author: FOREMAN, Chief Judge:

text:
    Tom BOREK, Plaintiff, v. TOWN OF McLEANSBORO, and John Engel, Supervisor and Trustee of the Town of McLeansboro, Defendants.
    Civ. No. 85-4087.
    United States District Court, S.D. Illinois, Benton Division.
    May 24, 1985.
    Samuel H. Liberman, Clayton, Mo., for plaintiff.
    Elmer Jenkins, Benton, Ill., for defendants.
   MEMORANDUM AND ORDER

FOREMAN, Chief Judge:

Before the Court is defendants’ Motion to Dismiss. Plaintiff, an attorney representing several residents of the Town of McLeansboro, has alleged that he contacted defendant Engle, Town Supervisor, for the purpose of determining the rules, procedures, and standards used in assessing eligibility for General Assistance. Plaintiff was attempting to discover the basis for denying General Assistance to some of his clients. According to plaintiff, defendant Engle suggested a meeting at the town office. Plaintiff attended the meeting with defendant Engle and several other town officials, but when it appeared that further discussion would be fruitless, plaintiff decided to leave.

Plaintiff alleges that as he attempted to leave, defendant Engle approached him, grabbed him, and hit him from behind on the shoulders, neck, ears, and head, thereby causing plaintiff to suffer cuts, bleeding, lacerations, bruises, contusions, abrasions, humiliation, fear, upset, and lasting emotionál injury. Plaintiff alleges that he did not strike back and that none of the town officials came to his assistance or otherwise tried to stop the attack. In his Complaint, plaintiff contends that defendant Engle had discussed his intention to assault and attack plaintiff with at least one-official prior to the meeting.

Defendant Engle then left the town office, and plaintiff attempted to continue to meet with the remaining town officials, but alleges that he could not effectively participate due to the beating he had received. Plaintiff went outside, where he was confronted by defendant Engle. Plaintiff returned to the meeting and eventually called the sheriff, who came and assisted plaintiff in his departure. Defendant Engle was charged and convicted of battery after pleading guilty to the charge.

Plaintiff sets forth two claims for relief, one based on 42 U.S.C. § 1983 and another for assault and battery. Plaintiff requests actual damages against both defendants and punitive damages against defendant Engle. Defendants, in their Motion to Dismiss, argue that plaintiffs claim is not actionable under § 1983, that the defendants did not act under color of state law, and that punitive damages are not recoverable against the town. For purposes of defendants’ Motion, all of plaintiff’s allegations must be taken as true. Hampton v. City of Chicago, 484 F.2d 602, 606 (7th Cir.1973). A complaint should not be dismissed for failure to state a claim unless “plaintiff can prove no set of facts in support of his claim” that would entitle him to relief. Cruz v. Beto, 405 U.S. 319, 322, 92 S.Ct. 1079, 1081, 31 L.Ed.2d 263 (1972); Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 101-102, 2 L.Ed.2d 80 (1957).

Although defendants do not refer to Newport v. Fact Concerts, Inc., 453 U.S. 247, 101 S.Ct. 2748, 69 L.Ed.2d 616 (1981), they are nonetheless correct in their assertion that it would inappropriate to assess punitive damages against the Town of Mc-Leansboro. However, plaintiff’s Complaint requests punitive relief only as against defendant Engle, and not the town. Thus, the Court need not further discuss this issue.

Defendants’ contention that a tort committed under color of state law does not present an actionable 42 U.S.C. § 1983 claim under any circumstances must be rejected. The Seventh Circuit, while recognizing that not every tort committed under color of state law is actionable in federal court, has repeatedly refused to hold that the mere existence of a state tort remedy precludes a § 1983 claim for constitutional violations arising out of the same circumstances. For example, in Jackson v. City of Joliet, 715 F.2d 1200 (7th Cir.1983), it was recognized that § 1983 would impose liability on police and fire department officials who committed an intentional tort if the officials acted “under color of, but contrary to, state law.” Id., at 1204. In Jackson, the Seventh Circuit held that the ineffective assistance of state officials at the scene of an accident did not entail a deprivation of life without due process of law, and the § 1983 claim was therefore dismissed. According to the Court, this case was distinghishable from White v. Rochford, 592 F.2d 381 (7th Cir.1979), Wood v. Worachek, 618 F.2d 1225 (7th Cir.1980), and Spence v. Staras, 507 F.2d 554 (7th Cir.1974), where inaction on the part of state officials presented viable § 1983 claims because the state had deliberately placed the plaintiffs in danger. Jackson, 715 F.2d at 1204.

In Bart v. Telford, 677 F.2d 622 (7th Cir.1982), plaintiff claimed that her right to free speech had been violated when she was subjected to harassment after having run for a public office. The Court considered this to be an actionable § 1983 claim even though it recognized that the effect of the harassment on her freedom of speech may be small. The Court expressly noted that “Section 1983 is a tort statute.” Id., at 625. Certainly, the act of inviting an attorney to an official meeting regarding official business and conducted in the town office by town officials, and then battering the attorney, would present an even stronger case for a § 1983 claim than the relatively minor harassment that occurred in Bart.

The often referenced opinion of the United States Supreme Court in Parratt v. Taylor, 451 U.S. 527, 101 S.Ct. 1908, 68 L.Ed.2d 420 (1981), held that state post-deprivation remedies were adequate to provide due process to an inmate who had suffered the loss of a hobby kit through the negligence of officials acting under color of state law. The Court set forth the two essential elements of a § 1983 action: “(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.” Id., at 535,101 S.Ct. at 1912. Justice Blackmun expressly noted that where a case concerned deprivation of life or liberty, as opposed to the negligent deprivation of property, “the mere availability of a subsequent tort remedy ... might well not provide the due process of which the Fourteenth Amendment speaks.” Id,., at 546-47, 101 S.Ct. at 1918-19. Indeed, in a later case the Supreme Court recognized that a tort suit alone may not vindicate violations of constitutional rights. Logan v. Zimmerman Brush Co., 455 U.S. 422, 436-37, 102 S.Ct. 1148, 1158-59, 71 L.Ed.2d 265 (1982). See also, Brown v. Brienen, 722 F.2d 360, 365 (7th Cir.1983).

Seventh Circuit cases directly applying the analysis in Parratt v. Taylor, 451 U.S. 527, 101 S.Ct. 1908, 68 L.Ed.2d 420 (1981), have distinguished procedural due process claims such as that made in Parratt from substantive constitutional violations. See, e.g., Wolf-Lillie v. Sonquist, 699 F.2d 864, 871 (7th Cir.1983). Even due process violations may be cognizable under 42 U.S.C. § 1983 “when the challenged conduct was so egregious that it ‘shocks the conscience.’ E. g., Rochin v. California, 342 U.S. 165, 172, 72 S.Ct. 205, 209, 96 L.Ed. 183 (1952).” State Bank of St. Charles v. Camic, 712 F. 2d 1140 (7th Cir.1983), cert, denied, — U.S. —, 104 S.Ct. 491, 78 L.Ed.2d 686. Although Koch v. Schneider held that “the common law tort of misuse of legal procedure, without more, does not rise to the level of a constitutional wrong to be remedied by § 1983,” 550 F.Supp. 846, 852 (N.D. Ill.1982), this Court considers that the allegations in plaintiff’s Complaint do set forth actions which rise to the level of a constitutional wrong on the part of both defendants.

The Seventh Circuit has previously upheld the distinction “between a common law action for battery and a violation of civil rights to ensure that the plaintiff received full compensation for his injuries.” Freeman v. Franzen, 695 F.2d 485, 493 (7th Cir.1982). In the context of use of excessive force, a prison guard’s liability under § 1983 “is not co-extensive with common law tort liability for battery.” Id., at 492 (citations omitted). The same analysis holds true in the context of the excessive use of force in making an arrest. Spallone v. Village of Roselle, 584 F.Supp. 1387 (N.D.Ill.1984). If the use of excessive force were actionable in the above-cited cases, certainly the allegations in the instant case state a claim for relief under § 1983.

Plaintiff’s Complaint adequately alleges that the defendants acted under color of state law. Although defendants do not make the argument that they were acting as individuals and not as state officials, the Court notes an analogy between the instant case and similar cases involving public officials accused of wrongful acts beyond the scope of their authority. For example, in cases involving judicial misconduct, where a judge performs acts not normally performed by a judge, to the extent that these acts are unconstitutional, liability may be imposed under § 1983 without the protection afforded by judicial immunity. Cf, Lopez v. Vanderwater, 620 F.2d 1229 (7th Cir.1980) (judge performed prosecutorial acts); Harris v. Harvey, 605 F.2d 330 (7th Cir.1979) (judge undertook a racially motivated campaign to discredit a police officer); Gregory v. Thompson, 500 F.2d 59 (9th Cir.1974) (justice of the peace assaulted and battered a citizen in the courtroom).

Regarding the § 1983 claim against defendant Town of McLeansboro, the Court notes that the Seventh Circuit has stated:

... a defendant’s direct participation in the deprivation is not required. An official satisfies the personal responsibility requirement of section 1983 if she acts or fails to act with a deliberate or reckless disregard of plaintiffs constitutional rights, or if the conduct causing the constitutional deprivation occurs at her direction or with her knowledge and consent. Beard v. Mitchell, 604 F.2d 485, 498-99 (7th Cir.1979); Adams v. Pate, 445 F.2d 105, 107 (7th Cir.1971). See also Wood v. Worachek, 618 F.2d 1225, 1233 (7th Cir.1980); Stringer v. Rowe, 616 F.2d 993, 1000-01 (7th Cir.1980); Spence.v. Staras, 507 F.2d 554, 557 (7th Cir.1974).

Crowder v. Lash, 687 F.2d 996, 1005 (7th Cir.1982). See also,. Sulie v. Duckworth, 583 F.Supp. 995, 999 (N.D.Ind.1984); Estate of Eklund v. Hardiman, 580 F.Supp. 410, 412-13 (N.D.Ill.1984). In light of plaintiffs allegations in his Complaint, § 1983 liability may be imposed should plaintiff meet his burden of proof.

Accordingly, defendants’ Motion to Dismiss, Strike, or for a More Definite Statement (Document No. 4) is hereby DENIED.

IT IS SO ORDERED.


source: Caselaw Access Project

license: Public Domain

text:
    CHARTRAND EQUIPMENT COMPANY, an Illinois Corporation, William Chartrand and Katheryn Chartrand, Plaintiffs, v. ADMIRAL INSURANCE COMPANY, a foreign insurance company, doing business in the State of Illinois, Defendant.
    Civ. No. 84-3012.
    United States District Court, S.D. Illinois.
    May 24, 1985.

      William A. Schmitt, Pope & Driemeyer, Belleville, Ill., for plaintiffs.
    Fritz G. Gaerber, Lucas & Murphy, P.C., Alton, Ill., for defendant.
   MEMORANDUM AND ORDER

FOREMAN, Chief Judge:

Before the Court is defendant’s Motion to Dismiss Count III of the amended complaint (Document No. 43). Plaintiffs brought this action seeking a declaratory judgment with respect to certain policies of liability insurance issued by the defendant to Chartrand Equipment Company. Chart-rand’s amended complaint seeks a declaration in Count I that the defendant had and has a duty to fully defend and indemnify Chartrand with respect to a lawsuit filed in Marion County, Illinois. Count II seeks attorney’s fees, costs, and exemplary damages for vexatious delay pursuant to Ill. Rev.Stat. ch. 73, § 767 (1983). The defendant has counterclaimed seeking a declaration that it has no duty to defend or indemnify Chartrand with respect to a suit in Oklahoma.

The plaintiffs have now added Count III to their amended complaint alleging that the defendant breach its duty of good faith and fair dealing and intentionally inflicted emotional distress on the plaintiffs by increasing the premiums for the liability policy from $3,400 a year to $25,000 a year and notifying the plaintiffs of the increase after expiration of their then present policy. The defendant contends that Illinois does not recognize an independent tort for the breach of good faith and fair dealing or intentional infliction of emotional distress in the insurance context.

In Ellis v. Metropolitan Property and Liability Insurance Co., 600 F.Supp. 1 (S.D.Ill.1982), this Court held that Illinois law would not recognize an independent tort action for a insurer’s breach of a duty of good faith and fair dealing. The Court reasoned that Ill.Rev.Stat. ch. 73, § 767 preempted an independent tort where the insurer’s breach was a result of unjustified delay or refusal in paying a claim. Extending this analysis, this Court in Anderson v. Mutual of Omaha Insurance Co., 594 F.Supp. 726 (S.D.Ill.1984), held that § 767 preempted the tort of intentional infliction of emotional distress resulting from an insurer’s outrageous delay in settling a claim. However, the Court limited the decision by stating that it expressed no view as to whether a plaintiff may claim in tort for emotional distress resulting from outrageous activity apart from delay. Id. at 728.

This case presents such a question. Unlike the two situations above, the plaintiffs herein have no statutory remedy for the unreasonable increase in the premiums without adequate notice. Therefore, it is clear that § 767 does not preempt the remedy the plaintiffs seek. However, this does not end the Court’s inquiry. Reading the complaint in the light most favorable to the plaintiffs, as this Court must, it appears as if they are alleging that the defendant committed a tort when it increased the premiums without notice after expiration of the policy. Although not perfectly clear, the plaintiffs seemed to be labeling the tort both a breach of the defendant’s duty of good faith and fair dealing and intentional infliction of emotional distress.

Every contract imposes upon each party a duty of good faith and fair dealing. Restatement (Second) of Contracts § 205 (1979). Like any other duty imposed by the contract, when this duty is breached the non-breaching party has a cause of action on the contract. However, violation of this duty may also give rise to a tort action in addition to a breach of contract action. See Morgan v. American Family Life Assurance Co. of Columbus, 559 F.Supp. 477 (W.D.Va.1983); Ledingham v. Blue Cross Plan For Hospital Care, ETC., 29 Ill. App.3d 339, 330 N.E.2d 540, 546 (1975). When the conduct of the defendant raises to the level to support a tort action the courts have either resorted to the tort of intentional infliction of emotional distress or have stated that a violation of the duty of good faith and fair dealing “sounds in tort.” Ledingham, 330 N.E.2d at 546; Eckenrode v. Life Of American Insurance Co., 470 F.2d 1 (7th Cir.1972). Under either theory, the allegations in Count III failed to state a claim for relief.

The essential elements of a cause of action for intentional infliction of emotional distress are (1) extreme and outrageous conduct, (2) severe emotional distress, and (3) conduct from which the defendant knows severe distress is certain or substantially certain to flow. Public Finance Corp. v. Davis, 66 Ill.2d 85, 89-90, 4 Ill.Dec. 652, 654, 360 N.E.2d 765, 767 (1976). Due to the inability to precisely calculate the severity of emotional distress the courts have focused on the first element. There are two distinct variants of outrageous conduct, which when alleged, would support the tort. The first variant has been described as conduct so outrageous, even when viewed in the abstract, that a finding of severe emotional distress is entirely reasonable, not merely conjectural. Geist v. Martin, 675 F.2d 859, 864 (7th Cir.1982) (Eschbach, J. concurring in part and dissenting in part). The second variant involves a situation in which the “defendant had prior knowledge that the victim was particularly vulnerable to the challenged conduct.” Id. Applying this standard, it is clear that the plaintiffs have failed to allege that the defendant’s conduct was sufficiently outrageous. Viewed in the abstract, the plaintiffs’ allegation that the defendant unreasonably increased the premiums after their present policy had expired surely does not amount to outrageous conduct as that term is used above. Nor is there any indication that special circumstances rendered the plaintiff particularly vulnerable to the challenged conduct. Further, the plaintiffs have failed to allege any objective manifestations of emotional distress. Therefore, the Court holds as a matter of law that the plaintiffs have failed to state a claim for relief under the intentional infliction of emotional distress theory.

With respect to the tort of breach of the duty of good faith and fair dealing, the Court is of the opinion that Illinois would not recognize the tort in this context. Initially, the Court emphasizes that the duty of good faith and fair dealing is a contractual duty. Courts have been willing to raise a breach of this duty to the level of tort in limited circumstances. An examination of these circumstances in the insurance context indicates that a tort will be recognized only where the insurer takes advantage of a certain vulnerability of the insured, as when the insurer maliciously threatens to withhold payments, or actually withholds payments, or when the insurer who undertakes a defense unjustifiably refuses to settle within the policy limits. See Ledingham (and cases cited therein). In each case the insured is at the mercy of the insurer.

Here, however, the defendant’s increase in the premiums after the expiration of the current policy did not take advantage of a certain vulnerability of the plaintiffs. While increasing the premiums without notice or after expiration of the policy may have been an unfair tactical maneuver on the part of the defendant to get the plaintiffs to cancel the policy, the plaintiffs were free to obtain coverage from another insurer. The actions of the defendant may have breached a provision of the agreement and may have breached the insurer’s duty of good faith and fair dealing, but the Court is unwilling to say that they may have also formed the basis of a tort action. Unlike the two situations above, the plaintiffs were placed in no more of a vulnerable position than any other non-breaching party who must make adjustments and arrangements to compensate for the other party’s breach.

Accordingly, the defendant’s Motion to dismiss Count III of the amended complaint (Document No. 43) is hereby GRANTED. Count III of the amended complaint is hereby DISMISSED.

IT IS SO ORDERED.


author: WILLIAM D. BROWNING, District Judge.

text:
    Stephen TERRY and Barbara B. Terry; Ralph A. Malone; Virginia Higuera; Patrick D. Hudson; Ruth C. Newcomer; John P. Krischak and Mary Ann Kirschak: Jacqueline Peterson; Ruben Rios; Lynette Escobar; Joseph P. McCraren and Kathryn McCraren; Joyce E. Chadburn; Trudy Neff; Arthur W. Riley and Dianne P. Riley; Domingo A. Sison and Darlene A. Sison; Ellis Baughman and Barbara L. Baughman; Betty Lee Peterson and George Walrabenstein; Robert Ohahanian; Seth E. Southard and Cynthia J. Southard; Elizabeth Ann Bailey; Octavio Marquez; on their own Behalf and on Behalf of all others similarly situated, Plaintiffs, v. John R. BLOCK, Secretary, U.S. Dept. of Agriculture; John B. Crowell, Jr., Asst. Sec. for Natural Resources and Environment, U.S. Dept. of Agriculture; R. Max Peterson, Chief, U.S. Forest Service, U.S. Dept. of Agriculture; Gary F. Cargill, Assoc. Deputy Chief, U.S. Forest Service; M.J. Hassell, Regional Forester, Southwestern Region U.S. Forest Service; R.B. Tippeconnic, Forest Supervisor, Coronado Natl Forest, U.S. Forest Service, Defendants.
    No. Civ. 84-1006TUC-WDB.
    United States District Court, D. Arizona.
    May 24, 1985.

      O’Dowd, Burke & Lundquist, Erik M. O’Dowd, Tucson, Ariz., for plaintiffs.
    Stephen M. McNamee, U.S. Atty., Dist. of Arizona, Don B. Overall, Tucson, Ariz., for defendants.
   WILLIAM D. BROWNING, District Judge.

This matter is before the Court on the parties’ cross motions for summary judgment. The motions were argued before the Court on May 15, 1985, and the Court took them under advisement. The Court issued a minute entry granting defendants’ motion for summary judgment and denying plaintiffs’ motion, and stating that a formal order would follow.

Plaintiffs were holders of special-use permits for recreational residences in Madera Canyon, located in Coronado National Forest. The permits expired December 31, 1984.

In 1972, the Forest Supervisor of Coronado National Forest issued a decision letter advising the special-use permit holders that the permits would expire December 31, 1982. The permit holders appealed; utimately, an environmental impact statement was prepared showing the need to limit residential use of Madera Canyon, and the termination date was extended to December 31, 1984.

The 1984 date was also appealed by some, but not all, permittees. A settlement was reached whereby those who had carried the appeal to the Board of Forest Appeals were issued permits which were effective through December 31, 1990, but others were held to the 1984 date.

The settlement decision was challenged in federal court. Judge Alfredo C. Marquez found that the termination of the special-use permits is reasonably related to a legitimate governmental goal, that facts in the record support the decision to terminate, and that the distinction for purposes of settlement between persons who did not pursue the appeal to the Board of Forest Appeals and those who did is not invidious discrimination, but a reasonable distinction within the discretion of the Forest Service. Bailey v. Block, CIV 80-154-TUC-ACM (D.Ariz.), Order, Dec. 8, 1981 at 6.

The permit holders now challenge the 1984 termination date on new grounds.

Because the cost of real property rose steeply in the 1970s, and the Forest Service pegged its fees to the market, the cost of permits rose dramatically in the 1970s. Congress decided that the rise had been too steep and that it threatened to limit availability of use permits in the national forests to those who were wealthy. Congress passed appropriation acts for fiscal years 1983, 1984 and 1985 that entitle permit holders to certain amounts as fee credits “to offset future fees owed to the Forest Service.” P.L. 97-394, 96 Stat. 1985 (Dec. 30,1982); P.L. 98-146, 97 Stat. 919 (Nov. 4, 1983) ; P.L. 98-473, 98 Stat. 1837 (Oct. 12, 1984) .

The acts state in pertinent part:
None of the funds made available under this Act shall be obligated or expended to adjust annual recreational residence fees to an amount greater than that annual fee in effect at the time of the next to last fee adjustment, plus fifty per centum. In those cases where the currently applicable annual residence fee exceeds that adjusted amount, the Forest Service shall credit that excess amount, times the number of years that that fee has been in effect, to offset future fees owed to the Forest Service.

Id. This paragraph is known as “amendment 100.” The initial senate version provided for a credit or reimbursement to the permittee. H.R. 7356, 97th Cong., 2d Sess. at 46. In the conference report, the reimbursement provision was eliminated. H.Rep. No. 97-978, 97th Cong., 2d Sess. 32 (Amendment No. 100) (Dec. 17, 1982).

The plaintiffs would be entitled to fee credits if they owed future fees. ''They argue that the 1984 termination of their special-use permits, before receipt of the full credit due under the fee credit provision, takes their property without due process of law and in denial of equal protection of the laws. The plaintiffs maintain that the Forest Service must extend the permits until the permit holders have been credited the full amounts they have “overpaid.”

This is a challenge to an administrative decision. The Administrative Procedure Act, 5 U.S.C. § 551 et seq., provides in relevant part that a reviewing court shall:

(2) hold unlawful and set aside agency action, findings and conclusions found to be—
(A) Arbitrary, capricious or an abuse of discretion or otherwise not in accordance with the law;
(B) Contrary to constitutional right, power, privilege, or immunity.

5 U.S.C. § 706.

A reviewing court must make its own determination of the law. SEC v. Chenery, 318 U.S. 80, 94, 63 S.Ct. 454, 462, 87 L.Ed. 626 (1943); 5 U.S.C. § 706. The starting point in a case involving construction of a statute is the statutory language itself. Rubin v. United States, 449 U.S. 424, 430, 101 S.Ct. 698, 701, 66 L.Ed.2d 633 (1981). If the terms are unambiguous, the inquiry is ordinarily complete. Id. However, congressional intent behind a piece of legislation may persuade a court that Congress did not intend the words to have their literal effect. Watt v. Alaska, 451 U.S. 259, 266, 101 S.Ct. 1673, 1677, 68 L.Ed.2d 80 (1981). The parties have focused most of their dispute on the question of how much deference the Court should give to the agency interpretation of the statute. The Court need not consider that question, because it finds that neither the plain meaning of the statute nor the congressional intent in providing fee credits requires the Forest Service to extend permits that it lawfully decided to terminate.

Plain Meaning

The statutes say that the Forest Service shall credit the excess amount, as calculated by the statutory formula, “to offset future fees owed to the Forest Service.”

Where there are no future fees owed, there is nothing against which the Forest Service can credit an amount. The statutes simply provide for a credit against future fees owed, and no other “remedy” for having paid inflated market prices in recent years.

The inflated amounts charged for permits were legitimate when charged; the Forest Service had authority to set rates, and was not “overcharging.” Congress simply decided later that the rate of rise was too steep, and fees too high, so Congress provided retroactively for relief for those who still had future fees owing, including, for fiscal 1985, those who received new permits for the same residence. Legislative Intent

The House Appropriations Committee Report on the initial fee credit states:

The Committee does not believe fee structures should be set so high that they restrict access to our national assets to only the wealthy. Indeed, the Committee is interested in establishing fair fee structures derived from its goal of sustaining a program as broad and open to as many people as possible____ [T]he Committee requests that [the agencies review the laws and regulations] with the objective of providing a means of reducing increases in those fees to a level more approximating the consumer price index.

H.Rep. No. 97-942, 97th Cong., 2d Sess. 79 (Dec. 2, 1982).

The Conference Committee Report states:

[T]he current methodology for establishing and revising recreational residence fees has led to enormous increases in fees ... and has thereby restricted access to residence sites to the wealthy. This amendment provides needed fee relief.

H.Rep. No. 97-978, 97th Cong., 2d Sess. 32 (Dec. 17, 1982).

The committee statements indicate an intention that there be some kind of equality in access to permits for both the rich and the less rich. By providing retroactive relief to lighten the loads of those who had permits, Congress helped enable those who were not wealthy to keep their permits and not be forced to sell. But Congress expressed no general intention to disgorge gains and to offer relief to everyone who had paid steep fees — those who had already sold their recreational residences had no relief. The lack of relief for those who had sold their recreational residences is consistent with the intent to provide more open access. For the government to pay those who no longer have permits would do nothing to increase access to the less wealthy. A permittee whose permit expires while fee credits are still “owing” is in the same situation as a person who has sold the recreational residence.

The Forest Service acted properly and within the scope of its authority by providing that the Madera Canyon permits expire in 1984. Bailey v. Block at 6-7. The rationale for the 1984 termination date is environmental. It is independent of monetary concerns. Congress did not intend in the fee credit provision that the Forest Service must extend expiring permits. It would have been inimical to environmental goals for Congress to have provided that the Forest Service extend permits whenever fee credits were “owing,” in situations where the Forest Service decided for environmental reasons to terminate permits. Congress could have provided for reimbursement in these limited situations, but did not. Congress did not intend to provide something akin to restitution, but rather to render access to forests more equal by income. Neither reimbursement nor extension of permits furthers that goal. In this case, one of the concerns behind the termination of the permits is that Madera Canyon be available, with sufficient, clean water, for more general use by the public. Bailey v. Block at 3-4, 7. Thus the decision to terminate the permits actually furthers the congressional goal of providing more equal access, that is, of “sustaining programs as broad and open to as many people as possible ...” H.Rep. 97-942, 97th Cong., 2d Sess. 32.

The Forest Service acted within its authority in deciding to terminate the permits. Congress acted within its authority when it provided fee relief for those who still owe fees. Nothing in the language of the acts or in the congressional intention behind those acts requires the Forest Service to extend permits where it has decided, for environmental reasons, that recreational residences are no longer appropriate, and that special-use permits should expire.

IT IS THEREFORE ORDERED that defendants’ motion for summary judgment is GRANTED, and plaintiffs’ motion for summary judgment is DENIED.


author: PATRICK F. KELLY, District Judge.

text:
    Kelly M. O’GILVIE, Individually and as Administrator of the Estate of Betty L. O’Gilvie, Deceased; and Stephanie L. O’Gilvie, a Minor, and Kevin M. O’Gilvie, a Minor, By and Through Kelly M. O’Gilvie, Their Father and Natural Guardian, Plaintiffs, v. INTERNATIONAL PLAYTEX, INC., a Corporation, Defendant.
    No. 83-1846-K.
    United States District Court, D. Kansas.
    May 24, 1985.
    Gerald L. Michaud and Mark B. Hutton, Wichita, Kan., for plaintiffs.
    Larry Wall, Fleeson, Gooing, Coulson & Kitch, Wichita, Kan., Charles M. McCaghey, Olwine, Connelly, Chase, O’Donnell & Weyner, New York City, for defendant.
   REMITTITUR OF PUNITIVE DAMAGES

PATRICK F. KELLY, District Judge.

On February 25, 1985, the jury unanimously responded to certain questions propounded by the Court as follows:

1. Was decedent Betty O’Gilvie, in late March 1983 and during the course of her menstrual cycle, using defendant’s product?
Yes _X_ No_
2. In March 1983, did use of Playtex super deodorant tampons cause or contribute to the cause of toxic shock syndrome?
Yes _X_ No_
3. As compared to all other tampons, including competitors, is there an increased risk of contracting toxic shock syndrome when using these super deodorant tampons?
YesJ^ No_
4. Did the label and instructions inside and outside the Playtex box at the time the product was being used by Betty O’Gilvie adequately and fairly inform and warn Betty O’Gilvie of the risk of TSS which may be fatal from using Playtex tampons?
Yes_ No X
5. Do you find International Playtex and/or Dr. Thomas Hays to be at fault in this case?
Yes _X_ No_
6. If you answer No. 5 “yes”, then, considering all of the fault at 100%, what percentage of fault is attributable to each of the following:
International Playtex (0 to 100%) 80%
Dr. Hays (and his agents or
employees) (0 to 100%) 20%
Total 100%
7. Without considering the percentage of fault found in No. 6, what total amount of damages do you find should be awarded:
Conscious pain and suffering of Betty O’Gilvie $250,000.00
Nonpecuniary loss (not to exceed $25,000.00) to Kelly O’Gilvie and children 25,000.00
Pecuniary loss to Kelly O’Gilvie and children 1,250,000.00
8. Did International Playtex know, or should it have known, of the increased risk of developing toxic shock syndrome when using Playtex super deodorant tampons at the time of the death of Betty O’Gilvie?
Yes _X_ No_
9. Was the failure of International Playtex to adequately warn about the increased risk of toxic shock syndrome with the usage of Playtex super deodorant tampons a reckless disregard by International Playtex of the consequences of its acts?
. Yes _X_ No_
10. If your answer to No. 9 is “yes”, you may assess punitive damages as you feel are warranted from the evidence. Punitive damages $10 million

On March 21, 1985, the Court took up defendant’s motions, all of which were overruled. Specifically, the jury’s assessment of punitive damages, while substantial, was found to be not excessive, nor did it shock the Court’s conscience. In the Court’s view, in light of the evidence and the jury’s findings, the jurors expressed their “outrage” the only way they could— with money damages. Conversely, the jurors were actually saying, “Take that damnable product off the market!”

Following the Court’s findings and rulings, the Court tendered a provocative proposition to the defendant. Speaking indirectly to the President of Beatrice Company, the parent company of defendant International Playtex, the Court commented in substance as follows:

That this person should know, that in the Court’s view, there was ample evidence to support each finding of the jury; that punitive damages are essentially intended to deter wrongdoing; that in the event there are no changes contemplated by the defendant International Playtex, such damages as manifested by this jury are probably “only the beginning. There surely will be others!”

Further, the Court ventured that the President of Beatrice was probably an entirely decent person, and if he concurred with these findings, he would surely order a change.

The Court then represented to defendant’s counsel that in the event this person, or his authorized representative, elected to appear in this Court on April 29, 1985, to acknowledge the jury’s findings as factually established and announce the removal of the polyacrylate tampon from the marketplace, the Court in turn would consider a substantial reduction, if not elimination, of the punitive damages award.

The Court’s tender of a reduction of any portion of the jury verdict on the basis of the conditions set forth was probably without precedent. This proposition was an innovative remedy geared to what the Court reasoned as “that which ought to be.” In this, the Court has drawn from similar experiences in dealing with those persons who have appeared here for the purposes of punishment. In many instances the ordeal itself is punishment enough. In others, deterrence is paramount. When wrongdoing is acknowledged, where changed is agreed to, indeed, where change has occurred, the Court is usually impressed and persuaded principally as to what further punishment, if any, is then in order. In the Court’s view, such remedial events are appropriate elements of mitigation which, in the Court’s discretion, should be noted and considered.

Within two weeks of that hearing, the Court noted the defendant’s public announcement to the effect that its Playtex Slender, Super and Super Plus Tampons— those containing polyacrylate fibers — will no longer be made. Shortly thereafter, defendant’s counsel communicated with the Court in the interest of further conference and for a continuance of the pending hearing. With the concurrence of plaintiffs’ counsel, the Court conferred with counsel for International Playtex; the hearing was set over to May 24, 1985.

At the outset, the defendant’s counsel were apprised that it has never been the Court’s intention to negotiate or otherwise dictate the course of defendant’s decisions. Indeed, whatever decisions were made by the defendant company, were its alone to make.

In the course of the first session, the defendant’s counsel specifically represented that the defendant had indeed removed polyacrylate fibers from all tampons, and all tampons with polyacrylate fibers are being removed from the market. The Court discussed the present state of the warning on defendant’s product which acknowledges an “association” between the use of the tampon and toxic shock syndrome (TSS). The jury found that this warning was inadequate and the Court concurs. Additionally, the Court took up the necessity of a broad-spread communication by the industry to the consuming public and the medical community with regard to early signs and symptoms of TSS.

As to the need for a public education program, the defendant’s counsel have outlined a meaningful program which, given time and exposure, should serve to inform and alert the public and medical community about the toxic shock process.

With regard to the warning, defendant’s counsel have represented to the Court that as of now the defendant’s alert statement or any warnings with regard to the sale of any tampon will be modified to include the following:

There are scientific studies which have concluded that tampons contribute to the cause of TSS.

While some may argue as to the adequacy of this statement, all should agree that it represents a sizeable “first step.” Indeed, the Court is the first to note the sense of sincerity exercised by defendant’s counsel. The Court is ever sensitive to certain pragmatics of this action. Given misperception, it could surely be abused by some, either in the course of pending litigation here or elsewhere — and in future days! However unfortunate, it may well invite additional litigation. Prom the Court’s perspective, however, the defendant’s action represents a commendable exercise of fortitude and decency.

Of paramount importance, the Court finds that such action is a significant post-judgment remedial and mitigatory response to the jury’s findings. Indeed, the jury’s intent has been substantially sufficed. In view of the defendant’s actions, the Court finds that the punitive damages award is now, in part, excessive and unnecessary. The jury’s finding of ten million dollars ($10,000,000.00) is reduced to the amount of one million three hundred fifty thousand dollars ($1,350,000.00), effective from February 26, 1985. This remaining sum is intended to represent the jury’s assessment regarding the element of punishment and is clearly the proprietary right of the plaintiffs. In the Court’s view, such an amount is fair, reasonable and deserving. In light of defendant’s action, the Court here asserts that International Playtex should not be called upon to respond in any punitive damage claims, at least with those matters pending here. It has faced its situation, it has acted most responsibly, and it has acted decently. It can be no further deterred; it has been punished enough!

Some comment is in order for the benefit of the plaintiff, Mr. Kelly O’Gilvie, for himself and on behalf of his children. Following the jury’s verdict, they enjoyed the expectancy of a substantial recovery. Yet, they did not bring this action for personal enrichment. They sought punitive damages solely to punish and deter the defendant from future wrongdoing. In the face of defendant’s announcements and representations, the plaintiffs have truly won!

Additionally, perhaps some solace is owing to plaintiffs’ counsel. These lawyers, doubtless, have proceeded here with an attorney fee arrangement contingent upon the amount of recovery. This procedure is entirely acceptable and understood. They have surely advanced substantial expenses necessary for the successful trial of this case. To reduce the recovery reduces their expectancy. Fortunately, trial of this case involves the kinds of lawyers with whom the Court can find comfort in open discussions.

The Court is first to note that it is only through these attorneys’ considerable efforts, their commitment of much time in study and preparation, and their skills in the trial of this case, that plaintiffs have prevailed. Not every lawyer would share this experience. In the Court’s view, however, they are also the kinds of lawyers who quietly share a certain professional satisfaction and sense of pride in seeing our adversary system work. Their efforts here have literally changed an industry! In the minds of good lawyers such as these, no amount of recompense quite touches that accomplishment. To them, the Court suggests that there will be other cases and other conquests. Indeed, attorneys such as these are always welcome here.

IT IS THEREFORE ORDERED this 24 day of May, 1985, that the jury’s assessment of ten million dollars ($10,000,000.00) punitive damages is reduced to the sum of one million three hundred fifty thousand dollars ($1,350,000.00), effective from the date of first entry of judgment.


author: CARRIGAN, District Judge.

text:
    Van STAFFORD and Lois Stafford, Plaintiffs, v. W.E. GOFF, John C. Statler, John Arbuthnot and Mark Schmidt, Defendants.
    Civ. A. No. 85-C-629.
    United States District Court, D. Colorado.
    May 25, 1985.

      Van Stafford, pro se.
    L. Richard Musat/Nancy Lopez, Hall and Evans, Denver, Colo., Rexford L. Mitchell, Mitchell & Mitchell, Rocky Ford, Colo., for defendants.
   ORDER

CARRIGAN, District Judge.

Plaintiffs, Van and Lois Stafford, brought this action, pro se, seeking damages under 42 U.S.C. §§ 1983, 1985, and 1986 for alleged violations of their civil and constitutional rights. Although it is difficult to decipher the factual bases for the plaintiffs’ claims, it appears that the alleged violations stem from the filing and prosecuting of a foreclosure proceeding against the plaintiffs’ farm under a Federal Land Bank of Wichita (“Bank”) mortgage. Plaintiffs allege that the defendants, John C. Statler, District Judge for Baca County, Colorado; Willard Goff, Sheriff of Baca County; John Arbuthnot, Undersheriff of Baca County; and Mark Schmidt, local counsel for the Bank, all conspired to deprive the plaintiffs of their civil and constitutional rights.

Defendants have moved to dismiss on the grounds of immunity and failure to state a claim upon which relief may be granted. The parties have briefed the issues, and oral argument would not assist in resolving them.

1. Claims under 42 U.S.C. §§ 1985 and 1986.

In order to state a claim under 42 U.S.C. § 1985, the plaintiff must allege a “racial, or perhaps otherwise class-based, invidiously discriminatory animus behind the conspirator’s action.” Griffin v. Breckenridge, 403 U.S. 88, 102, 91 S.Ct. 1790, 1798, 29 L.Ed.2d 338 (1970). There is no such allegation in the plaintiffs’ complaint. Therefore, the plaintiffs’ § 1985 claim must be dismissed. Because a claim for relief under § 1986 is dependent upon the existence of a valid claim under § 1985, the plaintiffs’ § 1986 claim must also be dismissed. Brown v. Chaffee, 612 F.2d 497 (10th Cir.1979).

2. Claims under 42 U.S. C. § 1983.

Plaintiffs seek damages from Judge Statler for allegedly depriving them of property by “signing several documents.” They also allege that Judge Statler “knew or reasonably should have known of the fact that Mark Schmidt was not duly authorized to represent an instrumentality of the federal government, and also knew that the Federal Land Bank was foreclosing on a credit instrument.” These actions are claimed to be a conspiracy in violation of the plaintiffs’ civil and constitutional rights.

It is clear that a judge is absolutely immune from liability for damages under § 1983 for actions arising out of the performance of his judicial functions unless he acted "in the clear absence of all jurisdiction.” Stump v. Sparkman, 435 U.S. 349, 357, 98 S.Ct. 1099, 1105, 55 L.Ed.2d 331 (1978). Plaintiffs argue that Judge Statler was without jurisdiction to enter the orders which led to the foreclosure because the District Court of Baca County did not have subject matter jurisdiction over the action. In support of this argument, the plaintiffs cite 28 U.S.C. § 1338 which vests in the federal courts exclusive jurisdiction over all actions arising under any Act of Congress relating to patents. Plaintiffs argue that a land patent, which is the original source of their title, is at issue and therefore that the Baca County Court had no jurisdiction over this matter. This argument is wholly without merit; the cited statute obviously does not apply. Judge Statler and the Baca County Court clearly had jurisdiction to hear the foreclosure action, and therefore Judge Statler is absolutely immune from liability for damages. His motion to dismiss is therefore granted.

With respect to the claims against Sheriff Goff and Undersheriff Arbuthnot, these defendants are protected by a qualified immunity. Pierson v. Ray, 386 U.S. 547, 87 S.Ct. 1213, 18 L.Ed.2d 288 (1967). In order to avoid dismissal of the claims against these two, the plaintiffs must allege that they knew or reasonably should have known that the plaintiffs’ constitutional rights were being violated by their actions. Harlow v. Fitzgerald, 457 U.S. 800, 102 S.Ct. 2727, 73 L.Ed.2d 396 (1982). See also Davis v. Sherer, — U.S. —, 104 S.Ct. 3012, 82 L.Ed.2d 139 (1984). (Defendant who otherwise passes the Harlow qualified immunity test regarding clearly settled constitutional law does not lose qualified immunity for violating clearly settled state law.)

In this case, the plaintiffs have not alleged that these two defendants knew or should have known that they were violating the plaintiffs’ rights. Therefore, Goff and Arbuthnot are protected by qualified immunity. The alleged violation of a state statute does not abrogate this immunity. Davis. Therefore, the motion of the defendants Goff and Arbuthnot to dismiss is granted.

Finally, the plaintiffs’ claim, against Mark Schmidt is based on allegations of conspiracy between Mr. Schmidt and the other defendants. The law requires that factual allegations supporting a claim of conspiracy under § 1983 be pleaded with particularity. Although a pro se complaint must be construed as liberally as possible, White v. Commissioner, 537 F.Supp. 679 (D.Colo.1982), mere eonclusory assertions are insufficient. In Sooner Products Co. v. McBride, 708 F.2d 510 (10th Cir.1983), the Tenth Circuit stated:

“When a plaintiff in a § 1983 action attempts to assert the necessary ‘state action’ by implicating state officials or judges in a conspiracy with private defendants, mere eonclusory allegations with no supporting factual averments are insufficient; the pleadings must specifically present facts tending to show agreement arid concerted action. Clulow v. Oklahoma, 700 F.2d 1291, 1303 (10th Cir.1983). The standard is even stricter where the state officials allegedly involved in the conspiracy are immune from suit, as are the state court judges here. Shaffer v. Cook, 634 F.2d 1259, 1260 (10th Cir.1980) (per curiam), cert, denied, 451 U.S. 984, 101 S.Ct. 2316, 68 L.Ed.2d 840 (1981); Norton v. Liddel, 620 F.2d 1375, 1380 (10th Cir.1980)” Id. at 512

Plaintiffs’ complaint does not satisfy this standard. All claims against the defendant Schmidt therefore shall be dismissed.

Accordingly, it is ordered that the complaint and action as against Judge John C. Statler, Sheriff Willard Goff, and Under-sheriff John Arbuthnot are dismissed with prejudice. The complaint and action as against the defendant Mark Schmidt are dismissed without prejudice.


author: FEIKENS, Chief Judge.

text:
    DUANE SMELSER ROOFING COMPANY, Plaintiff, v. ARMM CONSULTANTS, INC., Defendant.
    No. 83-CV-0496-DT.
    United States District Court, E.D. Michigan, S.D.
    May 28, 1985.
    Samuel W. Barr, Troy, Mich., for plaintiff.
    Stephen M. Losh, Farmington Hills, Mich., for defendant.
   OPINION AND ORDER

FEIKENS, Chief Judge.

Defendant Armm Consultants, Inc. (“defendant”), moves for sanctions to be imposed against plaintiff Smelser Roofing Company (“plaintiff”) pursuant to Rule 11 of the Federal Rules of Civil Procedure. Defendant’s position is that plaintiff’s claim against it had no foundation in law and, accordingly, plaintiff’s counsel did not sign the pleadings in good faith.

The facts of this case can be stated briefly. This action was brought by plaintiff, a subcontractor hired to construct the roof of a building owned by Aetna Life & Casualty Company (“Aetna”). Defendant, an expert consultant, inspector and roofing engineer, contracted with Aetna to inspect the roof construction and report to Aetna on the quality of plaintiff’s work. Plaintiff alleged in its complaint that it was not paid because defendant made a negative report about the quality of plaintiff’s work. Plaintiff sought recovery from defendant based on an alleged breach of defendant’s contract with Aetna and the negligent performance of a duty owed to plaintiff. On May 4, 1983, I held that plaintiff had no cause of action against defendant and granted defendant’s motion for summary judgment. This decision was affirmed by the United States Court of Appeals for the Sixth Circuit on November 14, 1984.'

On January 15, 1985, defendant moved for sanctions against plaintiff’s attorney, arguing that this action was so frivolous that attorney fees and a fine should be charged against plaintiff and its attorney. Plaintiff responds by arguing that I have no jurisdiction to consider this motion. Plaintiff's view is that jurisdiction was lost when the case was appealed to the Court of Appeals and was never regained because the Court of Appeals decided the case and did not remand it.

The general rule governing a District Court’s continuing authority to act in a case after the filing of a notice of appeal was explained in United States v. Holloway, 740 F.2d 1373, 1382 (6th Cir.1984), cert, denied, — U.S. —, 105 S.Ct. 440, 83 L.Ed.2d 366 (1984): “It is well settled that the filing of the notice of appeal with the district court clerk deprives the district court of jurisdiction to act in matters involving the merits of the appeal.” See also Griggs v. Provident Consumer Discount Co., 459 U.S. 56, 58, 103 S.Ct. 400, 402, 74 L.Ed.2d 225 (1982) (per curiam); 9 MOORE’S FEDERAL PRACTICE j[ 203.11 (1985). Application of this rule is not always an easy matter. In some cases it is not altogether clear whether the motion before the District Court can be said to so involve the merits of the appeal that the District Court has no jurisdiction. In such cases, courts have tended to look to jurisprudential considerations to determine whether .the District Court may exercise jurisdiction. See, e.g., Masalosalo v. Stonewall Insurance Co., 718 F.2d 955, 956 (9th Cir.1983).

The motion now before me indisputably bears a strong relation to the merits of the appeal: the very basis for defendant’s motion is that plaintiff’s legal position was meritless. Similarly, the issue on which this case was appealed to the Court of Appeals was the validity of plaintiff’s legal position. Hence, straightforward application of the general rule would lead to the conclusion that District Courts retain no jurisdiction to decide a motion seeking sanctions on the ground that plaintiff’s claim was meritless.

Although there are no cases precisely on point, there are a number of cases considering the analogous question of a District Court’s jurisdiction to award attorney fees after notice of appeal has been filed. Several of these cases hold that during the pendency of the appeal the District Court may consider a motion for attorney fees. Masalosalo v. Stonewall Insurance Co., 718 F.2d 955 (9th Cir.1983); Obin v. District No. 9, 651 F.2d 574 (8th Cir.1981). These decisions have been predicated on the desirability of avoiding piecemeal appeals and have emphasized that motions for fees should be resolved promptly by District Courts “so that any appeal by an aggrieved party from an allowance or disallowance of fees can be considered by this court together with any appeal taken from a final judgment on the merits.” Obin, 651 F.2d at 583. See also Masalosalo, 718 F.2d at 957.

These cases do not suggest, however, that a District Court may consider motions for fees in a case such as this, where the motion is brought almost two years after the District Court has decided the case and two months after the Court of Appeals has affirmed that decision. In these circumstances, the prudential reason for permitting District Court jurisdiction is absent. A decision by the District Court comes too late to permit consolidation of appeals; on the contrary, consideration of a motion at this late date might very well result in the fragmented appeals that the Obin and Masalosalo decisions sought to avoid.

This situation was considered by the United States Court of Appeals for the Seventh Circuit in Overnite Transportation Co. v. Chicago Industrial Tire Co., 697 F.2d 789 (7th Cir.1983). The Court held that the District Court had no jurisdiction to consider a motion for attorney fees after the Court of Appeals rendered its decision and docketed its mandate affirming dismissal of the action. The Court reasoned that the motion was “so inexorably bound to the underlying merits of the case that a party must bring a motion for fees and costs either before an appeal is perfected or during the pendency of the appeal on the merits.” 697 F.2d at 793. After the appeal was decided “no case or controversy ... existed between the litigants” and the District Court was without jurisdiction to rule on the. motion. 697 F.2d at 792.

The case before me has been decided by the Court of Appeals. In light of the general rule divesting District Courts of jurisdiction over issues involving the merits of an appeal, the prudential considerations that support adherence to this rule, and the decisions reached in analogous cases, I conclude that I have no jurisdiction to consider defendant’s motion. Accordingly, the motion for sanctions is hereby DENIED.

IT IS SO ORDERED.


author: CANNELLA, District Judge.

text:
    TRANS WORLD AIRLINES, INC., Plaintiff, v. Carl C. ICAHN, Aero Limited Partnership, Cardinal Investors Corp., Longview Investors Limited Partnership, Ocelot Associates Corporation, Heron Investors Plan, Inc., Icahn Acquisition Corp., Excalibur Partners, ACF Industries, Incorporated, I.C. Holding Company, Inc., Icahn Capital Corporation, and Icahn Holding Corporation, Defendants.
    No. 85 Civ. 3677 (JMC).
    United States District Court, S.D. New York.
    May 28, 1985.
    Skadden, Arps, Slate, Meagher & Flom, New York City (Robert E. Zimet, Marc B. Tucker, Jay B. Kasner, Margaret A. Enloe, New York City, of counsel), for plaintiff.
    Weil, Gotshal & Manges, New York City (Dennis J. Block, Irwin H. Warren, Sanford F. Remz, Stephen A. Radin, New York City, of counsel), for defendants.
   MEMORANDUM AND ORDER

CANNELLA, District Judge.

Plaintiffs motions for a temporary restraining order and a preliminary injunction are denied. Fed.R.Civ.P. 65(a), (b).

FACTS

On May 15, 1985, plaintiff, Trans World Airlines, Inc. [“TWA”], filed a complaint seeking injunctive relief and damages, charging defendants with violating section 13(d) of the Williams Act amendments to the Securities and Exchange Act of 1934 [the “Act”], 15 U.S.C. § 78m(d) [“Section 13(d)”]. TWA is a Delaware corporation with its principal places of business in New York City and St. Louis, Missouri. TWA common stock and securities are traded on the New York and Pacific Stock Exchanges and are registered pursuant to the Act, 15 U.S.C. § 181. This action arises out of the purchases, beginning in September 1984 and continuing until Monday, May 20, of approximately 25% of TWA common stock by defendants. Defendant Carl C. Icahn, is a resident of New York, a registered broker-dealer and a renowned master of the corporate takeover game. Icahn controls the defendant companies and partnerships [“Icahn Group” or “Group”]. The sole claim argued before the Court in connection with the instant motions is that defendants have continually failed to disclose their true motivations in purchasing TWA stock and the actions they intend to take if they gain control of the company.

Icahn’s attention first focused upon TWA in the summer of 1984 when he met with Sanford Rederer, an expert on the airlines business, to discuss a possible acquisition of Frontier Airlines. Although Icahn did not pursue Frontier Airlines, he and his associate, Alfred Kingsley, also discussed with Rederer the airlines business in general and TWA in particular as a potential target for a takeover. Rederer subsequently prepared for Icahn numerous reports on TWA which were transmitted via Kingsley. The reports discussed the operating costs, cash flow, asset value and flight operations of TWA. They also recommended strategies for increasing cash flow and cash value by disposal of assets or elimination of certain operations, the so-called “feeder lines”.

On October 28, 1984, Rederer indicated that he was “more convinced than ever that TWA would be worth much more than its current market value with management prepared to move decisively to rationalize the route system and convert certain of the physical assets to cash.” He went on to explain that by “selling $300 to $500 million worth of assets the company would improve its operating results markedly because those assets as deployed are generating net losses.” In his earlier “Preliminary Assessment of the Value of TWA,” Rederer indicated that he believed “that TWA could improve results measurably by eliminating its non-hub flying,” referring to those flights not operating through the airline’s St. Louis or New York City hubs. In the same report, Rederer recommended closing the Kansas City maintenance base, selling at least 25 and as many as 35 aircraft by scaling down flights, and selling airport facilities at O’Hare (Chicago), LaGuardia (New York), Philadelphia and Boston, “where TWA once had a major presence but never will again.”

The subsequent reports further develop the theme that TWA would be a valuable takeover target only if the operations were scaled down and/or substantial assets, of the company sold. Rederer also indicated that by following these steps the anticipated acquisition debt could be repaid within a year. Additionally, he discussed the potential of a leveraged buyout.

The reports recognized that TWA management was pursuing a different plan whereby the assets would be retained and operations expanded. Rederer’s most recent report is dated May 1985. Rederer was the only aviation analyst employed by Icahn during this period.

Beginning in September 1984, members of the Icahn Group began buying TWA common stock. The purchases continued through the winter and spring. By April 29, 1985, the Group had obtained 5% of TWA’s outstanding stock, thereby triggering the requirement of Section 13(d) that the Group file a Schedule 13D disclosing material information about themselves and their intentions. Defendants timely filed their original 13D on May 9, 1985.

During the preregistration period, Icahn clearly intended to pursue the Rederer plan in at least a general way. Icahn testified that he liked the plan because it permitted him to acquire an airline, an industry which he considered to be generally undervalued, without liquidating the entire company after acquisition. He claims he has never favored liquidation plans and that he does not want to have the image of a liquidator. In Icahn’s opinion, Rederer’s plan called for sale of a limited and unproductive part of TWA’s business, while permitting an increased cash flow following the reduction of assets and operations.

On May 3, following the April 29 triggering date, but prior to the Schedule 13D filing, Icahn met for the first time with TWA management. At the meeting, arranged by Drexel Burnham Lambert Inc., Icahn met with Carl E. Meyer, President and Chief Executive officer of TWA. Several associates, legal and financial advisors from each side were also present. Icahn made several suggestions for changes at TWA including the Rederer plan as well as a leveraged buyout. The TWA representatives strongly disputed the feasibility of the Rederer plan or the accrual of additional debt by the airline. Meyer indicated that TWA management had previously studied similar possibilities and rejected them.

On May 5, a second meeting took place, this time with Rederer present to defend his plan. In Icahn’s words, the TWA representatives “really tore the plan apart and I think did a pretty good job of [it].” Icahn claims that he then abandoned the Rederer plan.' The next day, Icahn spoke by telephone with a second aviation consultant, David Campbell. Campbell focused his analysis of TWA on the labor situation. He recommended the creation of a two-tier contract system similar to that used by American Airlines. The Campbell program would also require the layoff of 2000 employees, a 7% reduction of workforce, apparently through severance agreements. It would result in a 10% reduction in salaries, because of the introduction of the two-tier system. He did not recommend the sale of assets or the elimination of operations.

In his testimony before the Court, Icahn indicated that he did not think the Rederer plan was very different from the Campbell plan because both sought ways to increase the cash flow without fully liquidating the company. He suggested that Rederer also believed that if labor costs could be reduced the company should be expanded. Icahn claimed that he never really was fully committed to the Rederer plan because it required the elimination of operations, but he thought it was better than total liquidation. He preferred the Campbell plan because no operations would have to be shut down.

A third meeting just between Icahn and Meyer took place on May 7. Meyer and Icahn agree that the discussion continued to turn around possible plans for increasing cash flow and for a leveraged buyout. Meyer does not claim that Icahn persisted openly with his plan to sell assets or eliminate operations, but that such an intent could be inferred from Icahn’s resistance to TWA’s current plans for rapid expansion and purchase of new aircraft.

Icahn stated at the hearing that he does not necessarily oppose the TWA plan for expansion and purchase of airplanes, but believes that TWA could pursue the plan and still carry an additional $200 million of debt. He believes the acquisition debt can be funded either by TWA cash flow or additional debt or by ACF Industries Inc., [“ACF”], a member of the Icahn Group and previous takeover acquisition by Icahn. A final meeting between Icahn and Meyer took place on May 15, apparently similar in substance to the May 7 meeting. It was clear by this time that TWA management did not want Icahn to control TWA.

In addition to their original Schedule 13D, defendants have filed three amended schedules. The original May 9 schedule indicates that the Group’s purpose in acquiring stock was to take advantage of an undervalued company. They indicated that they had consulted with TWA management and intended to continue to do so. They disclosed that they had originally held the view that substantial funds could be derived from the elimination of domestic flights and the sale of airplanes, but had rejected the idea after discussions with management. They indicated that they might seek control by means including merger or acquisition of stock, by tender offer or other methods. The first amendment, filed on May 14, 1985, made no substantial changes relevant to this motion. The second amendment, filed on May 16, stated that Icahn had met with Meyer to discuss business combinations that would result in Icahn control and that the Icahn Group was actively exploring control “to protect our substantial equity interest” in light,of TWA management’s hostility to Icahn’s suggestions. They indicated that although they intended to pursue acquisition by means of tender offer, proxy, purchase of shares or otherwise, they did not guarantee that they would do so.

Before the third amendment was filed on May 23, Icahn announced, on May 21, a proposed cash merger whereby the Icahn Group would purchase all remaining outstanding shares of TWA at $18 per share. Icahn indicated that ACF and its affiliates would produce $400 million in cash of the $600 million required. He stated that he was so certain the other $200 million would be forthcoming that he promised TWA a two-year standstill if he could not raise it expeditiously. Icahn also indicated that the Group would not accept any offer by TWA to purchase the Group’s shares unless the same offer were made available to all shareholders, thus apparently ruling out a “greenmail” option. Finally, he announced the commencement of a consent procedure to remove the TWA Board of Directors in the event that the Board declined to put the cash merger proposal to a vote. He stated that the Group’s shares would be voted with the majority decision of the remaining shareholders in a cash merger vote.

The third Schedule 13D reflected these new proposals and also indicated that Icahn intended to operate TWA in its long term interest and that of its employees and the travelling public. He disclosed that if he acquired control, he intended to change the Board of Directors and review assets, operations, properties, policies and management. Icahn indicated that the Group had determined not, to eliminate domestic flights, sell assets or conduct a leveraged buyout, but that the sale of some assets might become necessary to pay back acquisition debt if the cash flow is insufficient.

The day after filing the complaint in this Court, TWA filed a complaint alleging state law violations in the Circuit Court of the County of St. Louis, Missouri. See Petition for Declaratory and Injunctive Relief, Cause No. 525256 (Cir.Ct.Mo.) (filed May 16, 1985). On that same day, TWA made an application to the United States Department of Transportation for an inquiry into Icahn’s fitness to operate an airline. A conference was held in this Court on Friday May 17, to arrange a discovery schedule. Pursuant to the schedule agreed upon by the parties, discovery was to be expedited and a preliminary injunction hearing held on June 6. Although defendants requested TWA to agree not to use this discovery in the Missouri action and to bring any motion in this Court first, plaintiff declined to make such a promise and indicated that no decision had been made as to any motion in the Missouri action.

On Monday May 20, however, plaintiff brought on a motion for temporary restraining order by order to show cause in St. Louis. Because defendants received notice too late for their New York attorneys to get to St. Louis for the hearing, they were represented by a St. Louis firm. After hearing argument, the St. Louis judge, the Hon. Bernhardt C. Drumm, Jr., indicated that he favored entering a limited restraining order but that he thought the state action more properly belonged as a pendent matter in the Southern District of New York. At this point, defendants offered to refrain from further purchases of stock and thus maintain the status quo until this Court had had a chance to rule on the motion. TWA agreed, and arrangements were made with this Court for a hearing on a motion- for a temporary restraining order the following morning, May 21.

At the May 21 hearing, defendants were ready to defend on state as well as federal claims, but plaintiff declined to raise the Missouri state law claims in this Court. Following brief argument, the Court and the parties had a discussion on the possibility of further expediting discovery and moving up the June 6 hearing date. The St. Louis agreement was accordingly extended pending an evidentiary, hearing on the preliminary injunction motion to be held on Friday, May 24, and the Court reserved decision on the temporary restraining order. See Order, 85 Civ. 3677 (JMC) (S.D. N.Y. May 21, 1985). It was revealed for the first time at the May 21 hearing that Icahn had offered to pay for a cash merger at $18 a share. There was no discussion at that time as to whether the offer was a breach of the St. Louis agreement. The Court ordered defendants to file an amended Schedule 13D to reflect the cash merger offer.

On the afternoon of May 21, the parties reappeared before the Court to discuss the full scope of the now public announcement by Icahn of the cash merger proposal and consent procedure. The Court found that there was no violation of the St. Louis agreement. It also declined to enter a temporary restraining order precluding defendants from pursuing the consent procedure, without prejudice to renewal of the motion at the May 24 hearing or thereafter, if any issue had developed as to the propriety of the consent procedure.

On May 24, the preliminary injunction hearing was held. Icahn and Meyer both testified, and numerous documents including the Rederer reports were entered into evidence. TWA raised only one core issue at the hearing and in its papers: whether defendants had improperly failed to disclose that their actual and present intent .includes a plan to sell substantial TWA assets and/or eliminate domestic operations. After the close of the hearing, TWA raised a new argument: that Icahn had improperly failed to disclose his intent to remove Meyer as President of TWA. The Court then announced that it would reserve decision on the motions and would issue its written decision by 11:00 a.m. on Tuesday, May 28, the next business day following the Memorial Day weekend.

DISCUSSION

To obtain injunctive relief plaintiff must establish irreparable harm and either (1) a likelihood of success on the merits or (2) sufficiently serious questions going to the merits to make them a fair ground for litigation and a balance of hardships tipping decidedly in its favor. See 754 Orange Ave., Inc. v. City of West Haven, Connecticut, 761 F.2d 105, 110 & n. 2 (2d Cir.1985); Jackson Dairy, Inc. v. H.P. Hood & Sons, Inc., 596 F.2d 70, 72 (2d Cir.1979) (per curiam); Crown Zellerbach Corp. v. Goldsmith, et al., 609 F.Supp. 187, 188-189 (S.D.N.Y.1985). In determining whether there will result irreparable harm in the absence of injunctive relief requested, the Court must examine the adequacy of the legal remedies. See Beacon Theatres, Inc. v. Westover, 359 U.S. 500, 506-07, 79 S.Ct. 948, 954-55, 3 L.Ed.2d 988 (1959). Additionally, in an action based upon an alleged violation of Section 13(d), the focus is on harm to the shareholders and investing public, not management, because the “purpose of the Williams Act is to insure that public shareholders who are confronted by a cash tender offer for their stock will not be required to respond without adequate information regarding the qualifications and intentions of the offering party.” Rondeau v. Mosinee Paper Corp., 422 U.S. 49, 58, 95 S.Ct. 2069, 2075, 45 L.Ed.2d 12 (1975). Courts have held that a continuing failure to disclose material information on a Schedule 13D will result in irreparable harm because it precludes the shareholders from obtaining “important and legally required information as to the acquiring group’s intentions which may affect their judgment as to whether the stock should be sold, bought, or held.” Marshall Field & Co. v. Icahn, 537 F.Supp. 413, 416 (S.D.N.Y.1982); see also Kaufman and Broad, Inc. v. Belzberg, 522 F.Supp. 35, 46 (S.D.N.Y.1981). Any prior inadequate disclosure subsequently corrected will not give rise to irreparable harm, however, because an adequate remedy exists at law. See Rondeau, 422 U.S. at 59, 95 S.Ct. at 2076; Belzberg, 522 F.Supp. at 45.

Accordingly, the question before the Court is whether there is any continuing violation of Section 13(d). Among the purposes that must be disclosed pursuant to Section 13(d), are “(c) A sale or transfer of a material amount of assets of the issuer ...; (d) Any change in the present board of directors or management of the issuer ...; (f) Any other material change in the issuer’s business or corporate structure ....” 17 C.F.R. § 240.13d-101 (1984); see GAF Corp. v. Milstein, 453 F.2d 709, 717 (2d Cir.1971), cert, denied, 406 U.S. 910, 92 S.Ct. 1610, 31 L.Ed.2d 821 (1972). There is little question that if Icahn intends to sell material assets of TWA or dispense with domestic flights, he is required to so state in his Schedule 13D.

In his most recent 13D, Icahn states that defendants had “previously considered the possibility of eliminating some of [TWA’s] domestic flights and selling certain planes; however, the [defendants] have been advised by [TWA’s] management, and believe, as previously reported in this Schedule 13D, that such a strategy would not be feasible.” They warn, however, that if TWA’s earnings and cash flow are insufficient to pay any debt incurred in acquisition, they “would explore alternative financing sources, including the possible sale of assets of [TWA].”

Icahn has, therefore, expressly disavowed any fixed plan to sell assets or eliminate operations. He has, however, disclosed the possibility that certain assets might be sold if necessary to repay acquisition debt. The factual issue before the Court then is whether, despite his denial, Icahn in fact maintains the intent to sell substantial assets or dispose of local operations without regard to the availability of other sources of cash or debt for repayment of acquisition costs.

It is readily apparent from the evidence before the Court that Icahn came into the TWA gambit entertaining as a primary plan the sale of assets and discontinuance of domestic flights. Rederer’s numerous reports, as well as the testimony of both Icahn and Meyer, make it clear that Rederer’s plan was foremost in Icahn’s mind at least until May 5. Icahn states that he gave up the plan after the May 5 meeting and felt even more convinced of its inadequacy after speaking with Campbell. Plaintiff argues that it is incredible that Icahn would so quickly discard the voluminous reports of his own consultant upon the word of TWA management, for whom Icahn seems to have little respect and whom Fortune Magazine recently credited with managing the third least admired major corporation in America. Plaintiff also argues that it is unlikely that, after spending only two hours on the phone with Campbell, Icahn would rely upon his statements, many of which Icahn had not confirmed by the time the third Schedule 13D amendment was filed. Finally, plaintiff argues that Icahn’s prior record of raiding corporate assets after acquisition, as well as his prior brushes with securities law violations, impeaches his credibility. Meyer does not claim, however, that Icahn discussed the Rederer plan at the last two meetings.

The Court has reviewed the record and listened to the testimony and finds Icahn to be credible. It is not unreasonable for him to have changed his mind after having his consultant’s report heavily criticized by the people who had been running TWA in recent years and who had, themselves, had a similar report made recently, which indicated that to sell off planes and discontinue routes would be disasterous for the company. That Icahn may replace some of the existing management with his own choices does not mean that he has no respect for any of their decisions or opinions. Moreover, the nature of the fast moving takeover battle requires quick and semi-intuitive decisions. As Icahn testified, he often operates by seat of the pants instinct in these situations. Thus to make a decision based in part upon an essentially unsubstantiated oral report by Campbell is not an impossibility. Nor can the Court infer from his past conduct that Icahn has a particular pattern or gameplan that necessarily or even most likely implicates the sale of major assets or a “greenmail” attempt. Evidence that Icahn may have sold substantial assets or divisions of previously acquired companies on two occasions is some evidence of his current intent. It does not overcome, however, the explicit and public statements made repeatedly by Icahn in his Schedule 13D, on the stand, in the press, and in recent letters to Senator John C. Danforth, Chairman of the Senate Committee on Commerce, Science and Transportation, and Congressman James J. Howard, Chairman of the House Committee on Public Works and Transportation. The Court finds it unlikely that such a skilled businessman would make such public announcements concerning a corporation with such a visible profile if he did not intend to carry out his stated plans. At this time, the Court is not convinced by the highly attenuated circumstantial inferences TWA puts forth.

TWA’s most recent argument is that Icahn, having disclosed in his testimony that he may replace Meyer as President, must also disclose this plan on his Schedule 13D. There is of course authority, aside from the plain wording of Section 13D, that disclosure of plans to replace management must be disclosed. See Gulf & Western Indus., Inc., v. Great A. & P. Tea Co., 476 F.2d 687, 696-97 (2d Cir.1973).

Icahn, as noted above, has disclosed that he intends to remove the Board of Directors, of which Meyer is a member, and to review the management of the company if he gains control. The Court is mindful of the Second Circuit’s recommendation that the evaluation of adequate disclosure not be turned into an exercise of judicial “nit-picking”. Kennecott Copper Corp. v. Curtiss-Wright Corp., 584 F.2d 1195, 1200 (2d Cir.1978) (discussing adequacy of proxy disclosure); see Pantry Pride, Inc. v. Rooney, 598 F.Supp. 891, 901 (S.D.N.Y.1984). Here, Icahn has disclosed his intent to review management and to remove Meyer as a Board member. To require him to file an additional 13D to disclose that he may replace one member of management and is considering others is premature. The Court, of course, would expect that if Icahn comes to any more firm decisions on this subject, and particularly if he intends to make wholesale changes in management, he will file an amended 13D expeditiously.

Accordingly, the Court finds that there is no material violation of Section 13D that is ongoing at this time. It makes no decision with respect to any prior violations, currently corrected, because any such violations would be adequately remedied in an action for damages. Because plaintiff has failed to show probable success on the merits of any continuing violation, or even serious questions going to the merits of such a claim, there is no irreparable harm and no injunction may issue.

CONCLUSION

Plaintiff’s motions for a temporary restraining order and a preliminary injunction are denied. Fed.R.Civ.P. 65(a), (b).

SO ORDERED.

      . Plaintiff's Exhibit ["PX”] 2, Letter from Sanford Rederer to Alfred D. Kingsley at 2 (dated Oct. 28, 1984).

      . Id.

      . PX 1 at 8. This document is undated and unsigned. Icahn indicated at the hearing that it was submitted by Rederer.

      . See id. at 9.

      . See PX 5, Letter from Rederer to Kingsley at 2 (dated Nov. 30, 1984). See also PX 11, Letter from Rederer to Kingsley at 1 (dated Apr. 11, 1985) (indicating that TWA "may be considering development of a second domestic hub and are also seeking to expand their transatlantic services through gateways other than New York____ They probably are planning for Spring 1986 expansion, so that it would be important to gain control of the company before those plans are turned into significant cash outlays.”).

      . Transcript of May 24 Hearing at 60.

      . Icahn testified that his impression was that TWA management was opposed to the Group's proposals. See id. at 58-59, 64-66, 85. Shortly thereafter, this impression was borne out by the lawsuits and administrative action filed, as well as a full page advertisement in the New York Times criticizing Icahn and his fitness to run TWA. An Open Letter to Carl Icahn, N.Y. Times, May 20, 1985 at D4.

      . The Court notes that the recent ruling in Unocal Corp. v. Mesa Petroleum Co., 493 A.2d 946 (Del.1985) (business judgment rule gives wide latitude to corporate directors), suggests that TWA, at least under Delaware law, would be able to exclude the Icahn Group's shares from a securities exchange offer to the remaining shareholders through a form of reverse greenmail.

      . Amendment No. 3 to Schedule 13D at 16.

      . Id.

      . Defendants’ Exhibit [‘‘DX’’] B, FORTUNE MAGAZINE, At the Top and Bottom of the 250 Companies, Jan. 7, 1985, at 19.

      . Plaintiff claims that of all Icahn’s prior takeover attempts, only two have resulted in actual takeovers — ACF and Baird & Warner Mortgage Realty Investors. It is claimed that in each of these cases Icahn subsequently sold off substantial assets of the corporation to further his investment goals.

      . See DX A (dated May 22, 1985) ("Please rest assured — despite the publicity campaign that has been mounted against me — that I am fully committed to the long term interests of TWA. I personally believe that the airline industry will continue to grow and that a well managed TWA could turn around and become the leader in this deregulated environment. Thus, it is my intention to cause the airline to be operated on an on-going basis by experienced and competent managers. I have absolutely no plans or intentions to liquidate TWA's business or its fleet of planes or to cause widespread layoffs or to curtail its routes or its St. Louis or Kansas City facilities. You might find it ironic that protection is being sought from Congress and the Administration by TWA’s current management, which in the last five years has shrunk the size of the airline and reduced its workforce by 12,000 people (about 30%).”).