F.2d 402, 405 (3d Cir.1981); see also Continental Insurance Co. v. Bodie, 682 F.2d 436, 438 (3d Cir.1982). Doubts as to the existence of genuine issue of fact must be resolved against the moving party. Continental Ins. Co., 682 F.2d at 438, quoting Hollinger, 667 F.2d at 405. Any “inferences ... drawn from the underlying facts contained in the evidential sources submitted to the trial court must be viewed in the light most favorable to the party opposing the motion.” Id.

DISCUSSION

The Dealers’ Day Act allows “automobile dealers” to bring actions in federal court against automobile manufacturers who have not acted in good faith in performing the provisions of the franchise or in terminating the franchise. 15 U.S.C. § 1222. Wahsner and Novin alleged that AMSC acted in bad faith when it terminated them. As evidence of this bad faith they point to the lack of notice, their lack of alternatives, the short amount of time in which they were allowed to make their decision and the abrupt manner in which they were treated at the meeting. AMSC counters that it did not terminate the franchise, which continued to operate under another’s supervision. Rather, AMSC presented Wahsner and Novin with two choices — resign and sign the release in exchange for certain benefits or face immediate termination and receive nothing. Wahsner and Novin were no more than at will employees and thus they received more than they were entitled to receive when they signed their releases in exchange for the already enumerated benefits. Since the Act requires good faith in the termination of franchises and here the franchise was not terminated, AMSC argues that it did not violate the Act. Moreover, under Pennsylvania law, defendants contend Wahsner and Novin executed valid releases, releasing both AMSC and Will, which should be enforced by this court.

The Dealers’ Act defines good faith as: [T]he duty of each party to any franchise, and all officers, employees, or agents thereof to act in a fair and equitable manner toward each other so as to guarantee the one party freedom from coercion, intimidation, or threats of coercion or intimidation from the other party: Provided, That recommendation, endorsement, exposition, persuasion, urging or argument shall not be deemed to constitute a lack of good faith.

15 U.S.C. § 1221(e). The good faith inquiry centers on whether the manufacturer is guilty of coercion or intimidation. See Francis Chevrolet Co. v. General Motors Corp., 602 F.2d 227, 229 (8th Cir.1979), citing Milos v. Ford Motor Co., 317 F.2d 712 (3d Cir.), cert. denied, 375 U.S. 896, 84 S.Ct. 172, 11 L.Ed.2d 125 (1963); Pierce Ford Sales, Inc. v. Ford Motor Co., 299 F.2d 425 (2d Cir.), cert. denied, 371 U.S. 829, 83 S.Ct. 24, 9 L.Ed.2d 66 (1962); Globe Motors, Inc. v. Studebaker-Packard Corp., 328 F.2d 645 (3d Cir.1964). In determining whether the manufacturer acted in good faith, one must examine not only what the manufacturer did, but also the reasons for its actions. See Rea v. Ford Motor Co., 497 F.2d 577, 585 (3d Cir.), cert. denied 419 U.S. 868, 95 S.Ct. 126, 42 L.Ed.2d 106 (1974). For example, a manufacturer does not breach its duty to act in good faith when it terminates a dealer’s franchise because of the dealer’s failure to fulfill its reasonable obligations under the terms of operation of the dealership. See Rea, 497 F.2d at 585; Milos, 317 F.2d at 716 (quoting the House Report). Thus, termination in and of itself is not necessarily an act of bad faith. Milos, 317 F.2d at 716. As has been observed, there is a “conflict in the policies underlying the Act: protecting the dealer but preserving the manufacturer’s ability to make business decisions.” Chinetti-Garthwaite Imports, Inc. v. Ferrari Societa Per Azioni Esercizio Fabbriche Automobili E Corse, 463 F.Supp. 73, 77 (E.D.Pa.1978).

Given these legal principles, defendants’ argument appears rather attractive at first glance. In opposing the motion for summary judgment Wahsner and Novin have relied upon the allegations of the complaint and their deposition testimony that there was a course of conduct by AMSC, designed to drive them out of business. They have not filed documents to specifically dispute those filed by defendants. On the other hand, there is considerable evidence supporting AMSC’s contention that the franchise was operating at a loss under Wahsner and Novin; that agents of AMSC attempted, without success, to work with Wahsner and Novin and reverse the loss trend, that the franchise had to be recapitalized twice and that Wahsner and Novin were unable or unwilling to do whatever was necessary to operate a profitable franchise. Consequently, the record evidence indicates generally that AMSC’s decision to terminate Wahsner and Novin was probably made in good faith. Nevertheless, a material issue of fact yet exists as to whether AMSC carried out this termination decision in good faith.

The mailgram informing Wahsner and Novin of the meeting can hardly be characterized as advance warning that AMSC planned to terminate them. It merely indicated that they would be “reviewing continuing losses and ... implement[ing] appropriate actions with respect to the future management of Economy ...” In addition, Wahsner and Novin were not provided the opportunity to consult counsel or given much more than twenty minutes to ponder and decide whether to execute a release or find alternatives. These were decisions which could affect the rest of their economic lives. In cases where releases have been found valid under the Dealers’ Day Act, the parties were represented by counsel when the release was negotiated or the issue of the validity of the release was decided by a jury. See Olson Motor Co. v. General Motors Corp., 703 F.2d 284 (8th Cir.), cert. denied, — U.S.-, 104 S.Ct. 240, 78 L.Ed.2d 231 (1983) (question of release’s validity submitted to jury); Fabert Motors, Inc. v. Ford Motor Co., 355 F.2d 888 (7th Cir.), cert. denied, 384 U.S. 939, 86 S.Ct. 1462, 16 L.Ed.2d 539 (1966) (plaintiff acted with counsel’s advice and negotiations concerning plaintiff’s resignation and the release were conducted over a period of months during which several offers and counter offers were made); Schmitt-Norton Ford, Inc. v. Ford Motor Co., 524 F.Supp. 1099 (D.Minn.1981) aff'd, 685 F.2d 438 (8th Cir.1982) (plaintiff consulted counsel before signing the release).

Under Pennsylvania law, the conditions under which Wahsner and Novin signed the releases may constitute duress. Pennsylvania law is the appropriate law to apply here with respect to the validity of the releases. The Third Circuit held in Three Rivers Motor Co. v. Ford Motor Co., 522 F.2d 885 (3d Cir.1975) that Pennsylvania law applied in determining whether a release signed by the parties barred plaintiff’s antitrust claim. The court reasoned that “[s]tate law customarily governs the field of contracts and [consequently] it is to state law rather than federal law that private parties are likely to refer when formulating the terms of a contractual release.” Id. at 891 (citation omitted). The court also determined that Pennsylvania law was “not incongruous with federal antitrust objectives.” Id. at 892 (footnote omitted). Under Pennsylvania law, the intention of the parties governs in the construction of releases and this intention must be determined from the language of the release. Id. See also Young v. Robertshaw Controls Co., 430 F.Supp. 1265, 1268 (E.D.Pa.1977), citing Frank v. Volkswagenwerk, A.G. of West Germany, 382 F.Supp. 1394 (E.D.Pa.1974), modified on appeal, 522 F.2d 321 (3d Cir.1975). The signed release binds “the parties unless executed and procured by fraud, duress, accident or mutual mistake.” Three Rivers, 522 F.2d at 892. See also Young, 430 F.Supp. at 1268; Dorenzo v. General Motors Corp., 334 F.Supp. 1155, 1156 (E.D.Pa.1971), appeal dismissed, 474 F.2d 1339 (3d Cir.1973), quoting Mannke v. Benjamin Moore & Co., 375 F.2d 281, 285 (3d Cir.1967). Thus, releases that are executed due to fraud, duress or the like are voidable under Pennsylvania law. Moreover, the Dealers’ Day Act does not prohibit parties from entering into releases in which they relinquish their Dealers’ Day claims. Schmitt-Norton Ford, 524 F.Supp. at 1104-05. See Olson Motor Co., 703 F.2d at 286; Fabert Motors, Inc., 355 F.2d at 890-91. This court therefore concludes that Pennsylvania law on the validity of releases is not incongruous with the Dealers’ Day Act.

Generally, “under Pennsylvania law where the contracting party is free to come and go and to consult with counsel, there can be no duress in the absence of threats of actual bodily harm.” Three Rivers, 522 F.2d at 893, citing Carrier v. Wm. Penn Broadcasting Co., 426 Pa. 427, 430-31, 233 A.2d 519 (1967) (footnote omitted). Taking as true Wahsner’s and Novin’s deposition testimony, as is required in deciding a summary judgment motion, there is a material question of fact as to whether they were free to leave and consult counsel. Both testified, during their respective depositions, that they were told that if they did not resign during the meeting, they would leave with absolutely nothing. They could have understood this statement to mean that they had to resign or actually walk home. Although they were permitted to discuss the matter by themselves, there is no indication that they had access to a telephone with which to call a lawyer. That they may have negotiated, without the assistance of counsel, more benefits than were originally offered does not negate the fact that they may not have been provided with the opportunity to consult counsel. With counsel, they may have received even better benefits or decided not to resign and sign the release after having been apprised of their rights under the Dealers’ Day Act.

Under Pennsylvania law, executing a contract under duress renders that contract voidable, not void. National Auto Brokers v. Aleeda Development Corp., 243 Pa.Super. 101, 108-09, 364 A.2d 470 (1976). Such a contract can be ratified “if a party who executed a contract under duress accepts the benefits flowing from it, or remains silent, or acquiesces in the contract for any considerable length of time after the party has the opportunity to annul or avoid the contract.” Id. at 114, 364 A.2d 470. Nevertheless, Wahsner’s and Novin’s failure to return the consideration they received in exchange for their resignations and releases does not necessarily mean their duress claim fails. Unlike Pennsylvania law on the validity of releases, Pennsylvania law on the ratification of an otherwise voidable release strikes this court as incongruous with the Dealers’ Day Act. For one, the Dealers’ Day Act was enacted to provide redress for the very type of activity alleged here — a bad faith termination caused by coercion. As the Supreme Court stated in Sola Electric Co. v. Jefferson Electric Co., “the prohibition of a federal statute may not be set at naught, or its benefits denied, by state statutes or state common, law rules.” 317 U.S. 173, 176, 63 S.Ct. 172, 173, 87 L.Ed. 165 (1942). See also Home Box Office v. Spectrum Electronics, Inc., 100 F.R.D. 379, 382 n. 1 (E.D.Pa.1983); Taxin v. Food Fair Stores, Inc., 197 F.Supp. 827, 830-31 (E.D.Pa.1961). Because there is a dearth of federal statutory or common law addressing the effect of a party’s failure to return consideration, the courts in Home Box Office and Taxin turned to the Restatement of Contracts § 480. The benefits received and retained by Wahsner and Novin were either money or services to which a value can be assigned. If Wahsner and Novin are successful at trial, under § 480 these benefits can be credited against damages once determined.

Defendants’ motion for summary judgment is denied and Wahsner and Novin will be allowed to proceed to trial.

      . It appears from the complaint that the claim against Will is based on pendent jurisdiction. Plaintiffs seem to be asserting that Will tortiously interfered with the contractual agreement between them and AMSC. Such a claim is grounded in state law and not the Dealers’ Day Act.

      . According to Novin, he and Wahsner personally guaranteed the loan as well.

      . The record is unclear on exactly when Economy was listed in the top ten dealer list.

      . By February, 1980, the current balance on the First Pennsylvania loan had been reduced' to $71,500.

      . Although Will was not a member of the board of directors, he was allowed to attend because he had recommended approval of their application to the dealer investment program. The board members for Economy were Crawford, Cleary and Wahsner. However, Wahsner was a non-voting member.

      . The releases provided:
      For the sum of One Dollar ($1.00) and other valuable consideration, the receipt and adequacy of which is hereby acknowledged, [Wahsner/Novin], the undersigned, has remised, released and forever discharged, and by these presents, does for himself, his heirs, executors, administrators, successors and assigns, remise, release and forever discharge American Motors Corporation, American Motors Sales Corporation, Economy AMC/Jeep, Inc., their agents, employees, successors and assigns, of and from all manner of actions, causes of action, suits ... claims and any and all demands whatsoever, in law or in equity, which the said [Wahsner/Novin] ... may at any time have or have had----

      . Although technically plaintiffs were AMSC employees rather than “automobile dealers,” they have standing to bring this action under the Act, a fact which AMSC does not dispute. Courts routinely hold that individuals like plaintiffs — that is individuals who have invested substantial sums in the dealership, who have purchased non-voting stock with the manufacturer holding the voting stock and who have contracted to become the sole owners of the dealership if they operate it at a profit over a period of years — have standing to sue under the Act. See Rea v. Ford Motor Co., 497 F.2d 577, 584 (3d Cir.), cert. denied, 419 U.S. 868, 95 S.Ct. 126, 42 L.Ed.2d 106 (1974); York Chrysler-Plymouth, Inc. v. Chrysler Credit Corp., 447 F.2d 786, 790-91 (5th Cir.1971); Kavanaugh v. Ford Motor Co., 353 F.2d 710 (7th Cir.1965); Imperial Motors, Inc. v. Chrysler Corp., 559 F.Supp. 1312, 1314-15 (D.Mass.1983). Cf. Vincel v. White Motor Corp., 521 F.2d 1113, 1119-20 (2d Cir.1975); Moorehead v. General Motors Corp., 442 F.Supp. 873 (E.D.Pa.1977). Holding otherwise would effectively negate "the protective features of the Act.” Imperial Motors, 559 F.Supp. at 1314-15, quoting Vincel, 521 F.2d at 1120.

      . Plaintiffs have the burden of showing absence of good faith by the manufacturer. Milos, 317 F.2d at 718, quoting S.Rep. No. 2073, 84th Cong., 2d Sess. (1956) and citing 102 Cong.Rec. 14071 (1956) (remarks of Representative Celler).

      . This court is unpersuaded by defendants’ argument that as at will employees, Wahsner and Novin received more than they were entitled to because they could have been terminated without advance notice and without receiving benefits of any kind. Wahsner and Novin have standing to bring an action under the Act and their at will employee status cannot be dispositive of the validity of the releases. To hold otherwise would render meaningless their right to bring an action under the Act.

      . Because there is a material issue of fact with respect to whether Wahsner and Novin were given the opportunity to consult counsel before signing the releases, precluding the granting of summary judgment, this court need not address the business compulsion arguments advanced by the parties.

      . Section 480 has been modified somewhat in the Restatement (Second) of Contracts § 384. This section provides that a party is not required to return benefits received in order to be granted restitution if “the court can assure such return in connection with the relief granted.” § 384(1)(b). Thus, even under the Restatement (Second) of Contracts, Wahsner and Novin may proceed if they return to defendants an amount equal to the benefits they received.