author: COHEN, Senior District Judge:

text:
    CESSNA AIRCRAFT COMPANY, Plaintiff, v. FIDELITY AND CASUALTY COMPANY OF NEW YORK and Certain Underwriters at Lloyd’s, London, and Certain British Companies, Defendants. FIDELITY AND CASUALTY COMPANY OF NEW YORK and Certain Companies and Underwriters at Lloyd’s of London, Plaintiffs, v. CESSNA AIRCRAFT COMPANY, Defendant.
    Civ. A. Nos. 85-0063, 84-4614.
    United States District Court, D. New Jersey.
    Aug. 26, 1985.

      Tompkins, McGuire & Wachenfeld by William B. McGuire (argued), Lorraine M. Armenti (on brief), Newark, N.J., for Cessna Aircraft Co.
    McCarter & English by Eugene M. Haring (argued), Beverly R. Tanenhaus, Newark, N.J., and Engstrom, Lipscomb & Lack by Paul W. Engstrom, admitted pro hac vice (argued), Los Angeles, Cal., for Fidelity and Cas. Co. of New York and Certain Companies and Underwriters at Lloyd’s of London.
   OPINION

COHEN, Senior District Judge:

I. INTRODUCTION

On June 8, 1984 a unanimous jury returned a verdict in favor of the plaintiffs in three consolidated personal injury, wrongful death/or product liability cases; namely, Joseph E. Guarnere v. Shirley Harper, et al, Civil Action No. 80-3285, Thomas Cannuli v. Cessna Aircraft Company, Civil Action No. 81-2209, and Shirley Harper v. Cessna Aircraft Company, Civil Action No. 82-1052. The verdict awarded both compensatory and punitive damages in favor of all three plaintiffs and against Cessna Aircraft Company (hereinafter Cessna). The award of compensatory damages totaled $4,300,000, while punitive damages totaled $25,000,000. Shortly thereafter, Cessna filed motions with this Court seeking, alternatively, a new trial, judgment notwithstanding the verdict or a remittitur. At the request of all parties, and to facilitate a non-litigious conclusion of the matter, this Court postponed its adjudication of Cessna’s motions on numerous occasions. Finally, in February, 1985, the parties to the consolidated actions reached a settlement whereby the plaintiffs agreed to accept approximately $13 million in return for the withdrawal of Cessna’s motions and an agreement not to appeal.

Underlying the negotiations between the individual plaintiffs and Cessna were discussions between Cessna and its insurers, Fidelity and Casualty Company of New York (hereinafter Fidelity) and Certain Underwriters at Lloyd’s, London, and certain British Companies (hereinafter Lloyd’s), relating to the payment of the damage award and, more importantly, the ultimate liability for the award of punitive damages. The actions presently before this Court are the outgrowth of a dispute between Cessna and its insurers on the issues of the insurability against punitive damage awards and the coverage provided by the insurance contracts herein at issue.

Prior to any consideration of the ultimate issues, we must determine whether these two actions should be adjudicated in Federal court, State court, or both. On November 13, 1984, Fidelity and Lloyd’s filed a declaratory judgment action in this Court seeking a determination of their obligation to pay punitive damages (hereinafter the Federal court action). Before filing its Answer to the Fidelity and Lloyd’s Complaint, Cessna, on December 3, 1984, filed an essentially identical declaratory judgment action in the Law Division of New Jersey Superior Court, Essex County (hereinafter the State court action). On January 4, 1985, the State Court action was removed to this Court on the petition of Fidelity and Lloyd’s. In the interim, on December 27, 1984, Cessna filed its Answer in the Federal court action. Thus, we currently have two actions before us involving identical parties as well as identical issues of fact and law.

Fidelity and Lloyd’s maintain that the State court amounts to a compulsory counterclaim to the Federal court action and is duplicative of that previously filed action. As such, they maintain that the State court action should be dismissed. Cessna, on the other hand, urges that the State court action was improperly removed to this Court. In support of its contentions, it relies upon a “Service of Suit” or forum selection clause, which is contained in the Lloyd’s policies and which states, in effect, that Lloyd’s agrees to submit to the jurisdiction of any court within the United States when a dispute arises as to the payment of sums alleged to be due under the policy . By its motion, Cessna seeks the remand of the State court action and the dismissal, or stay, of the Federal court action. We shall first address Cessna’s motion for remand.

II. CESSNA’S MOTION TO REMAND THE STATE COURT ACTION

A. Prior to addressing the merits of Cessna’s motion, we must determine the applicability of the forum selection clause contained in its agreement with Lloyd’s. Service of suit clauses, or forum selection clauses as they are commonly known, have been held to be enforceable for a number of years. In the case of The Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 92 S.Ct. 1907, 32 L.Ed.2d 513 (1972), the Supreme Court held that a forum selection clause should be controlling “absent a strong showing that it should be set aside.” Id. at 15, 92 S.Ct. at 1916. The Court, thus, placed the burden upon the party challenging the clause to “show that enforcement would be unreasonable and unjust, or that the clause was invalid for such reasons as fraud or overreaching.” Id. In the instant case, Lloyd’s does not actually challenge the general enforceability of forum selection clauses. Rather, it maintains that the clause is inapplicable under the present circumstances.

First, Lloyd’s urges that the clause does not forbid the institution of suit by the insurer prior to any action being taken by the insured. Assuming, arguendo, that this is true, Lloyd’s has not challenged Cessna’s concurrent ability to bring suit as well. The issue remains, therefore, what to do with these two actions now that they exist.

Second, Lloyd’s maintains that the clause has no applicability to a declaratory judgment action seeking a judicial determination of rights and responsibilities under a contract. In making this second argument, Lloyd’s urges that, at most, its only obligation under the contract is to pay the sums in dispute and, since it has done so, this action falls outside the ambit of the clause. Lloyd’s interpretation of this clause, however, is unreasonably narrow. It is uncontested that Lloyd’s payment in settlement of the underlying consolidated cases was a conditional payment, which was made for legitimate tactical, as well as economic, reasons. Although there has been a conditional payment of the amount owed, this cannot alter the fact that Lloyd’s continues to dispute its legal obligation to pay.

The cases cited by Lloyd’s in its attempt to remove this clause from consideration are unpersuasive in light of our view that Lloyd’s has not, within the meaning of the clause, paid the amounts due under the policy. A policy containing a clause stating, for example, that any dispute arising hereunder would be litigated in the forum selected by the insured, would likely have obviated the need for the instant action. See e.g. The Bremen, 407 U.S. at 2; Richardson Greenshields Sec., Inc. v. Metz, 566 F.Supp. 131 (S.D.N.Y. 1983); Air Economy Corp. v. Aero-Flow Dynamics, Inc., 122 N.J.Super. 456, 300 A.2d 856 (App.Div.1973). However, the lack of such clarity, in these circumstances, is not dispositive. Because we interpret this dispute as one concerning a “failure to pay,” we find the Lloyd’s service of suit clause to be applicable. We turn now to the merits of Cessna’s remand motion.

B. Language identical to that in issue here has consistently been held to constitute a waiver, by the insurer, of its right to remove an action from state court to federal court. See Capital Bank and Trust Co. v. Associated International Co., 576 F.Supp. 1522 (M.D.La.1984); Lavan Petroleum Co. v. Underwriters at Lloyd’s, 334 F.Supp. 1069 (S.D.N.Y.1971); Perini Corporation v. Orion Insurance Co., 331 F.Supp. 453 (E.D.Cal.1971); Oil Well Service Co. v. Underwriters at Lloyd’s London, 302 F.Supp. 384 (C.D.Cal.1969); Euzzino v. London & Edinburgh Insurance Co., 228 F.Supp. 431 (N.D.Ill., E.D.1964). In Euzzino, the various references in the clause to “such court” and the insurer’s agreement to comply “with all requirements necessary to give such Court jurisdiction,” were interpreted as a waiver of the right of removal. Euzzino, 228 F.Supp. at 433. The identical language is present in the clause herein at issue and compels the identical result. By inserting the forum selection clause in its agreement with Cessna, Lloyd’s effectively waived its right to remove any subsequent dispute under the contract to Federal court. Thus, we shall grant Cessna’s motion for remand of the State court action.

III. CESSNA’S MOTION TO DISMISS OR STAY THE FEDERAL COURT ACTION

With the remand of the State court action, we now have identical actions continuing along parallel paths to adjudication. The issue before us, then, is whether the Federal court action should be halted in order to allow the State court to reach its determination first. For reasons which are explained below, we believe that it should.

[T]he power to stay proceedings is incidental to the power inherent in every court to control the disposition of the causes on its docket with economy of time and effort for itself, for counsel, and for litigants. How this can best be done calls for the exercise of judgment, which must weigh competing interests and maintain an even balance.

Landis v. North American Co., 299 U.S. 248, 254-55, 57 S.Ct. 163, 165-66, 81 L.Ed. 153 (1936).

A determination to stay a particular proceeding on the Court’s docket is an issue committed to the sound discretion of the trial court. See Gold v. Johns-Manville Sales Corp., 723 F.2d 1068, 1077 (3d Cir. 1983).

Our determination to stay the Federal court action is premised on two grounds. First, we recognize that Lloyd’s has waived its right to remove Cessna’s action from State court. Since that action will now be remanded, our ability to further the goals of judicial economy, through the issuance of a stay, is significantly diminished. The Anti-Injunction Act, 28 U.S.C. § 2283, provides only three exceptions to the general rule that a federal court may not enjoin a state court proceeding. See Bonser v. State of New Jersey, 605 F.Supp. 1227, 1230 (D.N.J.1985). None seems applicable here. Thus, absent settlement, the State court action is likely to go to judgment.

Second, and most important, is the fact that the issues in the declaratory judgment actions are clearly ones of state law and public policy. Although this Court, and any federal court, is well equipped to consider and rule on state law and policy issues, the primary issue involved here—the insurability against punitive damage awards—is one which has yet to be addressed by New Jersey’s highest court. Given the fact that this issue is addressed squarely by these cases, and that it is expected to be resolved rapidly through the use of summary judgment motions, we see no detriment to Fidelity and Lloyd’s by staying the Federal court action. Furthermore, we see no true benefit to them in having this Court, and the Third Circuit, opine on an issue of state law when an action has been filed, pursuant to a contractual agreement, in state court. Moreover, should it become evident that a national policy is needed with regard to this issue, we believe that it is up to the Legislative branch to act first.

We note that it has not as yet been determined that the law of New Jersey will apply in this case. It is clear, however, that New Jersey’s choice-of-law provisions will supply the means of making that determination. See Klaxon Company v. Stentor Electric Manufacturing Co., 313 U.S. 487, 61 S.Ct. 1020, 85 L.Ed. 1477 (1940). New Jersey’s choice-of-law rule regarding liability insurance contracts is as follows:

[T]he law of the place of the contract will govern the determination of the rights and liabilities of the parties under the insurance policy. This rule is to be applied unless the dominant and significant relationship of another state to the parties and the underlying issue dictates that this basic rule should yield.

State Farm Mutual Automobile Insurance Co. v. Estate of Simmons, 84 N.J. 28, 37, 417 A.2d 488 (1980) (emphasis added).

Although it appears that New Jersey may not be the place of the contract, we note without deciding, that, in the circumstances here, it would be unreasonable to presume that New Jersey has no significant, and perhaps dominant, relationship with this case. The aviation accident which gave rise to this dispute occurred in New Jersey and caused the deaths of two New Jersey residents and the severe injury of a third. In addition, a jury made up of New Jersey residents found Cessna’s actions to be so outrageous that they warranted the award of punitive damages in the staggering sum of $25 million.

For the reasons heretofore stated, we shall grant Cessna’s motion for remand, deny Fidelity and Lloyd’s motion to dismiss, and stay any further consideration of the Federal Court action pending the outcome of the State court action. An appropriate order shall be issued by the Court.

      . In pertinent part, the language of the clause is as follows:
      SERVICE OF SUIT CLAUSE (U.S.A.)

        (Approved by Lloyd’s Underwriters’ Non-Marine Association)
      It is agreed that in the event of the failure of Underwriters [i.e. Lloyd’s] hereon to pay any amount to be due hereunder, [Lloyd’s] hereon, at the request of the insured (or reinsured), will submit to the jurisdiction of any Court of competent jurisdiction within the United States and will comply with all requirements necessary to give such Court jurisdiction and all matters arising hereunder shall be determined in accordance with the law and practice of such Court.
      It is further agreed that ... [Lloyd’s] will abide by the final decision of such Court or of any Appellate Courts in the event of an appeal.

      . Because only the Lloyd’s policies contain the clause herein at issue, this section of the Court’s opinion shall refer solely to Lloyd’s.

      . Prior to the post-judgment settlement of the underlying cases, Cessna and its insurers were becoming subject to thousands of dollars per day in post judgment interest. In order to limit their exposure to these potentially staggering sums, Cessna and its insurers agreed to act together in settling with plaintiffs, with the proviso that their disagreement with respect to punitive damages would be litigated at a later date. Apparently, Cessna agreed that should it ultimately be found responsible for the payment of punitive damages, it would reimburse its insurers.

      . Although the clause herein at issue is present only in the Lloyd's policies, we find that judicial economy, and the parties’ interests are best served by a remand of the entire State court action rather than merely those claims which are asserted against Lloyd’s. In making this finding, we note that Lloyd’s is responsible for 65% of any amounts due under these policies. In addition, the parties have all referred to, and apparently considered, Fidelity and Lloyd’s as one entity for purposes of this litigation. Indeed, they are each represented by the same counsel.
      In light of our determination to remand the entire State court action, we shall deny the motion to dismiss made on behalf of Fidelity and Lloyd’s.

      . The Anti-Injunction Act provides:
      A court of the United States may not grant an injunction to stay proceedings in a State court except as expressly authorized by Act of Congress, or where necessary in aid of its jurisdiction, or to protect or effectuate its judgment. 28 U.S.C.A. § 2283 (1978).


source: Caselaw Access Project

license: Public Domain

text:
    UNITED STATES of America, v. Robert SKALSKY, Defendant.
    Crim. No. 85-121.
    United States District Court, D. New Jersey.
    Aug. 26, 1985.

      United States Department of Justice by George E. Wilson, Sp. Atty., Camden, N.J., for U.S.
    Wolf, Block, Schorr and Solis-Cohen by Gregory T. Magarity (argued), Nancy D’Mara Ezold (on brief), Andrew A. Chirls (on brief), Philadelphia, Pa., for defendant.
   OPINION

COHEN, Senior District Judge:

On April 10, 1985 the Grand Jury returned a three count indictment against the defendant, Robert Skalsky, charging him with willfully and knowingly attempting to evade and defeat payment of income taxes for the calendar years 1978 (Count I), 1979 (Count II) and 1961 through 1964 (Count III). See 26 U.S.C. § 7201; 18 U.S.C. § 2. Currently, there are two motions before this Court which are being made on behalf of the defendant: the first, to dismiss the indictment; the second, to compel disclosure of Grand Jury materials. After a thorough evaluation of the facts and applicable law, and for the reasons which follow, we shall deny the defendant’s motion to compel disclosure of Grand Jury materials and reserve decision on his motion to dismiss, pending an evidentiary hearing which shall be described below.

INTRODUCTION

In early 1980, the defendant was notified that the government sought information from him concerning the business affairs of one Emmanuel Gambino (hereinafter Gambino) who, at that time, was under investigation for income tax evasion. Prior to submitting himself for the government’s questioning, the defendant, through his attorney at that time, Michael K. Simon, Esquire, who is also the defendant’s son-in-law, entered into an agreement with the government’s attorney, George E. Wilson, Esquire. The legal interpretation of this agreement is the initial issue for our consideration.

Upon execution of the aforementioned agreement, the defendant was interviewed by two IRS Special Agents prior to his appearance before the Grand Jury. Subsequent to these appearances, the government, through Wilson, determined that the defendant had lied to the Grand Jury and had omitted certain material information from his statement to the Special Agents. As a result of these determinations, defendant’s counsel was notified on July 10, 1981 that the earlier agreement would no longer be given any force and effect.

In addition to the above communications to Mr. Simon, the defendant himself became aware, subsequent to July, 1981, that he had become a target of the investigation. Thereafter, on October 6, 1981, the defendant again appeared before a Grand Jury. At this appearance, however, he asserted his Fifth Amendment privilege against self-incrimination on two occasions. This series of contacts between the defendant, his counsel and the government culminated in the filing of the instant indictment.

DISMISSAL OF THE INDICTMENT

Prior to addressing the issue of interpretation of the agreement between the government and this defendant, we note that generally, contractual agreements by which defendants are granted some measure of immunity are binding and enforceable. See United States v. Quatermain, 613 F.2d 38, 41 (3d Cir.1980); United States v. Deerfield Specialty Papers, Inc., 501 F.Supp. 796, 800 n. 3 (E.D.Pa.1980). Thus, we recognize, as do the parties, that grants of immunity by judicial decree, pursuant to 18 U.S.C. §§ 6001-6003, are not the only methods of acquiring a witness’ testimony.

Having determined that the government can confer immunity by agreement, defendant now urges that the agreement at issue conferred upon him the most extensive immunity possible: namely, “transactional” immunity. An agreement of this type would place an absolute bar on prosecution “for the offense to which the compelled testimony relates.” Kastigar v. United States, 406 U.S. 441, 453, 92 S.Ct. 1653, 1661, 32 L.Ed.2d 212 (1972). However, the very first sentence of the agreement, “On the understandings specified below, the United States will not prosecute Mr. Skalsky for potential charges based upon information supplied to this office by him,” contradicts defendant’s interpretation. By referencing the agreement to information supplied by the defendant, the government has, at the very most, granted him use and derivative use immunity. Transactional immunity, despite defendant’s arguments, which are based on his own carefully edited version of the agreement, was not provided.

As an alternate position, the defendant urges that the agreement must be interpreted to protect him with use and derivative use immunity similar to that which is judicially sanctioned in 18 U.S.C. § 6002 and discussed in Kastigar, supra. In response, the government maintains that it merely entered into an agreement not to prosecute the defendant provided he complied with its terms. At first glance, it would appear that the parties’ positions are indistinguishable. In essence, a grant of immunity from prosecution bears a striking resemblance to an agreement not to prosecute. However, considering both their upside and down-side risks, it is apparent that these two means of inducing testimony differ significantly. Although the up-side risk to the potential defendant (i.e. non-prosecution) is virtually identical in each instance, the down-side risk (i.e. prosecution) differs substantially dependent upon whether a defendant testifies pursuant to an agreement or a grant of judicial immunity.

If a defendant is prosecuted following a grant of use and derivative use immunity, the government must establish, by clear and convincing evidence, see United States v. Smith, 580 F.Supp. 1418, 1422 (D.N.J.1984), that the evidence it uses to prosecute is derived from legitimate sources independent of the immunized testimony. Kastigar, 406 U.S. at 461, 92 S.Ct. at 1665. Any direct use of the defendant’s compelled statements can come only in a prosecution for perjury or similar crimes. Cf. 18 U.S.C. § 6002; United States v. Frumento, 552 F.2d 534 (3d Cir.1977) (prosecution subsequent to a judicial grant of immunity).

On the other hand, a defendant who breaches an agreement not to prosecute subjects himself to prosecution for substantive offenses which were the topic of his statements. See Deerfield Papers, 501 F.Supp. at 800 n. 3. In effect, the government may make use of his statements and any information it is able to derive therefrom. Id. See also United States v. Stirling, 571 F.2d 708, 732 (2d Cir.), cert. denied, 439 U.S. 824, 99 S.Ct. 93, 58 L.Ed.2d 116 (1978).

In the instant case, the unambiguous language of the agreement compels our decision. The government simply entered into a contract with the defendant whereby it agreed not to prosecute him and he agreed to “at all times give complete, truthful and accurate information and testimony.” (emphasis added). Importantly, the agreement went further and informed the defendant of the consequences facing him in the event he failed to live up to the agreement:

Should it be judged by this office that Mr. Skalsky has given false, incomplete or misleading testimony of [sic] information, or has otherwise violated any provision of this agreement, this agreement shall null and void and he shall thereafter be subject to prosecution in this and any other prosecuting office for any federal criminal violation of which this office has knowledge, including, but not limited to, perjury and obstruction of justice. Any such prosecutions may be premised upon any information provided by Mr. Skalsky and such information may be used against him.

(emphasis added). We note that the defendant, an apparently successful businessman, entered into this agreement willingly and with the advice of counsel. Cf. United States v. Quatermain, 467 F.Supp. 782, 788 (E.D.Pa.1979) (in interpreting agreement, District Court had been concerned with the fact that defendant was not represented by counsel at the time the agreement was executed). In fact, the government maintains that the defendant’s attorney caused certain additions to be made to the agreement. (Government brief at 6). In light of these factors, we hold that defendant willingly and with the advice and consent and participation of counsel, entered into a contract with the government which, if breached, would expose him to prosecution by the instant indictment. See Stirling, 571 F.2d at 732.

Our holding that the government merely agreed not to prosecute the defendant does not end our inquiry. We must now determine whether this agreement was breached by defendant and, if it was, whether that breach was material. The government alleges that defendant breached the agreement on at least the following four occasions. First, when he testified before the Grand Jury in April, 1980, he stated that he had reported, on his 1977 tax return, his portion of a $15,000.00 finder’s fee which he shared with Gambino and another. The government maintains that he failed to file a return for 1977. Second, when asked by IRS Special Agents about specific real estate holdings in Atlantic City, New Jersey, Skalsky stated merely that he and Gambino had held options on the property which never materialized. The government contends that he totally omitted any mention of a $250,000.00 settlement which he had divided with Gambino and which he had received prior to making this statement. Third, subsequent to being informed that his agreement with the government was null and void and that he was a target of investigation, Skalsky asserted his Fifth Amendment rights on two occasions before the October, 1981 Grand Jury. Fourth, several of the answers given by Skalsky to the October, 1981 Grand Jury relating to numerous business dealings, are alleged to have been false. (Wilson Affidavit ¶¶ 15-17, 11-14, 27-28, 29-31 respectively). Each of these allegations of breach, contained in the affidavit of the government attorney responsible for the ease, has gone uncontradicted by defendant except for non-evidential statements made within his brief and notice of motion.

Were this merely a civil breach of contract case, the Court would be satisfied with the uncontradicted, sworn statements of a party, especially a non-moving party. See e.g. Fed.R.Civ.P. 56(c). This is not, however, a civil case. Rather, defendant has been charged with serious criminal offenses and is entitled to a presumption of innocence. Although the affidavit of the responsible government attorney is somewhat probative of the issue of the defendant's breach, we feel compelled to require more under circumstances such as these which have the potential to lead to a criminal prosecution. Up to now, this Court has been provided with only a skeleton of the government’s allegations of breach. In order to reach a valid decision on this issue, we shall require that the government, by way of a limited evidentiary hearing, add some flesh to this skeleton through testimonial and/or documentary evidence of the defendant’s breach. Because we find that three of the four alleged breaches, even if proven, would not be material, this hearing may be limited to proof of only one.

First, the issue of whether defendant reported the $5,000.00 finder’s fee on his 1977 tax return is neither relevant nor material to the investigation of Gambino which was being conducted in April, 1980. In questioning Skalsky, the government’s attorney sought to determine the state of mind of the recipients of this fee. In essence, he sought to determine whether they considered it to be taxable income. (Wilson Affidavit ¶ 15 quoting transcript of Skalsky’s April 15, 1980 Grand Jury appearance). Thus, the government got what it wanted: a series of statements from Skalsky which evinced his belief that the money was “income.” Skalsky’s statement that he had reported the fee on his income tax is simply not material to the Gambino investigation, even if patently false.

Likewise, the government’s third and fourth grounds for alleging a breach, which relate to defendant’s October, 1981 Grand Jury appearance, are without merit. At the time of this appearance, defendant had been informed, by the government, of two very important facts: first, that the April, 1980 agreement was no longer of any force and effect; and second, that he had become a target of the Grand Jury investigation. The government urges that “[a]n honest belief [on Skalsky’s part] that he had not [previously] breached the agreement would have compelled him to cooperate.” (Government’s brief at 18). This argument borders on speciousness. Having been informed that his agreement with the government was null and void and that the investigation had turned to him, Skalsky appears to have acted reasonably in asserting his Fifth Amendment rights. The government’s allegations of lying to the Grand Jury, in light of the July 10th, 1981 letter voiding the agreement, cannot, for our purposes, be seen as a breach of the agreement.

The government is left with its allegations of breach which relate to Skalsky’s and Gambino’s real estate dealings in Atlantic City, New Jersey. Because we feel that these allegations of breach,'if proven, would be material, thus warranting the government’s voiding of the agreement, we shall hold an evidentiary hearing in order to allow the government the opportunity to prove its allegations with testimonal and/or documentary evidence. Although this hearing need not be as extensive as a Kastigar hearing, we shall require that the government prove Skalsky’s breach by clear and convincing evidence. See United States v. Smith, 580 F.Supp. 1418, 1422 (D.N.J.1984).

Materiality, we note, is an issue of law for the Court’s consideration. See United States v. Crocker, 568 F.2d 1049, 1056 (3d Cir.1977). In addition, it is well established that a statement is material “if it has a tendency to influence, impede, or hamper the grand jury from pursuing its investigation.” United States v. Lardieri, 497 F.2d 317, 319 (3d Cir.1974), on rehearing, 506 F.2d 319 (3d Cir.1974). In the instant case, the April, 1980 Grand Jury was undertaking an investigation of Skalsky’s business associate, Emmanuel Gambino, in order to ascertain whether Gambino should be indicted for tax evasion. Defendant was well aware of the Grand Jury’s purpose both at the time he executed the agreement and when he was interviewed by IRS Special Agents. He was also aware that any information which he could provide with regard to money received by Gambino would be helpful to the government’s investigation.

The government maintains that Skalsky was asked directly about his and Gambino’s ownership interests in two Atlantic City properties. Skalsky allegedly responded merely that they had held options which “never materialized.” (Report of Special Agents Gould and Pisker, p. 3, attached as Exhibit 1 to Wilson affidavit). If, as the government maintains, Skalsky and Gambino actually divided a $250,000.00 settlement arising from litigation concerning these properties, Skalsky’s failure to inform the Special Agents of this fact would certainly appear to have had a “tendency to influence, impede, or hamper” the Gambino investigation. Lardieri, 497 F.2d at 319.

This Court shall, therefore, hold an evidentiary hearing with the purpose of determining whether or not defendant breached his agreement with the government. Our final decision on the instant motion to dismiss shall await the outcome of the hearing.

DISCLOSURE OF GRAND JURY MATERIALS

By this motion, defendant seeks to compel disclosure of a vast quantity of materials which were presented to the Grand Jury. He urges that his request should be granted, pursuant to Fed.R.Crim.P. 6(e)(3)(C)(i) and (ii), as a result of two prior disclosures by the government to IRS personnel in violation of Fed.R.Crim.P. 6(e)(2).

Defendant’s first allegation of violation is premised on a letter to his second former attorney, James C. Schwartzman, Esquire, from Stanley F. Krysa, the Chief of the Criminal Section of the Justice Department, Tax Division, which stated in its entirety, “This is to advise you that the above captioned case has been transmitted to the Internal Revenue Service.” (Krysa letter of May 20, 1983, Exhibit C, to defendant’s Notice of Motion). In his affidavit, Michael K. Simon, Esquire, who is defendant’s son-in-law and the attorney who represented him prior to Mr. Schwartzman, avers that Schwartzman informed him of a conversation he had with Mr. Krysa, who informed him that the letter was an indication that his case had been referred to the IRS for civil prosecution. (Simon affidavit ¶¶ 14-15).

The government concedes that if the Skalsky Grand Jury materials had been referred to the IRS for civil prosecution, such referral would be in violation of Rule 6. See United States v. Sells Engineering, Inc., 463 U.S. 418, 103 S.Ct. 3133, 77 L.Ed.2d 743 (1983). In response to defendant’s allegations, however, the government has presented the affidavit of Stanley F. Krysa, the author of the letter in question. From his affidavit, it becomes clear that this letter was sent in error and that the case was never referred to IRS for civil prosecution. Krysa avers that letters of this type are only sent when prosecution has been declined. (Krysa affidavit U 5). Furthermore, he avers that prosecution of Mr. Skalsky was never declined. {Id. ¶ 6). The affidavit of Russell Stewart, who was the Senior Tax Attorney assigned to assist the Grand Jury, confirms this statement. (Stewart affidavit, if 5, attached as Exhibit 2 to Wilson supplemental affidavit). It is clear that the case was merely sent to the IRS Regional Counsel for referral back to the Strike Force and IRS District Counsel for further information on two issues relevant to the investigation. {Id. ¶ 4). In light of the hearsay nature of the Simon affidavit, and the explanation provided by the Krysa affidavit, we find that there was no transmittal of defendant’s case to the IRS Civil Division in violation of Rule 6(e). We note, as well, the relevant fact that there has been no civil tax proceedings initiated against the defendant with reference to the time periods at issue before the Grand Jury.

The second violation alleged by defendant concerns the disclosure of Grand Jury materials to IRS criminal investigators. Such disclosures can hardly be challenged if, as in this case, they have been made for the purpose of obtaining technical advice regarding the criminal matter being investigated and they satisfy the criteria of Rule 6(e)(3)(A)(i) or (ii). See Sells Engineering, 463 U.S. at 426, 103 S.Ct. at 3139. Cooperation between various branches of the government in the investigation and enforcement of the criminal statutes, when done in recognition of procedural rules, should be commended and not discouraged. We find that the submissions or disclosures to various IRS criminal investigators and tax specialists are within the ambit of valid Rule 6 disclosures and did not require a court order pursuant to Rule 6(e)(3)(C). We shall, therefore, deny defendant’s motion.

The primary concern in the disclosure of Grand Jury materials is that the Grand Jury’s secrecy remain intact to the greatest extent possible. Sells Engineering, 463 U.S. at 423-25, 103 S.Ct. at 3137-38. When any information is divulged, secrecy is threatened. The enactment of Rules 6(e)(3)(A)(i) and (ii), however, indicates a recognition of the fact that a certain level of disclosure is necessary for the Grand Jury to function properly. Each of the individuals responsible for supervising the disclosed materials has submitted an affidavit describing the actions taken in order to protect the integrity of that material. We are satisfied that these actions have sufficiently protected the interests involved, and therefore hold that these disclosures do not violate Rule 6(e) so as to warrant disclosure to the defendant.

The only grounds alleged by defendant as support for his motion are those discussed above. Because we find no merit to these allegations, we shall deny defendant’s motion.

The Court shall enter an order appropriate to both of the motions considered herein.

      . At oral argument, defendant’s attorney indicated to this Court that he was satisfied with the government’s response to three additional motions which had been filed simultaneously with the two at issue here. These three motions, namely: to compel disclosure of certain exculpatory and other discoverable material; for a Bill of Particulars; and to compel the government to maintain certain handwritten notes, memos and summaries, shall therefore be denied as moot.

      . The text of the letter follows:
      April 15, 1980
      Michael K. Simon, Esquire
      Suite 700, 1315 Walnut Street
      Philadelphia, Pennsylvania 19107
      Re: Robert Skalsky
      Dear Mr. Simon:
      On the understandings specified below, the United States will not prosecute Mr. Skalsky for potential charges based upon information supplied to this office by him. Such immunity specifically includes charges related to his activities in dealing with Emmanuel Gambino. This agreement is expressly conditioned on this office’s knowledge of all activities and possible wrongdoing on Mr. Skalsky’s part in connection with Emmanuel Gambino and his representation through you that no other such wrongdoing exists.
      The understandings are that Mr. Skalsky shall truthfully disclose all information with respect to the activities of himself and others concerning all matters about which this office inquires of him, and further, shall truthfully testify before the Grand Jury and/or at any trial or other court proceeding with respect to any matters about which this office may request his testimony.
      It is further understood that this agreement is limited to the District of New Jersey, and cannot bind other federal, state, or local prosecuting authorities, although this office will bring the cooperation of Mr. Skalsky to the attention of other prosecuting offices, if requested. If any other prosecuting office should commence an investigation of Mr. Skalsky for the possible wrongdoing referred to in this letter, we will recommend to such other prosecuting agency that it adopt the terms of this letter. It is also understood that on Constitutional grounds, any testimony given pursuant to this agreement is tainted for use by any other prosecuting office.
      It is further understood that Mr. Skalsky must at all times give complete, truthful and accurate information and testimony. Should it be judged by this office that Mr. Skalsky has given false, incomplete or misleading testimony or information, or has otherwise violated any provision of this agreement, this agreement shall be null and void and he shall thereafter be subject to prosecution in this and any other prosecuting office for any federal criminal violation of which this office has knowledge, including, but not limited to, perjury and obstruction of justice. Any such prosecutions may be premised upon any information provided by Mr. Skalsky and such information may be used against him.
      Finally, it is expressly understood that the fact of this agreement is not to be construed as a legal or factual determination by this office that Mr. Skalsky has violated any federal law.' This understanding has been entered into solely to facilitate this office’s investigation and to clarify Mr. Skalsky’s status as a witness.
      No additional promises, agreements and conditions have been entered into other than those set forth in this letter and none will be entered into unless in writing and signed by all parties.
      Very truly yours,
      George E. Wilson
      GEORGE E. WILSON
      Special Attorney
      AGREED AND CONSENTED TO:
      Robert Skalsky
      ROBERT SKALSKY
      Michael K. Simon
      MICHAEL K. SIMON, ESQ.
      Attorney for Robert Skalsky

      . The text of the letter follows:
      July 10, 1981
      Michael K. Simon, Esq.
      Suite 700
      1315 Walnut Street
      Philadelphia, Pa. 19107
      RE: Robert Skalsky
      Dear Mr. Simon:
      On April 5, 1980, this office issued a letter form of immunity to your client, Robert Skalsky. One of the terms of that agreement was as follows:
      "It is further understood that Mr. Skalsky must at all times give complete, truthful and accurate information and testimony. Should it be judged' by this office that Mr. Skalsky has given false, incomplete or misleading testimony or information, or has otherwise violated any provision of this agreement, this agreement shall be null and void".
      A review of the statement made by Mr. Skalsky on April 15, 1980 to Special Agents of the Internal Revenue Service, as well as the Grand Jury testimony which he gave later that day (in which statement to the IRS was incorporated) reveals, in the light of more recently acquired third-party evidence, that Mr. Skalsky’s testimony in several respects was not complete, truthful, and accurate.
      Accordingly, please be advised that the agreement of April 15, 1980, is no longer of any force and effect.
      Very truly yours,
      George E. Wilson
      GEORGE E. WILSON
      Special Attorney
      cc: Charles Schmidtheiser IRS

      . Even though the government need not prove that the statement did influence, impede, or hamper the investigation, see United States v. Isabella, 582 F.Supp. 1534, 1535 (E.D.Pa.1984), we note that the government, based on Skalsky's response, did not pursue the real estate deals before the Grand Jury. (Wilson affidavit W 12-13).

      . In his affidavit, George E. Wilson, Special Attorney, related the procedures followed in obtaining assistance from IRS experts regarding the question of defendant’s tax law violations. Wilson further averred that the names of personnel given access to this material were promptly provided to the district court pursuant to Rule 6(e)(3)(B).
      Charles J. Schmidheiser, a Special Agent with the Criminal Investigation Division of the IRS, averred that he received specific instructions with regard to the use and maintenance of any Grand Jury material divulged to him. He further averred that the Skalsky investigation was conducted in accordance with the standard procedure described which includes the virtually total segregation of all Grand Jury materials. See Exhibit 1 to Wilson affidavit.
      Likewise, Richard A. Francis, Deputy Regional Counsel for Criminal Tax cases for the IRS Mid-Atlantic Region, described the procedures followed by his office including secrecy and segregation of Grand Jury materials. See Exhibit 2 to Wilson affidavit.
      Finally, Russell Stewart, the Senior Tax Attorney assigned to assist the Grand Jury investigation, averred that the procedures articulated in the Francis affidavit were followed in this case. Moreover, Stewart stated that the Justice Department never declined prosecution of this matter.


author: HAND, Chief Judge.

text:
    Ruth Cornelia WEAVER, as Administratrix of the Estate of James Weaver, Deceased, Plaintiff, v. MILLER ELECTRIC MANUFACTURING COMPANY, INC., etc., Defendant, American Mutual Liability Insurance Company, Intervenor.
    Civ. A. No. 85-0711-X.
    United States District Court, S.D. Alabama, S.D.
    Aug. 26, 1985.

      John T. Crowder, Jr., Gregory B. Breed-love, Jay A. York, Cunningham, Bounds, Yance, Crowder & Brown, Mobile, Ala., for plaintiff.
    Donald F. Pierce and J. Hodge Alves, III, Hand, Arendall, Bedsole, Greaves & Johnston, Mobile, Ala., for Miller Elec. Mfg. Co., Inc.
    Kirk C. Shaw and Robert J. Mullican, Armbrecht, Jackson, DeMouy, Crowe, Holmes & Reeves, Mobile, Ala., for American Mut.
   ORDER

HAND, Chief Judge.

This case gives the Court the opportunity to shed some light on the removal statutes, 28 U.S.C. §§ 1441-1452 (1976), as they relate to Ala.R.Civ.P. 9(h), that allows the practice of pleading fictitious parties. In particular the Court is concerned with the issue of when a defendant must remove to comply with the time limit imposed by section 1446(b).

The complaint in this action was filed in the Circuit Court of Mobile County, Alabama on December 2, 1980. Along with the removant herein, Miller Electric Manufacturing Company, Inc. (Miller), nine fictitious parties were named as defendants. The plaintiff alleged that these were the persons or entities who manufactured, sold, designed and/or distributed a welding machine that allegedly caused the death of the plaintiff’s decedent. Miller was served with the complaint on December 18, 1980. Thereafter the case proceeded toward trial for over four years. The parties disagree on when the case was set for trial, the plaintiff claiming March 11, 1985, the defendant claiming March 4. One week before the correct date the parties met in conference with a judge of the circuit court. The judge then continued the trial until May 20, 1985. Each side blames the other for the continuance, and the parties also disagree as to the content of other representations made to the court. On May 20, 1985, the parties arrived for trial, having conducted limited discovery and issued trial subpoenas in the interim. Upon the plaintiff’s announcement of ready for trial, which action worked a dismissal of the fictitious parties, Miller filed a petition for removal.

The plaintiff now contends that removal was untimely. Section 1446(b) of Title 28 governs the timeliness of removal. That subsection states, in relevant part:

[t]he petition for removal of a civil action or proceeding shall be filed within thirty days after the receipt by the defendant, through service or otherwise, of a copy of the initial pleading setting forth the claim for relief upon which such action is based____
If the case stated by the initial pleading is not removable, a petition for removal may be filed within thirty days after receipt by the defendant, through service or otherwise, of a copy of an amended pleading, motion, order or other paper from which it may first be ascertained that the case is one which is or has become removable.

28 U.S.C. § 1446(b) (1976) (emphasis added). This statute has been interpreted as establishing three classes of cases. “The case on the initial pleadings may be removable on its face, not removable on its face, or indeterminate in the sense that it does not on its face supply sufficient information to determine whether or not it is removable.” Kaneshiro v. North Am. Co. for Life & Health Ins., 496 F.Supp. 452, 456 (D.Hawaii 1980). The first category of cases plainly causes the time limit to start running. The second plainly does not, as the limit will not run until the bar to removal is gone. The third category, which encompasses fictitious party practice, poses a problem. Should the time limit start with the service of the complaint?

The weight of authority in this area is that if the uncertainty arises from something definitely acertainable, such as the diversity of citizenship of known parties, or the amount in controversy, the time limit will commence if the court could determine the case to be removable. See, e.g., Blow v. Liberty Travel, Inc., 550 F.Supp. 375 (E.D.Pa.1982) (indefinite citizenship); Keller v. Carr, 534 F.Supp. 100 (W.D.Ark. 1981) (indefinite citizenship); Kaneshiro, supra, (uncertain amount in controversy); Nicholas v. Macneille, 492 F.Supp. 1046 (D.S.C.1980) (indefinite citizenship); Horak v. Color Metal of Zurich, Switzerland, 285 F.Supp. 603 (D.N.J.1968) (uncertain amount). In all of these cases, as in the case at bar, jurisdiction was by diversity of citizenship, 28 U.S.C. § 1332 (1976) and the plaintiffs complaint did not actively conceal diversity, but yielded some clue to diversity. Federal question jurisdiction, 28 U.S.C. § 1331 (1976), involves a totally different inquiry, the well pleaded complaint rule, which need not concern us.

The problem in this case is that the citizenship of fictitious parties is not readily ascertainable as is that of a known defendant or plaintiff. About the most that can be done is to discern whether the claims against the nonresident defendant are severable from those against the fictitious parties. See, e.g., Pullman Co. v. Jenkins, 305 U.S. 534, 59 S.Ct. 347, 83 L.Ed. 334 (1939). No such contention is made in this case, as the claims are plainly non-severable. Since the plaintiff controls whether this complaint contains fictitious parties, a better case can be made for tolling the time limit.

Other courts have apparently analyzed the fictitious party issue in terms of when the case becomes removable. See, e.g., Coker v. Amoco Oil Co., 709 F.2d 1433 (11th Cir.1983) in which the court states, albeit in dicta, that “the complaint does not become removable until the plaintiff takes some affirmative action indicating that he does not wish to pursue his claims against the fictitious defendants.” Id. at 1439. Similarly, in Hamby v. Zayre Corp., 544 F.Supp. 176 (N.D.Ala.1982), the court decided to treat cases with fictitious defendants “as not immediately removable on the basis of diversity jurisdiction, regardless of the specificity of the description of, or of the charges against, such persons.” Id. at 178. Both of these courts then stated that removal could be had at once if the removant showed fraudulent joinder of the fictitious parties, and that the time limit did not begin until the plaintiff indicated that the fictitious defendants were no longer in the action. However, the initial language on removability tends to confuse the analysis.

This is not a merely theoretical point. Despite attempts to simplify it, removal practice is somewhat technical. This Court desires not just to lay down a hard and fast rule, which is impossible, but to clarify the proper analysis so that a practical method can be followed that will not snare attorneys in subtle academic pitfalls. For the time limit on removals, while not jurisdictional, is mandatory. Powers v. Chesapeake & Ohio Ry., 169 U.S. 92, 18 S.Ct. 264, 42 L.Ed. 673 (1898). Moreover, the limit is to be construed, along with the rest of the removal statutes, narrowly and against federal jurisdiction. See, e.g., Shamrock Oil Corp. v. Sheets, 313 U.S. 100, 61 S.Ct. 868, 85 L.Ed. 1214 (1941). Since an untimely removal can result not only in remand, but in severe sanctions, see McLaughlin v. Western Casualty and Surety Co., 603 F.Supp. 978 (S.D.Ala.1985), it is important to have as certain a method as possible for determining whether the time limit has expired.

The philosophy espoused by the Court is that both plaintiff and defendant should act reasonably and in good faith, so as to not prejudice the rights of the other party. Plaintiffs, who are not required to file state actions with federal jurisdiction in mind, Blow v. Liberty Travel, Inc., supra, 500 F.Supp. at 377, should not be allowed to actively conceal removability and yet profit from the thirty day time limit. See, e.g., Ezon v. Cornwall Eq. Ltd.., 540 F.Supp. 885 (S.D.Tex.1982) (plaintiff apparently attempted to conceal his citizenship). Because the section 1446(b) does not create a jurisdictional bar, the time limit can be waived. Plaintiff’s who do conceal removability effectually waive the right to rely on the limit. A defendant should not be allowed to delay removing when he knows the facts necessary for removal, as the purpose of the statute is to extend the time limit only when a defendant cannot ascertain removability. Mielke v. Allstate Ins. Co., 472 F.Supp. 851, 853 (E.D.Mich.1979). As the defendant has the burden of showing removability, Pullman Co. v. Jenkins, supra, 305 U.S. at 540, 59 S.Ct. at 350, 83 L.Ed. at 339, he should not be able to claim the limit is tolled when he knows he could remove. Finally, the Court should not become entangled in a lengthy fact-finding process to determine removability.

The Court finds that the best application of these issues is as follows. When a state court complaint is filed that does not facially preclude removal, the defendant has a duty to inquire about removability. Kaneshiro, supra, 496 F.Supp. at 460. The mere presence of fictitious co-defendants does not relieve the defendant of that duty. The purpose of the time limit dictates that a defendant should remove if the court can find the case to be removable. Cf. Horak, supra. However, the plaintiff’s control of the use of fictitious parties dictates that he not be allowed to rely on the time bar unless the defendant should be particularly aware of the legality of removal. Thus it may be that the circumstances and facts controlling removability are peculiarly within the defendant’s knowledge. If the defendant knows, for example, that some fictitious defendants are not diverse, or that a fictitious party is a resident defendant, he should wait to remove. Upon dismissal of those parties he can cite the reviewing court to these facts in the removal petition, and the case will fall under the second paragraph of section 1446(b), having then become removable. If there is diversity, and this fact is peculiarly within the defendant’s knowledge, the thirty days will commence with the service of the complaint. If, however, diversity exists but either the plaintiff has so pled as to conceal it, or the defendant has no special knowledge, the thirty days is tolled until the defendant is furnished with information that shows the case as originally filed was removable. (If the information shows that the case was originally not removable, the thirty days commences from the date on which the barrier to removal is eliminated.) Again, the defendant should remove if he comes by such knowledge independently of the plaintiff, and not sit on his rights.

The proof of the defendant’s special knowledge, in cases in which the complaint is originally removable, may be difficult, amounting almost to bad faith. There is no proof in this case that Miller Electric had any special knowledge of the citizenship of the fictitious parties. Thus, the thirty day limit of section 1446(b) was tolled until the defendant was made aware that there were no obstacles to removal.

The plaintiff argues that the defendant knew at the status conference that the plaintiff was then ready for trial and would not pursue any of the fictitious parties. This is controverted by the defendant, which states that until trial commenced it believed there were resident defendants who were quite possibly responsible for the plaintiff’s decedent’s injuries. These defendants were, according to Miller, citizens of Alabama who set up the welding system at plaintiff’s decedent’s place of employment. The Court finds that plaintiff has failed to prove that Miller was definitely made aware of the status of the fictitious parties.

Plaintiff also contends, however, that the trial subpoenas issued for the May 20 setting showed that the claims against the fictitious parties had been dropped. Miller responds that subpoenas are not proper notice of removability. While not agreeing that subpoenas can never be the source of such notice, the Court does not find that such notice was given in this case. -The Court notes that section 1446(b) contemplates a wide variety of sources for notice of the elimination of bars to removal: “... after receipt by the defendant, through service or otherwise, of a copy of an amended pleading, motion, order or other paper____” 28 U.S.C. § 1446(b) (1976).

The Court finds that this case remained indeterminate for purposes of removal until the plaintiff announced ready for trial, thereby dismissing the fictitious parties. Plaintiff’s protestations that the defendant knew the situation is unsupported by proof.

In this case the Court does not find the conduct on either side to suggest a violation of the requirement of Rule 11 of the Federal Rules of Civil Procedure. However, in the future in cases of either improper use of fictitious parties, improper removals, or frivolous motions to remand such sanctions might be warranted. Removal is a means of allowing out-of-state defendants to avoid being prejudiced by litigating in the plaintiff’s forum. It is not a tactical weapon by which counsel may avoid an inconvenient trial setting or otherwise gain some advantage from delay.

The Court notes, finally, that the approach herein varies somewhat from both Hamby and the dicta in Coker, cited earlier. The Court believes its analysis will furnish a more structured method for the practicing attorney to follow in deciding when, and whether, to remove.

As the removal herein was timely effected, the motion to remand to state court is without merit. The Court therefore ORDERS that the motion to remand be, and it hereby is DENIED.

IT IS SO ORDERED.


author: GARRITY, District Judge.

text:
    COMMONWEALTH OF MASSACHUSETTS, Plaintiff, v. Margaret HECKLER et al., Defendants.
    Civ. A. No. 83-2523-G.
    United States District Court, D. Massachusetts.
    Aug. 27, 1985.

      Thomas A. Barnico, Asst. Atty. Gen., Boston, Mass., for plaintiff.
    Karen M. Green, Asst. U.S. Atty., Boston, Mass., for defendants.
   MEMORANDUM AND ORDERS ON CROSS-MOTIONS FOR SUMMARY JUDGMENT

GARRITY, District Judge.

In this action, the Commonwealth of Massachusetts (“Commonwealth”) seeks review of a May 31, 1983 decision of the Department Grant Appeals Board (“the Board”) of the Health Care Financing Administration (“HCFA”) of the Department of Health and Human Services (“HHS”), which held that certain services provided to persons residing in state-owned intermediate care facilities for the mentally retarded (“ICF/MRs”) were not eligible for reimbursement under Title XIX of the Social Security Act, 42 U.S.C. § 1396 et seq. (“the Medicaid program”). The Board disallowed $6,414,964 in federal financial participation (“FFP”) advanced to the Commonwealth between July 1, 1978 and December 31, 1980, claiming that those costs were incurred by the Commonwealth in providing educational services and were therefore not reimbursable under the Medicaid program. The Commonwealth contests this decision, claiming that the services in question are reimbursable under Medicaid. Jurisdiction is based on 28 U.S.C. § 1331. The parties have filed cross-motions for summary judgment. After hearing oral argument and considering the briefs and administrative record, the court grants the Commonwealth’s motion for summary judgment and denies defendants’ motion.

I. Relevant Statutory and Regulatory Background

The Medicaid program, created in 1965, is designed to assist states in providing “(1) medical assistance on behalf of families with dependent children and of aged, blind, or disabled individuals, whose income and resources are insufficient to meet the costs of necessary medical services, and (2) rehabilitation and other services to help such families and individuals attain or retain capability for independence or self-care.” 42 U.S.C. § 1396. Under the Medicaid program, such services are financed in part by federal grants to participating states which have submitted, and had approved by the Secretary of HHS, state plans for medical assistance. Id. The federal government pays a certain percentage of the total cost of Medicaid services, and the balance is paid by the state. 42 U.S.C. § 1396b(a).

In 1971, Congress included in the Medicaid program “intermediate care facility services.” 42 U.S.C. § 1396d(a)(15). An ICF is defined as

an institution which is (1) licensed under state law to provide, on a regular basis, health-related care and services to individuals who do not require the degree of care and treatment which a hospital or skilled nursing facility is designed to provide, but who because of their mental or physical condition require care and service (above the level of room and board) which can be made available to them only through institutional facilities, (2) meets such standards prescribed by the Secretary as he finds appropriate for the proper provision of such care, and (3) meets such standards of safety and sanitation as are established under regulation of the Secretary in addition to those applicable to nursing facilities under State law____

42 U.S.C. § 1396d(c). 42 U.S.C. § 1396d(d) provides the following:

(d) Intermediate care facility services
The term “intermediate care facility services” may include services in a public institution (or distinct part thereof) for the mentally retarded or persons with related conditions if—
(1) the primary purpose of such institution (or distinct part thereof) is to provide health or rehabilitative services for mentally retarded individuals and which meet such standards as may be prescribed by the Secretary;
(2) the mentally retarded individual with respect to whom a request for payment is made under a plan approved under this subchapter is receiving active treatment under such a program; and
(3) the State or political subdivision responsible for the operation of such institution has agreed that the non-Federal expenditures in any calendar quarter pri- or to January 1, 1975, with respect to services furnished to patients in such institution (or distinct part thereof) in the State will not, because of payments made under this subchapter, be reduced below the average amount expended for such services in such institution in the four quarters immediately preceding the quarter in which the State in which such institution is located elected to make such services available under its plan approved under this subchapter.

Under the Social Security Act, the Secretary of HHS is authorized to promulgate rules and regulations, not inconsistent with the Act, as are necessary to the efficient administration of her functions under the Act. 42 U.S.C. § 1302. Pursuant to this authority, the Secretary promulgated 42 C.F.R. § 441.13(b), which provides the following:

Payments to institutions for the mentally retarded or persons with related conditions and to psychiatric facilities or programs providing inpatient psychiatric services to individuals under age 21 may not include reimbursement for vocational training and educational activities.

II. State Background

The Commonwealth has participated in the Medicaid program since 1966. The Massachusetts Department of Public Welfare is responsible for administering the Massachusetts plan. The Massachusetts Department of Mental Health (“DMH”) operates the state-owned ICF/MRs certified to participate in the Medicaid program. As an ICF/MR operator, the DMH is responsible for complying with the statutory and regulatory requirements of ICF/MRs under the Medicaid program. In particular, the DMH must ensure that all mentally retarded individuals residing in ICF/MRs are receiving active treatment, in accordance with 42 U.S.C. § 1396d(d)(2). Under the Secretary’s regulations, “active treatment” requires among other things that these individuals regularly participate in “professionally developed and supervised activities, experiences or therapies” and that each individual receive an “individual written plan of care”, known as an “ISP” (Individual Service Plan), which sets forth measurable goals or objectives and an integrated program of activities or therapies designed to achieve those goals. 45 C.F.R. § 435.1009. According to the regulation, “[t]he overall purpose of the plan is to help the individual function at the greatest physical, intellectual, social, or vocational level he can presently or potentially achieve.” 42 C.F.R. § 435.1009(b).

Pursuant to state law, the Commonwealth is also required to provide special education to all school age children with special needs in Massachusetts. Chapter 766 of the Acts of 1972, M.G.L. c. 71B (“Chapter 766”). Special education is defined as “everything which is required to be provided to a child in need of special education pursuant to the IEP.” Chapter 766 Regulations, 122.0. The IEP (Individual Education Plan), which is prepared for each Massachusetts child with special needs, describes the child’s educational abilities and goals and sets forth methodologies and teaching approaches designed to meet these goals. See Chapter 766 Regulations, § 322.0.

Section 12 of Chapter 766 requires that the Department of Education (“DOE”) establish and maintain a school department for school-age children in each ICF/MR and provide services jointly with the DMH. M.G.L. c. 71B, § 12. The director and staff of such school departments are employees of the DOE, which is responsible for the costs of all aspects of the educational programs in the ICF/MRs. Id. The Bureau of Institutional Schools (“BIS”) of the Division of Special Education of the DOE is responsible for administering the educational programs at ICF/MRs pursuant to Chapter 766. Chapter 766 Regulations, § 700.0.

The Commonwealth, in an effort to comply with both state and federal law concerning the treatment of the mentally retarded at ICF/MRs and to promote efficiency, has consolidated the administration of the services provided by the DMH pursuant to the “active treatment” requirement of Medicaid and the services provided by the BIS pursuant to Chapter 766. Each individual residing in an ICF/MR who is required to have an annual ISP developed in accordance with the Medicaid regulations and an annual IEP developed in accordance with Chapter 766, is evaluated annually through a “Joint Review Process”, in which DMH and BIS staff develop a joint plan meeting the requirements of federal and state law. The DMH then delegates the services required in each individual’s plan to the appropriate professional groups. The Commonwealth also utilizes a “Transdisciplinary Approach” in its staffing. This approach encourages “role release” by different professionals, or the sharing of one’s expertise with others of different professions, in order to consolidate the staff and to ensure continuity and consistency in the delivery of services to these individuals.

Concerned that in providing the services to individuals at ICF/MRs there would be difficulty distinguishing between payments for services which are reimbursable under the Medicaid program and those which are not, the Commonwealth sought clarification from the regional Medicaid office of HHS and received an interpretative bulletin, Action Transmittal HCFA-AT-78-104 (“the Action Transmittal”) in response (attached as Appendix 1). The Action Transmittal, dated November 29, 1978, was issued by HHS in an effort to clarify the relationship between the Medicaid program and the Education for All Handicapped Children Act of 1975, 20 U.S.C. § 1400 et seq. (“EAH-CA”) with respect to services provided to individuals residing at ICF/MRs. Briefly, EAHCA requires that in order to qualify for federal education assistance under the statute, the state must assure all handicapped children the right to a free appropriate public education. 20 U.S.C. § 1412(1). Free appropriate public education consists of “special education” and “related services”. 20 U.S.C. § 1401(18). The term special education is defined as

specially designed instruction, at no cost to parents or guardians, to meet the unique needs of a handicapped child, including classroom instruction, instruction in physical education, home instruction and instruction in hospitals and institutions.

20 U.S.C. § 1401(16). The term related services is defined as

transportation, and such developmental, corrective and other supportive services (including speech pathology and audiology» psychological services, physical and occupational therapy, recreation, and medical and counseling services except that such medical services shall be for diagnostic and evaluation purposes only) as may be required to assist a handicapped child to benefit from special education, and includes the early identification and assessment of handicapping conditions in children.

20 U.S.C. § 1401(17). EACHA allows for federal funding for related services if they are provided by the state to individuals free of charge. 34 C.F.R. § 300.14(a)(2)

The Action Transmittal acknowledges that in providing services to individuals at ICF/MRs, “it is difficult to clearly differentiate between a habilitative ... and an educational service.” In a letter accompanying the transmittal, an attorney for HCFA states that while academic education (reading, writing, etc.) and vocational training are not eligible for FFP under the Medicaid program, “training in ‘the activities of daily living’ (such as dressing and feeding oneself) are both required and reimbursable under Title XIX.” However, according to the Action Transmittal, some services may constitute both habilitative services under Medicaid and related services under EA-CHA. Therefore, it states that these habilitative services may be reimbursable under Medicaid even though they are also considered to be related services in an individual’s IEP. Furthermore, states may develop “consolidated” IEPs and ISPs for individuals whose Medicaid and educational services overlap. However, the transmittal also states that “[i]f [the] state statute extends responsibility for payment of specific health services to the education agency, then the Medicaid Agency cannot pay for those services.” Finally, the Action Transmittal explained that the purpose of 42 C.F.R. § 441.13 in excluding education and vocational activities from Medicaid coverage was “to assure nonduplication of federal funds.”

The Commonwealth determined that all of the services rendered by the DMH and BIS to individuals at the ICF/MRs were eligible for reimbursement under Title XIX. The Secretary, however, disallowed all costs incurred by the BIS in providing services at ICF/MRs as non-reimbursable education services. Specifically, the following BIS costs were disallowed:

1. Activities funded under Title I of the Elementary and Secondary Education Act, P.L. 89-10;
2. Service delivery contracts with educational collaboratives and one regional vocational school entered into by the BIS to provide specific services required by Chapter 766 regulations which could not be provided by existing state personnel;
3. Contracts for personnel to perform evaluation and monitoring functions required by Chapter 766; and
4. State-salaried personnel of the Department of Education, including institution school teachers and instructional aides, who, as required by Chapter 766, service ICF/MR residents in accordance with documented goals stated in IEPs.

III. Findings and Conclusions

We hold that the services provided by the BIS in ICF/MRs are eligible for reimbursement under the Medicaid program. The types of services provided by the BIS to these mentally retarded individuals fall clearly within the category of habilitative services explicitly covered by Title XIX. 42 U.S.C. § 1396.

In making this decision, the court relies to a great extent on the. video tape described in footnote 1 ante and on the case study of Client “B” described in the Commonwealth’s memorandum in support of its motion for summary judgment. Client “B” is profoundly retarded, as well as severely physically handicapped. Because B has extreme difficulty in interacting with his environment, i.e., he is virtually unable to respond to visual or auditory activity, his ISP and IEP goals as of 1980 largely involved the stimulation of B’s senses to increase his awareness of his surroundings. B’s curriculum at his day program, which was located outside his ICF/MR and was staffed by the BIS, included learning to signal for food when he was ready to eat to prevent aspiration of food into his lungs by controlling the speed at which he was fed; attending auditory stimulation for two minutes; locating hidden objects; showing preference for certain objects presented; and encouraging social interactions with adults.

The video tape depicts nine Belchertown State School residents performing various exercises under the supervision of BIS staff. For example, these exercises include training different individuals to respond to visual stimuli, to turn on a radio with an adaptive switch, to remember the letters in one’s name, to ask for a drink by reaching out with a cup, to eat with a spoon, and to sort out objects. We hold that these services, which we believe are representative of the services generally provided by BIS staff, are covered by the Medicaid program.

The purpose of Medicaid is to provide medical assistance to eligible individuals as well as “rehabilitation and other services to help ... such individuals attain ... capability for independence or self-care.” 42 U.S.C. § 1396. Medicaid coverage is not limited to purely medical assistance, but was “ ‘designed to alleviate the cost of health care which is active and remedial rather than custodial in nature.’ ” State of Minnesota v. Heckler, 8 Cir.1983, 718 F.2d 852, 864 (citing Legion v. Richardson, S.D.N.Y., 354 F.Supp. 456, 459, aff’d sub nom. Legion v. Weinberger, 414 U.S. 1058, 94 S.Ct. 564, 38 L.Ed.2d 465 (1973)).

ICF/MRs were included in the Medicaid program in 1971 for that same purpose, viz., to provide “health or rehabilitative services for mentally retarded individuals.” 42 U.S.C. § 1396d(d)(l). By this amendment to the Medicaid statute, Congress sought to remove the mentally retarded from mental hospitals and skilled nursing homes, where the services are largely custodial, to institutions in which the primary objective is the provision of health and rehabilitative services to enable these individuals to achieve some degree of self-care. See Report of Senate Finance Committee printed in Statement of Sen. Long, 117 Cong.Rec. 44721 (1971). As stated by Senator Bellman:

Mental retardation is not, in most instances, a condition which responds to treatment. However, there are public institutions whose primary objective is the active provision of rehabilitative, educational and training services to enhance the capacity of mentally retarded individuals to care for themselves or to engage in employment. Public institutions whose primary objective is the provision of health services or rehabilitative services to the mentally retarded should be subject to Federal participation under adequate safeguards.

117 Cong.Rec. 44720 (1971). Therefore, within the Medicaid statute and its legislative history we find clear Congressional intent to provide Medicaid coverage for the types of habilitative services provided by the BIS.

The Board concurred in the decision of HHS that these BIS costs were incurred for “educational activities” within the meaning of 42 C.F.R. § 441.13(b). The basis for this decision is essentially that these services were provided by the Commonwealth pursuant to Chapter 766 through the DOE in accordance with each individual’s IEP.

Regulations section 441.13(b) is consistent with the purposes of the Medicaid program. Medicaid was not designed to cover traditional educational services; rather, as stated ante, its purpose is to provide those treatments, therapies, and other programs necessary to enable disabled individuals to gain some degree of independence in performing “the activities of daily living.” In our opinion, section 441.13(b) was inappropriately applied in this case. In particular HHS defined “education” by reference to state and federal education statutes and to the Commonwealth’s method of administering the services in question, rather than to the nature of the services themselves. This approach errs on the side of administrative convenience at the expense of compliance with the Medicaid statute in our view.

Section 441.13(b) does not define “educational activities.” The services provided by the BIS, involving for the most part therapies designed to train the mentally retarded to function at some minimal level in society, cannot be defined as “traditional” or “academic” education, which clearly would be excluded under the regulation. Yet these Medicaid covered services could perhaps be described as “special education” or “related services” as defined by Chapter 766 or EACHA. See Abrahamson v. Hershman, 1 Cir.1983, 701 F.2d 223, 228. On that basis, HHS would have them excluded from Medicaid coverage under section 441.13(b).

However, section 441.13 does not state that the costs of all services which are provided pursuant to a state education statute and paid for by the state are not reimbursable under the Medicaid program; rather, it states only that the costs of “educational activities” are not reimbursable. The Massachusetts and federal education statutes define special education extremely broadly. See Abrahamson, supra. But the fact that these services might be classified as “education”, “special education” or “related services” under other statutes, particularly a state statute, is not dispositive of the classification of these services for the purposes of the Medicaid statute nor the regulations promulgated thereunder. “[A] word used in one statute does not necessarily have the same meaning in another statute.” Complaint of Tracey, D.Mass.1985, 608 F.Supp. 263, 268. Education is normally more narrowly defined. It connotes a more traditional, academic discipline. All training or instruction is not education in our view. The simple skills being taught to the individuals at these institutions, particularly those shown on the videotape and being taught to Client “B”, are certainly not educational in the traditional sense of the word.

Furthermore the court has found ante that these services are covered by the Medicaid program because they are habilitative in nature. Section 441.13(b) may not be used by HHS to take out of the coverage of Medicaid those services explicitly covered by the statute. Therefore, we reject the position of HHS that Medicaid coverage is not available for services covered by state education statutes.

The fact that these services are provided by an agency of the Commonwealth’s education department does not bar their classification as Medicaid covered habilitative services. As explained by the Commonwealth, each individual in an ICF/MR is evaluated annually by DMH and BIS staff together and is given a joint plan of care, which includes his or her ISP and IEP. In fact, many of the services required under these individuals’ ISPs and IEPs are similar or identical, which is understandable in light of 45 C.F.R. § 435.1009, which states that the overall purpose of the ISP is to help the individual function “at the greatest physical, intellectual, social, or vocational level he can presently or potentially achieve.” Under its Transdisciplinary Approach, the programs and therapies required by these plans are provided by both DMH and BIS staff in an integrated fashion. This technique employed by the Commonwealth was specifically endorsed by HHS in its Action Transmittal. Given this Transdisciplinary Approach, HHS’s decision to disallow all services provided by the BIS pursuant to IEPs, while allowing similar services provided by the DMH pursuant to ISPs, is arbitrary in our opinion and is also not supported by substantial evidence.

Finally, we find that the Commonwealth was justified in seeking FFP for the costs incurred by the BIS under categories 2, 3 and 4 listed on page nine of this opinion. All of the costs listed in these categories were expended by the Commonwealth in administering the programs and providing the services to ICF/MR residents which we have held are covered by the Medicaid program.

Conclusion

The Commonwealth is entitled to FFP under the Medicaid program for the costs incurred by the BIS at ICF/MRs. Therefore, the Commonwealth’s motion for summary judgment is granted and defendants’ cross-motion for summary judgment is denied.

      . Included in the administrative record ("A.R.”) is a video tape exhibit submitted by the Commonwealth which depicts the services provided to a sample of individuals who reside in Belchertown State Hospital, an ICF/MR. The court viewed the entire video tape, which is forty-five minutes in length, in chambers, having borrowed a television and video cassette recorder from the Probation Office of the court.

      . Federal Medicaid grants are awarded to each participating state prospectively, based on an estimate provided by the state each quarter year. 42 U.S.C. § 1396b(d). Following each quarter, the state submits a report of its actual expenditures and the next quarter’s grant is adjusted accordingly. The HCFA reviews state reports of expenditures and may disallow FFP when it determines that an expenditure is not reimbursable under the Medicaid program. Administrative review of a disallowance is available in the form of a request for reconsideration by the Board. 42 U.S.C. § 1316(d). Decisions of the Board are then reviewable in a United States District Court.

      . Chapter 766, which was enacted three years before the federal statute, provides such assurance in Massachusetts.

      . Defendants now reject non-duplication of funding as the purpose behind the regulation.

      . Prior to the issuance of the HCFA disallowance notice, the Commonwealth agreed to reduce from its claim for reimbursement those costs for which it had received reimbursement already under Title I. According to defendants these costs amounted to $67,800, of which the federal share was $35,090. Therefore the disallowance in category 1 above is not disputed by the Commonwealth.

      . This case presents questions of both fact and law. Findings of fact of the Board are reviewable by this court under the "substantial evidence" standard. State of Minnesota v. Heckler, 8 Cir.1983, 718 F.2d 852, 860. Questions of law are to be resolved by the court. Id.

      . The Secretary suggests that Client “B” is not representative of the individuals who receive services from the BIS because he was the most severely handicapped of all the individuals whose cases were audited by HHS. However, she does not dispute the fact that she disallowed the services provided to B as "educational", a position we find untenable.

      . The court was aided in understanding these exercises by the testimony of Linda Brown before the Board on March 17, 1983 (A.R. 1278-1315).

      . We do not agree with the Commonwealth that all services provided pursuant to the "active treatment” requirement of 42 U.S.C. § 1396d(d)(2) and 42 C.F.R. § 435.1009 are reimbursable under Medicaid. The active treatment language of the statute demands that residents at ICF/MRs participate in regular programs and therapies. The purpose of this requirement is to avoid coverage for purely custodial services. In our opinion, active treatment is a condition placed on ICF/MRs under the Medicaid statute. However, we find that the "health and rehabilitative services" language of § 1396d(d)(2) describes the types of services covered by the Medicaid program.

      . Federal education assistance is provided to the states through Title I of the Elementary and Secondary Education Act of 1965, P.L. 89-10; the Elementary and Secondary Education Amendments of 1969, P.L. 91-230; and the Education for All Handicapped Children Act of 1975, P.L. 94-142.

      . The Commonwealth claims that the services in question do not constitute "education” because they do not aid these individuals in progressing from one "cognitive” level to another (Commonwealth's brief, p. 37). That analysis may be a more technical way to characterize what we have described in lay terms.

      . We agree with the Commonwealth that many of the services described in the videotape and in the Commonwealth’s brief seem to be designed to aid these individuals in overcoming their health-related disabilities and therefore could be categorized as health services.

      . Counsel shall endeavor to stipulate and file a form of judgment consistent herewith as soon as practicable.


author: MILTON POLLACK, Senior District Judge:

text:
    Jerry WORD, Petitioner, v. UNITED STATES of America, Respondent.
    No. 85 Civ. 6246 (MP).
    United States District Court, S.D. New York.
    Aug. 27, 1985.

      Jerry Word, pro se.
    Rudolph W. Giuliani, U.S. Atty., S.D.N.Y. by Franklin H. Stone, Asst. U.S. Atty., New York City, for United States.
   OPINION

MILTON POLLACK, Senior District Judge:

Jerry Word, pro se, moves, pursuant to 28 U.S.C. § 2255, to vacate and set aside his sentences, primarily on the ground that he was tried within 30 days of a superseding indictment, allegedly in violation of 18 U.S.C. § 3161(c)(2) of the Speedy Trial Act. For the reasons set forth below, petitioner’s motion will be denied.

On September 8, 1982, petitioner was arrested while attempting to purchase heroin from a government agent. On September, 16, 1982, the Grand Jury indicted petitioner on one count of conspiracy to possess heroin with intent to distribute, in violation of 21 U.S.C. § 846; the indictment specified seven overt acts in furtherence of a conspiracy which extended from August 1, 1982, through September 7, 1982. The Grand Jury also indicted Word on one count of attempted possession of one kilogram of heroin with intent to distribute, also in violation of § 846. On November 4, 1982, the government filed a superseding indictment, enlarging the conspiracy, alleging that it commenced on May 1, 1981, and adding three overt acts. The November 4th superseding indictment re-indicted Word on the attempted possession charge.

Trial on the superseding indictment began on November 29, 1982; on December 1, 1982, the jury returned a verdict of guilty on both the conspiracy and attempt counts. The Court sentenced Word to concurrent 15-year prison terms on each count, a $50,000 fine on each count, and ten years of special parole on the attempt count. The Court of Appeals affirmed. See United States v. Word, 742 F.2d 1444 (2d Cir.1983). Subsequently, petitioner filed a pro se § 2255 motion with this Court, raising numerous grounds to vacate his convictions. The Court denied the petition and the Court of Appeals affirmed. See Word v. United States, 762 F.2d 991 (2d Cir.1985).

At the time of the petitioner’s arrest on September 8, 1982, petitioner filed an affidavit, professing financial inability to retain counsel. On September 8, 1982, counsel was appointed to represent petitioner. On November 28, 1982, the day before the trial was scheduled, the Court received a letter from Wilfred Rice, who claimed that “effective 11-23-82” Word’s family had retained him to represent Word. Rice requested a three week adjournment for trial preparation and to accomodate “prior commitments.” The Court refused to adjourn a trial date which had been set for two months. Word went to trial, on November 29, with his court-appointed attorney.

Word now claims that the Court violated his Sixth Amendment right to effective assistance of counsel by denying the three week continuance and denying petitioner counsel of his choice. However, petitioner raised these claims on direct appeal and the Court of Appeals rejected them, holding,

“The decision whether to grant a continuance is committed to the sound discretion of the trial judge ... and the denial of the continuance in the circumstances of this case was a proper exercise of that discretion ... [Furthermore, Word’s] contention that appointed counsel was forced upon him since he could afford to retain counsel is frivolous. Counsel was appointed upon Word’s sworn representation that he had no assets with which to retain an attorney.”

Since Word had a full and fair opportunity to litigate these claims on appeal, he is barred from relitigating them on this motion. See Chin v. United States, 622 F.2d 1090 (2d Cir.1980), cert. denied, 450 U.S. 923, 101 S.Ct. 1375, 67 L.Ed.2d 353 (1981).

Petitioner also claims that the Court’s refusal to grant a continuance violated 18 U.S.C. § 3161(c)(2). That section provides in pertinent part:

“Unless the defendant consents in writing to the contrary, the trial shall not commence less than thirty days from the date on which the defendant first appears through counsel or expressly waives counsel and elects to proceed pro se.”

Petitioner claims that the Court erred in commencing the trial within thirty days of the superseding indictment. Petitioner did not raise this issue at trial or on appeal, although, ironically, he did argue that the government took too long in bringing him to trial, in violation of 18 U.S.C. § 3161(c)(1). Both this Court and the Court of Appeals rejected that argument.

Petitioner has waived his right to press the § 3161(c)(2) claim on this motion by not raising it at trial. A claim under § 3161(c)(2) may be raised only upon motion of the defendant before or at trial. See 18 U.S.C. § 3162(a)(2) (“If a defendant is not brought to trial within the time limit required by section 3161(c) ... the information or indictment shall be dismissed on motion of the defendant”) (emphasis added).

Furthermore, there is no reason to depart from the usual rule that petitioner waives a claim unless it has been presented at trial, absent “cause” excusing the procedural default and “actual prejudice” resulting from the default. See United States v. Frady, 456 U.S. 152, 168, 102 S.Ct. 1584, 1594, 71 L.Ed.2d 816 (1982). Cf. United States v. Samples, 713 F.2d 298 (7th Cir. 1983) (failure to raise a claim under 18 U.S.C. § 3161(d)(1); waives claim). But see United States v. Daly, 716 F.2d 1499 (9th Cir.1983), cert. denied, — U.S. —, 104 S.Ct. 1456, 79 L.Ed.2d 773 (1984). Petitioner has not alleged any cause for failing to raise the issue, especially in light of the fact that petitioner did raise the § 3161(c)(1) claim at trial. Similarly, petitioner has not alleged that the error “worked to his actual and substantial disadvantage.” Frady, 456 U.S. at 170, 102 S.Ct. at 1596 (emphasis in the original).

In any event, petitioner’s contentions fail on the merits. Petitioner urges this Court to adopt the per se rule, accepted by the Ninth Circuit in United States v. Harris, 724 F.2d 1452 (9th Cir.1984), “guaranteeing that the defendant is not forced to trial less than thirty days from the date on which the defendant first appears on the indictment on which the defendant ultimately goes to trial.” Id. at 1455 (emphasis in the original). See also United States v. Daly, 716 F.2d 1499, 1506 (9th Cir.1983) (“section 3161(c)(2) essentially establishes that any pretrial preparation period shorter than 30 days is inadequate per se.”), cert. denied, — U.S. —, 104 S.Ct. 1456,79 L.Ed.2d 773 (1984).

However, the Second Circuit, in United States v. Guzman, 754 F.2d 482 (2d Cir. 1985), petition for cert. filed, 53 U.S.L.W. 3856 (U.S. Apr. 9, 1985) (No. 84-1604), expressly rejected the Ninth Circuit’s per se rule. The Court said, “[W]e read the Speedy Trial Act, 18 U.S.C. § 3161(c), as not divesting a district court of its discretion to grant or refuse a continuance, where this discretion is exercised in keeping with the policies underlying specific provisions of the Act.” Id. at 486. See also United States v. Todisco, 667 F.2d 255, 260 (2d Cir. 1981), cert. denied, 455 U.S. 906, 102 S.Ct. 1250, 71 L.Ed.2d 444 (1982).

In Guzman, a superseding indictment was filed, one day before trial, realleging a count of possession of cocaine, and expanding the conspiracy from two days to two years. The Court upheld the possession conviction because the charge in the superseding indictment was simply a reallegation of the earlier indictment and the defendant had ample time to prepare for it. However, the Court reversed the conspiracy conviction because defendant’s lawyer had claimed, at trial, that he needed more than one day to adduce additional evidence and formulate a new theory.

Recently, the Eleventh Circuit, in United States v. Hawkins, 765 F.2d 1482 (11th Cir.1985), also rejected a per se rule. In Hawkins, the Court upheld a defendant’s conviction on conspiracy to obstruct justice, even though a superseding indictment, filed 24 days before trial, added an overt act, namely that defendant obstructed the FBI in addition to the Grand Jury. The Court held that § 3161(c)(2) “does not forbid the government’s reshaping of its ease, but merely guarantees to defendants a minimum time in which to prepare against whatever charges the government ultimately makes at the trial.” Id. at 1488. See also United States v. Gallo, 763 F.2d 1504 (6th Cir.1985). See generally Committee on the Administration of Criminal Law of the Judicial Conference of the United States, Guidelines to the Administration of the Speedy Trial Act of 1974, as Amended 15 (1984) (“In the opinion of the Committee, the period does not begin to run anew when the superseding indictments are filed in circumstances in which the seventy-day time limit is determined by reference to the original indictment or information”).

The Legislative History of the Speedy Trial Act also makes clear that district courts have discretion in granting continuances under § 3161(c)(2) and may refuse continuances which would result in unwarranted delays in commencing the trial. The 1979 Senate Report explains that § 3161(c)(2) “assures the defendant some minimal time to prepare____ [T]he Committee wishes to stress that this minimum-preparation time guarantee is not to be construed to permit the defendant to delay unduly the trial date, especially where permissible excludable delay is found.” A. Partridge, Legislative History of Title I of the Speedy Trial Act of 1974 73-74 (Fed. Judicial Center 1980). Cf. United States v. Darby, 744 F.2d 1508, 1520 n. 5 (11th Cir. 1984) (rejecting an interpretation of § 3161(c)(2) which “would enable defendants to postpone their prosecutions by simply changing lawyers or by retaining lawyers only for limited purposes prior to trial”).

Word’s counsel had 25 days between the time of the superseding indictment and trial to prepare. The superseding indictment realleged the same conspiracy, although it expanded the time frame and added three overt acts. Word’s counsel, a capable and experienced defense lawyer, never requested additional time to research or prepare. There is no intimation that an additional five days was needed for defendant’s counsel to prepare. In fact, counsel, at Word’s insistence, brought a motion pursuant to § 3161(c)(1), to dismiss the indictment because the Government allegedly took too much time in bringing the defendant to trial. Petitioner had ample time to prepare his defense to the conspiracy charge and certainly was not prejudiced by being brought to trial 25 days after the superseding indictment was rendered.

Petitioner clearly cannot claim that § 3161(c)(2) was violated when he was brought to trial on November 29th on the attempted possession count. That count was charged originally in the September 16th indictment and was realleged, in its entirety and without any additions, in the superseding indictment. There was ample evidence to support the conviction. Therefore, even if the sentence for conspiracy would have to be vacated, the conviction, concurrent 15-year prison sentence, and 10 years of special parole on the attempt count would still remain. See Guzman, 754 F.2d at 482; Gallo, 763 F.2d at 1524.

Petitioner’s next claim, that failure to comply with § 3161(c)(2) constitutes a violation of the Fifth and Sixth Amendment, is clearly frivolous; § 3161(c)(2) is a statutory, not a constitutional defense.

After petitioner submitted this motion and accompanying brief, he filed a “supplemental brief,” raising yet another ground for vacating his sentences. The Court will address petitioner’s latest frivolous argument now, instead of on a third § 2255 motion. Petitioner claims that the full grand jury did not consider the superseding indictment of November 4, 1982, but that the foreman ratified it as a true bill, allegedly in violation of Rule 6(f), Fed. R.Crim.P., and the Fifth Amendment.

The Court puts aside the issue of whether petitioner waived the right to object to the indictment on collateral attack, compare United States v. Macklin, 523 F.2d 193 (2d Cir.1975) (jurisdictional objection to indictment handed down by a grand jury whose term had been improperly extended), with Gaither v. United States, 413 F.2d 1061 (D.C.Cir.1969) (no jurisdictional objection to an indictment ratified only by foreman after presentment to the entire grand jury), to address the frivolous argument petitioner now makes. In a sworn affidavit, the Assistant United States Attorney states that the grand jury’s foreman and secretary signed an entry in the grand jury records, attesting that 22 grand jurors voted for a true bill on the superseding indictment on November 4, 1984. Petitioner has not presented any contrary facts, let alone a sworn affidavit, tending to show that only the foreman, and not the entire grand jury, ratified the superseding indictment. “[A] judge is well within his discretion in denying a petition when the supporting affidavit is insufficient on its face to warrant a hearing.” Dalli v. United States, 491 F.2d 758, 760 (2d Cir.1974). See also Williams v. United States, 503 F.2d 995 (2d Cir.1974).

Conclusion

Accordingly, petitioner’s motion is denied in all respects.

SO ORDERED.