author: TROUTMAN, Senior District Judge.

text:
    Orlindo SIERRA, v. LEHIGH COUNTY PENNSYLVANIA, Timothy Carver, Leroy Beans, H. Ring, G. Schairer, D. Ressler, H. Morris, J.W. Thomas, D. Pizzarro and F. Williams.
    Civ. A. No. 84-152.
    United States District Court, E.D. Pennsylvania.
    Aug. 7, 1985.

      Orlindo Sierra, pro se.
    Patrick J. Reilly, Asst. County Sol., Le-high County, Allentown, Pa., for defendant.
   MEMORANDUM AND ORDER

TROUTMAN, Senior District Judge.

Orlindo Sierra was an inmate at Lehigh County Prison, when in February, 1983, he was involved in an incident with several prison guards which ultimately led to his placement in B.A.U. for ninety (90) days, the filing of criminal charges against him and this law suit. Plaintiff alleges that he was subjected to a beating by prison guards which resulted in permanent injuries. Plaintiff does not reveal the nature or extent of his injuries. The pro se complaint itself does not relate the facts of the incident, instead it simply states that plaintiff’s Eighth Amendment rights were violated as a result of the beating. Defendants have filed motions to dismiss and for summary judgment, accompanied by supporting affidavits. Plaintiff has responded to these motions and it is from this response that the Court elicits plaintiff’s version of the events leading up to and following the alleged beating, as well as additional claims by plaintiff of deprivation by defendants of his constitutional rights. The Court will treat the allegations set forth in plaintiff’s response to defendants’ motions as though set forth in plaintiff’s original form complaint. The Court will rule on defendants’ motion for summary judgment as opposed to the motion to dismiss due to the Court’s review and consideration of pleadings outside of the original complaint.

The Court will address plaintiff’s request for appointment of counsel before turning to the motion for summary judgment. Although a district court may in its discretion appoint counsel pursuant to 28 U.S.C. § 1915(d), there is no constitutional or statutory right thereto. Ray v. Robinson, 640 F.2d 474, 477 (3d Cir.1981). In light of the difficulties inherent in finding attorneys willing to invest the time and money required to prosecute inmate civil rights actions, appointment of counsel should be reserved for “those inmates who appear unable to litigate their own actions”. Watson v. Frame, et al., (No. 83-4653) slip op. at 2, (E.D.Pa. December 8, 1983). Plaintiff cannot meet that standard in this case. In addition, as will be discussed shortly, the case at hand does not present a cognizable claim on plaintiff’s behalf.

Turning now to the pending motion for summary judgment, the Court will review plaintiff’s allegations and recitation of the facts in this case. Plaintiff alleges that he was accused of committing an infraction of the rules and told he would be reprimanded by not being permitted to eat with fellow inmates. He was not permitted to request nor was he given a copy of the misconduct charge which resulted in the loss of mess privileges, which he believes was a violation of his First and Fourteenth Amendment rights. Plaintiff also alleges that when he protested this action Officer Ring used excessive force, including kicking, in order to subdue him. Officers Schairer, Ressler, Morris, Thomas, Pizzarro and Williams also present were not accused of using excessive force, but rather of violating plaintiff’s First Amendment rights by not permitting him to request a copy of the charge against him. Plaintiff alleges that as a result of actions taken by defendant Carver, he was punished twice for this incident, once in a disciplinary proceeding within the prison over which Carver presided and a second time when criminal charges were filed in the Court of Common Pleas. Plaintiff asserts a claim against Leroy Bean, then warden of the Lehigh County Prison. Plaintiff claims that as a result of his position of command, Warden Bean was vicariously liable for the actions of his subordinates. Plaintiff asserts a similar claim against defendant Carver and the County of Lehigh. Finally, plaintiff claims that the County failed to provide adequate training and screening of the correctional officers and that such failure made it responsible for those actions of the guards which allegedly violated plaintiff’s Eighth Amendment right to be free of cruel and unusual punishment.

In deciding a motion for summary judgment the Court must determine whether the moving party has carried its burden of showing that there are no genuine issues of material facts and that it is entitled to judgment as a matter of law. Hollinger v. Wagner Mining Equipment Co., 667 F.2d 402 (3d Cir.1981). All evidentiary material of record must be read in a light most favorable to the nonmoving party. Small v. Seldows, 617 F.2d 992 (3d Cir. 1980). The responding party may not rest on the allegations .of his/her pleading but must present by affidavit or otherwise specific facts sufficient to create a genuine issue of material fact. Sunshine Books, Ltd. v. Temple University, 697 F.2d 90 (3d Cir.1982); Federal Rules of Civil Procedure 56(e). After reviewing all pleadings, motions, documents and affidavits filed in this action, the Court concludes that plaintiff has not presented, via affidavit or otherwise, specific facts sufficient to create a genuine issue of material fact in this action.

The initial inquiry in a § 1983 action is two-fold; “... (1) whether the conduct complained of was committed by a person acting under color of state law; and (2) whether this conduct deprived a person of his rights, privileges or immunities secured by the Constitution or laws of the United States”. Parratt v. Taylor, 451 U.S. 527, 535, 101 S.Ct. 1908, 1913, 68 L.Ed.2d 420 (1981). Prison officials acting in their official capacity are acting under color of state law.

Although plaintiffs claim against Officers Schairer, Ressler, Mossi, Thomas, Pizzarro and Williams is for a deprivation of plaintiffs First Amendment rights, the Court, after a thorough review of the record, characterizes plaintiffs claim as a violation of his right to due process. The Fourteenth Amendment provides that no state shall deprive any person of life, liberty or property, without due process of law. Plaintiff has the burden of establishing several elements in order to make out a valid due process claim. Plaintiff must show the existence of a protected life, liberty or property interest, the deprivation of that protected interest and the state action which brought about the deprivation. Parratt v. Taylor, supra.

In the present case the plaintiff has not established the existence of a protected liberty interest. It is well settled that while no state may deprive any person of life, liberty or property without due process of law, only a limited range of interests fall within this provision. Liberty interests protected by the Fourteenth Amendment may arise from two sources, the due process clause and the laws of the state. Hewitt v. Helms, 459 U.S. 460, 103 S.Ct. 864, 74 L.Ed.2d 675 (1983). Under the Pennsylvania Code an inmate has a protected liberty interest in remaining in the prison population. In the case at bar plaintiff was not deprived of this liberty interest. To the contrary, he was permitted to remain in the general prison population and the only restriction placed on him was the loss of mess privileges that evening. This does not rise to the level of a protected liberty interest and thus plaintiff did not carry his burden and allege a valid due process claim under § 1983 against the six defendant prison guards.

Plaintiff alleges that Officer Ring utilized excessive force thereby violating plaintiff’s Eighth Amendment right. Affording the pleadings a liberal construction as mandated by Haines v. Kerner, 404 U.S. 519, 92 S.Ct. 594, 30 L.Ed.2d 652 (1972) plaintiff’s allegations lack the specificity needed to establish a viable civil rights claim. Rotolo v. Borough of Charleroi, 532 F.2d 920 (3d Cir.1976). Plaintiff does not indicate whether Ring’s conduct was part of a pattern or routine of physical abuse to which he was subjected or merely one incident among isolated incidents. As to the latter, it is well established that isolated torts which are cognizable under state law do not become constitutional violations solely because the complaining party is a prisoner. Estelle v. Gamble, 429 U.S. 97, 106, 97 S.Ct. 285, 292, 50 L.Ed.2d 251 (1976); Paul v. Davis, 424 U.S. 693, 699-701, 96 S.Ct. 1155, 1159-1160, 47 L.Ed.2d 405 (1976). In short, plaintiff’s lone allegation with regard to Officer Ring that he used excessive force to subdue plaintiff, without more, does not rise to the level of a constitutional wrong. In addition, plaintiff presents no affidavits or other forms of evidence to support such an allegation. Whereas, Officer Ring and Officer Thomas filed sworn affidavits, refuting plaintiff’s allegation and further stating that any force used was in the nature of self-defense. Therefore, the Court has no alternative but to grant summary judgment in favor of Officer Ring.

Plaintiff presents a claim against Timothy Carver, charging him with violations of plaintiff’s Fifth, Sixth, Eighth, Ninth and Fourteenth Amendment rights. Plaintiff claims that Carver presided over the disciplinary hearing following this incident and caused criminal charges to be filed against the plaintiff. However, plaintiff presents no facts upon which the Court can determine how or whether plaintiff’s rights may have been violated. Plaintiff makes no allegation that the procedures followed at the hearing, over which Carver presided, violated his constitutional rights, except that he was given ninety days in B.A.U. and subjected to criminal charges as well. The Court is unable to discern any violation of plaintiffs constitutional rights. Plaintiff was not subjected to double jeopardy as he seems to believe. He violated prison discipline as well as committing a criminal offense which resulted in two unrelated penal proceedings. The Court concludes that the allegations against Carver do not constitute a valid civil rights claim.

Plaintiff’s allegations against former Warden Leroy Bean and Lehigh County are premised solely on the theory of respondeat superior. Plaintiff also makes a similar claim against Timothy Carver. Plaintiff claims that by virtue of their positions of command Bean, Carver and Lehigh County are responsible and, therefore, liable for the actions of their subordinates. It is a well settled principle that liability under § 1983 cannot be based on the traditional theory of respondeat superior. Rizzo v. Goode, 423 U.S. 362, 96 S.Ct. 598, 46 L.Ed.2d 561 (1976). Consequently, where, as here, the complaint fails to allege personal involvement of the County, Warden Bean, or Timothy Carver, in the form of actual participation or acquiescence in the alleged unlawful conduct, there is no § 1983 liability. Hampton v. Holmesburg Prison Officials, 546 F.2d 1077 (3d Cir. 1976). It is clear that plaintiff has not alleged a valid claim pursuant to § 1983 against Bean, Carver and the County of Lehigh and as a matter of law, these defendants are entitled to summary judgment.

In light of the foregoing, the Court finds that plaintiff has failed to assert a cause of action under § 1983 and will, therefore, enter summary judgment in favor of all defendants and against plaintiff. An appropriate order follows.

      . Title 37 Pa.Code § 95.104(b)(1), (b)(3) (1978).


source: Caselaw Access Project

license: Public Domain

text:
    Raymond D. FEATHERMAN v. A.S. DiGIACINTO, James Onembo, Mark Seymore and Ralph Fennel.
    Civ. A. No. 84-471.
    United States District Court, E.D. Pennsylvania.
    Aug. 13, 1985.

      Raymond D. Featherman, pro se.
    Karl H. Kline, Easton, Pa., for defendant.
   MEMORANDUM AND ORDER

TROUTMAN, Senior District Judge.

Raymond Featherman, plaintiff, was an inmate of Northampton County Prison, Easton, Pennsylvania, when on January 19, 1984, he was involved in a verbal confrontation with corrections officer Ralph Fennell, which led to the filing of a misconduct report. A disciplinary hearing was conducted as a direct result of the misconduct report and plaintiff was placed in administrative segregation for fifteen days. Plaintiff alleges that the procedure at the hearing and the conditions of his administrative segregation constituted a concerted and systematic effort on the part of defendants to deny plaintiff his First, Sixth, Eighth and Fourteenth Amendment rights. Plaintiff has named Warden A.S. DiGiacinto; director of treatment, James Onembo; shift supervisor, Mark Seymore; and correctional officer, Ralph Fennell as defendants in this action. Defendants have moved for summary judgment. Plaintiff has responded to this motion in the form of a request to stay the proceedings until he has completed discovery and the Court enters a ruling on his motion to appoint counsel.

Plaintiff’s request for appointment of counsel was denied by order dated August 20, 1984, at which time he was given until September 25, 1984, to supplement his response to the summary judgment motion. Plaintiff did not supplement his response to the summary judgment motion but rather filed several motions to compel discovery. The Court will address plaintiffs discovery motions.

Plaintiff has filed motions to compel answers to interrogatories and production of documents as well as a motion to compel responses to plaintiffs second request for production of documents. Defendants have filed a responsive brief to each of the foregoing motions. After a careful review of the motions, responses, the discovery requests themselves, and the answers provided thereto, the Court sees no alternative but to deny plaintiffs motions. The Court finds defendants’ objections to the relevancy of several requests made by plaintiff to be proper. The information sought by plaintiff in those requests is totally irrelevant to the issues at hand and would not lead to the discovery of admissible evidence. Therefore, the Court will deny plaintiff’s motions to compel discovery.

In deciding a motion for summary judgment the Court must determine whether the moving party has carried its burden of showing that there are no genuine issues of material fact and that it is entitled to judgment as a matter of law, Hollinger v. Wagner Mining Equipment Co., 667 F.2d 402 (3d Cir.1981). All evidentiary materials of record must be read in a light most favorable to the nonmoving party. Small v. Seldows Stationary, 617 F.2d 992 (3d Cir.1980). The responding party to a motion for summary judgment may not rest upon the allegations of his/her pleading but must present by affidavit or otherwise specific facts sufficient to create a genuine issue of material fact. Sunshine Books, Ltd. v. Temple University, 697 F.2d 90 (3d Cir.1982); Federal Rules of Civil Procedure 56(e). In the present case defendants filed numerous affidavits in support of their motion for summary judgment, while plaintiff, on the other hand, failed to respond in substance to said motion, let alone file counter affidavits. Plaintiff has been given ample time and opportunity, via the Court’s order dated August 20, 1984, to file a supplemental response to the summary judgment motion but has failed to seize the opportunity. After reviewing all pleadings, information revealed through discovery, and finally defendants’ motion for summary judgment and supporting affidavits, the Court concludes that plaintiff is unable to present, via affidavit or otherwise, specific facts sufficient to create a genuine issue of material fact. The Court, therefore, has no choice but to accept defendants’ uncontradicted version of the incident as true. Despite this conclusion, the Court will address plaintiff’s allegations of deprivation of his constitutional rights in violation of § 1983 of the Civil Rights Act.

The initial inquiry in a § 1983 action is two-fold: “... 1) whether the conduct complained of was committed by a person acting under color of state law; and 2) whether this conduct deprived a person of rights, privileges or immunities secured by the Constitution or laws of the United States.” Parratt v. Taylor, 451 U.S. 527, 535, 101 S.Ct. 1908, 1913, 68 L.Ed.2d 420 (1981). Prison officials acting in their official capacity are acting under color of state law. Therefore, the first prong of plaintiff’s § 1983 action is satisfied.

Plaintiff contends that the procedures followed in the January 19, 1984, disciplinary hearing violated his right to due process. The Fourteenth Amendment provides that no state shall deprive any person of life, liberty or property without due process of law. Plaintiff has the burden of establishing several elements in order to make out a valid due process claim. Plaintiff must show the existence of a protected life, liberty, or property interest, the deprivation of that protected interest and the state action which brought about the deprivation of that interest. Parratt v. Taylor, supra.

In the case at bar, plaintiff has established through his complaint a protected liberty interest. Under the Pennsylvania Code plaintiff has a protected liberty interest in remaining in the general prison population. Hewitt v. Helms, 459 U.S. 460, 103 S.Ct. 864, 74 L.Ed.2d 675 (1983). Plaintiff was deprived of that right for fifteen days while in administrative segregation.

The element of illegal state action is missing in this case. The United States Supreme Court has stated that:

an inmate must merely receive some notice of the charges against him and an opportunity to present his views to the prison official charged with deciding whether to transfer him to administrative segregation ... So long as this occurs and the decision maker reviews the charges and the available evidence against the prisoner the Due Process Clause is satisfied.

Hewitt v. Helms, supra, at 476, 103 S.Ct. at 874, 74 L.Ed.2d at 691. See also Wolfe v. McDonnell, 418 U.S. 539, 94 S.Ct. 2963, 41 L.Ed.2d 935 (1974).

Plaintiff has not established that the deprivation of that protected liberty interest occurred in violation of plaintiffs right to due process. Quite to the contrary, the facts in this case clearly show that:

(1) plaintiff had advance notice of the disciplinary hearing and chose to proceed immediately;
(2) plaintiff received a written copy of the charges brought against him prior to the commencement of the hearing;
(3) plaintiff was permitted to present his version of the incident;
(4) plaintiff was permitted to cross examine the charging officer; and
(5) finally plaintiff was not permitted to call as witnesses two fellow inmates, after he admitted that they had not witnessed the incident and would not present any relevant testimony.

Therefore, viewed in its entirety the actions taken by the disciplinary board were proper and in accord with the precepts of Hewitt and Wolfe.

Plaintiff includes Warden DiGiacinto as a direct participant in his allegations of deprivation of his constitutional rights. Plaintiff also states in his complaint, which was dated January 25, 1984, that he spoke with the Warden regarding these violations. (See p. 3 Para. II of Complaint). However, Warden DiGiacinto’s uncontradicted affidavit states that he was not even within the State of Pennsylvania from January 17, 1984, to February 7, 1984. (Ex. G). Therefore, the Court finds it an impossibility that defendant DiGiacinto had any personal involvement in the January 19, 1984, disciplinary hearing or the administrative segregation conditions about which plaintiff complains. The Court also notes that a complaint naming a supervisor as a defendant and which is based solely on the theory of respondeat superior or vicarious liability will be dismissed. Egan v. Concini, 585 F.Supp. 801 (M.D.Pa.1984). “In order to survive scrutiny, the complaint must state that the defendant actually participated in or approved of the alleged illegal conduct”. Id. at 804. It is clear that plaintiff has failed to meet the requirements set forth above and therefore the Court will enter judgment in favor of defendant DiGiacinto. We will now turn to plaintiffs remaining allegations of deprivation of his constitutional rights.

Plaintiff contends that conditions of administrative segregation were violative of his constitutional rights. First, plaintiff claims a denial of his visitation rights and alleges his food was brought uncovered to his cell. This Court finds that plaintiff’s allegations do not rise to the level of constitutional violations. Plaintiff does not have a protected interest in having his meals covered. “The constitution does not require that sentenced prisoners be provided with every amenity which one might find desirable”. Wolfish v. Levi, 573 F.2d 118, 125 (2d Cir.1978), rev’ed on other grounds sub nom. See also Cooper v. Com. of Pa. et al, (slip op. 84-4032, E.D.Pa. November 30, 1984). With regard to visitation, such matters are subject to the discretion of prison officials and denial thereof does not involve a constitutional violation. Wallace v. Hutto, 80 F.R.D. 739 (D.C.1978).

Plaintiff also alleges interference with legal process and lack of medical care which, if true, could rise to the level of constitutional violations. Plaintiff alleges denial by defendants of access to the courts, as well as the law library. These allegations were refuted by the affidavits of defendants Seymore and Onembo and Roseanne Joseph, Esq., plaintiffs legal counsel (Ex. E). But more importantly, the falsity of these allegations is apparent simply by reviewing plaintiffs complaint which is dated January 25, 1984, during plaintiffs administrative segregation. This fact alone provides sufficient basis for the Court to find plaintiffs allegations to be untrue. Furthermore, Attorney Joseph states in her affidavit that she was not denied access to her client during his confinement in administrative segregation. (Ex. E).

Plaintiffs claim that he was denied periodic medical checkups, without more, does not rise to the level of a constitutional violation “In order to state a cognizable claim a prisoner must allege facts or omissions sufficiently harmful to evidence a deliberate indifference to serious medical needs”. Estelle v. Gamble, 429 U.S. 97, 106, 97 S.Ct. 285, 292, 50 L.Ed.2d 251 (1976). It is clear that plaintiffs complaint does not set forth a claim under § 1983 with respect to denial of medical care.

Finally, plaintiffs assertions of threats by defendants to place him in “cell 17” without more, do not set forth a cause of action pursuant to § 1983.

In light of the foregoing the Court finds that plaintiff has failed to assert a cause of action under Section 1983 and will, therefore, enter judgment in favor of defendants and against plaintiff.

      . Title 37 Pa.Code § 95.104(b)(1), (b)(3)(1978).

      . Ponte et al. v. Real, 471 U.S. -, 105 S.Ct. 2192, 85 L.Ed.2d 553.


author: ROBERT F. COLLINS, District Judge.

text:
    In re OCEAN RANGER SINKING OFF NEWFOUNDLAND ON FEBRUARY 15, 1982.
    MDL No. 508.
    United States District Court, E.D. Louisiana.
    Aug. 14, 1985.

      George A. Frilot, III, James F. Shuey, Lemle, Kelleher, Kohlmeyer, Hunley, Moss & Frilot, New Orleans, La., for ODECO.
    Robert W. Booksh, Jr., Donald R. Abaunza, Liskow & Lewis, New Orleans, La., for Mobil Oil.
    Ann Arango, Speiser & Krause, Benton Musslewhite, Houston, Tex., for Canadian Claimants.
   ROBERT F. COLLINS, District Judge.

Defendants Ocean Drilling and Exploration Company, ODECO International Corporation, ODECO Engineers, Inc., ODECO Drilling of Canada Mobil Oil Corporation, and Mobil Oil Canada, Ltd. have moved this Court to enjoin the Canadian claimants in these cases from filing and/or prosecuting their suits in the state courts of Texas or any other court in the United States. Upon consideration of briefs submitted by counsel, the applicable law, and the facts of the case, the injunction is hereby GRANTED.

In the Court’s Minute Entry and Reasons issued on June 4,1984, 589 F.Supp. 302, the Court determined that Canadian law governs this controversy and granted the Motion to Dismiss the Canadian claimants on the ground of forum non conveniens. The Court clearly held that the litigation should be prosecuted in the courts of Canada. Nonetheless, Canadian claimants filed an action in Matagorda County, Texas. The Court finds that this was a flagrant attempt to avoid the effect of the adverse judgment plaintiffs received by this Multidistrict Litigation Court. This action, filed by the same plaintiffs and same attorneys who actually litigated before this Court, is based on the same cause of action presented in the federal forum. The Court finds that this is an effort to relitigate issues already determined by this Court. The Court will not tolerate abuse at the judicial system through duplicative and harassing litigation. An injunction is the appropriate sanction to preclude this “judicial hopscotch.”

To effectuate this Court’s judgment, preclude relitigation, and avoid prejudice to defendants, the Court enjoins the Canadian plaintiffs from filing and/or prosecuting claims arising out of the facts which form the subject matter of these actions in any other court, state or federal, in the United States. For reasons set forth below, the Court has authority to grant this injunction under the All Writs Statute, 28 U.S.C. § 1651, and is not barred from doing so by the Anti-Injunction Act, 28 U.S.C. § 2283.

All federal courts are empowered to protect and effectuate their judgments under the All Writs Statute, 28 U.S.C. § 1651(a), which provides as follows:

The Supreme Court and all other courts established by Act of Congress may issue all writs necessary or appropriate in aid of their respective jurisdictions and agreeable to the usages and principles of law.

The statute empowers a federal court to enjoin a party before it from attempting to relitigate an issue in a state court, to “prevent any interference” with the federal court’s judgment. Teas v. Twentieth Century-Fox Film Corp., 413 F.2d 1263, 1266 (5th Cir.1969). Pursuant to this statute, this Court may enjoin the Canadian parties in these suits from relitigating the issues of the applicability of the laws of Canada and of the propriety of the dismissal on the ground of forum non conveniens.

The circumstances here support the use of an injunction because the plaintiffs have attempted to circumvent this Court’s judgment by seeking relief in other courts. Bank of Heflin v. Miles, 621 F.2d 108 (5th Cir.1980); Seaboard Coast Line R. Co. v. Union Camp Corp., 613 F.2d 604 (5th Cir. 1980); Southwest Airlines Co. v. Texas International Airlines, 546 F.2d 84 (5th Cir.1977). The end result of the plaintiffs’ actions is prejudice to the defendants’ effort to abide by the orders of the Multidistrict Panel. The Fifth Circuit has clearly stated that a federal district court “has the power under 28 U.S.C. § 1651(a) to enjoin litigants who are abusing the court system by harassing their opponents.” Harrelson v. United States, 613 F.2d 114, 116 (5th Cir.1980).

The Anti-Injunction Act, 28 U.S.C. § 2283, does not forbid enjoining the Canadian claimants from prosecuting further litigation in state courts. The Anti-Injunction Act permits a federal court to enjoin a state-court action “where necessary in aid of its jurisdiction or to protect or effectuate its judgments.” This exception “prevents multiple litigation of the same cause of action, and it assures the winner in a federal court that he will not be deprived of the fruits of his victory by a later contrary state judgment which the Supreme Court may or may not decide to review.” Woods Exploration and Producing Co. v. Aluminum Co. of America, 438 F.2d 1286, 1312 (5th Cir.1971), cert. denied, 404 U.S. 1047, 92 S.Ct. 701, 30 L.Ed.2d 736 (1972).

As the Fifth Circuit has viewed the jurisprudence, it is clear that “federal courts may enjoin the relitigation in state court of issues that federal courts have fully and finally adjudicated.” Meridian Investing and Development Corp. v. Suncoast Highland Corporation, 628 F.2d 370, 373 (5th Cir.1980); International Association of Machinists and Aerospace Workers v. Nix, 512 F.2d 125, 130 (5th Cir.1975). Any action the plaintiffs take in state court to obtain remedies with respect to the OCEAN RANGER disaster would result in the relitigation of the same issues this Court has fully and finally decided. Moreover, the plaintiffs’ actions in state court would undermine this Court’s jurisdictional mandate from the Panel on Multidistrict Litigation. See In Re Corrugated Container Antitrust Litigation, 659 F.2d 1332 (5th Cir.1981) (enjoining a state court action that challenged the multidistrict court’s jurisdiction and seriously impaired the federal court’s flexibility and authority to decide the case. 659 F.2d at 1334).

The Court is unpersuaded by the cases cited by plaintiffs. For example, plaintiffs’ cite to a 1937 5th Circuit opinion, Schell v. Food Machinery Corp., 87 F.2d 385 (5th Cir.1937). This Court has found a more recent decision that supports the granting of an injunction. In Southwest Airlines Co. v. Texas International Airlines, 546 F.2d 84 (5th Cir.1977), the Fifth Circuit noted that Supreme Court decisions suggest an action for injunction to enforce a federal judgment is “supplemental” or “ancillary,” and “therefore the jurisdiction follows that of the original suit, regardless of the citizenship of the parties to the bill or the amount in controversy,” 546 F.2d at 90, citing Dugas v. American Surety Co. of New York, 300 U.S. 414, 57 S.Ct. 515, 521, 81 L.Ed. 720 (1937). Accordingly, the Court rejects the plaintiffs’ allegation that jurisdiction to grant the injunction is lacking.

Plaintiffs attempt to distinguish two cases cited by the movants as being “enormous anti-trust case[s].” Yet, at a later part of their brief, they cite as authority Allied Chemical Corp. v. Daiflon, Inc., 449 U.S. 33, 101 S.Ct. 188, 66 L.Ed.2d 193 (1980), a case involving violations of § 2 of the Sherman Act, 15 U.S.C. § 1. The plaintiffs’ position is inconsistent. The Court is unconvinced by the plaintiffs’ attempt to distinguish the defendants’ cases. Moreover, the Court finds that Daiflon does not stand for the broad principle claimed by the plaintiffs.

Plaintiffs cite Daiflon for the proposition that “the All Writs Act cannot be utilized to restrain and enjoin or to mandamus or to seek other equitable relief in connection with ‘discretionary’ rulings of the court sought to be enjoined.” (emphasis added). This proposition does not logically flow from the Supreme Court’s holding. Daiflon involved a petition for a writ of mandamus filed with the Court of Appeals for the Tenth Circuit requesting that it instruct the trial court to reinstate a $2.5 million jury verdict. 449 U.S. at 34, 101 S.Ct. at 189. The court held that “under the All Writs Act, 28 U.S.C. § 1651(a), courts of appeals may issue a writ of mandamus only when ‘necessary or appropriate in aid of their respective jurisdictions.’ ” 449 U.S. at 34-35, 101 S.Ct. at 189-90. The decision did not involve a federal district court enjoining litigation in a state court. The decision involved a mandamus issued by a court of appeals to a federal district court. Daiflon does not support plaintiffs’ allegation that “the All Writs Act cannot be utilized to ... enjoin ... discretionary rulings of the court sought to be enjoined.”

Plaintiffs purport to derive their broad proposition from another Supreme Court opinion, Will v. Calvert Fire Ins. Co., 437 U.S. 655, 98 S.Ct. 2552, 57 L.Ed.2d 504 (1978). This decision is equally inapposite to the case sub judice. In Will v. Calvert Fire Ins. Co., the Court of Appeals for the Seventh Circuit granted a petition for a writ of mandamus ordering a federal district judge to proceed immediately to adjudicate a claim based upon the Securities Exchange Act of 1934, despite the pendency of a substantially identical proceeding between the same parties in the Illinois state courts. 437 U.S. at 657, 98 S.Ct. at 2554. Certiorari was granted “to consider the propriety of the use of mandamus to review a District Court’s decision to defer to concurrent state proceedings.” 437 U.S. at 658, 98 S.Ct. at 2555. Motions before this Court in OCEAN RANGER do not involve a mandamus from an appellate court. Nor do motions before this Court involve a district court’s decision to defer to concurrent state proceedings. Quite to the contrary, the motions before the Court seek to enjoin state court proceedings, not to defer to them.

Finally, plaintiffs cite State of Missouri v. Mayfield, 340 U.S. 1, 71 S.Ct. 1, 95 L.Ed. 3 (1950), for the proposition that each state is free “to decide the availability of forum non conveniens in these suits according to its own local law.” Mayfield does not control the instant case because it only involved a state court ruling on a motion for forum non conveniens. Mayfield did not involve a prior granting of a motion for forum non conveniens by a federal district court. There were no motions to enjoin the state court proceedings in May-field. There are such motions pending in OCEAN RANGER.

Moments before the Court was to entertain arguments on June 12, 1985, the plaintiffs filed a notice of appeal. Based on the notice of appeal, plaintiffs have argued that this Court lacks jurisdiction to issue the injunction even though warranted under an exception to Title 28 United States Code section 2283. At oral argument, the Court requested supplemental briefs to discuss this new jurisdictional issue.

The Court has concluded that it has the inherent jurisdiction to issue the injunction, and it is especially appropriate in the context of the relitigation exception provided in Title 28 United States Code section 2283. As the Fifth Circuit held in In Re Corrugated Container Antitrust Litigation, 659 F.2d 1332, 1335 (5th Cir.1981), cert. denied, 456 U.S. 936, 102 S.Ct. 1993, 72 L.Ed.2d 456 (1982):

The entry of an appealable order is generally considered a pre-requisite to invocation of the relitigation or “protection of judgment” exception____ An exception to the general rule that a federal forum may not enjoin the prosecution of a simultaneous in personam action on the same cause of action in state court comes into play once judgment is entered. Unless the judgment is set aside on appeal, state proceedings seeking to religitate issues covered by the federal judgment may be enjoined under the “protection” exception. Woods Exploration & Producing Co. v. Aluminum Co. of America, 438 F.2d 1286, 1311-16 (5th Cir.1971), cert. denied, 404 U.S. 1047, 92 S.Ct. 701, 30 L.Ed.2d 736 (1972); Wright, Miller & Cooper, Federal Practice and Procedure: Jurisdiction § 4226 (1978) (emphasis added).

It is precisely the appealability of this Court’s Order entered on May 16, 1985, that warrants the issuance of the injunction. Since the relitigation exception is appropriate after final judgment when res judicata has an effect, it is axiomatic that the Court must have jurisdiction to issue the injunction after final judgment. As the Fifth Circuit expressly stated in In Re Corrugated Container Antitrust Litigation, supra, “unless the judgment is set aside on appeal” the injunction may issue. See also, BGW Associates v. Valley Broadcasting Co., 532 F.Supp. 1115 (S.D.N.Y.1982); Oliver v. Kalamazoo Board of Education, 510 F.Supp. 1104 (W.D.Mich.1981); Hayward v. Clay, 456 F.Supp. 1156 (D.S.C. 1977).

This Court has concluded that it has the authority, by virtue of the All Writs Statute, 28 U.S.C. § 1651, to issue an injunction prohibiting the three remaining Canadian plaintiffs from filing and/or prosecuting actions arising out of the OCEAN RANGER disaster in the state courts of Texas or in any other court in the United States. The Relitigation Exception to the Anti-Injunction Act, 28 U.S.C. § 2283, is applicable. The Court has further concluded that the filing of an appeal does not prevent the issuance of this injunction.

WHEREFORE, the remaining Canadian claimants are hereby ENJOINED from filing and/or prosecuting actions arising out of the OCEAN RANGER sinking off Newfoundland on February 15, 1982 in the state courts of Texas or in any other court in the United States.


author: WICKER, District Judge.

text:
    Ray J. HOPE and Doris F. Hope v. UNITED STATES of America. Alvin A. ARCEMONT and Lana B. Arcemont v. UNITED STATES of America. Clyde P. PARKER and Bessie A. Parker v. UNITED STATES of America. Allen L. LOFTON v. UNITED STATES of America. William C. HIGHTOWER and Susan B. Hightower v. UNITED STATES of America. Bill J. RAMEY and Diane M. Ramey v. UNITED STATES of America. Marinus QUIST and Kathleen H. Quist v. UNITED STATES of America. Richard A. BARTON and Eva C. Barton v. UNITED STATES of America. Richard B. WEIR and Barbara S. Weir v. UNITED STATES of America.
    Civ. A. Nos. 82-5295, 84-3088 to 84-3095.
    United States District Court, E.D. Louisiana.
    Aug. 14, 1985.

      Julian P. Brignac, Robert W. Nuzum, Jones, Walker, Waechter, Poitevent, Carr-ere & Denegre, New Orleans, La., for plaintiffs.
    Glenn L. Archer, Jr., Asst. Atty. Gen., Steven Shapiro, Steven Gremminger, Tax Div., Dept, of Justice, Washington, D.C., John Volz, U.S. Atty., New Orleans, La., for defendant.
   WICKER, District Judge.

Plaintiffs in these consolidated civil actions seek to recover federal income taxes paid by them for the calendar year 1981. The parties have stipulated to all relevant facts and agree that the sole remaining issue involves a res nova question of law.

This matter is now before the Court on cross motions for summary judgment concerning the validity of certain Temporary as well as Proposed Treasury Regulations.

After considering the briefs and arguments of counsel and the applicable law, the Court finds in favor of the plaintiffs and against the defendant for the following reasons, to-wit:

Although the parties have stipulated to all relevant facts, for purposes of clarity a brief summary of the facts follows:

FACTS

Plaintiffs, who were employed by Tidewater, Inc., were participants in a stock option plan (hereinafter the “Plan”) adopted by Tidewater on April 23, 1975. (Joint Exhibit 1). In accordance with the terms of the Plan, stock options were granted to plaintiffs on March 17, 1976 and provided that plaintiffs could exercise their options by payment in cash, certified or bank cashier’s check, or the equivalent.

In 1980 Tidewater amended the Plan adding a new additional means by which shareholders could exercise their options. In lieu of tendering cash or its equivalent, and subject to the sole discretion of the Plan’s stock option committee, shareholders were granted the alternative of exercising their options by paying with previously acquired Tidewater stock. (Joint Exhibit 3).

During the first half of 1981, between January 3 and June 26, plaintiffs exercised a number of their Tidewater options. Six plaintiffs exercised options by tendering checks. Pursuant to the 1980 amendment to the Plan, the remaining three plaintiffs exercised their Tidewater options by delivering previously acquired stock in lieu of cash or the equivalent thereof.

On August 13, 1981, Congress enacted The Economic Recovery Tax Act (hereinafter ERTA), Public Law 97-34. ERTA § 251(a) created Section 422A of the Internal Revenue Code (hereinafter IRC) which provides for a new type of statutory stock option, christened the “incentive stock option” (hereinafter ISO).

Tidewater filed its fiscal year corporate income tax return on December 15, 1981 and elected at that time, as required by ERTA § 251(c), to convert its previously nonqualified stock option plan into an incentive stock option plan. Just six days later, Treasury promulgated Temporary Treasury Regulation § 14a.422A-l which declared that the 1980 amendment to the Tidewater Plan would result in the denial to plaintiffs of the favorable capital gains treatment typically granted to persons who exercise ISO’s.

The plaintiffs subsequently filed their 1981 individual income tax returns in accordance with the provisions of Temporary Treasury Regulation § 14a.422A-l. In adhering to this Regulation, the plaintiffs treated their options as “nonqualified” stock options rather than ISO’s and thus included in their 1981 taxable incomes (as ordinary income) the difference between the amounts they paid for the options in 1976 and the fair market value of the Tidewater stock on the date the options were exercised. When the plaintiffs later timely filed claims for refund on the basis that their options should qualify as ISO’s, such claims were denied by IRS. Consequently, the plaintiffs filed these actions seeking to have Regulation § 14a.422A-l declared invalid. As a final postscript, Treasury promulgated on February 7, 1984 Proposed Regulations §§ 1.422A-3(c)(2) and 1.425-l(e)(5)(i).

In their stipulations of the facts, the parties to this litigation have phrased the issue to be decided as follows:

Whether Plaintiffs are entitled to a refund ... on the basis of their claim that Question and Answer 9 and 10 of Temporary Regulations Section 14a.422A-l and Proposed Regulations Section 1.422A-3(c)(2) and Section 1.425-l(e)(5)(i) do not properly interpret ERTA Section 251 in providing that an amendment prior to January 1, 1981 of an option granted prior to January 1, 1981, to allow an optionee the right to exercise the option with previously-acquired corporate stock will cause the option, pursuant to Section 425(h) of the Internal Revenue Code, to be treated as newly granted on the date it was amended with the result that the option must be repriced to the fair market value on the date of such amendment to qualify as an incentive stock option.

Under the facts of this case, the issue to be decided is whether an amendment to a non-qualified stock option plan that allows the exercise of options by tendering previously acquired stock, made nearly a year prior to the plan’s conversation into an ISO plan, will result in the loss of capital gain treatment typically afforded ISO holders upon disposition of their stock.

Plaintiffs, in their claims for refund, contest the IRS’s interpretation of the parameters of § 425(h) as set forth in Temporary Regulation § 14a.422A-l. In particular, the plaintiffs challenge the validity of Questions and Answers 9 and 10 of such regulation:

Q-9:
If an option granted on or after January 1,1976, was amended between its date of grant and August 13, 1981, will such an amendment affect the option’s eligibility for ISO treatment?
A-9:
An amendment to an otherwise eligible option (or plan) prior to August 13, 1981, will be subject to the rules of section 425(h). If, pursuant to section 425(h), the amendment is a modification, extension, or renewal of the option, such amendment shall be considered as the granting of a new option. In order for such an option to be eligible for ISO treatment, the option (and plan) must comply with the section 422A qualification requirements (see A-2(c)). The option will be deemed to have been granted on the date it was amended. Thus, the option price cannot be less than the fair maket value of the stock on that date. If the corporation wishes to retain the original grant price (and grant date) of the option, the corporation may do so by rescinding the amendment that was either a modification, extension, or renewal pursuant to section 425(h), so long as such rescission occurs prior to the earliest of the exercise of the option, the election of ISO treatment, and August 14,1982. To be effective, such rescission must apply to the entire option. For example,.....
* * * * * *
Q-10:
An option granted during 1978 was amended during 1980 to add the following features: an alternative stock appreciation right, the right to exercise the option with previously-acquired corporate stock, and the right to receive a cash bonus upon the exercise of the option____ If the option is to be elected as an ISO, which of the above amendments is either a modification, exetension, or renewal within the meaning of section 425(h) so that the option will be treated as newly granted on the date it was amended? [emphasis added]
A-10:
Any one of the above amendments will cause the option, pursuant to section 425(h), to be treated as newly granted on the date it was amended.

The fact pattern set out in the above regulation is duplicative of that now before this Court. The focal point of this litigation is the foregoing Regulation’s provision that the modification rules of IRC § 425(h) are applicable to the plaintiffs’ fact situations. Briefly, § 425(h) provides that any “modification” to a statutory stock option that confers an “additional benefit” to the option holders shall result in the options being treated as newly granted. These seemingly innocuous terms can result in severely adverse tax ramifications on options sought to be classified as ISO’s. Included among the requisite elements for ISO status enumerated in IRC § 422A is the mandate that the option price (set at the time of grant) must not be less than the fair market value of the stock at the time the option is “granted.” However, when there has been a modification to an option and such modification falls under the auspi-" cies of § 425(h), the fair market value at the time of the modification (rather than back in time to the date of original grant of the option) will be the yardstick for determining ISO status. Under the facts of the instant suits, the option price set in 1976 was clearly “less than” the fair market value of the Tidewater stock when the Plan was modified in 1980. Consequently, treating the 1980 amendment as subject to the § 425(h) rules results in a loss of ISO status for the plaintiffs’ options.

The loss of ISO status in turn results in a loss of capital gain treatment. When the plaintiffs’ options were nonqualified stock options, they were subject to the provisions of IRC § 83(a). As such, the exercise of such options by a shareholder gives rise to ordinary income in the year of exercise. To the contrary, statutory stock options such as ISO’s are governed by IRC §§ 421-425. Under those statutes, a shareholder may recognize capital gain or loss and delay such recognition until the year in which he sells or exchanges the stock acquired at the time of exercise of the statutory stock option. It is this distinction between ordinary (26 U.S.C. § 83) versus capital (26 U.S.C. § 421, et seq.) income or loss, as well as the timing of recognition of such income or loss, that lies at the root of this litigation.

Question and Answer 9 and 10 of Temporary Regulation § 14a.422A-l, and the manner in which they interpret the parameters of IRC § 425(h), are to be considered valid as long as they implement the congressional mandate in some reasonable manner. Rowan Companies, Inc. v. United States, 452 U.S. 247, 101 S.Ct. 2288, 68 L.Ed.2d 814 (1981). To overcome the presumption of validity, a challenging party must demonstrate that the contested regulation is unreasonable and plainly inconsistent with the underlying statute(s). Commissioner v. Portland Cement Co. of Utah, 450 U.S. 156, 101 S.Ct. 1037, 67 L.Ed.2d 140 (1981); Zemurray Founda tion v. United States, 687 F.2d 97 (5th Cir.1982).

The parties to this litigation have conceded in their briefs that the contested regulations are of an interpretative nature. Since a court can independently measure the Commissioner’s interpretation against a specific IRC section, an “interpretative regulation” is to be given less deference than a regulation issued under a specific grant of authority (i.e., a “legislative” regulation). Rowan, 452 U.S. at 251, 101 S.Ct. at 2292. The jurisprudence is well settled that a court may, when appropriate, substitute its own judgment for an agency’s when the regulation is an interpretative one. CWT Farms, Inc. v. C.I.R., 755 F.2d 790 (11th Cir.1985), citing, General Electric Co. v. Gilbert, 429 U.S. 125, 97 S.Ct. 401, 50 L.Ed.2d 343 (1976), and Batterton v. Francis, 432 U.S. 416, 97 S.Ct. 2399, 53 L.Ed.2d 448 (1977). “The current trend in tax cases appears to be shifting towards more careful scrutiny of IRS regulations.” Estate of Applebaum v. Commissioner of Internal Revenue, 724 F.2d 375 (3d Cir. 1983).

In presenting their challenge to Temporary Treasury Regulation § 14a.422A-l, plaintiffs point out that their options were IRC § 83 options at the time of the 1980 amendment. They observe that § 425(h) is not now, nor has it ever been applicable to § 83 nonqualified stock options, and therefore, the challenged regulations exceed the scope and authority of ERTA § 251 and its underlying authority by retroactively applying the modification rules of § 425(h) to options which at the time of their amendment, were not even subject to such rules.

The jurisprudence lends strong support to the plaintiffs’ point of view. In determining whether a particular regulation carries out the congressional mandate in a proper manner, a court must look to see whether the regulation “harmonizes with the plain language of the statute, its origin, and its purpose.” National Muffler Dealers Association, Inc. v. United States, 440 U.S. 472, 99 S.Ct. 1304, 59 L.Ed.2d 519 (1979). The following language of IRC § 425(h) clearly limits the scope of its reach:

(1) In general. — For purposes of this part, if the terms of any option to purchase stock are modified, ..., such modification, ... shall be considered as the granting of a new option. [emphasis added]

The words “of this part” compels an analysis of the structure of the Internal Revenue Code.

The Internal Revenue Code consists of nine Subtitles that are subdivided in the following reverse progression: Subtitle— Chapter — Subchapter—Part —Subpart.

IRC § 425(h) falls under Subtitle A, Chapter 1, Subchapter D, Part II of the Code. “Part II (i.e., the “of this part” referred to in § 425(h)(1) consists of the following Code sections:

§ 421 General rules
§ 422 Qualified stock options
§ 422A Incentive stock options
§ 423 Employee stock purchase plans
§ 424 Restricted stock options
§ 425 Definitions and special rules

As is evident from the “plain” language of § 425(h)(1), the modification rules of § 425 apply only to the preceding five Code sections located in “Part” II of Subchapter D.

Section 83, on the other hand, is located in Subchapter B of Chapter 1, Subtitle A. There is nothing in the statute which extends § 425(h) to § 83 stock options. To the contrary, § 83(e) expressly states that “This section shall not apply to ... a transaction to which section 421 applies.” Thus, the “plain” language of both §§ 425 and 83 make it clear that they are mutually exclusive.

Accordingly, the Court concludes that the modification rules of IRC § 425(h) do not apply to amendments made to § 83 nonqualified stock option plans. The plaintiffs’ options were § 83 options when granted in 1976, when amended in 1980, and when exercised in the early part of 1981. The fact that those options subsequently (post-August 13,1981) underwent a metamorphosis by an election of ISO status does not justify an enlargement of the scope of § 425(h) modification rules. Such an extension or enlargement is clearly inconsistent with the plain language of both 26 U.S.C. § 83 and 26 U.S.C. § 425(h).

The Court also finds such an extension of the § 425(h) rules to be entirely unreasonable. At the time Tidewater made its 1980 amendment to allow the exercise of options by delivering previously acquired stock, there were no adverse tax ramifications to such a move. In fact, IRS enticed Tidewater into making just a modification with its 1980 issuance of Revenue Ruling 80-244, 1980-1 C.B. 234. The essence of this ruling provides that an option holder will not recognize gain or loss when a nonqualified stock option is exercised by delivering previously acquired stock in full or partial payment of the option price. For the Treasury to then later promulgate a regulation that severely penalizes a taxpayer for having taken an action that the IRS itself stated was free of negative tax implications defies reason and constitutes an abuse of the discretion given the Secretary of Treasury by 26 U.S.C. § 7805. “An abuse of discretion may be found where the retroactive regulation alters settled prior law or policy upon which the taxpayer justifiably relied and if the change causes the taxpayer to suffer inordinate harm.” CWT Farms, Inc., supra, 755 F.2d at 802.

A review of the legislative history similarly contradicts Treasury’s attempt to penalize plaintiffs for the pre-election (of ISO status) amendment to their options. Senate Report 97-144 states that “An option will not be disqualified because of the inclusion of any condition not inconsistent with the qualification requirements nor because the corporation may make a cash payment to the employee at the time of exercise.” Not only did the 1980 amendment add a condition to the plaintiffs’ options that was not inconsistent with ISO qualification requirements enumerated in IRC § 422A(b), but that same condition is specifically allowable as a permissive feature of ISO’s by IRC § 422A(c)(5):

Permissive provisions. — An option which meets the requirements of subsection (b) shall be treated as an incentive stock option even if—
(A) the employee may pay for the stock with stock of the corporation granting the option.

Thus, when the plaintiffs’ nonqualified options were reincarnated as ISO’s, they came into their new lifeform with the full weight of their pre-election amendments. This Court concludes that those amendments are not subject to the modification rules of IRC § 425(h) as long as they are not inconsistent with the ISO qualification requirements expressly enumerated in IRC § 422A. Those provisions in Temporary Treasury Regulation § 14a.422A-l holding to the contrary are unreasonable and inconsistent with the plain language of IRC §§ 422A and 425(h) and the legislative history.

This unreasonableness is highlighted by the disconcerting rescission rules contained in Answer 9 of such Regulation:

If the corporation wishes to retain the original grant price (and grant date) of the option, the corporation may do so by rescinding the amendment that was either a modification, extension, or renewal pursuant to section 425(h), so long as such rescission occurs prior to the earliest of the exercise of the option, the election of ISO treatment, and August 14, 1982. [Emphasis added]

Plaintiffs argue that this rescission provision discriminates against options that were exercised between January 1, 1981 and August 13, 1981 (the date § 422A was enacted). As noted by the plaintiffs, and as demonstrated below, this provision does indeed box them into a Catch-22 predicament:

(1) date of exercise of options = Jan. 3,1981
(2) date of election of ISO treatment = Dec. 15,1981
(3) August 14,1982 = August 14,1982

The Court notes that the “earliest” of the above three dates is January 3, 1981 (actually, the period spanning January 3 until the last option was exercised on June 26). Thus, in a rather fascinating paradox, Temporary Treasury Regulation § 14a.422A-l required plaintiffs to have rescinded the 1980 amendment not only before ISO status was elected for their options, but even before ISO’s existed. Of course this is absurd and only demonstrates that this regulation does not and was not meant to apply to the fact situation at bar. The Government offers no explanation to justify the denial of a rescission right to those taxpayers who exercised options between January 1 and August 1, 1981. Nor does Senate Report 97-144 indicate a legislative intent that this should be the case:

In addition, the terms of a stock option plan or an option issued before 1982 can be modified to conform to the incentive stock option rules within one year of the date of enactment of the bill, without the modification being considered as giving rise to a new option requiring a new option price. [Emphasis added]

To deny a feasible rescission alternative to the plaintiffs is unreasonable and inconsistent with the purpose of the statutes and the intent of the legislature.

This Court concludes that the IRS’s reach far exceeds its legally permissible grasp under the facts of this case. Although the plaintiffs have framed the issue in this case as one of retroactivity, this Court suggests that it is more one of applicability.

Accordingly, Temporary Treasury Regulation § 14a.422A-l is invalid to the extent that it applies the modification rules of IRC § 425(h) to a pre-August 13, 1981 amendment to an IRC § 83 nonqualified stock option, subsequently converted into an ISO, where such amendment allows the exercise of an option by tendering previously acquired stock.

However, even if the Regulation were held to apply to the facts of this case, it is invalid to the extent that it fails to provide a reasonable alternative to stock options exercised between January 1, 1981 and August 13, 1981.

Plaintiffs also seek to have Proposed Treasury Regulations §§ 1.422A-3(c)(2) and 1.4251(e)(5)(i) declared invalid. Since proposed regulations are nothing more than arguments advanced on brief by the Government, a ruling on the validity of the proposed regulations is inappropriate. As the Second Circuit Court of Appeals stated in LeCroy Research Systems Corporation v. C.I.R., 751 F.2d 123 (2d Cir.1984), “Proposed Regulations are suggestions made for comment; they modify nothing____ If the Commissioner wanted this regulation to have binding effect, it could have been issued as a temporary regulation.” See also, F.W. Woolworth Co. v. Commissioner, 54 T.C. 1233 (1970).

Accordingly;

IT IS ORDERED that the motions of plaintiffs for summary judgment is hereby GRANTED and plaintiffs are entitled to judgments as follows:

Ray J. and Doris F. Hope, in the amount of $103,912.00, plus interest and other statutory additions;

Alvin A. and Lana B. Arcemont, in the amount of $18,095.00, plus interest and other statutory additions;

Clyde P. and Bessie A. Parker, in the amount of $18,911.55, plus interest and other statutory additions; Allen L. Lofton, in the amount of $31,778.99, plus interest and other statutory additions;

William C. and Susan B. Hightower, in the amount of $22,946.00, plus interest and other statutory additions;

Bill J. and Diane M. Ramey, in the amount of $29,141.00, plus interest and other statutory additions;

Marinus and Kathleen H. Quist, in the amount of $663.00, plus interest and other statutory additions;

Richard A. and Eva C. Barton, in the amount of $40,906.00, plus interest and other statutory additions; and

Richard B. and Barbara S. Weir, in the amount of $61,696.00, plus interest and other statutory additions.

      . See Record Documents Nos. 10, 12, 13, 14, 15, 16, 17, 18 and 19 in Civil Action No. 82-5295. Henceforth, all references to record documents and/or joint exhibits shall be to Civil Action No. 82-5295.

      . 26 U.S.C. § 422A provides in pertinent part:
      (b) Incentive Stock Option — For purposes of this part, the term "incentive stock option” means an option granted to an individual for any reason connected with his employment by a corporation, if granted by the employer corporation or its parent or subsidiary corporation, to purchase stock of any such corporations, but only if—
      (4) the option price is not less than the fair market value of the stock at the time such option is granted.

      . Temporary Treasury Regulation § 14a.422A-l, promulgated on December 21, 1981, employs a question and answer format to address sundry points of concern to taxpayers relevant to ISO transitional rules. Of the thirty-nine questions and answers contained therein, the plaintiffs only take issue with numbers 9 and 10.

      . 26 U.S.C. § 425(h) provides in pertinent part:

        (1) In general. — For purposes of this part, if the terms of any option to purchase stock are modified, extended, or renewed, such modification, extension, or renewal shall be considered as the granting of a new option.
      (2) Definition of modification. — The term "modification" means any change in the terms of the option which gives the employee additional benefits under the option, but such term shall not include a change in the terms of the option—
      (A) attributable to the issuance or assumption of an option under subsection (a);
      (B) to permit the option to qualify under sections 422(b)(6), 422A(b)(5), 423(b)(9), and 424(b)(2); or
      (C) in the case of an option not immediately exercisable in full, to accelerate the time at which the option may be exercised.

      . See Note 2, supra.

      . 26 U.S.C. § 83(a) provides:

        General rule. — If, in connection with the performance of services, property is transferred to any person other than the person for whom such services are performed, the excess of—
      (1) the fair market value of such property (determined without regard to any restriction other than a restriction which by its terms will never lapse) at the first time the rights of the person having the beneficial interest in such property are transferable or are not subject to a substantial risk of forfeiture, whichever occurs earlier, over
      (2) the amount (if any) paid for such property.
      shall be included in the gross income of the person who performed such services in the first taxable year in which the rights of the person having the beneficial interest in such property are transferable or are not subject to a substantial risk of forfeiture, .whichever is applicable. The preceding sentence shall not apply if such person sells or otherwise disposes of such property in an arm’s length transaction before his rights in such property become transferable or not subject to a substantial risk of forfeiture.
      26 U.S.C. § 83(e) provides in pertinent part:

        Applicability of section —This section shall not apply to-
      il) a transaction to which section 421 applies.

      . "Interpretative" regulations are issued pursuant to the Commissioner’s (of Internal Revenue) general authority to prescribe all needful rules and regulations, 26 U.S.C. § 7805. CWT Farms, Inc. v. C.I.R., 755 F.2d 790, 800. "Legislative” regulations are issued under a specific delegation of authority by Congress under 26 U.S.C. § 994(b)(1) and have the same effect as a valid statute. Id.; Batterton v. Francis, 432 U.S. 416, 97 S.Ct. 2399, 53 L.Ed.2d 448 (1977).

      . See note 2, supra; IRC § 421 provides the general rules for statutory stock options, including ISO's.

      . 97th Congress, 1st Sess. 97 (1981), reprinted in U.S.Code Cong. & Ad.News 105, 200-204.

      . See note 9, supra.

      . Proposed Treasury Regulation § 1.422A-3(c)(2), recites, in pertinent part:
      (2) An amendment to an otherwise eligible option (or plan) prior to August 13, 1981, will be subject to the rules of section 425(h). If, pursuant to section 425(h), the amendment is a modification, extension, or renewal of the option, such amendment shall be considered as the grant of a new option. Such an option is not eligible for conversion into an incentive stock option unless the option (and plan) comply with the section 422A qualification requirements. Since the option will be considered to have been granted on the date it was amended, the option price cannot be less than the fair market value of the stock on that date. If the option price is less than the fair market value of the stock on the date the option was amended, the corporation may qualify the option by adjusting the option price, so long as such adjustment occurs prior to the earliest of the exercise of the option, the date of the election under paragraph (b) of this section (if applicable), or August 14, 1982. If the corporation wishes to retain the original grant price (and grant date) of the option, the corporation may do so by rescinding the amendment, so long as such rescission occurs prior the earliest of the exercise of the option, the date of the election under paragraph (b) of this section (if applicable), or August 14, 1982. If only a portion of an option is to become an incentive stock option, the adjustment of the option price or the rescission of the amendment need apply only to that portion.
      Proposed Treasury Regulation § 1.425-l(e)(5)(i) recites:

        The time or date when an option is modified, extended, or renewed shall be determined, insofar as applicable, in accordance with the rules governing determination of the time or date of granting an option provided in paragraph (c) of § 1.421-7. For purposes of sections 421 through 425, the term "modification" means any change in the terms of the option (or change in the terms of the plan pursuant to which the option was granted) which gives the optionee additional benefits under the option regardless of whether the optionee in fact benefits from the change in the terms. For example a change in the terms of the option, which shortens the period during which the option is exercisable, is not a modification. However, any one of the following changes is a modification: a change which provides more favorable terms for payment for the stock purchased under the option, such as the right to tender previously acquired stock; a change which provides an extension of the period during which an option may be exercised, such as after termination of employment; a change which provides an additional benefit upon exercise of the option, such as the payment of a cash bonus; and a change which provides an alternative to the exercise of the option, such as a stock appreciation right. Finally, a change which provides, either by its terms or in substance, that the optionee may receive an additional benefit under the option at the future discretion of the grantor, is a modification both at the time the option is changed and at the time the benefit is actually granted. Where an option is amended solely to increase the number of shares subject to the option, such increase shall not be considered as a modification of the option, but shall be treated as the grant of a new option for the additional shares.


author: SHOOB, District Judge.

text:
    MacMILLAN BLOEDEL, INC., Plaintiff, v. HAMRIC TRANSPORTATION, INC., and Wise Transportation, Inc., Defendants.
    Civ. A. No. C84-2039A.
    United States District Court, N.D. Georgia, Atlanta Division.
    Aug. 14, 1985.

      John C. Staton, Jr., Michael Eric Ross and Sylvia M. King, King & Spalding, Atlanta, Ga., for plaintiff.
    Gary D. Stoker, Cotton, White & Palmer, P.A., Atlanta, Ga., for defendants.
   ORDER

SHOOB, District Judge.

Pursuant to 28 U.S.C. § 1404(a), defendants have moved to transfer this action for declaratory judgment to Beaumont, Texas. For the reasons stated below, the motion is denied.

Plaintiff MacMillan Bloedel, Inc. (“MacMillan”), an Alabama corporation, is in the building materials business; its principal place of business is in Atlanta, Georgia. Defendant Hamric Transportation, Inc. (“Hamric”) and defendant Wise Transportation, Inc. (“Wise”) are in the trucking business. Hamric is incorporated and has its principal place of business in Texas. Wise is an Oklahoma corporation with its principal place of business in that state. MacMillan alleges that Wise is Hamric’s parent corporation.

MacMillan seeks a declaratory judgment that it is not indebted for freight services provided by Hamric or its alleged agent, S & R Enterprises (“S & R”), since MacMillan has settled the account with S & R. Defendants deny that they received payment and that S & R ever served as Hamric’s authorized agent. Consequently, Hamric has demanded payment of the alleged debt.

Absent clear justification, courts in this district have uniformly declined to override a plaintiff’s choice of forum. Wheeling Corrugating Co. v. Universal Construction Co., 571 F.Supp. 487, 489 (N.D.Ga.1983); A.L. Williams & Assoc. v. D.R. Richardson, 98 F.R.D. 748, 754 (N.D. Ga.1983); Dutka v. Southern Railway Co., 92 F.R.D. 375, 379 (N.D.Ga.1981). Accordingly, the movant in a motion to transfer venue bears the burden of “demonstratpng] that the balance of convenience and justice weighs heavily in favor of the transfer.” A.L. Williams, 98 F.R.D. at 754. This burden is especially taxing where, as here, plaintiff has elected to bring suit “in the district in which he resides ____” Flowers Industries v. Bakery & Confectionery Union, 565 F.Supp. 286, 293 (N.D.Ga.1983).

Defendants have not satisfied their burden to justify a change of venue. The Court must inquire whether the requested transfer would make it substantially more convenient for the parties to produce witnesses and evidence. See, e.g., Koehring Co. v. Hyde Construction Co., 324 F.2d 295, 296 (5th Cir.1963). In the instant case, it appears that regardless of the forum a number of witnesses will have to travel some distance, since the potential witnesses reside in Atlanta, Texas and Oklahoma. Similarly, relevant documents are located at both potential forums.

Relying on Wheeling Corrugating, defendants contend that a transfer is appropriate because a key witness, Stan Spivey (“Spivey”), may be subpoenaed to appear in Beaumont but not in Atlanta. There is no doubt that Spivey, a principal of S & R, is an important witness. Nonetheless, the Court rejects defendants’ argument for several reasons. First, in Wheeling Corrugating, the Court relied on the “guarantee of availability” of one of plaintiff’s witnesses to “buttress” plaintiff’s right to the forum of its choice. 571 F.Supp. at 489. Conversely, in the instant case, defendants are attempting to disturb plaintiff’s choice of forum. Moreover, the Court is not convinced that Spivey is guaranteed to appear in Beaumont. Indeed, the parties dispute whether Spivey is currently in Beaumont. Finally, even assuming arguendo that Spivey can be compelled to appear in Beaumont but not in Atlanta, defendants have failed to demonstrate that his testimony cannot be presented adequately via a deposition. See Flowers Industries, 565 F.Supp. at 293.

Aecordingly, defendants’ motion to transfer venue is DENIED.

      . Defendants cite Hotel Constructors, Inc. v. Seagrave, 543 F.Supp. 1048 (N.D.Ill.1982), for the proposition that a plaintiffs choice of forum is of diminished importance where the forum selected lacks a substantial relationship with the underlying cause of action. However, the view expressed in Hotel Constructors runs counter to the law in this district. Furthermore, there is a relationship between the underlying events and this forum, since communications relating to defendants’ demand for payment were received at MacMillan’s Atlanta office and by its local counsel. In addition, two of plaintiff's witnesses reside in Atlanta.

      . Defendants have attempted to refute the value of the testimony of plaintiffs two Atlanta witnesses. However, plaintiff has submitted sufficient supporting affidavits to demonstrate that its Atlanta witnesses can provide useful testimony. In fact, defendants' argument might have been more availing if it were accompanied by the requisite support. See Flowers Industries v. Bakery & Confectionery Union, 565 F.Supp. 286, 293 (N.D.Ga.1983); C. Wright, Law of Federal Courts, § 44 at 190 (3d ed. 1976).

      . The Court declines to accept defendants’ unsubstantiated assertion that Spivey is still in Beaumont, in light of contrary statements made in plaintiffs supporting affidavits. See, supra, note 2.


author: MORAN, District Judge.

text:
    Robert J. ADAMS, Jr., Lawrence William Korrub and Tom O’Connell Holstein and Robert E. McKenzie, Plaintiffs, v. ATTORNEY REGISTRATION AND DISCIPLINARY COMMISSION OF the SUPREME COURT OF ILLINOIS, and Carl H. Rolewick, its Administrator, Defendants.
    Nos. 84 C 3548, 84 C 4771, 84 C 5179 and 84 C 5711.
    United States District Court, N.D. Illinois, E.D.
    Aug. 15, 1985.

      Richard W. Cosby, Dozoryst, Cosby & Brustein, Chicago, 111., for plaintiffs.
    Robert J. Adams Jr., Lawrence William Korrub, Tom O’Connell Holstein and Robert E. McKenzie, Chicago, 111., pro se.
    John C. O’Malley and Theresa M. Gronkiewicz, Chicago, 111., for defendants.
   MEMORANDUM AND ORDER

MORAN, District Judge.

This case raises the question whether the Illinois Attorney Registration and Disciplinary Commission (Commission) can constitutionally prohibit a lawyer from advertising through the mail to a targeted audience. Plaintiffs are all practicing attorneys who have done or plan to do direct mail advertising. They seek injunctive and declaratory relief. Before the court at this time is their motion for preliminary injunction.

Facts

On April 6, 1984, the Illinois Supreme Court amended Disciplinary Rule 2-103 of the Code of Professional Responsibility to read, in relevant part:

(b) A lawyer may initiate contact with a prospective client in the following circumstances:
* * * * * *
(2) by written communication distributed generally to persons not known in a specific matter to require such legal services as the lawyer offers to provide but who in general might find such services to be useful and providing that such letters and circulars and the envelopes containing them are plainly labeled advertising material;
* * * * * *
(e) ... A copy of any written private communication recommending or soliciting professional employment, together with the name and address of each person to whom the communication is sent, shall be filed with the Attorney Registration and Disciplinary Commission within thirty days after it is sent.

The amended rule became effective May 1, 1984.

Plaintiffs Adams, Korrub, Holstein and McKenzie filed this suit on April 25, 1984, challenging the part of Rule 2-103(b)(2) which prohibits direct mail advertising by a lawyer to persons known to require such specific legal services as that lawyer offers to provide. They specifically did not challenge any other part of the amended rule.

Each attorney devotes much of his practice to certain specific legal problems and periodically sends out mailings to those whom he thinks are in need of his services with respect to those problems. Typically, the list for these mailings comes from an agency responsible for keeping track of those with such a problem. For example, Kaplan is a bankruptcy lawyer and he receives lists of debtors against whom a judgment has been entered from Circuit Court.

The court granted plaintiffs a temporary restraining order on April 26, 1984. In June 1984 defendant Commission filed a complaint in the Supreme Court of Illinois for declaratory judgment on whether the amended rule is constitutional. Plaintiffs (defendants in the state court action) promptly removed the case to this court. By that time the court was aware that the United States Supreme Court had before it a case involving somewhat similar issues, Philip Q. Zauderer v. Office of Disciplinary Counsel of the Supreme Court of Ohio, — U.S. -, 105 S.Ct. 2265, 85 L.Ed.2d 652 (1985). The court delayed proceedings until decision in that case. The opinion in that case issued on May 28,1985, and this court now grants plaintiffs a preliminary injunction for the following reasons.

Governing Law

Recognizing the importance of information in a free market economy, the Supreme Court in Virginia Pharmacy Board v. Virginia Consumer Council, 425 U.S. 748, 96 S.Ct. 1817, 48 L.Ed.2d 346 (1975), extended limited First Amendment protection to commercial speed. A year later, in Bates v. State Bar of Arizona, 433 U.S. 350, 97 S.Ct. 2691, 53 L.Ed.2d 810 (1976), the Court addressed the issue of lawyer advertising. In that case the state prohibited a lawyer from using newspapers to advertise his prices for “routine” legal services. The Court rejected the state’s arguments that price advertising has an adverse effect on lawyers’ professionalism, is inherently misleading, stirs up litigation, increases the cost of legal services, encourages shoddy work and is. so difficult to regulate that an absolute prohibition is necessary. The Court also indicated that advertising can be restrained if it is inherently likely to deceive, or is false, deceptive or misleading in fact. The Court held that these problems are not present in newspaper advertising of prices for “routine” legal services.

The Court addressed the First Amendment concerns of lawyers who solicit business through in-person communication with prospective clients in Ohralik v. Ohio State Bar Association, 436 U.S. 447, 98 S.Ct. 1912, 56 L.Ed.2d 444 (1978). The case involved an attorney who met with two accident victims, one at the hospital where she was in traction and the other at her home the day she was released from the hospital. The attorney had not been invited by either victim. At these meetings the victims orally agreed to let him represent them, but they later decided against filing suit. The Court held that a prophylactic rule against such in-person solicitation was not unconstitutional because of the inherently injurious nature of such communication. 436 U.S. at 464-66, 98 S.Ct. at 1922-23. The harm the Court found in this speech was that

[u]nlike a public advertisement, which simply provides information and leaves the recipient free to act upon it or not, in-person solicitation may exert pressure and often demands an immediate response, without providing an opportunity for comparison or reflection.

Id. at 457, 98 S.Ct. at 1919. The Court also found the state had a strong interest in “maintaining standards among members of the licensed professions,” id. at 460, 98 S.Ct. at 1920, and in “preventing those aspects of solicitation that involve fraud, undue influence, intimidation, overreaching and other forms of ‘vexatious conduct.’ ” Id. at 462, 98 S.Ct. at 1921. The Court was careful to base its holding on the actual conduct involved in the case, although it held that the state need not prove actual harm when the circumstances present substantial dangers of harm. Id. at 463-64, 98 S.Ct. at 1922. Ohralik is the only case to date in which the Court has held that the state could ban a certain form of lawyer advertising.

In In Re R.M.J., 455 U.S. 191, 102 S.Ct. 929, 71 L.Ed.2d 64 (1982), the Court considered regulation of lawyer print advertising that restricted it to certain categories of information and specified language, in some instances, and restrained the mailing of announcement cards to lawyers, clients, friends and relatives. The Court made clear that “regulation — and imposition of discipline — are permissible where the particular advertising is inherently likely to deceive or where the record indicates that a particular form or method of advertising has in fact been deceptive.” Id. at 202, 102 S.Ct. at 937. The Court also stated:

Misleading advertising may be prohibited entirely. But the States may not place an absolute prohibition on certain types of potentially misleading information, e.g., ... a listing of areas of practice, if the information also may be presented in a way that is not deceptive____
Even when a communication is not misleading, the State retains some authority to regulate. But the State must assert a substantial interest and the interference with speech must be in proportion to the interest served. Restrictions must be narrowly drawn, and the State lawfully may regulate only to the extent regulation furthers the State’s substantial interest.

Id. at 203, 102 S.Ct. at 937 (citations omitted). The Court found the state’s restrictions unsupported by substantial interests and too broadly written. Regarding the rule on “announcement cards,” the Court rejected the state’s argument that general mailings from lawyers should be prohibited because they are likely to frighten the public, suggesting that the public’s privacy interest can be protected by requiring the lawyer to “stamp ‘This is an advertisement’ on the envelope.” Id. at 206 n. 20, 102 S.Ct. at 939 n. 20. The Court recognized that “[mjailings and handbills may be more difficult to supervise than newspapers,” id. at 206, 102 S.Ct. at 939, but suggested these difficulties could be alleviated by requiring a lawyer to file with the state a copy of all general mailings.

Most recently, the Supreme Court has dealt with lawyer advertising in Philip Q. Zauderer v. Office of Disciplinary Counsel of the Supreme Court of Ohio, — U.S. -, 105 S.Ct. 2265, 85 L.Ed.2d 652 (1985). The advertising in that case involved a line drawing of a Daikon Shield, followed by words to the effect that women who had been injured by the shield had legal remedies and that plaintiff has experience in representing such persons on a contingent fee basis that would result in no fee if there was no recovery.

The Court found the phrase, “[i]f there is no recovery, no legal fees are owed,” to be misleading because the public is not likely to know the difference between legal fees and other litigation costs, and upheld state regulation in the form of disclosure requirements relating to the terms of contingent fees. The Court held that “an advertiser’s rights are adequately protected as long as disclosure requirements are reasonably related to the State’s interest in preventing deception of consumers.” Id. 105 S.Ct. at 2282. However, the rest of the advertisement passed constitutional muster because it was not inherently misleading and the state could not articulate a substantial governmental interest in prohibiting such advertising. The state argued that such advertising was akin to in-person solicitation and encouraged meritless litigation. The Court rejected both arguments. To the first it replied:

Print advertising may convey information and ideas more or less effectively, but in most cases, it will lack the coercive force of the personal presence of a trained advocate. In addition, a printed advertisement, unlike a personal encounter initiated by an attorney, is not likely to involve pressure on the potential client for an immediate yes-or-no answer to the offer of representation. Thus, a printed advertisement is a means of conveying information about legal services that is more conducive to reflection and the exercise of choice on the part of the consumer than is personal solicitation by an attorney.

Id. at 2277. To the second argument it replied, “the State is not entitled to prejudge the merits of its citizens’ claims by choking off access to information that may be useful to its citizens in deciding whether to press those claims in court.” Id. at 2279 n. 12. Thus, the Court held, “[a]n attorney may not be disciplined for soliciting legal business through printed advertising containing truthful and nondeceptive information and advice regarding the legal rights of potential clients.” Id. at 2280.

While the Supreme Court has not addressed lawyers’ use of direct mail advertising to targeted audiences, various lower courts have applied the principles developed above to decide such cases. See Matter of Von Wiegen, 101 App.Div.2d 627, 474 N.Y.S.2d 147, modified 63 N.Y.2d 163, 481 N.Y.S.2d 40, 470 N.E.2d 838 (1984), cert. denied, — U.S.-, 105 S.Ct. 2701, 86 L.Ed.2d 717 (1985). Spencer, III v. Honorable Justices of the Supreme Court of Pennsylvania, 579 F.Supp. 880 (E.D.Pa. 1984); Bishop v. Committee on Professional Ethics and Conduct of the Iowa State Bar Association, 521 F.Supp. 1219 (S.D.Ia.1981), vacated and remanded on other grounds, 686 F.2d 1278 (8th Cir. 1982); Koffler v. Joint Bar Association, 51 N.Y.2d 140, 432 N.Y.S.2d 872, 412 N.E.2d 927 (1980); Kentucky Bar Association v. Stuart, 568 S.W.2d 933 (Ky.1978). The mailings involved in these cases ranged from a letter on law firm stationery sent to two real estate agencies, to a letter sent to the 250 victims of the Hyatt “sky-walk” accident. In no case did the court find that the state’s interest in regulating commercial speech justified an outright prohibition of direct mail advertising. These cases are discussed in more detail below.

Plaintiffs’ Challenge

In Bates v. State Bar of Arizona, 433 U.S. 350, 97 S.Ct. 2691, 53 L.Ed.2d 810 (1977) the Court held that First Amendment overbreath doctrine does not apply to the professional advertising context. Therefore, plaintiffs cannot rest their challenge on the regulation’s potential to chill speech but rather must show that their specific conduct or speech is protected. On the other hand, as Justice Brennan pointed out in his concurrence in Zauderer, the state may not rely on “highly speculative” or “tenuous arguments,” and in the case where the speech is not inherently misleading “must muster record evidence showing that ‘a particular form or method of advertising has in fact been deceptive.’ ” 105 S.Ct. at 2286.

Defendants’ arguments rest primarily on the theory that there is a substantive difference between solicitation and advertising. The Committee Comments to amended Rule 2-103 illuminate this theory:

Solicitation, as distinguished from advertising, connotes a “private” communication targeted at a person or category of persons known by the lawyer to have an immediate potential need for legal services. Rule 2-103(a) accordingly prohibits such solicitations, while Rule 2-103(b)(2) permits general advertising mailings which are not directed to persons known to require legal services with respect to a specific matter or problem.

Having made the distinction, the Commission places plaintiffs’ letters in the solicitation category and relies on Ohralik to argue that this type of solicitation is not protected by the First Amendment.

Even if this court were to agree that a “private communication” distinguishes advertising from soliciting, mail and in-person solicitation cannot be so swiftly equated. The Supreme Court in Zauderer implicitly distinguished between “print advertising” and “the personal presence of a trained advocate.” 105 S.Ct. at 2277. The Court in In Re Von Weigen found unconstitutional a state ban on mail solicitation of accident victims, basing its decision on “the distinction between mail solicitation and in-person solicitation____” 63 N.Y.2d at 170, 481 N.Y.S.2d 40, 470 N.E.2d 838. The Court reasoned that the potential for intimidation and pressure for an immediate response which so disturbed the Court in Ohralik were not present in the case of mail solicitation. See also Spencer v. Honorable Justices of Supreme Court of Pennsylvania, 579 F.Supp. 880, 889-90 (E.D.Pa.1984) (attorney who was also a pilot wanted to send solicitation letters to those in need of his special services); Kentucky Bar Association v. Stuart, 568 S.W.2d 933 (Ky.1978) (real estate lawyer wanted to send letters to real estate brokerage firms).

The court agrees with the analysis in In Re Von Weigen, Spencer, and Kentucky Bar Association. The substantial state interests in protecting the public from an invasion of privacy, and from overreaching and undue influence which justified a ban on in-person solicitation upheld in Ohralik, are not inherently present in mail advertising to a targeted audience. Thus, the state can only regulate to the extent reasonably necessary to protect these interests, and the regulations must be narrowly drawn. Rule 2-103(b)(2) requires that the mailings be plainly identified as advertising, thus protecting the privacy of the recipient in the sense that if he does not want to read lawyer advertising he can simply dispose of the envelope with its contents. The state’s argument that people treat mail from attorneys differently from other mail was implicitly rejected in In Re R.M.J., 455 U.S. at 206 n. 20, 102 S.Ct. at 939 n. 20. The state cannot limit the public’s access to information on the basis that some might find such a letter offensive and, as such, an invasion of their privacy. See Bolger v. Youngs Drug Products Corp., 463 U.S. 60, 103 S.Ct. 2875, 2883, 77 L.Ed.2d 469 (1983).

Similarly, an absolute ban on mailings cannot be justified by the threat of undue influence and overreaching. A letter, even if a “private communication,” is a means of conveying information that is “more conducive to reflection and the exercise of choice on the part of the consumer than is personal solicitation by an attorney.” 105 S.Ct. at 2277. As the court in Spencer said:

Even if the state could identify specific situations in which mail recipients were particularly susceptible or vulnerable to the persuasive influence contained in a lawyer’s letter, an absolute prohibition of direct mailings would not be justified. Rather, direct mailings could be banned only in those identified circumstances.

579 F.Supp. at 890.

However, defendants argue that Rule 2-103 takes into account the concerns in Spencer by prohibiting only targeted mailings, and is thus narrowly drawn to prevent misleading communication. The court cannot see a principled reason for allowing direct mailing to the public at large, but not to target audiences. If a person confronting a mortgage foreclosure receives a solicitation letter like the one sent by plaintiff Adams, his reaction to it will in no way be affected by whether the rest of the world, or only those facing foreclosures, also receive the letter. Thus, the state’s narrowly drawn rule cannot be premised on this theory. Rather, the state must have assumed, when writing the rule, that the content of the mailings would differ significantly if target mailings were banned. However, because the content of even targeted mailings can be and are regulated (see Rule 2-103(e)), an absolute ban is not “reasonably related to the State’s interest in preventing deception of consumers.” 105 S.Ct. at 2282. As the Court in Zauderer stated:

[g]iven the possibility of policing the [advertising] on a case by case basis, the prophylactic approach taken by [the State] cannot stand____

105 S.Ct. at 2281.

The court does not deny the state’s right to regulate plaintiffs’ advertising to ensure it is not misleading or deceptive. See In Re R.J.M., 455 U.S. 191, 203, 102 S.Ct. 929, 937, 71 L.Ed.2d 64 (1982). The Commission might reasonably question Holstein’s use of the phrase, “[w]e guarantee you quality representation,” and Korrub’s promise that once one has filed under Chapter 13 creditors “cannot take money from your paycheck. They cannot harass you.” Any regulation of plaintiffs’ letters would have to be based on a finding that their content was either inherently deceptive or misleading, or had that effect in fact. See Zauderer, 105 S.Ct. at 2283 (discussion of the phrase, “if there is no recovery no legal fees are owed by our clients ... ”).

The Commission, although it has introduced many exhibits of letters lawyers have sent to targeted audiences, has not made any arguments regarding the misleading or deceptive nature of the language contained in the letters. Rather, it has submitted the complaints regarding these letters it received. Most of the complaints were from attorneys representing the recipients of these letters. In the instances where the recipient complained to the Commission, it was mostly to say that the letter generated confusion as to the status of his or her case, or the nature of his or her problem. More than a showing that some people were hassled by these letters is, however, necessary to sustain a blanket prohibition.

Relief

Plaintiffs seek a preliminary injunction. Ordinarily this case might be an appropriate one in which to apply Younger deference to the state court. See Spencer, 579 F.Supp. at 892. However, the court in the initial stages of the case asked the Commission to invite the Committee to reconsider the amended rule, thus providing a means by which the Illinois Supreme Court could further review the rule. The Committee refused to reconsider so the Commission brought an action in the Illinois Supreme Court. That case was removed to this court and we determined that it could not be remanded, 600 F.Supp. 390 (N.D.Ill., 1984). This court refused to abstain under those circumstances, and it sees no reason to abstain now. See People of the State of Illinois v. General Electric Co., 683 F.2d 206 (7th Cir.1982), cert. denied, 461 U.S. 913, 103 S.Ct. 1891, 77 L.Ed.2d 282 (1983).

Plaintiffs have met all the requirements for a preliminary injunction. See Citizens Energy Coalition of Indiana v. Sendak, 594 F.2d 1158, 1162-63 (7th Cir. 1979), cert. denied, 444 U.S. 842, 100 S.Ct. 83, 62 L.Ed.2d 54 (1979). They are faced with a threat of prosecution by defendants, with a harm to their professional standing and reputation which cannot be remedied by money damages, and with a harm that outweighs the harm to defendants of being prevented from enforcing their rule. As the analysis above indicates, the plaintiffs also have a strong likelihood of success on the merits.

Given the court’s duty to decide the issues involved in this case, and the plaintiffs’ showing that a preliminary injunction is the appropriate relief, plaintiffs’ motion for preliminary injunction against enforcement of the rule in its present form is granted.

      . Their case has been consolidated with the case of Kaplan v. Attorney Registration and Disciplinary Commission of the Supreme Court of Illinois, et al., No. 84 C 5179, and the case of Zalutcky and Pinsky v. Attorney Registration and Disciplinary Commission of the Supreme Court of Illinois, No. 84 C 4771.

      . Defendants have submitted one written communication which moves closer to the kind of solicitation prohibited by the Court in Ohralik. The communication was a telegram received by the family two hours after the death of a train-truck accident victim. • The telegram stated, "Extremely sorry to hear about accident regarding____ Please contact our law office if we can be of help to you as we have been in the past.” When the family called the attorney he could not remember the name of the victim, let alone any work he had done for the victim. However, the attorney was more than willing to discuss the possibility of a personal injury suit. Although a telegram cannot exert the same kind of pressure on vulnerable people that in-person solicitation can, it is not unreasonable to assume that the recipient of such a letter would feel obligated to answer. A ban of this type of communication might not be unconstitutional.