source: Caselaw Access Project

author: HAROLD H. GREENE, District Judge. MacKINNON, Senior Circuit Judge

license: Public Domain

text:
    CITY OF PLEASANT GROVE, Plaintiff, v. The UNITED STATES of America, Defendant.
    Civ. A. No. 80-2589.
    United States District Court, District of Columbia.
    Oct. 25, 1985.
    Thomas G. Corcoran, Jr., Donald J. Cronin, Corcoran, Youngman & Rowe, Washington, D.C., for plaintiff; Thomas N. Crawford, Jr., Cooper, Mitch & Crawford, of counsel, Birmingham, Ala.
    Gerald W. Jones, Paul F. Hancock, Jeremy I. Schwartz, John K. Tanner, Voting Section, Civil Rights Div., U.S. Dept, of Justice, Washington, D.C., for defendant.
   OPINION

HAROLD H. GREENE, District Judge.

On October 9, 1980, the City of Pleasant Grove, a community in Jefferson County, Alabama, brought this action under section 5 of the Voting Rights Act of 1965, 42 U.S.C. § 1973c, seeking a declaration that the annexation by the city of the so-called “Western Addition” did not have the purpose or effect of denying or abridging the right to vote on account of race or color. In March 1982, plaintiff moved for summary judgment, and on August 3, 1983, after a hearing, the Court denied plaintiffs motion. City of Pleasant Grove v. United States, 568 F.Supp. 1455 (D.D.C.1983).

The Court’s opinion on the motion and Judge MacKinnon’s dissent focused on the question whether a community without black voters would be in violation of the Act by annexing areas inhabited by whites while refusing to annex similarly situated, contiguous areas inhabited by blacks. On that issue, the Court held that, in the context of annexation, a violation occurs upon a showing of discriminatory purpose alone, and that it was not significant in terms of the Voting Rights Act that, since there were no black voters in the City of Pleasant Grove, there could be no dilution of the voting rights of blacks and hence no discriminatory effect. The Court further decided that a political entity may not annex adjacent white areas while applying a wholly different standard to adjacent black areas and failing to annex them based upon that discriminatory standard. 568 F.Supp. at 1460.

That decision is, of course, the law of the case. Fogel v. Chestnutt, 668 F.2d 100, 108-09 (2d Cir.1981); Handi Investment Co. v. Mobil Oil Corp., 653 F.2d 391, 392 (9th Cir.1981); Major v. Benton, 647 F.2d 110, 112 (10th Cir.1981); United States v. Fernandez, 506 F.2d 1200, 1204 (2d Cir. 1974); White v. Murtha, 377 F.2d 428, 431-32 (5th Cir.1967); Schupak v. Califano, 454 F.Supp. 105, 114 (E.D.N.Y.1978). See generally IB Moore’s Federal Practice paragraphs 0.404[1], 0.404[4.-l],

The action is now before the Court on the merits and, as the plaintiff, the City of Pleasant Grove has the burden of proof. City of Rome v. United States, 446 U.S. 156, 162, 183-87, 100 S.Ct. 1548, 1554, 1564-67, 64 L.Ed.2d 119 (1980); City of Richmond v. United States, 422 U.S. 358, 362, 95 S.Ct. 2296, 2299, 45 L.Ed.2d 245 (1975); Georgia v. United States, 411 U.S. 526, 538, 93 S.Ct. 1702, 1709, 36 L.Ed.2d 472 (1973); City of Port Arthur v. United States, 517 F.Supp. 987, 1010-11 (D.D.C.1981), aff'd, 459 U.S. 159, 103 S.Ct. 530, 74 L.Ed.2d 334 (1982); Mississippi v. United States, 490 F.Supp. 569, 581 (D.D.C.1979), aff'd, 444 U.S. 1050, 100 S.Ct. 994, 62 L.Ed.2d 739 (1980); City of Petersburg v. United States, 354 F.Supp. 1021, 1027 (D.D.C.1972), aff'd, 410 U.S. 962, 93 S.Ct. 1441, 35 L.Ed.2d 398 (1973).

It is in this procedural framework that the Court now considers the factual issues.

I

During its history, Pleasant Grove approved the following four annexation requests: a parcel of land to the southeast of the city (1945); land in the northern, southern, and western areas (1967); the Glasgow Addition (1971); and the Western Addition (1979). None of these areas had any black residents. During the same period, the city rejected annexation petitions from the Woodward School (August, 1971), the Pleasant Grove Highlands (April 18, 1979); and the Dolomite area (October, 1979). Each of these areas has been identified as a “black” area.

The annexations directly at issue in this proceeding are those of the Western Addition (Western), the Glasgow Addition (Glasgow), and the Pleasant Grove Highlands (Highlands). The basic rationale offered by Pleasant Grove in discharge of its burden of proof is that its decisions to annex the “white” Western and Glasgow areas, but not the “black” Highlands, were based not on race but on the city’s economic self-interest.

In support of that rationale, Pleasant Grove adduced evidence tending to show that, when the residents of the Highlands requested annexation (some two months after the annexation of Western), the mayor of Pleasant Grove appointed a committee to investigate. That committee, it is said, reported to the City Council that annexation would not be financially advantageous, and a second committee later likewise concluded that annexation would be economically costly to the city. The principal substantive contentions Pleasant Grove is making in support of these conclusions are (1) that by annexing the Highlands, it would give up approximately $59,000 in development fees, and (2) that the Highlands, unlike the “white” areas which had recently been annexed, requires more than its per capita share of City revenues, particularly in the form of police, fire, and sanitation services. We find, based on the evidence, that these contentions are without merit, and that they are a mere pretext for race-biased annexation decisions.

II

First. Neither in connection with the Highlands’ petition nor at any other time did Pleasant Grove conduct an economic study to determine the advantages and disadvantages of a particular annexation; all the economic conclusions reached in this regard were developed after the fact. The evidence clearly shows that the City did not assess the economic or other impacts of annexation prior to its decision not to annex the Highlands, and that it likewise performed no such studies in connection with its decisions to annex the Western and the Glasgow areas.

Second. Pleasant Grove’s reliance upon the determination of its so-called “Annexation Committee”—that annexation of the Highlands would be too costly—is unpersuasive for other reasons as well. Although the City asserts that the committee was established in March, 1981 to consider economic impacts, committee members have testified that they were not notified of their appointments until one year later. It is likewise established that, if the committee met at all, it did so only once and then only on an informal basis, and that it never gathered its own information, but what data it had were provided to it by the Mayor from various city department heads who had already prejudged the issue. The committee never questioned these individuals regarding economic issues; it generated no documents; and it made no official report to the City Council. Based on these uncontroverted facts, it is difficult to escape the conclusion that reliance by the City on the committee’s recommendation for its decision not to annex Pleasant Grove Highlands is a sham.

Third. Substantively, the economic justification presented to the Court for the City’s failure to annex the Highlands is no more persuasive. The factors that have been cited in that regard are fire protection, streets and sanitation, police protection, and revenues from development fees.

A. The Pleasant Grove fire chief has stated that the annexation of the Highlands would have generated the need for three additional firefighters/paramedics and one additional rescue truck, at considerable cost to the city. That projection was entirely without factual basis, for the city was already providing free fire, police, and paramedic services to the Highlands, area, and thus no additional monies would have been needed as a consequence of annexation. The fire chief’s projection is dubious for another reason as well: the anticipated cost for serving the 79 homes in the Highlands was more than the estimated cost of serving the 700 projected homes in the Western addition although the former is more easily accessible than the latter.

B. Similar problems exist with respect to the City’s findings concerning the respective costs of providing street and sanitation services to the Highlands as opposed to the Western Addition. Those responsible for calculating the costs of these services applied entirely different cost methods for the needs of the Highlands than they did for those of the Western Addition. If the same method of calculating costs are applied to both areas, the cost to the city would be, depending upon the formula used, either $20,000 for the Western Addition and zero for the Highlands, or $81,-900 for the Western Addition and $6,917.24 for the Highlands. In short, under either method, the cost of providing street and sanitation services to Western far exceeds the cost of providing such services to the Highlands.

C. On the issue of police protection, the City’s high cost estimates for the Highlands were based primarily upon the view expressed by the police chief, that the black residents of the Highlands were more “crime prone.” Actually, to the extent that the statistics support that assessment at all, they are explained by the fact that the Highlands was a “new” neighborhood still lacking cohesion. In any event—as is true with respect to the provision of fire and paramedic service—the Pleasant Grove police department already responds to calls in the Highlands, and the annexation therefore should not generate any additional costs.

D. As concerns finally the question of revenues from new development, Pleasant Grove relies primarily upon the fact that if the city brought in the 79 already-existing homes in the Highlands, as distinguished from having an equal number of new houses built within the city, it would lose $45,-820 in development fees. That argument fails entirely to consider, however, that annexation of the Highlands would generate immediate ad valoram tax revenues for the city, and that the Highlands area contains sufficient undeveloped land to allow the construction of 80 new homes.

Pleasant Grove also estimated that the annexation of the Western Addition would generate anywhere from $768,250 to $1,424,500 in development fees over a four year period, in the form of building permits, subcontractors’ licenses, increased property taxes, and the like. These figures, however, are shown by the record to be highly inflated. For example, the City’s estimated annual tax revenue for the new Western homes exceed those of the City’s most expensive neighborhoods. Moreover, on economic grounds other than development fees, the annexation of the Western Addition appears to be more costly to the City than the' annexation of the Highlands.

We find that the economic justification advanced by Pleasant Grove for its annexation practices is flawed both procedurally and substantively, and that it is no more than a transparent attempt to put a valid gloss on decisions which plainly had a racial purpose.

Ill

In addition to the evidence of the disparate approach Pleasant Grove took with respect to almost every phase of its economic analysis of the proposed annexations, there is ample evidence before the Court that the City adopted racially-discriminatory policies with respect to matters other than annexation. As a matter of law, the Court may, and it does, infer on the basis of this evidence as well that racial bias was the purpose of Pleasant Grove’s annexation policy.

From the 1940s to the present, Pleasant Grove’s housing and zoning policies have been designed to exclude blacks from the City. This was done either directly or through its efforts to exclude apartment construction (in the belief that apartment housing was likely to be occupied by blacks). Moreover, Pleasant Grove has managed to maintain an all-white residential community by operating a dual white-black housing market through a variety of devices, such as advertising and marketing directed exclusively to white buyers, and racial steering.

Pleasant Grove has likewise made clear its policy of hostility to the presence of blacks in subjects other than housing. The City has never hired a black person, preferring to draw its employees from as far away as fifty miles rather than to hire blacks living in surrounding Jefferson County, which is one-third black. When a federal court in 1969 required the County to abandon its segregated school system, Pleasant Grove voted to secede from the county school system on the evening of the very day the court’s order was issued. The City established its own separate “white” school system, financing it with extraordinary taxes, and funds diverted from the municipal utility system. These actions, and others, demonstrate that the City of Pleasant Grove has attempted to exclude blacks from becoming residents of the City and all facets of City life, including voting in municipal elections, and that it has, in fact, succeeded in doing so. As the Rogers and Busbee cases, cited supra, hold, such actions are valid evidence of discriminatory purpose in a voting rights action.

The mass of evidence of a specific racially-biased annexation policy, supported by what must be, for this day and age, an astonishing hostility to the presence and the rights of black Americans, far overshadows and outweighs the City’s feeble effort to portray its annexation policy as economically motivated. We find that the economic rationale advanced by Pleasant Grove is pretextual, and that the city has wholly failed to carry its burden of establishing that its annexation policy does not have the purpose of denying or abriding the right to vote on account of race or color.

For these reasons, it is the judgment of this Court that the request of plaintiff for preclearance of the annexations of the Western and the Glasgow Additions pursuant to section 5 of the Voting Rights Act must and will be denied.

MacKINNON, Senior Circuit Judge

(dissenting):

The City of Pleasant Grove is a small municipal corporation in Alabama which is a suburb of the City of Birmingham. At times here relevant it had a population of 7,086, all of whom were white citizens except for one Oriental and 32 blacks who live in two nursing homes and require 24 hour-a-day supervision. There are no black voters in Pleasant Grove. This case involves primarily the annexation of the Western Addition, a large tract of completely vacant land that is contiguous to the western boundary of the City. The 1969 annexation of the much smaller Glasgow Addition, inhabited only by the white citizens of the Glasgow family, is also involved in this case. Despite the absence of any affirmative duty under section 5 of the Voting Rights Act for an electoral district to improve the position of minority voters or to reduce the strength of a majority, my colleagues decide that these annexations violate the Voting Rights Act because the City Council did not subsequently annex an area south of the City that is inhabited completely by black citizens. The majority have thus in effect denied preclearance of the annexation of both the Western and Glasgow Additions. While Pleasant Grove has a history of past racially discriminatory conduct, in my opinion subject annexations do not violate the Voting Rights Act. Pleasant Grove, moreover, has clearly met its burden by showing an economic justification for the annexation of the Western Addition.

I.

The Western Addition is a tract of completely vacant land contiguous to the western boundary of Pleasant Grove. The City of Pleasant Grove owns 50 acres of the land and the Mead Corporation and Gary H. Dobbs, Sr. owns the remainder, estimated from the map at approximately 389 acres. In the latter part of 1978, these owners contacted the mayor of Pleasant Grove and requested annexation of the Western Addition to Pleasant Grove. The proposal came before the Municipal Council on February 5, 1979. On that date the Council adopted a resolution, four to one (abstention), annexing the Western Addition. Since the Western Addition was completely vacant land with no residents, and thus no person would be made a resident of Pleasant Grove without an opportunity to vote on the issue, the local state senator introduced legislation in the Alabama legislature to formalize the annexation. The bill was advertised in local newspapers in February and March 1979.

Shortly thereafter, some residents of nearby West Smithfield Manor (“Smith-field”) filed a petition jointly with some citizens of the adjacent “Five Acre Road” area (collectively “petitioners”) requesting annexation to Pleasant Grove. Petitioners’ areas are inhabited completely by black citizens. The petitioners’ request came before the Council on May 7, 1979, and was referred to a committee. The Smithfield petitioners explained that they sought annexation to Pleasant Grove because, according to the newspapers, Pleasant Grove was withdrawing their free fire protection. The continuation of paramedic services was also in doubt. At a meeting of the Pleasant Grove Council on June 18, 1979, however, the Council voted to continue providing free fire protection to Smithfield, and later paramedic services were also continued. The Council took no further action on petitioners’ request for annexation.

The Attorney General denied preclearance for the annexation of the Western Addition because the predominantly black Smithfield and the Five Acre Road areas had not been annexed by Pleasant Grove. Pleasant Grove subsequently brought in this court an action under section 5 of the Voting Rights Act of 1965, 42 U.S.C. § 1973c (1982), seeking a declaratory judgment that the annexation of the vacant land in the Western Addition did “not have the purpose and will not have the effect of denying or abridging the right to vote on account of race or color____”

Pleasant Grove later amended its complaint, pursuant to order of this court, to include the much smaller annexation 10 years before, in 1969, of the Glasgow Addition, which had not previously been approved. The Glasgow Addition is contiguous to Pleasant Grove on its northern boundary and, according to measurement of the map, comprises an area of slightly less than 40 acres. In 1969 the area contained four houses all belonging to the Glasgow family. Two houses have since been added. The population was 14 in 1969 and is currently 20; all are members of the Glasgow family, and are white. Otherwise the area is completely devoid of inhabitants.

Initially this court denied plaintiff’s motion for summary judgment, City of Pleasant Grove v. United States, 568 F.Supp. 1455 (D.D.C.1988), and the matter then came on for hearing on the merits. The majority today holds that the City’s proposed annexation violates the Voting Rights Act. Although the City of Pleasant Grove has a history of racial discrimination in other respects, in my opinion, it cannot be said that the City has violated the Voting Rights Act by subject annexations. A violation of the Act requires a “den[ial] or abridgement] of voting rights on account of race or color.” Incapable of finding any such effect, the majority finds a violation based on past racial discrimination in respects other than voting and on bare speculative future illegal discrimination in other respects that arguably would result in speculative dilution. As is demonstrated below, however, this conclusion is based on a number of assumptions that in truth are not supported by the record or by reason.

II.

As stated above, the annexed 430 acre Western Addition is completely uninhabited and the Glasgow Addition was practically uninhabited. Yet the majority opinion makes numerous references to the Western and Glasgow Additions as being “inhabited by whites.” There is not a single person, however, white or black, living in the large 430 acre area covered by the Western Addition, and the much smaller Glasgow Addition includes members of one family only—the Glasgows. But this mischaracterization of the facts is necessary to support the fallacious theory of my colleagues that these areas should be treated as being inhabited solely by white citizens because Pleasant Grove, through the years, has managed to remain all white in part by following racially discriminatory practices. The majority “therefore treats the annexation of vacant land exactly as if that land were already inhabited exclusively by whites. The majority thus treats its speculation as to the future development of the Western Addition to Pleasant Grove as a fact upon which a Voting Rights Act violation can be predicated.

The majority is apparently persuaded by the government’s assertion that the uninhabited areas should be treated as “white” areas. The weakness in the government’s-evidence, however, is apparent in its response to the plaintiff’s first set of interrogatories, which indicates that the government refused to approve the annexation of the Western Addition and Glasgow areas because “said land was annexed for the express purpose of residential construction, which houses will be occupied by white persons. ” As indicated above, the italicized statement is completely speculative. The government points to the fact that the other annexations have generally developed with completely white populations. However, there is absolutely no way to guarantee, much less safely predict, that newly annexed areas will be occupied exclusively by white citizens or by black citizens. Even if the annexed areas become generally white, this will not necessary be the result of illegal discrimination. The majority, however, writes as if the City has an affirmative duty to pursue an annexation policy which will result in a higher proportion of voting blacks within the City. But the existence of such a duty has been explicitly denied by the Supreme Court in its interpretation of the Voting Rights Act. See discussion infra. Whenever land in the Western Addition is available for purchase, there is always the possibility that it will be bought by a black citizen.

My colleagues further state:

The Court [meaning the majority opinion on the motion] further decided that a political entity may not annex adjacent white areas while applying a wholly different standard to adjacent black areas and failing to annex them based upon that discriminatory standard. 568 F.Supp. at 1460.

Maj.Op. at 783. They contend that this statement from the prior majority decision states the law of the case. But it is not the law of the case because it is based on facts that are not the facts of this case. The true facts here bring into play uninhabited and black inhabited areas—not white and black inhabited areas.

My colleagues spell out numerous racially discriminatory practices by Pleasant Grove over the last 45 years. These practices include racial discrimination in zoning and hiring, racial steering in the housing market, school segregation and discriminatory annexation. While some are overstated and recognize no adverse or ameliorative explanation, the allegations of substantial historical racial discrimination are generally accurate. The majority has some reason to conclude that Pleasant Grove has successfully excluded black citizens from becoming residents and from practically all facets of its local life. The court, relying upon Rogers v. Lodge, 458 U.S. 613, 624-26, 102 S.Ct. 3272, 3279-80, 73 L.Ed.2d 1012 (1982) (discrimination in at-large voting), and Busbee v. Smith, 549 F.Supp. 494, 516-17 (D.D.C.1982), aff'd, 459 U.S. 1166, 103 S.Ct. 809, 74 L.Ed.2d 1010 (1983) (reapportionment of congressional districts splitting composite black area to minimize possibility of electing a black candidate), however, goes further and concludes that such historic discrimination in other respects validly evidences the discriminatory purpose required under the Voting Rights Act to justify denying preclearance of annexations. This last step is unwarranted and misconstrues the law of discriminatory purpose.

The discriminatory “purpose” which is required by decisions in the voting rights cases is a purpose related to voting. No such relation exists here. Rogers, relied on by the majority, involved the maintenance of an at-large system of electing county commissioners that was neutral in origin, but which was being maintained for discriminatory purposes. Rogers, 458 U.S. at 626-27, 102 S.Ct. at 3280-81. It did not in any way involve the speculation that some act, such as annexation, would eventually result in the denial or abridgement of minority voting strength. Busbee, on which the majority also relies, emphasized that discriminatory purpose alone would taint a voting change. But Busbee involved an actual voting change—the reapportionment of congressional districts involving actual voters. In this case, since the land is vacant, there is no voting change. If there is no concrete voting change at issue, there can be no “voting change” taken with a purpose of discriminating, see Busbee, 549 F.Supp. at 516 (emphasis added), and thus no violation of the Voting Rights Act, even one based on “purpose” alone.

In its denial of the City’s motion for summary judgment, the majority virtually conceded that because of the peculiar facts of Pleasant Grove—the complete absence of blacks in the City and the annexed areas—the annexations could not conceivably have any discriminatory effect. See City of Pleasant Grove v. United States, 568 F.Supp. 1455, 1458 (D.D.C.1983). It defies all reason and common sense to attribute to a governmental entity the purpose to achieve something that cannot conceivably be achieved, particularly when it is so obviously impossible that the voting rights of any black citizen could be adversely affected. Under the majority’s approach, the statutory concept of “purpose” is stretched entirely out of proportion, to the point of becoming a mere legal fiction: where a municipality had a history of racial discrimination, the majority seems to say that “purpose” to impair the voting rights of blacks can be presumed by an annexation of completely vacant land.

In my view the plaintiffs have demonstrated that the annexations do not “have the purpose and will not have the effect of denying or abridging the right to vote on account of race or color____” Section 5 supra (emphasis added). Annexations pose problems slightly different than the ordinary Voting Rights Act case. See Perkins v. Matthews, 400 U.S. 379, 91 S.Ct. 431, 27 L.Ed.2d 476 (1971); City of Petersburg v. United States, 354 F.Supp. 1021 (D.D.C.1972), aff'd, 410 U.S. 962, 93 S.Ct. 1441, 35 L.Ed.2d 698 (1973); City of Richmond v. United States, 422 U.S. 358, 95 S.Ct. 2296, 45 L.Ed.2d 245 (1975).

In City of Petersburg we were confronted with a substantial dilution of the voting strength of black citizens. Petersburg covered an eight square mile area with a population of 36, 103, and it annexed fourteen square miles of adjacent area containing 7,323 persons. Before the annexation Petersburg was 55% black and 45% white; after the annexation Petersburg was 54% white and 46% black. This represented an almost complete reversal in racial proportion—a substantial dilution. We approved the annexation on the grounds that it was conducive to the orderly development of Petersburg but, in order to ameliorate the substantial dilution of the black vote, we imposed the condition that Petersburg switch from an at-large to a ward system of electing the members of the council. The Supreme Court affirmed, 410 U.S. 962, and in City of Richmond stated that “Petersburg was correctly decided.” 422 U.S. at 370.

City of Richmond was followed by Beer v. United States, 425 U.S. 130, 96 S.Ct. 1357, 47 L.Ed.2d 629 (1976), which held that “the purpose of § 5 has always been to ensure that no voting-procedure changes would be made that would lead to a retrogression in the'position of racial minorities with respect to their effective exercise of the electoral franchise.” 425 U.S. at 141, 96 S.Ct. at 1364. City of Lockhart v. United States, 460 U.S. 125, 103 S.Ct. 998, 74 L.Ed.2d 863 (1983), another Voting Rights Act case from a three-judge court of this district, followed. In Lockhart, Chief Judge Spottswood Robinson stated in dissent that “the voting strength of Lock-hart’s minorities, whether or not enhanced, [has not been] diminished one whit.” 559 F.Supp. 581, 595 (D.D.C.1981). In siding with the dissent, the Supreme Court found that “[t]he District Court erred in finding that the continued use of numbered posts has a retrogressive effect on minority voting strength.” 460 U.S. at 135,103 S.Ct. at 1004. The Court also stated that while “there may have been no improvement in [the] voting strength [of minorities] there has been no retrogression either,” and therefore “[a]pplying the standards of Beer v. United States” the Court ruled that “the election changes introduced by the 1973 Lockhart City Charter will not have the effect of denying or abridging the right to vote on account of race, color, or membership in a language minority group.” Id. at 135-36, 103 S.Ct. at 1004. The result of the annexations here is practically identical—the annexation of the Western Addition and the Glasgow Addition will not deny or abridge the right to vote on account of race or color of a single individual.

As stated above, however, the majority contends that the annexations in this case constitute a violation of the Voting Rights Act because Pleasant Grove cannot escape its history of numerous acts of racial discrimination extending all the way back to 1940 and beyond. In my view this conclusion is based on highly speculative reasoning and assumptions. Moreover, in my opinion, there is no violation of the Voting Rights Act here, since there is no showing of any retrogession in any respect in the Voting Rights of any minority by the speculative conclusion that such discrimination is “likely” to arise in the future. My colleagues are indulging in an unreasonable expansion of the Voting Rights Act. This is the first case I can find and none have been called to our attention where objection is raised to annexation of an uninhabited area by a municipality with no black voters. I would therefore approve the annexations, and to alleviate the speculative fears stemming from the historic racial discrimination, I would, as a condition to approving the annexations, enjoin the City of Pleasant Grove from taking any action affecting the Western and Glasgow Additions that would constitute any form of racial discrimination.

It may be in the years ahead that the development of the Western Addition will turn out like the rest of Pleasant Grove and become exclusively or substantially occupied by white citizens. This could be accomplished by completely normal and legal activity. However, if black citizens want to move into the area, they have a constitutionally protected right to do so. If Pleasant Grove takes any discriminatory action based on race or color, it could be redressed under the injunction.

III.

Not only is the government’s contention that the Western Addition assuredly will develop all white occupancy essentially speculative, but both annexations may also be justified in terms of the City’s fiscal structure. The City points out that uninhabited land is open to development, and once developed will create a new market for municipal water and gas, thus producing substantial municipal income. On the other hand, the areas that the majority faults Pleasant Grove for not annexing are substantially inhabited, and are thus void prospects for producing potential municipal income from its most beneficial source. Revenue from taxes would merely be a standoff for services rendered.

The majority’s decision focuses on, inter alia, the economics of the various annexation decisions. The government pointed out that the City’s decisions not to annex petitioners and Dolomite (another area inhabited by black citizens) were not preceded by any comprehensive study, and argues that some of the figures subsequently produced by City officials distort the true comparative picture of costs and benefits to Pleasant Grove of annexing the black citizens’ areas, as opposed to the Western Addition. The majority largely follows the government in this approach. The City does not contest the absence of any formal economic analysis prior to its annexation decisions, and now concedes that some of the cost figures (those for the fire department and for streets and sanitation) were inaccurate. Plaintiff’s Reply Brief at 10.

The record, however, is in truth largely inconclusive on the comparative per capita costs to Pleasant Grove of providing vital services to the respective areas in question. Only as to police services was there any indication that petitioners might be more expensive, and the crime data was incomplete. Nonetheless, there is one very good fiscal reason that Pleasant Grove should prefer annexation of the Western Addition to that of the petitioners—and indeed prefer annexing any undeveloped area to most inhabited developed neighborhoods. The following statement, based on deposition and exhibits, sums up the City’s financial situation:

The City of Pleasant Grove derives most of its revenue, not from taxes or the other usual impositions of city governments, but from the sale of water and natural gas. The City, through its Utilities Board, is the distributor of water and natural gas for the area of Alabama which surrounds it. [Mays Affidavit, para. 3]. In the year ending September 30, 1980, Pleasant Grove’s “Total revenues and transfers” were $1,382,193. [Exhibit C to Attachment 3 to the Mays Affidavit]. “Revenues” contributed only $499,341 of this amount. $882,852 came from “Transfers from other funds.” Of that $882,852, $871,852 was transferred from the Utilities Board of the City of Pleasant Grove____ “Revenues” provided only 28% of Pleasant Grove’s expenditures in the fiscal year ending September 30, 1980.
[H]owever, not all items under “Revenues” could be expected to increase in approximate proportion to population if Pleasant Grove were to annex [petitioners]____ [T]he items of revenue which would grow proportionately with annexation total only $255,404, which is only 14% of “Total expenditures and transfers” for 1980. [Mays Affidavit, para. 4].

Plaintiff’s Statement of Facts in Support of Motion for Summary Judgment at 10-11 (emphasis added). According to the deposi- • tion of the City’s clerk and treasurer, Sarah Mays, the updated figure for revenues that should increase proportionately to population is 23%. Mays Deposition at 12. The government nowhere contests the accuracy of these figures as a basic outline of the municipality’s finances.

The City’s heavy reliance on profits from the distribution of water and natural gas to the surrounding vicinity provides a powerful reason alone for aversion to annexation of already populated areas. Absent a complete restructuring of the fiscal system, revenues (taxes) from an already developed area could not possibly even approach the costs of services. In effect, the City would be subsidizing such an inhabited area—sharing the profit generated from water and gas distribution sold to new markets in newly annexed areas to pay for the services required in the already developed areas. Undeveloped areas, by contrast, may be expected to pay for the services they require by generating development fees, rather than tapping into the profits the City gains by selling gas and water. The exact levels of costs for services are entirely immaterial in this respect. This ability of Pleasant Grove to raise net revenue from the sale of water and gas alone provides a complete and presumably legitimate explanation for the failure of Pleasant Grove to annex the substantially developed areas of petitioners and Dolomite, and for preferring to annex the completely undeveloped Western Addition and the practically undeveloped Glasgow addition.

The only areas which could sensibly be annexed are those which remain undeveloped—i.e., still capable of yielding substantial development fees (for building permits). According to the affidavit of Mays and exhibits thereto, the City also relies to some significant degree on development fees as a source of revenue. Mays Affidavit, 11 5. In good years, the City’s receipts of development fees equal or exceed the total of revenues derived from such sources as sales, income, and property taxes. This suggests that the majority is incorrect in suggesting that if the sales, income, and property taxes of the petitioners’ areas were taken into account, it would be fiscally desirable to annex them. See Maj.Op. at 786. If the development of the Western Addition would produce a major potential source of such development fees, the City is thoroughly justified in desiring to annex the area which has that potential. The financial potential of the 1979 annexation is clearly distinguishable from the other situations, and constitutes a persuasive nonracial basis for the City’s decision to prefer annexation of the Western Addition.

The majority attempts to undercut the figures submitted by Pleasant Grove, pointing out that no prior studies were made. That, however, does not sully the present figures. Moreover, Pleasant Grove is a small town of slightly over 7,000 persons, and councilmen in such municipalities are traditionally close to the costs and benefits of a small municipal operation. They may not need the extensive studies of larger cities nor should this court require them. It is just plain common sense that Pleasant Grove would profit more from developing areas where they will have a new market for a profitable activity than from annexing areas that are already serviced.

The existence of these persuasive, nonracial purposes for the annexations of the Western and Glasgow Additions negates the inference based solely on speculative assumptions from historic discrimination policies. This is especially true in this case, where the finding of a racial purpose by the majority is little more than a presumption of discriminatory purpose inferred from the City’s history of racial discrimination. Historic racial discrimination can be a strong indication of discriminatory purpose, City of Richmond v. United States, 422 U.S. 358, 362, 95 S.Ct. 2296, 2299, 45 L.Ed.2d 245 (1975), in cases where voting rights of actual resident citizens are involved, but this annexation of vacant land is not connected to voting and does not deny or abridge the right to vote on account of race or color. For these reasons, I cannot join the majority in their conclusion that the evidence proves that the annexations were arranged to advance a discriminatory purpose that is violative of the Voting Rights Act. On the contrary, the City has provided adequate fiscal reasons for its annexation of the Western and Glasgow Additions, and enjoining the municipality from any racially discriminatory action in the annexed areas will ensure that voting rights, and other civil rights, are not denied in contravention of the Constitution and statutes of the United States.

      . The complaint initially sought declaratory relief only with respect to the annexation of the Western Addition, and on May 15, 1981, plaintiff filed a motion for summary judgment as to this single annexation. On October 7, 1981, the Court ordered plaintiff to amend its complaint to include a second annexation, accomplished in 1971, which had not been precleared with the Department of Justice—the so-called "Glasgow Addition.” Plaintiff amended its complaint and then moved for partial summary judgment as to the Glasgow Addition, requesting a finding that its annexation, too, did not have the purpose or effect of denying or abridging the right to vote on account of race or color. That annexation is therefore likewise before us.

      . In August of 1969, a committee from Sylvan Springs and the West Grove area (both inhabited by whites) requested Pleasant Grove to consider consolidation with the former and annexation of the latter. This petition for annexation was actively pursued and facilitated by Pleasant Grove, but the annexation was blocked by the United States Steel Corporation, which, as an intervening property owner, had the legal right to do so. This Opinion constitutes the findings of fact and conclusions of law required by Rule 52, Fed.R.Civ.P.

      . The city refused to annex the site on which the "black” Woodward School was located in order to avoid federal court school desegregation orders.

      . Pleasant Grove also refused to annex the Kohler (1969) and Westminster (1977-78) parcels which were inhabited by whites, because such annexations might have a "mushroom effect” leading to subsequent annexations of adjacent black areas. Patrick Deposition of April 2, 1981 at 55-56, 102-104.

      . While the Western Addition is undeveloped, its location and the City’s plans indicate that it is likely to be developed for use by white persons only.

      . The parties submitted to the Court their affidavits, depositions, answers to interrogatories, admissions, and exhibits, and they stipulated that the Court may render its decision on the merits based on that record without the need for the taking of additional evidence at a trial.

      . The chairman of the second committee testified that he decided to take no action on the request because no one had approached the City since his election to the Council in October, 1980; the matter was already in litigation; and he did not want to make any decision which would expose him to a race discrimination suit. Mosley Deposition of January 11, 1984, Part I at 15, Part II at 23-24, Plaintiff’s Brief at 9.

      . Plaintiff’s Brief at 9. Sarah A. Mays, the City Clerk of the City of Pleasant Grove and the Secretary-Treasurer of the Utilities Board, stated that the City would give up $45,820 in development fees if it annexed the Highlands (which consists of 79 houses) instead of building those houses within the city. Mays Deposition of January 13, 1984 at 19 and Exhibit 14 thereto.

      . Or intend its decisions not to annex the Dolomite, Kohler, and Westminster areas. See note 4, supra.

      . The Annexation Committee was made up of James (or "Pete”) Mosley, Clyde Morgan, and Joe Cooper. Mosley averred that he was notified of the formation of the Committee shortly before receiving the Mayor’s letter with enclosures concerning the estimated costs of providing services to the Highlands, dated May 24, 1982. Mosley Deposition of January 11, 1984, at 10-11.
      Morgan likewise stated that he was appointed to the committee at approximately the same time as the letter was sent. Morgan Deposition of January 11, 1984 at 7. And Cooper, the third alleged member of the Committee, has no recollection of ever being appointed or serving on the second committee. Cooper Deposition of January 11, 1984 at 7-8.

      . In his letter to the Committee Chairman, the Mayor gave his opinion that "it is the general consensus of all concerned that the costs of annexing [the Highlands] would be prohibitive, based upon the projected revenues that would be derived from same.” Letter to Mr. Pete Mosley, Chairman, from Mayor Donald R. Morrison dated May 24, 1982. Govt’s Exhibit 1 to January 11, 1984 Mosley Deposition.

      . Indeed, only one member of the Committee, Pete Mosley, reached a conclusion concerning the desirability of annexing the Highlands, and his decision was based largely, if not entirely, on the fact that the matter was in litigation. See January 11, 1984 Deposition of Mosley, Part I at 15, 18-20, Part II at 23-24.

      . In connection with the City’s reliance on the economic disadvantages allegedly flowing from an annexation of the Highlands, it is interesting to note that the Glasgow annexation, which the City did effect, was an economic drawback to it because of its inaccessibility to city fire and police services. That area, in fact, was annexed solely because of the personal relationship between city officials and the Glasgows who were described as "fine people” whom the city residents "would be proud to have in Pleasant Grove." Deposition of Councilmember Clyde E. Morgan of December 17, 1981, at 15, 17-18. Needless to say (see Part III infra), there were no expressions of opinion from city officials that the black inhabitants of the Highlands were "fine people” whom the City "would be proud to have” as members of the community.

      . Plaintiff stated that, as a result of anticipated development in the Western Addition, it would have to hire two additional sanitation workers at a cost of $10,000 each per year. No such additional personnel would be needed to service the 79 homes in the Highlands, however, because the residents offered to continue their private garbage collection after annexation. Graham Deposition of April 7, 1981 at 13 and 34. In any event, the City Clerk testified that the Department staff is currently underutilized. Mays Deposition of January 13, 1984 at 44-45.

      . These figures are based on the 1980 average cost of street and sanitation services per household of $87.56. George Parkin, Superintendent Streets and Sanitation Department, used this figure to calculate the cost of providing services to the Highlands. Government’s Exhibit 1 to Mosley Deposition of January 11, 1984.

      . Police Chief Robert L. Love deposition of January 12, 1984 at 18.

      . Chief Love based his opinion on a comparison of the number of burglaries committed in the Highlands between July 20, 1978 and January 3, 1979 with the number of burglaries committed in the City of Pleasant Grove during 1980. The available data for theft during this same high-crime period, however, indicates that the Highlands had a lower incident of theft than did Pleasant Grove. Only one theft was reported in the Highlands (79 homes, .013 thefts per household), whereas 79 thefts were reported in Pleasant Grove (2,400 homes, .033 thefts per household). Plaintiff's Exhibit 1 to Waldon Deposition of January 12, 1984 and attachments.

      . January 12, 1984 Deposition of Detective Sergeant Waldon at 14-15. Burglaries in the Highlands declined from 25 in 1978 to 16 in 1979, to 13 in 1980, and to 2 in the first nine months of 1981. Plaintiff’s Exhibit 1 to Waldon Deposition and attachments.

      . No new police costs were projected for the Western Addition even though Chief Love testified that development of this area would also require new resources. Love deposition of January 13, 1984 at 9-10.

      . Plaintiff's counsel stated in a letter of August 20, 1980 to the government that the City’s total estimated revenue from development fees over the next four years would be $768,250. Government Exhibit 1 to Mosley Deposition of January 11, 1984. In a letter dated July 14, 1980 to plaintiff's counsel, the Mayor of Pleasant Grove estimated that the development fees - and receipts expected from the annexed area for the next four year period would be $1,014,600. Government Exhibit 3 to Mosley Deposition. A month earlier, however, the Mayor had estimated that the City would receive $1,424,500 in development fees from the annexation of Western. Government Exhibit 2 to Mosley Deposition.

      . Thus, the overall projected cost of annexing Western fails to take into account such necessary construction as a new fire station, a major traffic artery, and a new neighborhood park.
      Beyond that, even if it were to be assumed that Pleasant Grove would not fare as well with respect to the one item of development income by annexing the Highlands as by failing to do so, the City clearly did not know this when it rejected the Highlands petition.

      . See Rogers v. Lodge, 458 U.S. 613, 624-26, 102 S.Ct. 3272, 3279-80, 73 L.Ed.2d 1012 (1982); Busbee v. Smith, 549 F.Supp. 494, 516-17 (D.D.C.1982), aff’d, 459 U.S. 1166, 103 S.Ct. 809, 74 L.Ed.2d 1010 (1983).

      . In the early 1940s, the Pleasant Grove City Council acted to prevent the construction of a "colored housing project” within the City, and it directed the City attorney to draft a zoning ordinance designed to “restrict colored property." See Minutes of Pleasant Grove Town Council Meeting of November 3, 1941. In fact, the Town Clerk was instructed to write Mr. Pill of the Woodward Iron Co., that the City sincerely desired that he would not sell any land within the corporate limits for a "colored housing project,” and that it highly encouraged the project to be “built outside so as to avoid conflict with our zoning ordinance. " Exhibit 12 to Response of the United States to Plaintiff's Motion for Summary Judgment filed on March 26, 1982 (hereinafter Government's Response Brief) (emphasis in the original). In the Town Council meeting of November 1, 1943, the Town Clerk was instructed to contact the City attorney concerning a zoning ordinance to restrict "colored” property and business districts and white residential property within the corporate limits. Exhibit 13 to Government's Response Brief.

      . See Milton C. Russell Deposition of April 3, 1981 at 22-24. See also Bobby R. Patrick Deposition of December 17, 1981 at 40. The City’s restrictive zoning ordinance prohibiting the construction of apartments was struck down by a federal court on the ground that it had a racially-exclusionary effect. Wheeler v. City of Pleasant Grove, C.A. No. 78-F-1150-S (N.D.Ga.1979).

      . See Joe Nathan Dickson Deposition of April 17, 1981 at 8-14, 17-18, 27-29; Albert Mason Deposition of April 7, 1981 at 21-22, 26-27; Billy F. Graham Deposition of April 7, 1981 at 7-10.

      . Stout v. Jefferson County Board of Education, C.A. No. 65-396 (N.D.Ala.1969).

      . In addition to enacting higher sales and other taxes, the City Council raised the ad valorem property tax rate to the highest level in Jefferson County.

      . That separate school system was ultimately abolished in 1972, by another federal court order. Stout v. Jefferson County Board of Education, No. 72-1102, aff’d, 466 F.2d 1213 (5th Cir.1972).

      . Among other things, the Pleasant Grove City Council authorized the formation of a chapter of the White Citizens Councils, it thanked Governor George Wallace for his fight against desegregation, and it condemned the Birmingham Bar Association for its expression of moral support to Judge Samuel Pointer of the U.S. District Court for the Northern District of Alabama for his efforts in Stout.

      . Even if the burden of proof were on the United States—which it is not—we would have had no difficulty in finding that the annexation policy of Pleasant Grove is, by design, racially-discriminatory in violation of the Voting Rights Act.

      . The bill was signed by the Governor on July 17, 1979.

      . The name of West Smithfield Manor was changed to Pleasant Grove Highlands after its petition for annexation was filed. There were approximately 80 black families in the Highlands. See Defendant’s Statement of Genuine Issues at 3.

      . In footnote 5 my colleagues state "while the Western Addition is undeveloped, its location and the city’s plans indicate that it is likely to be developed for use by white persons only” (emphasis added). Nevertheless, my colleagues continue to state that the annexations are white areas. They reason illogically that if it is likely to be developed it must be treated as a white area. The majority assumes that the City will lawlessly participate in the segregated development of the Western Addition. While I recognize that the City has acted previously in a racially discriminatory fashion, I am unwilling to fully join the majority’s assumption as to the City’s future conduct. Moreover, if the City does discriminate on the basis of race or color in developing the Western Addition, federal redress would be available by an action under the Fourteenth Amendment or the more appropriate Fair Housing Act, 42 U.S.C. § 3601 et seq. (1982). However, since the majority’s fears are based on historical practices, I would issue an injunction under the Voting Rights Act. See discussion infra.

      . It must be kept in mind that the City’s refusal to approve the annexation requests of the Smithfield, Five Acre Road, and Dolomite areas is not at issue in this action. On the authority of Beer v. United States, 425 U.S. 130, 96 S.Ct. 1357, 47 L.Ed.2d 629 (1976), it is clear that section 5 of the Voting Rights Act does not apply to the refusal to alter electoral procedures. Thus the City’s failure to annex these areas is not properly before the court, although the majority seems unaware of this point. See Maj. Op. at 784.

      . The 40 acre Glasgow Addition differs from the Western Addition insofar as it was inhabited by 14 white citizens at the time of annexation, in contrast to the 430 acres of completely vacant land in the Western Addition. However, the fact remains that the Glasgow Addition is a forty-acre parcel populated by members of a single extended family, albeit a white family. In addition, the record shows that annexation of the Glasgow Addition was approved as a personal favor to the Glasgow family, a reason not foreign to the action of city councils in small towns. While the majority may look askance at municipal decisions based on such factors, I am unprepared to say that the Glasgow decision was made for the "purpose or will have the effect of denying or abridging the right to vote on account of race or color.” 42 U.S.C. § 1973c (1982). Such effect is in no way demonstrated. Even if the presence of the Glasgow family were to cause a different result, the annexation of the Western Addition should still be approved. Since the Western Addition poses the primary problem here, this opinion is generally directed at the issue raised by its annexation.

      . The statute itself indicates that a discriminatory purpose must be related in some way to voting: "Whenever a [jurisdiction covered by the Voting Rights Act] shall enact or seek to administer any voting qualification or prerequisite to voting ... such [jurisdiction] may institute an action ... for a declaratory judgment that such qualification [etc.] does not have the purpose ... of denying or abridging the right to vote on account of race or color____” 42 U.S.C. § 1973c (1982). The Supreme Court’s decision in City of Richmond v. United States, 422 U.S. 358, 95 S.Ct. 2296, 45 L.Ed.2d 245 (1975), which held that annexation decisions may in some instances be subject to review under the preclearance procedures of section 5, is not to the contrary. In Richmond the proposed annexation had a direct and substantial bearing on the electoral position of the city’s black voters, whereas the proposed annexation in this case will not affect the position of minority voters, either by dilution or exclusion. To include all annexation decisions within the Voting Rights Act would not only hamper municipal decision-making, but would detract from the Act’s central purpose of assuring that minority voters are free to exercise their constitutionally protected suffrage rights.

      . I also rely on my opinion in City of Pleasant Grove v. United States, 568 F.Supp. at 1460-64 (1983).


author: GERALD J. WEBER, District Judge.

text:
    Virginia ANDERSON, Plaintiff, v. UNIVERSITY HEALTH CENTER OF PITTSBURGH, Defendant.
    Civ. A. No. 84-3070.
    United States District Court, W.D. Pennsylvania.
    Oct. 28, 1985.

      Virginia E. Anderson pro se.
    James Thomas Jr., Martha Hartle Munsch, Reed, Smith, Shaw & McClay, Pittsburgh, Pa., for defendant.
   OPINION

GERALD J. WEBER, District Judge.

Plaintiff is a black female who brings this action under Title VII of the Civil Rights Act of 1964 (42 U.S.C. § 2000e et seq.) and 42 U.S.C. § 1981. She alleges that she was discharged because of her race and sex.

Defendant now moves for summary judgment. The matter has been extensively discovered and the defendant’s motion is fully supported by evidentiary materials and brief. Defendant has not submitted any Response to the motion, but relies entirely on a brief in opposition which makes reference to certain parts of the discovery materials supplied.

Defendant moves to dismiss the plaintiff’s claim under 42 U.S.C. § 1981 as being barred by the statute of limitations. There can be no disputed issue of fact here. Plaintiff alleges a discharge from employment on September 20, 1982. The complaint was filed December 26, 1984. More than two years passed before the complaint was filed. Our Court of Appeals has mandated the Pennsylvania two-year statute of limitations for tort actions as the appropriate time limit for civil rights actions under 42 U.S.C. § 1983; there is no reason why the same rule should not apply to Section 1981 actions. Knoll v. Springfield Township School District, 763 F.2d 584 (3d Cir.1985); Smith v. City of Pittsburgh, 764 F.2d 188 (3d Cir.1985). This follows the Supreme Court’s determination in Wilson v. Garcia—U.S.-, 105 S.Ct. 1938, 85 L.Ed.2d 254 (1985) and Springfield Township School District v. Knoll,—U.S.-, 105 S.Ct. 2065, 85 L.Ed.2d 275 (1985) that claims under the Civil Rights Acts (42 U.S.C. § 1981 et seq.) are characterized as personal injury actions to ibe governed by state limitation periods for personal injuries. The claim under 42 U.S.C. § 1981 is therefore dismissed.

The remaining claims of race and sex discrimination are raised under Title VII of the Civil Rights Act of 1964 (42 U.S.C. § 2000e et seq.). Plaintiff has satisfied the administrative procedures timely, received a right to sue letter from the EEOC, after its finding of no probable cause, and timely filed this suit.

The procedural standards for considering Title VII claims as set by the Supreme Court in McDonnell Douglas Corp. v. Green, 411 U.S. 792, 93 S.Ct. 1817, 36 L.Ed.2d 668 (1973) and Texas Dept. of Community Affairs v. Burdine, 450 U.S. 248, 101 S.Ct. 1089, 67 L.Ed.2d 207 (1981) apply here.

While the first procedural stage requires plaintiff to establish a prima facie case of discrimination, we need not be concerned with this step in this motion because the defendant has assumed this step by coming forth with the evidentiary material articulating a legitimate, non-discriminatory reason for the discharge.

[w]here the defendant has done everything that would be required of him if the plaintiff had properly made out a prima facie case, whether the plaintiff really did so is no longer relevant.

United States Postal Service v. Aikens, 460 U.S. 711, 715, 103 S.Ct. 1478, 1482, 75 L.Ed.2d 403 (1983).

Further, even if plaintiff did establish a prima facie case, this does not preclude the entry of summary judgment for the defendant. Graham v. F.B. Leopold Co., Inc. 602 F.Supp. 1423 (W.D.Pa.1985).

Defendant has presented extensive evidentiary material including deposition testimony, affidavits and documents, setting forth a legitimate, non-discriminatory and non-retaliatory reason for plaintiffs discharge. These are multifaceted and chiefly involve the testimony, documents and affidavit of her immediate supervisor, the person who made the decision to discharge her. She was not qualified or able to do the work that her supervisors had a right to expect of her and she was deficient in her supervisory abilities. Some of these deficiencies were admitted by plaintiff in her own deposition. These matters were brought to plaintiffs attention, and she was advised and counseled about the performance of her duties.

The burden of proof always remains with the plaintiff to show discrimination. Jackson v. U.S. Steel Corp., 624 F.2d 436 (3d Cir.1980). The burden of producing evidence after plaintiff has established a prima facie case merely shifts to the employer to produce evidence of legitimate, non-discriminatory reasons. This the defendant has done.

The burden of coming forth with evidence now shifts to plaintiff. The plaintiff must come forth with evidence to show that defendant’s reasons are pretexts for discrimination. Pierce v. New Process Co., 580 F.Supp. 1543 (W.D.Pa.1984), aff'd. p.c. 749 F.2d 27 (3d Cir.1984).

Plaintiff has presented no evidence that raises a contested issue of fact that race played a role in her termination. While she points to the fact that three black women worked in her department and now there are none does not prove that the employer’s reasons for her discharge was a pretext. The testimony of one black co-employee showed that she left voluntarily; the other black employee was terminated later. This is not relevant;

It is only the facts existing at the time of Defendant’s decision and leading up to that decision which are relevant to the question of whether Defendant unlawfully discriminated against Plaintiff when it made its decision.

Golletti v. ARCO Polymers, Inc., 32 F.E.P. Cases 1796 (W.D.Pa.1983). See also Johnson v. Yellow Freight Systems, Inc., 734 F.2d 1304 (8th Cir.1984).

This instance is statistically insufficient to raise an inference that Plaintiff’s discharge was due to her race.

Further, the fact that plaintiff was replaced by a white woman of less experience is not sufficient to create an issue of fact that race was the motive for plaintiff’s discharge, or that the employer’s reasons are pretextual. There is no requirement that a minority employee be replaced by a minority person.

Plaintiffs claim of sexual harassment involves allegations of certain remarks and a touching by Dr. Eaglstein. These were denied. Plaintiff’s proofs fail to establish any nexus between these alleged remarks and her termination. Dr. Eaglstein was not her immediate superior nor the one who made the decision to terminate her. Plaintiff again has failed to offer evidence to create an issue of fact that her discharge was due to her rejection of any sexual advances. The proffered evidence, even if believed, fails to create a doubt as to employer’s motivation in the light of the great body of evidence supplied of a proper basis for plaintiff’s termination. There is no evidence to show that plaintiff’s job was dependent upon her response to any alleged sexual advances.

Plaintiff’s argument of evidence of an alleged sexual relationship between her supervisor and a co-worker is also irrelevant. It has been denied by both parties to the alleged relationship, but we are not weighing credibility here, we are searching for a relevant issue. It cannot create a racial issue, because the co-worker was also black. Further, it was not shown that the co-worker was favored, promoted, or replaced plaintiff.

Finally, plaintiff presents a claim for retaliation because plaintiff consulted the Pennsylvania Human Relations Commission. Plaintiff did not file a charge at that time, and plaintiff presented no evidence that her supervisor was aware of this consultation before the termination.

Finally, plaintiff’s brief argues discrepancies between testimony of different witnesses deposed as constituting an issue of fact. These discrepancies do not refer to material matters. While plaintiff and plaintiff’s witnesses assert their opinion that plaintiff’s performance was adequate, we find this insufficient to establish pretext. See Smith v. Flax, 618 F.2d 1062 (4th Cir.1980).

Ultimately we are not concerned with the preponderance of the evidence in this summary judgment, but rather whether plaintiff has produced any evidence to show that the employer’s reasons for the discharge were pretextual, either as to plaintiff’s race, her sex or as to retaliation. Nothing that plaintiff has argued from the evidence is sufficient, as a matter of law, to create an inference that she was not discharged because of job performance, but because of her race, or sex, or in retaliation.

ORDER

October 28, 1985, having considered defendant’s motion for summary judgment, its supporting evidentiary materials and briefs, and plaintiff’s response thereto, and finding no genuine issue of material fact, it is ORDERED that:

1. Plaintiff’s claims for violation of 42 U.S.C. § 1981 are DISMISSED as barred by the statute of limitations.

2. Summary Judgment is hereby ENTERED for defendant on all claims of plaintiff's complaint.

3. JUDGMENT is hereby entered for defendant on its counterclaim for costs and expenses, including attorney’s fees. Defendant shall submit its verified Petition setting forth expenses and fees claimed on or before November 8, 1985.


author: PHILIP PRATT, District Judge.

text:
    CHICAGO BLOWER CORP., Plaintiff, v. AIR SYSTEMS ASSOCIATES, INC., et al., Defendants.
    Civ. No. 83-CV-0997-DT.
    United States District Court, E.D. Michigan, S.D.
    Nov. 7, 1985.

      James J. Walsh, Frederick J. Dindoffer, Bodman, Longley & Dahling, Detroit, Mich., for plaintiff.
    Allen Krass, Krass, Young & Schivley, Troy, Mich., for defendants.
    James K. Robinson, Norman C. Ankers, Honigman, Miller, Schwartz & Cohn, Detroit, Mich., for the Canadian defendants Chicago Blower, Canada, CML Northern Blower and the three Canadian citizens, Christie, Lindenschmidt and Martin.
   MEMORANDUM OPINION AND ORDER

PHILIP PRATT, District Judge.

This action was filed on March 18, 1983 against Air Systems and its officers for trademark infringement and unfair competition. In February of 1985 the complaint was amended to include as defendants two Canadian corporations, Chicago Blower Canada and CML Northern Blower, and three Canadian citizens, Gordon Christie, Frederick Lindenschmidt and Stewart Martin. These additional defendants now move this court to dismiss the individual Canadian defendants for lack of personal jurisdiction and the two Canadian corporations for forum non conveniens.

The Michigan “long-arm” statute sets forth the circumstances under which nonresidents may be subjected to the personal jurisdiction of this court.

The existence of any of the following relationships between an individual or his agent and estate shall constitute a sufficient basis of jurisdiction to enable a court of record of this state to exercise limited personal jurisdiction over the individual and to enable the court to render personal judgments against the individual or his representative arising out of an act which creates any of the following relationships:
(1) The transaction of any business within the state.
(2) The doing or causing an act to be done, or consequences to occur, in the state resulting in an action for tort.

M. C.L.A. § 600.705. The phrase “the transaction of any business within the state” has been interpreted by Michigan courts to mean “just what it says” and includes “each and every” and comprehends the “slightest” contact. Sifers v. Horen, 385 Mich. 195, 199 n. 2, 188 N.W.2d 623 (1971); Lazzaro v. Charlevoix Lakes, 108 Mich.App. 120, 310 N.W.2d 295 (1981). The statute expands personal jurisdiction of courts to their “full potential” and has been interpreted to be co-extensive with the Due Process limitations of the Federal Constitution. Sifers, 385 Mich, at 198, 188 N. W.2d 623.

The Due Process Clause of the fourteenth amendment permits personal jurisdiction over a defendant in any state with which the defendant has “certain minimum contacts ... such that the maintenance of the suit does not offend ‘traditional notions of fair play and substantial justice.’ ” International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95 (1945). A court has not exceeded its powers where the defendant has “purposefully availed itself of the privilege of conducting activities within the forum state,” Hanson v. Denekla, 357 U.S. 235, 253, 78 S.Ct. 1228, 1240, 2 L.Ed.2d 1283 (1958), or has “purposefully directed” his activities at the forum state. Keeton v. Hustler Magazines, Inc., 465 U.S. 770, 104 S.Ct. 1473, 1478, 79 L.Ed.2d 790 (1984). In judging minimum contacts, a court properly focuses on “the relationship among the defendant, the forum, and the litigation.” Shaffer v. Heitner, 433 U.S. 186, 204, 97 S.Ct. 2569, 2580, 53 L.Ed.2d 683 (1977).

The Supreme Court’s latest pronouncement on the limits of due process held that a Florida District Court had personal jurisdiction over a Michigan franchisee even though the defendant had never set foot in Florida and the only contacts with the forum state were by telephone calls and letters. Burger King Corp. v. Rudzewicz,—U.S.-, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985). The court held that the defendant “purposefully availed” himself of the forum by entering into a franchise agreement with the Florida plaintiff. The contract was to be governed by Florida law, with policies and major disputes to be handled by the plaintiff’s Miami headquarters. When disputes arose between the parties, defendant dealt directly with the Florida office, though he never physically went to Florida.

The court first reviewed some of the policies behind an expansive reading of the Due Process Clause:

And with respect to interstate contractual obligations, we have emphasized that parties who ‘reach out beyond one state and create continuing relationships and obligations with citizens of another state’ are subject to regulation and sanctions in the other State for the consequences of their activities.

Burger King,—U.S.-, 105 S.Ct. at 2182. The Court went on to address the equities involved in jurisdictional disputes involving interstate contract cases.

Moreover where individuals ‘purposefully derive benefit’ from their interstate activities [citation omitted], it may well be unfair to allow them to escape having to account in other States for consequences that arise proximately from such activities; the Due Process Clause may not readily be wielded as a territorial shield to avoid interstate obligations that have been voluntarily assumed.

Id., 105 S.Ct. at 2183. The court then set forth the standards by which the trial court may determine if the defendant has “purposefully availed” himself of the forum state.

This ‘purposeful availment’ requirement ensures that a defendant will not be haled into a jurisdiction solely as a result of ‘random,’ ‘fortuitous,’ of ‘attenuated’ contacts, [citation omitted], or of the “unilateral activity of another party or a third person,” [citation omitted]. Jurisdiction is proper, however, where the contacts proximately result from actions by the defendant himself that create a ‘substantial connection’ with the forum State. [Citations omitted]. Thus, where the defendant ‘deliberately’ has engaged in significant activities within a State, [citation omitted], or has created ‘continuing obligations’ between himself and residents of the forum, [citation omitted], he manifestly has availed himself of the privilege of conducting business there, and because his activities are shielded by ‘the benefits and protections’ of the forum’s laws it is presumptively not unreasonable to require him to submit to the burdens of litigation in that forum as well.

Id., 105 S.Ct. at 2183-2184.

The defendant in Burger King argued that personal jurisdiction could not be exercised against him in Florida because he never entered the forum state and all contacts with Florida had been by mail or telephone from Michigan. The Supreme Court emphatically rejected the notion that physical presence was a prerequisite for the exercise of personal jurisdiction.

Jurisdiction in these circumstances may not be avoided merely because the defendant did not physically enter the forum State. Although territorial presence frequently will enhance a potential defendant’s affiliation with a State and reinforce the reasonable foreseeability of suit there, it is an inescapable fact of modern commercial life that a substantial amount of business is transacted solely by mail and wire communications across state lines, thus obviating the need for physical presence within a State in which business is conducted. So long as a commercial actor’s efforts are ‘purposefully directed’ toward residents of another State, we have consistently rejected the notion that an absence of physical contacts can defeat personal jurisdiction there. [Citations omitted].

Id. 105 S.Ct. at 2184. The court did, however, point out that it was not establishing a “talismanic jurisdictional formula,” and that each case should be directed on its own facts. Id. 105 S.Ct. at 2189. It noted that an interstate transaction may still be so “random,” “fortuitous” or “attenuated” so as to make the exercise of personal jurisdiction in a given case unreasonable.

In the case at bar, the contacts of the defendants Christie, Lindensehmidt and Martin with the State of Michigan were not random or fortuitous. The affidavit and deposition testimony of Lindensehmidt indicates continuous business contact with the Michigan defendants by telephone and mail. One outcome of these communications is the fact that the Michigan defendants are now the sales representatives of defendant CML Northern, the Canadian corporation of which Lindensehmidt is an officer and 20% owner. The affidavit and deposition testimony of Mr. Christie, who is Chief Executive Officer and 40% owner of CML Northern, reveals similar contacts with Michigan. Christie’s contacts were more extensive than Lindenschmidt’s in that he visited Michigan on two occasions in 1984, one of those being a trip to Ford Motor Company to discuss an order Ford had placed with the defendants.

It is clear that both Lindensehmidt and Christie “purposefully availed” themselves of the opportunity to do business in Michigan and that these contacts were neither random nor fortuitous. They had numerous contacts with a Michigan company that subsequently became their sales representative. The fact that this Michigan company, Air Systems, has handled approximately 95% of CML Northern’s United States sales and 20% of CML’s total sales indicates that neither the contact, nor the business relationships established in Michigan by Christie and Lindensehmidt were “attenuated.”

Martin’s connections with Michigan, while not as extensive as those of Christie and Lindensehmidt, are sufficient to support this court’s exercise of personal jurisdiction over him. He is a 40% owner of CML Northern, and though he did not participate in day-to-day operations, was aware of the dispute with Chicago Blower. He informed the sales representatives of Chicago Blower of Canada that he would put his personal fortune to protect the company, which he knew was involved in a dispute related to the Michigan distributor. As president of his family holding company, 'Rossmere, he signed an indemnity agreement whereby Chicago Blower of Canada’s legal expenses would be paid. He was also present at a meeting with Scheule and McVean of Air Systems who own and operate this Michigan defendant, and are individual defendants themselves, wherein he was informed that litigation was expected. Lindensehmidt testified that Chicago Blower of Canada has paid Air Systems’ legal expenses on a Rossmere account pursuant to an indemnity agreement. The agreement to pay the legal fees arising out of a dispute that includes a Michigan company as a major figure indicates that Martin could “reasonably anticipate being haled into court” in Michigan.

Defendants argue that even if they have “minimum contacts” with Michigan, personal jurisdiction cannot be exercised over them because they acted in their corporate, not individual capacity. This is the doctrine known variously as the “corporate/fiduciary shield” doctrine, which states that personal jurisdiction can only be exercised over those who act in their individual, not corporate, capacity. Forsythe v. Overmyer, 576 F.2d 779 (9th Cir.1978); Sponsler, Jurisdiction Over the Corporate Agent: The Fiduciary Shield, 35 Wash. & Lee L.Rev. 349 (1978). There is disagreement as to the applicability of this doctrine. Some courts have held that it is a rule of statutory construction used in interpreting the intended scope of a state’s long-arm statute. Marine Midland Bank, N.A. v. Miller, 664 F.2d 899 (2d Cir.1981); Soltex Polymer Corp. v. Fortex Industries, 590 F.Supp. 1453 (E.D.N.Y.1984); Quinto v. Legal Times of Washington, Inc., 506 F.Supp. 554 (D.D.C.1981). This doctrine has been persuasively criticized as giving corporate officers jurisdictional immunity where substantive corporate law would subject them to liability. Columbia Briargate Co. v. First Nat. Bank, 713 F.2d 1052 (4th Cir.1983), cert. denied, 465 U.S. 1007, 104 S.Ct. 1001, 79 L.Ed.2d 233 (1984). Michigan courts have not applied this doctrine to its long-arm statute, having extended personal jurisdiction as far as is allowed by the due process constraints of the Constitution.

Several courts have held that the fiduciary shield doctrine is a constitutional principle, applied to determine whether the exercise of jurisdiction comports with fair play and substantial justice. Allen v. Toshiba Corp., 599 F.Supp. 381 (D.N.M.1984); K Mart Corp. v. Knitjoy Mfg., Inc., 534 F.Supp. 153 (E.D.Mich.1981); Parliament Import Co. v. Gibson Wine Co., Inc., 537 F.Supp. 75 (E.D.Pa.1982). The Sixth Circuit has in dictum indicated its doubts about the constitutionality of allowing a state long-arm statute to confer jurisdiction over individuals whose sole contact with the forum was in their corporate, not individual, capacity.

But even if the statute was construed to permit suit in Ohio we would still be faced with grave questions as to its constitutionality. We have serious doubt whether the activities of the corporate officers in behalf of the corporation set forth in Weller’s affidavit are sufficient so as to make it reasonable and just, consistent with traditional notions of fair play, and in conformity with due process requirements of the Fourteenth Amendment that individuals be subjected to suit in Ohio to enforce personal liability arising out of such activities. [Citations omitted.] If such suits against officers of national corporations were permitted, the individuals could be sued in every state of the union whenever they make telephone calls or write letters to a customer who claims that they constitute misrepresentation.

Weller v. Cromwell, 504 F.2d 927, 931 (6th Cir.1974). While the Supreme Court has never expressly used the term “fiduciary shield,” it has had occasion to address the issues involved.

The “fiduciary shield” doctrine was recently argued before the Supreme Court in a libel case where a reporter and editor from Florida were sued in a California court by a California plaintiff. The Court refused to allow the individual defendants to avoid jurisdiction by hiding behind the “corporate veil” of their employer.

Petitioners argue that they are not responsible for the circulation of the article in California. A reporter and an editor, they claim, have no direct economic stake in their employer’s sales in a distant State. Nor are ordinary employees able to control their employer’s marketing activity. The mere fact that they can “foresee” that the article will be circulated and have an effect in California is not sufficient for an assertion of jurisdiction. World-Wide Volkswagen Corp. v. Woodson, 444 U.S. [286] at 295, 100 S.Ct. [559] at 566 [62 L.Ed.2d 490 (1980)]; [other citations omitted].
... Petitioners liken themselves to a welder employed in Florida who works on a boiler which subsequently explodes in California. Cases which hold that jurisdiction will be proper over the manufacturer, [citations omitted], should not be applied to the welder who has no control over and derives no direct benefit from his employer’s sales in that distant State. Petitioner’s analogy does not wash. Whatever the status of their hypothetical welder, petitioners are not charged with mere untargeted negligence. Rather, their intentional, and allegedly tortious, actions were expressly aimed at California____ Under the circumstances, petitioners must ‘reasonably anticipate being haled into court there’ to answer for the truth of the statements made in their article. [Citations omitted]. An individual injured in California need not go to Florida to seek redress from persons who, though remaining in Florida, knowingly cause injury in California. Petitioners are correct that their contacts with California are not to be judged according to their employer’s activities there. On the other hand, their status as employees does not somehow insulate them from jurisdiction. Each defendant’s contacts with the forum state must be assessed individually. [Citation omitted]. In this case, petitioners are primarily participants in an alleged wrongdoing intentionally directed at a California resident, and jurisdiction over them is proper on that basis.

Colder v. Jones, 465 U.S. 783, 104 S.Ct. 1482, 1487, 79 L.Ed.2d 804 (1984).

In another case decided that same day, the Court was even more emphatic in its rejection of automatic jurisdictional immunity for corporate officers.

In addition to Hustler Magazine, Inc., Larry Flint, the publisher and owner of the magazine, and L.F.P., Inc., Hustler’s holding company, were named as defendants in the District Court. It does not of course follow from the fact that jurisdiction may be asserted over Hustler Magazine, Inc., that jurisdiction may also be asserted over either of the other defendants. In Colder v. Jones, post, at 6, we today reject the suggestion that employees who act in their official capacity are somehow shielded from suit in their individual capacity. But jurisdiction over an employee does not automatically follow from jurisdiction over the corporation which employs him____ Each defendant’s contacts with the forum state must be assessed individually.

Keeton v. Hustler Magazine, Inc., 465 U.S. 770, 104 S.Ct. 1473, n. 13, 79 L.Ed.2d 790 (1984). The Colder decision has been interpreted by almost all courts as holding that where the state long-arm statute extends to the limit of due process, the exercise of jurisdiction over corporate officers who individually have had minimum contacts with the forum is permissible, even if those contacts were made in their capacity as corporate officers. Donovan v. Grim Hotel, 747 F.2d 966 (5th Cir.1984); Thomson McKinnon Securities v. Hamiltonian Industries, 610 F.Supp. 5 (S.D.N.Y.1985); Hudson v. Moore Business Forms, Inc., 609 F.Supp. 467 (N.D.Cal.1985); Stuart v. Federal Energy Systems, Inc., 596 F.Supp. 458 (D.Va.1984); Nordic Bank PLC v. Trend Group, LTD, 619 F.Supp. 542, (S.D.N.Y.1985); Chase v. Pan-Pacific, 617 F.Supp. 1414 (D.D.C.1985) Copiers Typewriters Calculators v. Toshiba Corp., 576 F.Supp. 312 (D.Maryland 1983) [decided before Colder.1

In the instant case, the court has already found that sufficient minimum contacts exist between the individual defendants and the forum to allow it to exercise personal jurisdiction over them. Michigan courts have not adopted the fiduciary shield doctrine, and due process does not command this court to apply it in the absence of state law requirements. The argument for exercising jurisdiction over the individual defendants in this ease is stronger than that in Colder. As sole owners of the Canadian corporate defendants whose actions are at issue here, they were the architects of the marketing strategy that resulted in the activity within the forum state which is the subject matter of this suit. They certainly are not being charged with “untargetted negligence,” as it was their personal contacts with the forum that in part led to this suit. The individual defendants were “primary participants in an alleged wrongdoing intentionally aimed” at the forum state, making jurisdiction over them proper.

Both the individual and corporate Canadian defendants contend that even if this court does have personal jurisdiction over them, they should be dismissed pursuant to the doctrine of forum non conveniens. In applying this doctrine, the court may consider ease of access to proofs, availability of compulsory process, the cost of obtaining attendance of witnesses, and “all other practical problems that make trial of a case easy, expeditious and inexpensive.” Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 508, 67 S.Ct. 839, 843, 91 L.Ed. 1053 (1946). It is also appropriate to consider the forum’s familiarity with the applicable law, “rather than having a court in some other forum untangle problems in conflict of laws, and in law foreign to itself.” Id., 330 U.S. at 509, 67 S.Ct. at 843.

This court should be cautious in exercising its discretion to dismiss pursuant to the doctrine of forum non conveniens. “But unless the balance is strongly in favor of the defendant, the plaintiff’s choice of forum should rarely be disturbed.” Id., 330 U.S. at 508, 67 S.Ct. at 843. An even stronger burden has been placed on defendants where, as in the instant case, a foreign defendant is attempting to deny a United States plaintiff access to a United States forum.

When such circumstances are present, the movant’s burden becomes considerable. To establish that the relief being sought—dismissal—is warranted, the defendant in essence must show not only that the proposed forum would be a significantly more convenient one, but also that to subject it [the defendant] to trial in the forum at.issue would be manifestly unjust, vexatious and/or oppressive.

Aigner v. Bell Helicopters, Inc., 86 F.R.D. 532, 543 (N.D.Ill.1980). It has also been said that a court should require “positive evidence of unusually extreme circumstances, and should be thoroughly convinced that material injustice is manifest before exercising any such discretion to deny a citizen access to the courts of this country.” Leasco Data Processing Corp. v. Maxwell, 468 F.2d 1326, 1344 (2d Cir.1972); See, Shepard Niles Crane & Hoist Corp. v. Fiat, S.p.A., 84 F.R.D. 299 (S.D.N.Y.1979) [granting motion to dismiss]; Reavis v. Gulf Oil Corp., 85 F.R.D. 666 (D.Del.1980); Ionescu v. E.F. Hutton & Co. (France) S.A., 465 F.Supp. 139 (S.D.N.Y.1979) [granting motion to dismiss].

The Canadian defendants have not demonstrated that a material injustice would result if this court fails to dismiss them from this action. There is certainly a nexus between the defendants and this forum. Their United States headquarters is located in Michigan. Deposition testimony indicates that 95% of their U.S. sales and 20% of their total sales are derived from the activity of their Michigan sales representative, a defendant in this action. The individual defendants had numerous contacts with Michigan by mail and telephone setting up the distribution network with the Michigan defendant that is the subject of this litigation. The bulk of this suit involves the application of United States patent law, a task that a United States court is better suited to than a Canadian court. This is not one of those rare cases requiring dismissal pursuant to the doctrine of forum non conveniens.

Defendant’s motions to dismiss due to absence of personal jurisdiction, or in the alternative for forum non conveniens, are DENIED.

IT IS SO ORDERED.

      . Where state courts interpret their long-arm statute to be co-extensive with the scope of personal jurisdiction permitted by the due process clause of the United States Constitution, a federal court is not bound to follow the state courts' interpretation of the United States Constitution, but rather is free to apply federal law. Empire Abrasive Equipment v. H.H. Watson, 567 F.2d 554 (3d Cir.1977); Simkins Corp. v. Gourmet Resources Intern., 601 F.Supp. 1336 (E.D.Pa.1985).


author: BROOKS, District Judge.

text:
    Douglas KNOBLETT, Plaintiff, v. Phillip KINMAN, Vincennes Orthopaedic Surgery Clinic, Inc. and Good Samaritan Hospital, Defendants.
    Cause No. TH 85-141-C.
    United States District Court, S.D. Indiana, Terre Haute Division.
    Nov. 8, 1985.

      William Fitzpatrick, Callahan & Fitzpatrick, Oak Lawn, 111., and Roger B. Gamien, Gamien & Root, Morris, 111., for plaintiff.
    Charles W. Brooke, Lane & Waterman, Davenport, Iowa, and Robert Latham, III, Bozeman, Neighbour, Patton & Noe, Mo-line, 111., for defendants.
   ORDER

BROOKS, District Judge.

This matter is before the Court upon two motions to dismiss. One motion to dismiss is filed by defendant Good Samaritan Hospital (hereinafter Good Samaritan) pursuant to Federal Rules of Civil Procedure 12(b)(6) on the grounds that plaintiff’s complaint fails to state a cause of action for which relief may be granted. The other motion to dismiss is filed by defendants Phillip Kinman M.D. (hereinafter Kinman), and Vincennes Orthopaedic Surgery Clinic, Inc. (hereinafter Vincennes Orthopaedic), pursuant to Federal Rules of Civil Procedure 12(b)(1) for the reason that this Court lacks subject matter jurisdiction as a result of plaintiff’s failure to have acquired a ruling from a medical review panel prior to filing this action. The plaintiff, Douglas Knoblett, contends however, that the motions mentioned herein are premature, for plaintiff argues that prior to ruling on the motions to dismiss the Court must address the question of which law to apply Indiana or Illinois. This Court agrees, for the conflict of law question must be addressed prior to reaching the merits of each motion to dismiss.

FACTS

The present action was originally filed in the United States District Court for the Central District of Illinois, and then transferred pursuant to 28 U.S.C. § 1404(a) and § 1631 to the United States District Court for the Southern District of Indiana, Terre Haute Division.

Plaintiff is a resident of Illinois; each defendant is a resident of the State of Indiana, and the amount in controversy exceeds Ten Thousand Dollars ($10,000.00). Hence, jurisdiction is properly asserted under 28 U.S.C. § 1332.

Plaintiff avers that he sustained a fracture to his left humerus while participating in a football game in Crawford County, Illinois. Thereafter, plaintiff was taken for medical care to Good Samaritan Hospital in Vincennes, Indiana, which is located just across the border from Crawford County, Illinois. Once at the hospital, the plaintiff was treated by defendant Kinman who not only is on the staff at Good Samaritan, but also practices as a member of the Vincennes Orthopaedic Clinic which is an Indiana corporation. Plaintiff was released the following day and was instructed to return in one week. A few days after his release from Good Samaritan, and while at his home, plaintiff learned that his radial nerve was trapped between bone fragments at the site of the fracture. Plaintiff avers that as a result of alleged negligent treatment by the defendants he has lost the use of his arm. Thus, prompting him to bring this present action.

ISSUE

Whether Indiana or Illinois law is to apply in the instant case.

If Indiana law applies, pursuant to Indiana Code Section 16-9.5-9-1 et seq., the plaintiff must submit his potential medical malpractice claims to a medical review panel as a condition precedent to filing his claims in any court of this state. Hence, if the plaintiff has not yet submitted his claims to said panel, then plaintiffs action must be dismissed without prejudice for failure to comply with the Indiana Medical Malpractice Act. Alternatively, if the Court finds that Illinois law governs then defendant’s motions to dismiss must be denied, for Illinois has no comparable medical malpractice act.

Since Indiana is the present forum, this Court must look at the Indiana conflict rule. The present action is for alleged medical malpractice which is a tort action. Courts of this state follow the doctrine of lex loci delicti when determining conflict of law questions in tort actions Lee v. Lincoln National Bank & Trust Co., Ind. App., 442 N.E.2d 1147 (1982). That is, the law of the place where the tort was committed governs. Maroon v. State Dept. of Mental Health, Ind.App. 411 N.E.2d 404 (1980). In the ease at bar, the Court is asked to determine whether the injury occurred in Indiana or Illinois.

The plaintiff, of course, is arguing strongly that the injury occurred in Illinois, hence Illinois law should apply. Plaintiff relies heavily on Eby v. Borg-Warner, (Ind.App.), 455 N.E.2d 623 (1983) which in pertinent part held that for claims of fraud and misrepresentation, the tort is considered to have been committed in the state where the loss occurred, typically because that is where the last event necessary to create liability has taken place. Eby at 626, citing Doody v. John Sexton & Co., 411 F.2d 1119 (1st Cir.1969); Rekeweg v. Federal Mutual Insurance Co., 324 F.2d 150 (7th Cir.), cert. denied (1964) 376 U.S. 943, 84 S.Ct. 798, 11 L.Ed.2d 767. Plaintiff is focusing on the latter part, to-wit: “the tort is considered to have been committed in the state where the last event necessary to create liability has taken place.” Plaintiff contends that while he did receive alleged negligent treatment from the defendants while in Indiana, that negligent treatment alone would not be sufficient to create a cause of action for medical malpractice in Illinois. Plaintiff argues that before one can have a cause of action there must be a negligent act and a corresponding injury. Therefore, plaintiff argues that while the treatment occurred in Indiana, the resulting injury occurred in Illinois. Hence, since the injury did not manifest itself until plaintiff reached Illinois then accordingly Illinois law should apply. This reasoning, albeit inventive, must fail.

The Eby decision, which plaintiff relies so heavily, is not applicable to the instant case. For the decisions cited in Eby, referring specifically to Doody and Rekeweg, supra, pertained to misrepresentation and fraud respectively. The instant action is not for misrepresentation or fraud but rather is for medical malpractice.

The record reflects that Kinman treated the plaintiff at Good Samaritan Hospital, and a few days later plaintiff learned his radial nerve was damaged. The Court applying lex loci delicti doctrine finds that the alleged tort occurred while plaintiff was being treated in Indiana, and that the injury resulted therefrom.

Accordingly, having determined that Indiana law applies, the Court must DISMISS without prejudice plaintiff’s action for failure to submit his potential medical malpractice claims to a medical review panel.

IT IS ORDERED that defendants’ motions to dismiss be GRANTED.