author: ARRAJ, District Judge.

text:
    UNITED STATES of America, Plaintiff, v. 5,063.17 ACRES OF LAND, MORE OR LESS, SITUATE IN LAS ANIMAS COUNTY, COLORADO; Charles Gyurman Land & Cattle Company, et al., and Unknown Owners, Defendants. UNITED STATES of America, Plaintiff, v. 7,313.77 ACRES OF LAND, MORE OR LESS, SITUATE IN LAS ANIMAS COUNTY, COLORADO; Cheyenne Mining and Land Company, Inc., et al., and Unknown Owners, Defendants.
    Civ. A. Nos. 82-A-1844, 82-A-1981.
    United States District Court, D. Colorado.
    March 14, 1985.

      Linda A. Surbaugh, Asst. U.S. Atty., Denver, Colo., for plaintiff.
    Marlin D. Opperman, Opperman & Associates, P.C., Denver, Colo., for defendants in No. 82-A-1844.
    Joseph M. Montano, Malcolm Murray, Gorsuch, Kirgis, Campbell, Walker & Grover, Denver, Colo., Tuck Young, P.C., Pueblo, Colo., Alex S. Keller, Keller, Dun-ievitz, Johnson, & Wahlberg, Denver, Colo., for defendants in No. 82-A-1981.
   MEMORANDUM OPINION AND ORDER

ARRAJ, District Judge.

These two cases are before me on defendants’ applications for attorneys’ fees and expenses pursuant to the Equal Access to Justice Act, 28 U.S.C. § 2412 (1978) (“EAJA”). In November 1982, the United States Army acquired thousands of acres of land in Las Animas County, Colorado, for the Fort Carson Pinon Canyon Maneuver Site. This spawned numerous lawsuits, including the instant condemnation cases. United States v. Cheyenne Mining and Land Company, Inc. was tried to a jury July 25, 1983, through July 27, 1983, and final judgment was entered in favor of defendants in the amount of $1,067,552.00. Because the initial U.S. deposit of estimated just compensation was $608,910.00, the landowners recovered an additional $458,-642.00. The second case, United States v. Charles Gyurman Land and Cattle Company, was also tried to a jury (October 18, 1983, through October 21,1983). The original jury verdict and judgment was $852,-936.00, but I granted the government’s motion for remittitur and final judgment was reduced to $827,936.00. The deposit with the court totaled $582,300.00, so defendants recovered an additional $245,636.00.

Defendants Gyurman and Cheyenne Mining request $64,973.28 and $126,684.20 respectively in attorneys’ fees and expenses under the EAJA. In support of their petitions, defendants contend that they are prevailing parties under the Act and that the position of the United States was not substantially justified. They rely heavily upon the fact that the amounts deposited with the court were substantially less than the judgments awarded. The government challenges the applicability of the EAJA to condemnation cases and argues, in the alternative, that neither party is a prevailing party under the Act and, even if they are prevailing parties, the government’s position was substantially justified and therefore, attorney’s fees should not be awarded.

Because I anticipate that many similar applications will follow, it is important to resolve the legal and practical problems surrounding these fee requests. The paramount issues raised by the instant petitions are questions which the Tenth Circuit Court of Appeals has not yet considered: whether the EAJA applies to condemnation actions and, if so, when is a litigant a “prevailing party” and when is the government’s position “substantially justified.” In addition, these fee requests underscore the critical need for detailed guidelines regarding the content and organization of EAJA applications and affidavits. The judicial task of reviewing records of attorneys’ hours is seldom easy and never pleasant. However, it is particularly burdensome and tedious when supporting affidavits fail to treat separately each attorney and each type of legal service which he/she rendered. I will address this problem by outlining a suggested specific format for such applications.

I

The EAJA provides, in part:

Except as otherwise specifically provided by statute, a court shall award to a prevailing party other than the United States fees and expenses, in addition to any costs awarded pursuant to [§ 2412(a) ], incurred by that party in any civil action (other than cases sounding in tort) brought by or against the United States in any court having jurisdiction of that action, unless the court finds that the position of the United States was substantially justified or that special circumstances make an award unjust. 28 U.S.C. § 2412(d)(1)(A).

Three circuit courts of appeal have concluded that the EAJA applies to condemnation actions. U.S. v. 341.45 Acres of Land, 751 F.2d 924 (8th Cir.1984); U.S. v. 101.80 Acres of Land, 716 F.2d 714 (9th Cir.1983); U.S. v. 329.73 Acres of Land, 704 F.2d 800 (5th Cir.1983) (en banc). But see U.S. v. 160 Acres of Land, 555 F.Supp. 84 (D.Utah 1982). These circuit courts reasoned that the plain language and the legislative history of the EAJA show that Congress intended that the Act apply to condemnation cases. The statutory language provides that the court shall award fees and expenses incurred by a prevailing party “in any civil action (other than cases sounding in tort) brought by or against the United States in any court having jurisdiction of that action_” 28 U.S.C. § 2412(d) (1)(A) (emphasis added). Condemnation actions are civil actions and are not tort cases. I conclude that this statutory language is clear and, on its face, provides that the EAJA applies to condemnation actions.

The government asserts in its Opposition to Defendant’s Motion for Fees and Other Expenses that Section 206 of the EAJA and the doctrine of “substantial re-enactment” preclude the application of the EAJA to condemnation actions. With respect to these arguments, I adopt the reasoning of the Eighth Circuit in US. v. 341.45 Acres of Land, supra, and conclude that the EAJA does apply to condemnation actions.

II

Having concluded that the EAJA applies to condemnation actions, I must now determine how the Act applies to specific condemnation cases. The purpose of the EAJA is to award fees and expenses to successful litigants in cases where the government acted unreasonably. The Congress recognized that impecunious parties are often reluctant to challenge unreasonable governmental activity because of the cost involved. By shifting the cost in special circumstances, the Congress hoped to diminish this deterrent effect. Under the EAJA, only “prevailing parties” are entitled to fees and expenses. After a prevailing party submits an application for fees, the burden shifts to the government to prove that an award should not be made because its position was “substantially justified.” U.S. v. 329 Acres of Land, supra, 704 F.2d 800, 803.

Condemnation actions are uniquely different from typical court actions which involve the liability or non-liability of the parties for certain alleged damages. For the most part, the only issue involved in condemnation cases is the value of the property taken, i.e., the government asserts that the property is worth less than the landowner claims it is worth. At trial, the government’s asserted value becomes the “minimum” amount the landowner will recover. The landowner’s asserted value is invariably significantly higher than the government’s, thereby creating great potential for the landowner to recover significantly more than the government has offered. The landowner has a great incentive to hold out for a very high price and go to trial because, at the worst, the landowner will recover what the government asserts is the value of the land and, more often than not, the landowner will recover a compromise amount somewhere in between the two asserted values. See U.S. v. 341.45 Acres of Land, supra, 741 F.2d 1034, 1047 (“And quite often the jury or commission will follow neither parties’ evidence or expert witnesses and instead award what is essentially a compromise amount higher than the government’s valuation but lower than the property owner’s.”) Therefore, the landowner rarely stands to “lose” by going to trial in a condemnation action involving the issue of just compensation. Moreover, the higher the landowner’s asserted value, the higher his award is likely to be in relation to the government’s asserted value. It is in this context that the application of the EAJA must be considered in condemnation cases.

A. Prevailing Party.

The EAJA unfortunately does not define “prevailing party” for purposes of condemnation cases. The Eighth Circuit concluded that prevailing party includes a property owner who wins by judgment or negotiation and settlement any amount more than the government’s offer. I find this test inappropriate in light of the context of condemnation actions. Under this test, virtually every landowner will be a “prevailing party.” I do not think Congress intended that the “prevailing party” threshold requirement be interpreted so broadly as to include virtually every litigant. This would put a burden on the government to prove in almost every condemnation case that its position was “substantially justified.”

The Fifth Circuit concluded that a prevailing party is a landowner who recovers “far more” than the government offered. U.S. v. 329.73 Acres of Land, supra. While this approach may come closer to what Congress intended, the standard set forth is so vague as to be unworkable. The same problem exists with the Ninth Circuit’s definition of a prevailing party as a landowner whose award is “substantially greater” than the government’s original deposit. See U.S. v. 101.80 Acres of Land, supra.

The proposed amendments to the EAJA contained a definition of “prevailing party” in condemnation actions which provides:

(H) “prevailing party”, in the case of eminent domain proceedings, means a party who obtains a final judgment (other than by settlement), exclusive of interest, the amount of which is at least as close to the highest valuation of the property involved that is attested to at trial on behalf of the property owner as it is to the highest valuation of the property involved that is attested to at trial on behalf of the Government.

This definition of “prevailing party” is a sensible and fair approach and, therefore, I adopt it for purposes of the instant cases. This test can be applied in a workable fashion and is more in line with the reality of condemnation cases. The definition acknowledges that the jury award will quite often be somewhere in between the government’s and landowner’s asserted values, and prevents every landowner from being a “prevailing party.” Moreover, this approach takes into account not only the government’s asserted value in relation to the jury award, but also the landowner’s asserted value in relation to the jury award. This is only fair in light of the fact that it is often the landowner’s very high claims of value which cause the ease to go to trial and create the potential for the jury’s award to greatly exceed the government’s valuation. Most importantly, this approach encourages both parties (and not just the government) to be more realistic with their respective claims of value.

Defendant Cheyenne Mining argues in its brief that H.R. 5479 has no applicability to the case at bar because when looking to legislative intent to divine the meaning of an ambiguous statutory provision, the courts must look to the intent of the legislature at the time of passage of the enactment and cannot be influenced by subsequent legislative activities. (Brief of Defendant at 2). In this regard, defendant asserts that “[tjhe purpose of H.R. 5479 as applied to eminent domain actions was to alter the definition of prevailing party,” (Brief of Defendant at 2). At the outset, I disagree with defendant’s assertion that H.R. 5479 “alters” the definition of prevailing party. “Prevailing party” is not defined under the EAJA, and it is clear from the circuit court cases that courts are perplexed with the application of the prevailing party requirement in condemnation actions. H.R. 5479 would have been a clarification, and not an alteration, of the definition of “prevailing party.” More importantly, however, I do not adopt H.R. 5479 because I feel bound by it as an enactment of legislative intent. Rather, the “prevailing party” definition contained in H.R. 5479 is a sensible suggestion which I find to be consistent with the legislative intent at the time of the enactment of the EAJA. I find this definition to be rational, workable, practicable, fair and just.

Therefore, I conclude that a “prevailing party” in condemnation actions is a landowner whose highest asserted value at trial is closer to the jury’s verdict than the government’s highest asserted value at trial.

B. Substantial Justification.

Having determined when a landowner may be characterized as a prevailing party, the next question is whether the government’s position was “substantially justified.” The meaning of “substantially justified” is not defined in the EAJA. The Eighth Circuit determined that the government’s position is substantially justified if the government relied upon expert witness appraisals in reaching its asserted value. See US. v. 341.45 Acres of Land, supra. This test is not helpful because the government almost always relies on expert appraisers. It is well known that appraisals of land can vary widely. A party is seldom hard pressed to find an expert appraiser who will testify on that party’s behalf and disagree with the opposition’s expert. It is not uncommon in condemnation cases to have property appraisals from opposing experts that are hundreds of thousands of dollars apart.

The Ninth Circuit has focused on the amount of the jury verdict in relation to the amount of the government’s deposit in defining “substantially justified.” U.S. v. 101.80 Acres of Land, supra, (“[T]he governments original deposit was wholly inadequate, representing only a fraction of the true value of the easement condemned as found by the jury. Under such circumstances, we cannot say the district court abused its discretion in concluding that the government’s position was not ‘substantially justified....’”)

Condemnation actions are unique in that they involve one discrete issue, i.e., the value of property taken, and generally do not present novel or unusual legal issues affecting the strength of the government’s position. Due to this lack of complexity in such actions, an objective, quantitative approach is suitable in defining substantial justification. Therefore, I adopt the definition for “prevailing party” stated earlier to be used for defining “substantially justified.” Hence, if the amount of the jury’s verdict is closer to the landowner’s highest asserted value at trial than it is to the government’s, then the government’s position was not substantially justified.

Ill

I turn now to the two instant cases. In Cheyenne Mining, the government’s highest value attested to at trial was $695,-000, the landowner’s highest value attested to at trial was $2,194,000 and the amount awarded by the jury was $1,067,552. The verdict was $372,552 more than the government’s highest value but $1,126,448 less than the landowner’s highest value. Therefore, the defendant landowner is not a prevailing party in this case and is not entitled to attorneys’ fees and expenses under the EAJA.

In Gyurman, the government’s highest value attested to at trial was $583,-510, the landowner’s highest value attested to at trial was $883,818, and the amount awarded by the jury was $852,936. The verdict was $269,426 more than the government’s highest value but only $30,882 less than the landowner’s highest value. In Gyurman, the defendant landowner is a . prevailing party and the government’s position was not substantially justified. Therefore, the defendants in Gyurman are entitled to attorneys’ fees and expenses under the EAJA. Unfortunately, the calculation of the defendant’s fees cannot be done at this time. Defendant’s application and supporting affidavits do not contain the necessary information.

A petition under the EAJA for attorneys’ fees and expenses in condemnation cases shall contain a separate detailed description of each attorney’s services. This should be broken down further into subcategories reflecting the separate charges and total amounts of time spent on any single type of legal service. It should state the customary and usual hourly rate for each attorney (by name) for the services listed.

EXAMPLE Customary and usual Rate Hours hourly rate requested

2. Smith — attorney

A. Document Preparation

1/12/82 — drafting interrogatories 1 .60 60

5/10/83 — motion for new trial 3 60 60

6/10/83 — notice of appeal and docketing statement 2 60 60

Subtotal 6 360 360

Total hours 6

Several important points should be noted. First, a meaningful description of the subject researched, or topic discussed, or document drafted, etc., must be included. A single word entry such as “conference” is inadequate. I must be able to determine whether the hours spent are reasonable and not duplicitous.

Two final matters should be considered in the supporting affidavits. With respect to expert witnesses or appraisers, it is important to note that the multiplying rates cannot exceed the highest rate of compensation paid for an expert by the United States. ' Consequently, there should be two calculation columns: one reflecting this ceiling level and another reflecting the party’s requested amount. Lastly, paralegal expenses, law clerk services and all other expenses must be detailed enough to allow the Court to evaluate the nature of the expense. To be sure, “legal research” alone, is inadequate; the description must include something more specific.

Accordingly, it is

ORDERED that defendant Cheyenne Mining’s application for attorneys’ fees and expenses under the EAJA is DENIED;

ORDERED that defendant Gyurman’s application for attorneys’ fees and expenses under the EAJA is GRANTED in accordance with the conditions hereinafter set out.

ORDERED that defendant Gyurman shall, within 10 days from the date of this Order, file a supplement to its last application for fees and expenses in accordance with the instructions contained in this Order.

ORDERED that counsel for both parties shall confer within 15 days from the date the defendant files its supplement in an attempt to agree on the amount of reasonable attorney’s fees and expenses. If no such agreement can be reached, the Court will then enter an appropriate Order, awarding such fees and expenses as in its discretion defendants may be entitled.

      . The proposed amendments, contained in H.R. 5479, were "pocket vetoed" by President Reagan. The President's veto message, set forth at Cong.Rec. H12292 (daily ed. Nov. 14, 1984), discusses the Administration’s reasons for withholding approval of H.R. 5479. These reasons are unrelated to the proposed definition of prevailing party in condemnation cases.

      . This approach does not remove all of the court’s discretion in awarding fees because the EAJA provides that the court shall award fees to prevailing parties "unless the court finds that the position of the United States was substantially justified or that special circumstances make an award unjust." 28 U.S.C. § 2412(d)(1)(A) (emphasis added). If special circumstances exist making an award unjust, a court has discretion to decline to make such an award,

      . "A request for attorney’s fees should not result in a second major litigation. Ideally, of course, litigants will settle the amount of the fee. Where settlement is not possible, the fee applicant bears the burden of establishing entitlement to an award and documenting the appropriate hours expended and hourly rates. The applicant should exercise ‘billing judgment’ with respect to hours worked, ... and should maintain billing time records in a manner that will enable a reviewing court to identify distinct claims.
      We reemphasize that the district court has discretion in determining the amount of a fee award.’’ Hensley v. Eckerhart, 461 U.S. 424, 103 S.Ct. 1933, 76 L.Ed.2d 40 (1983).


source: Caselaw Access Project

author: MUNSON, Chief Judge.

license: Public Domain

text:
    Brayton FRASIER, Plaintiff, v. Richard D. HEGEMAN, Tuscan Dairy Farms, Inc., and all other presently unknown John and Jane Does 1 through 100, Defendants.
    No. 84-CV-1247.
    United States District Court, N.D. New York.
    March 16, 1985.

      Brayton Frasier pro se.
    U.S. Dept, of Justice, Tax Div., Washington, D.C., Frederick J. Scullin, Jr., U.S. Atty., Albany, N.Y., for defendant Hege-man; Daniel F. Brown, Trial Atty., Washington, D.C., George Yanthis, Asst. U.S. Atty., Albany, N.Y., of counsel.
    Buckley, Kremer, O’Reilly, Pieper, Ho-ban & Marsh, Mineóla, N.Y., for defendant Tuscan Dairy Farms, Inc.; William G. Wallace, Mineóla, N.Y., of counsel.
   MEMORANDUM-DECISION AND ORDER

MUNSON, Chief Judge.

Mr. Brayton Frasier, plaintiff in this action, failed to pay or file his federal income taxes for 1977 through 1981. The IRS prepared substitutes for returns pursuant to I.R.C. § 6020(b) and assessed plaintiffs past due taxes in the amount of $64,-478.37. A notice of levy was served upon defendant Tuscan Dairy Farms, Inc. for money owed plaintiff for the purchase of milk produced on plaintiffs farm. In accordance with the notice of levy, defendant Tuscan Dairy paid to the IRS the money owed by. Tuscan Dairy to the plaintiff.

Plaintiff commenced this action pro se alleging numerous violations of his civil rights. Named in his complaint are defendants Tuscan Dairy Farms and an IRS officer, Richard Hegeman. Additional unnamed defendants are “all other presently unknown Defendants as John and Jane Does 1 through 100.” The action was originally commenced in state court and was removed by the defendant Hegeman. The two named defendants have moved to dismiss the complaint pursuant to Rule 12(b), Fed.R.Civ.P.

I

On December 26, 1983 a delegate of the Secretary of the Treasury made an assessment against the plaintiff pursuant to 1.R.C. § 6201(a) for unpaid individual income taxes, penalties, and interest for the years 1977 through 1981. As a revenue officer for the Internal Revenue Service, defendant Richard Hegeman had the responsibility for collecting the delinquent accounts of the plaintiff. Pursuant to I.R.C. § 6331(d), defendant Hegeman sent to plaintiff a final notice before seizure [IRS Form Letter 1058], dated June 13, 1984, demanding payment of his then outstanding unpaid tax balance of $64,478.37. Plaintiff did not respond to this letter.

On July 25, 1984 defendant Hegeman mailed a notice of levy [IRS Form 668A(c) ] to the defendant Tuscan Dairy Farms, Inc. Tuscan subsequently sent two checks total-ling $9,978.52 to the IRS, representing payments owed to the plaintiff for the purchase of milk produced on plaintiffs farm. These checks were applied by the IRS to the plaintiffs 1977 and 1978 tax liabilities.

Plaintiffs complaint alleges “Conspiracy under Color of Law,” “Grand Larceny,” and “Violations of Civil Rights.” Plaintiff seeks an injunction precluding any further efforts on the part of the defendants to collect the plaintiffs tax liabilities, return of money seized to date, money damages, and a court order directing a grand jury investigation of criminal charges against defendants.

II

Plaintiff alleges various constitutional violations against the defendant, IRS officer Hegeman. Sovereign immunity extends to officers of the U.S. acting within the scope of their official functions. Barr v. Mateo, 360 U.S. 564, 79 S.Ct. 1335, 3 L.Ed.2d 1434 (1958), including employees of the IRS. Babylon Milk and Cream Co., Inc. v. Rosenbush, 233 F.Supp. 735 (E.D.N.Y.1964), Bershed v. Wood, 290 F.2d 714 (9th Cir.1961). Following IRS procedures does not subject an IRS agent to liability for constitutional violations absent allegations of bad faith on the part of the IRS. Foxman v. Rennison, 44 A.F.T.R.2d, ¶ 79-5191 (W.D.N.Y.1979), aff'd, 625 F.2d 429 (2d Cir.1980). Since plaintiff alleges no more than that the IRS agent Hegeman followed IRS statutory procedure, plaintiffs allegations of constitutional violations against, defendant Hegeman must be dismissed.

Plaintiff seeks an injunction against defendant Hegeman’s efforts to collect taxes from plaintiff, a return of money seized by the IRS, and money damages. A lawsuit against an officer of the United States Government will be held to be a suit against the United States itself where, by obtaining relief against an officer of the Government relief in effect would be obtained against the sovereign itself. Larson v. Domestic and Foreign Commerce Corp., 337 U.S. 682, 688, 69 S.Ct. 1457, 1460, 93 L.Ed. 1628 (1949). Although the plaintiff here names the IRS officer individually, plaintiff’s action will be treated as one against the sovereign United States.

The United States is immune from lawsuits except to the extent that Congress has statutorily abrogated this immunity. United States v. Testan, 424 U.S. 392, 399, 96 S.Ct. 948, 953, 47 L.Ed.2d 114 (1976). A waiver of sovereign immunity “cannot be implied but must be unequivocally expressed.” Id. (quoting United States v. King, 395 U.S. 1, 4, 89 S.Ct. 1501, 1502, 23 L.Ed.2d 52 (1969)). Where there is no statutory consent waiving immunity, the court lacks jurisdiction to entertain suits against the United States. Testan, 424 U.S. at 399, 96 S.Ct. at 953 (quoting United States v. Sherwood, 312 U.S. 584, 587-88, 61 S.Ct. 767, 770-71, 85 L.Ed. 1058 (1941)). There is no statute granting consent by the United States to be sued in an action such as that of plaintiffs; Title 28 U.S.C. § 1346(a)(1) allows for actions against the United States for alleged erroneously or illegally assessed taxes. The statute requires that the taxpayer pay the full amount of the assessment before challenging its validity. Flora v. United States, 357 U.S. 63, 78 S.Ct. 1079, 2 L.Ed.2d 1165 (1958). Plaintiff has not complied with this requirement. Therefore, this court lacks jurisdiction over plaintiff’s challenge to the collection or assessmént of his taxes.

Plaintiff’s complaint against defendant IRS officer also alleges various state and common law violations, including “special assumpsit,” “trespass on the case,” and several state constitutional and statutory provisions. Although a pro se complaint is not to be held to stringent standards of pleading, Haines v. Kerner, 404 U.S. 519, 520-21, 92 S.Ct. 594, 595-96, 30 L.Ed.2d 652 (1972), a complaint against a federal official, given the possibility of harassment and potential.for interference with critical operations of government, must be held to an exacting standard. Harlow v. Fitzgerald, 457 U.S. 800, 807-08, 102 S.Ct. 2727, 2732-33; 73 L.Ed.2d 396 (1982). Where suits against federal officials are concerned, “a firm application of the Federal Rules of Civil Procedure will insure that federal officials are not harassed by frivolous lawsuits,” Id. at 808, 102 S.Ct. at 2733 (quoting Butz v. Economou, 438 U.S. 478, 507-08, 98 S.Ct. 2894, 2911-12, 57 L.Ed.2d 895 (1978)).

A motion to dismiss for failure to state a claim should not be granted “unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.” Green v. Maraio, 722 F.2d 1013, 1015-16 (2d Cir.1983) (quoting Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 101-102, 2 L.Ed.2d 80 (1957)); 2A J. Moore, Moore’s Federal Practice ¶ 12.08 at 2271, 2274 and 2284-85 n. 7 (citing cases) (2d Ed.1984). Plaintiff’s claim premised upon “special assumpsit” is stated in vague and conclusory terms and fails to contain any factual allegations in support thereof; plaintiff does not allege the existence of an express contract or other promise made to the plaintiff by the federal defendant upon which a suit might be premised. Accordingly, plaintiff’s claim under “special assumpsit” must be dismissed.

Plaintiffs claim arising under “trespass on the case” is specifically barred by the Federal Tort Claims Act, 28 U.S.C. Section 2671 et seq. Title 28 U.S.C. § 2680(c) provides that the Act, although generally allowing for a tort action against federal defendants, does not apply to any claim “arising in respect of the assessment or collection of any tax.” Under these circumstances plaintiffs claim of “trespass on the case” is dismissed. Plaintiff asserts claims arising under various unclearly specified provisions; these claims must be dismissed due to plaintiffs failure to specify the relevant provisions.

Plaintiffs prayer for relief includes a request for an injunction against the further collection of his overdue taxes. This type of injunction is specifically prohibited by the Tax Anti-Injunction Act, I.R.C. § 7421(a) which prohibits suits “for the purpose of restraining the assessment or collection of any tax.” Hassan Kadah v. United States, No. 81-CV-1253, slip op. at 1 (N.D.N.Y. Nov. 18, 1981). Accordingly, this court lacks jurisdiction to entertain plaintiffs request for an injunction.

Plaintiff also seeks the return of all money levied upon by the IRS. A taxpayer may maintain an action for a return of taxes assessed only after he has paid the full amount of the assessment and has filed an administrative claim with the IRS. I.R.C. § 7422; Flora v. United States, 362 U.S. 145, 80 S.Ct. 630, 4 L.Ed.2d 623 (1960); Altman v. Connally, 456 F.2d 1114 (2d Cir.1972). Since plaintiff has not complied with these statutory requirements, this court lacks jurisdiction to order the return of the monies seized to date.

III

Plaintiff asserts a claim for breach of contract against Tuscan Dairy Farms, Inc. for its compliance with the notice of levy issued by the IRS upon accounts receivable owed by Tuscan Dairy to plaintiff. The notice of levy was properly authorized under I.R.C. § 6321, pursuant to which defendant made payments to the IRS.

It has been recognized that “the indebtedness of a third party to a taxpayer is subject to distraint.” See, e.g., United States v. Long Island Drug Co., 115 F.2d 983, 985-86 (2d Cir.1940). Any party who surrenders property subject to an IRS levy “shall be discharged from any obligation or liability to the delinquent taxpayer with respect to such property ...” I.R.C. § 6332(d). Accordingly, plaintiff states no claim for relief against Tuscan Dairy for breach of contract.

IY

Plaintiff claims that the defendants violated his civil rights under 42 U.S.C. § 1983, § 1985 and § 1994. An essential element of a claim under § 1983 is that plaintiffs rights were deprived by defendants acting under color of state law. Flagg Bros., Inc. v. Brooks, 436 U.S. 149, 155-57, 98 S.Ct. 1729, 1732-34, 56 L.Ed.2d 185 (1978). Here the plaintiff has failed to show any state action whatsoever; rather the defendants acted in conformity with federal law. This does not constitute the requisite state action to maintain an action under 42 U.S.C. § 1983. See Campbell v. Amax Coal Co., 610 F.2d 701, 702 (10th Cir.1979).

Plaintiff alleges that a conspiracy between the defendants violated his civil rights under § 1985. This circuit has developed stringent pleading requirements for allegations of a conspiracy to violate civil rights. See 423 South Salina Street, Inc. v. City of Syracuse, 566 F.Supp. 484, 493 (N.D.N.Y.1983). Unsubstantiated allegations of a conspiracy are insufficient to withstand a motion to dismiss. See Contemporary Mission, Inc. v. United States Postal Services, 648 F.2d 97, 107 (2d Cir.1981). In the absence of allegations of class based or racial discriminatory animus, the complaint fails to state a claim under § 1985. Campbell, 610 F.2d at 702. Here plaintiff has failed to allege any facts in support of his conspiracy claims other than the defendant’s actions authorized by the Internal Revenue Code. Thus, plaintiffs cause of action under 42 U.S.C. § 1985 must be dismissed.

Additionally, plaintiffs cause of action arising under § 1994 must also be dismissed. This statute, promulgated to implement the thirteenth amendment, does not apply to disgruntled taxpayers who feel held in peonage. Lonsdale v. Egger, 525 F.Supp. 610, 612 (N.D.Tex.1981), appeal dismissed, 673 F.2d 1325 (5th Cir.1982).

V

Plaintiff also requests a grand jury investigation of the criminal charges against the defendants. There is no New York State law nor federal law authorizing a private individual to force the commencement of a grand jury investigation. Accordingly, this claim is dismissed.

Defendant Tuscan also requests the awarding of expenses, including attorney’s fees. The apparent amount of plaintiff’s outstanding tax liability convinces this court that this request should be denied.

For the foregoing reasons plaintiff’s complaint is hereby dismissed pursuant to Rule 12(b)(1) and (b)(6), Fed.R.Civ.P.

It is so Ordered.

      .I.R.C. § 6020 provides:
      § 6020. Returns prepared for or executed by Secretary
      (a) Preparation of return by Secretary
      If any person shall fail to make a return required by this title or by regulations prescribed thereunder, but shall consent to disclose all information necessary for the preparation thereof, then, and in that case, the Secretary may prepare such return, which, being signed by such person, may be received by the Secretary as the return of such person.
      (b) Execution of return by Secretary
      (1) Authority of Secretary to execute return
      If any person fails to make any return (other than a declaration of estimated tax required under section 6015) required by any internal revenue law or regulation made thereunder at the time prescribed therefor, or makes, willfully or otherwise, a false or fraudulent return, the Secretary shall make such return from his own knowledge and from such information as he can obtain through testimony or otherwise.
      (2) Status of returns
      Any return so made and subscribed by the Secretary shall be prima facie good and sufficient for all legal purposes.
      26 U.S.C. § 6201(a) (1982).

      . I.R.C. § 6201 provides:
      § 6201. Assessment authority
      (a) Authority of Secretary
      The Secretary is authorized and required to make the inquiries, determinations, and assessments of all taxes (including interest, additional amounts, additions to the tax, and assessable penalties) imposed by this title, or accruing under any former internal revenue law, which have not been duly paid by stamp at the time and in the manner provided by law. Such authority shall extend to and include the following:
      (1) Taxes shown on return
      The Secretary shall assess all taxes determined by the taxpayer or by the Secretary as to which returns or lists are made under this title.
      26 U.S.C. § 6201(a) (1982).

      . I.R.C. § 6331 provides:
      § 6331. Levy and distraint
      (a) Authority of Secretary
      If any person liable to pay any tax neglects or refuses to pay the same within 10 days after notice and demand, it shall be lawful for the Secretary to collect such tax (and such further sum as shall be sufficient to cover the expenses of the levy) by levy upon all property and rights to property (except such property as is exempt under section 6334) belonging to such person or on which there is a lien provided in this chapter for the payment of such tax. Levy may be made upon the accrued salary or wages of any officer, employee, or elected official, of the United States, the District of Columbia, or any agency or instrumentality of the United States or the District of Columbia, by serving a notice of levy on the employer (as defined in section 3401(d) of such officer, employee, or elected official. If the Secretary makes a finding that the collection of such tax is in jeopardy, notice and demand for immediate payment of such tax may be made by the Secretary and, upon failure or refusal to pay such tax, collection thereof by levy shall be lawful without regard to the 10-day period provided in this section. (b) Seizure and sale of property
      The term "levy” as used in this title includes the power of distraint and seizure by any means. Except as otherwise provided in subsection (d)(3), a levy shall extend only to property possessed and obligations existing at the time thereof. In any case in which the Secretary may levy upon property or rights to property, he may seize and sell such property or rights to property (whether real or personal, tangible or intangible).
      (c) Successive seizures
      Whenever any property or right to property upon which levy has been made by virtue of subsection (a) is not sufficient to satisfy the claim of the United States for which levy is made, the Secretary may, thereafter, and as often as may be necessary, proceed to levy in like manner upon any other property liable to levy of the person against whom such claim exists, until the amount due from him, together with all expenses, is fully paid.
      (d) Requirement of notice before levy
      (1)In general
      Levy may be made under subsection (a) upon the salary or wages or other property of any person with respect to any unpaid tax only after the Secretary has notified such person in writing of his intention to make such levy.
      (2)10-day requirement
      The notice required under paragraph (1) shall be—
      (A) given in person,
      (B) left at the dwelling or usual place of business of such person, or
      (C) sent by certified or registered mail to such persons’s last known address, no less than 10 days before the day of the levy.
      (3)Jeopardy
      Paragraph (1) shall not apply to a levy if the Secretary has made a finding under the last sentence of subsection (a) that the collection of tax is in jeopardy.
      (e)Continuing levy on salary and wages
      (1) Effect of levy
      The effect of a levy on salary or wages payable to or received by a taxpayer shall be continuous from the date such levy is first made until the liability out of which such levy arose is satisfied or becomes unenforceable by reason of lapse of time.
      (2) Release and notice of release
      With respect to a levy described in paragraph (1), the Secretary shall promptly release the levy when the liability out of which such levy arose is satisfied or becomes unenforceable by reason of lapse of time, and shall promptly notify the person upon whom such levy was made that such levy has been released.
      26 U.S.C. § 6331 (1982).

      . Plaintiff alleges violations of his rights pursuant to the first, fourth, fifth, seventh, ninth, tenth, thirteenth, and fourteenth amendments.

      . Rule 8(a)(2), Fed.R.Civ.P. requires that a pleading contain "a short and plain statement of the claim showing that the pleader is entitled to relief."

      . An exception to I.R.C. § 7421 exists where the plaintiff establishes equity jurisdiction and demonstrates that under no circumstances could the United States prevail. Enoch v. Williams Packing & Navigation Co., 370 U.S. 1, 7, 82 S.Ct. 1125, 1129, 8 L.Ed.2d 292 (1962). The plaintiff here has failed to establish that his situation falls within this exception.

      . Though plaintiff's claims against Tuscan Dairy could be dismissed for lack of pendent jurisdiction upon dismissal of all claims against the federal defendant, the apparent lack of any legal basis for plaintiffs claims against Tuscan Dairy compels this court to discuss these claims. Additionally, this course seems prudent because of the probability that in a state court action for breach of contract against Tuscan Dairy, Tuscan Dairy would undoubtedly interpose as a defense the IRS notice of levy. The notice of levy appears to have been served properly and, therefore, is a complete defense to plaintiffs claim of breach of contract. See I.R.C. § 6332(d).


author: BRIEANT, District Judge.

text:
    LAKER AIRWAYS LIMITED, Plaintiff, v. PAN AMERICAN WORLD AIRWAYS, et al., Defendants.
    No. M 8-85.
    United States District Court, S.D. New York.
    March 21, 1985.

      Robert M. Beckman, Beckman & Kir-stein, Thomas P. Lynch, Lynch, Rowin, Burnbaum & Crystal, New York City, for plaintiff.
    Michael J. Chepiga, New York City, for Witness Montagu.
    Robert S. Fischler, Shearmon & Sterling, New York City, for Witness Midland Bank.
   MEMORANDUM AND ORDER

BRIEANT, District Judge.

By separate motions argued together and fully submitted on March 12, 1985, Midland Bank pic (“Midland”) and Samuel Montagu & Co. Ltd. (“Montagu”) moved for orders pursuant to Rule 45(b), F.R. Civ.P. quashing deposition subpoenas duc-es tecum, which were served respectively in this district on the Midland Bank’s New York branch office, and upon Montagu’s New York Representative Office, or agency, also in this district, by plaintiff.

The subpoenas seek information and documents from movant non-party witnesses in the above entitled action, which is now pending in the United States District Court for the District of Columbia, under docket number 82-3362.

We describe briefly the underlying action. It is a private civil action seeking treble damages for federal antitrust violations alleged to have resulted in injury to Laker Airways Limited (“Laker”) at one time a well-known British passenger airline of which Sir Freddie Laker was the founder and chief executive officer. On February 5, 1982, Laker ceased doing business due to insolvency, and on February 17, 1982 an individual residing in the United Kingdom was appointed Liquidator.

The action filed November 24, 1982 and thereafter consolidated with companion cases thereafter filed, alleges that plaintiff, described as a “foreign corporation in liquidation,” exists under the laws of the Island of Jersey in the Channel Islands having its principal office in London, England. Plaintiff is represented to this Court to be insolvent allegedly as a result of the tortious and conspiratorial misconduct of various defendant American, British, Swiss, German, Dutch and Belgian airlines, the British Airways Board, an American aircraft manufacturer, and its finance subsidiary.

The thrust of the two-pronged complaint is, first, that “the airline defendants agreed to a predatory scheme to destroy Trans Atlantic Charters and Laker’s scheduled Skytrain [passenger] service by offering, among other things, high cost service, at prices below the costs of those services.” (Complaint 1118). After alleging other wrongful competition, which need not concern us here, the complaint also alleged as a second factual basis, that “Laker realized in May of 1981 that it might be unable to meet its aircraft loan repayment requirements in January 1982 and explained the situation to its lenders.” (Complaint ¶ 24). In ¶ 30, the Complaint alleges that “by Christmas Eve 1981 Laker was advised that all of the lenders had agreed to provide the necessary finance” to reschedule Laker’s debts. It is then alleged that certain named airline defendants “pressured Laker’s lenders” to deny Laker the necessary finance so as to force Laker out of business, that the lender defendants continued to mislead Laker into believing that the financing was being provided as agreed, that Laker relied on this misrepresentation to its detriment and did not seek other sources of financing.

The non-party witnesses Midland and Montagu are not sued in the District of Columbia at this time. Implicit, however, is the suggestion that they are among the “lenders” believed by plaintiff to have colluded with Laker’s competitors to deny financing to Laker.

Movants have not been sued because a court in the United Kingdom enjoined such action by the Laker Liquidator, a person subject to its jurisdiction. A motion is pending to vacate that injunction in light of a decision subsequently rendered by the House of Lords in a related case, British Airways v. Laker Airways, decided July 19, 1984, 3 W.L.R. 416. It is highly likely that the injunction will be vacated in the due course of time, and thereafter movants will be named as additional parties defendant in the District Court of the District of Columbia. See generally Laker Airways v. Sabena, Belgian World Airlines, 731 F.2d 909 (D.C.Cir.1984). At present they are no more than non-party witnesses, entitled to have their pending motion adjudicated in accordance with the present state of the litigation. Should either or both mov-ants become parties defendant in the future, then any necessary pre-trial discovery may be obtained directly through the exercise of the powers of the district court in which the above entitled action is pending.

These subpoenas presently before this Court are extremely broad and burdensome as drafted. Although apparently intended only to elicit evidence for purposes of trial to demonstrate such pressuring or collusion with regard to Midland and Montagu in their capacity as potential lenders to Laker, the demands extend as well to all papers relating to Sir Freddie Laker personally. A Midland subsidiary has provided banking services to Sir Freddie Laker for, we are told, in excess of 30 years, generating a lot of paper. Midland, for its part, and Montagu deny that they were pressured, and attribute the failure to make the loan to the continuous deterioration of the airline industry generally, and Laker in particular in the latter part of 1981.

This Court concludes that the subpoenas must be vacated for a number of reasons. Foremost among them is the fact that all of Midland’s activities in connection with this matter took place solely in the United Kingdom, and Midland’s New York branch office had no involvement whatsoever with Laker. This point is not disputed at the hearing. The fact is that the New York branch of Midland did not open until April 1983, long after the alleged antitrust violations sued on in the District of Columbia. Similarly Montagu does not have a branch office in this District; it has a “representative office” which conducts no banking operations in New York. Here again there are no files or documents in the New York Representative Office of Montagu concerning Laker and no person at that office has any knowledge of the matters concerning Laker. That office also was not opened in New York until long after the events complained of by Laker in the District of Columbia action. Essentially then the deposition subpoenas duces tecum seek to require Midland and Montagu, by officers having custody in the United Kingdom to produce in New York for use in the District of Columbia litigation, documents and records regularly maintained at their home offices in London. This is inappropriate. See generally Ings v. Ferguson, 282 F.2d 149 (2d Cir.1960); First National City Bank of New York v. Internal Revenue Service, 271 F.2d 616 (2d Cir.1959); Cates v. LTV Aerospace Corp., 480 F.2d 620 (5th Cir.1973); and Elder-Beerman Stores Corp. v. Federated Dept. Stores, Inc., 45 F.R.D. 515 (S.D.N.Y.1968) (by then District Judge Mansfield), which continue to reflect the law applicable to non-parties.

A.s a second reason to vacate, this Court finds that the service of the subpoenas in New York is a transparent attempt to circumvent the Hague Convention on the Taking of Evidence Abroad in Civil or Commercial Matters, codified at 28 U.S.C. § 1871 (hereinafter the “Hague Convention”), which sets forth agreed international procedures for seeking evidence in this Court from non-parties abroad.

The failure to use the Hague Convention is more than a mere technicality. The extraterritorial jurisdiction asserted over foreign interests by the American antitrust laws has long been a sore point with many foreign governments, including that of the United Kingdom. The English Protection of Trading Interests Act of 1980. (“PTIA”) authorizes and empowers the Secretary of State for Trade and Industry to interpose the official power of the British Government so as to prevent persons conducting business in the United Kingdom from complying with foreign judicial or regulatory provisions designated by the Secretary of State as intrusive upon the sovereignty of that nation.

With respect to the District of Columbia Laker action, the Secretary has already issued one directive that “no person or persons in the United Kingdom shall comply, or cause or permit compliance, whether by themselves, their officers, servants or agents, with any requirement to produce or furnish to the district court any commercial document in the United Kingdom or any commercial information_” That the entire Laker litigation situation is a matter of sensitive international interest also is emphasized by the determination of the Department of Justice of the United States, announced November 20, 1984 to refrain from initiating civil or criminal antitrust action with respect to the refinancing aspect of the collapse of Laker, and the publicly announced determination on November 19, 1984 by the President that the grand jury investigating Laker antitrust violations in the District of Columbia since June 1983 should terminate its inquiry for “foreign policy reasons.”

Implicit in the concerns expressed by the British Government is the notion that the British bureaucracy had the power to consider and investigate all tariffs on international routes flying in and out of the United Kingdom with respect to which the predatory pricing was allegedly conducted, with the power to disapprove such fares, but did not exercise its power, accordingly the allegations against “predatory pricing” in the American antitrust suit brought by Laker, challenge indirectly the validity and indeed the honesty of decisions of the British Government with respect to tariff decisions made in exercise of the sovereignty of the British Government. The power of the British Government to regulate such matters, presumably in the interests of its own nationals, is clearly recognized by international treaty and agreements. The validity of the antitrust claims being made in the District of Columbia are of course of no direct concern to this Court. However, the very real problems presented by the PTIA are cited to demonstrate that the attempt to effect the subpoena duces tecum in this District is in effect an end run, not only around the Hague Convention, but also an end run on the PTIA. In effect, this Court is being asked to aid the plaintiff in the District of Columbia in obtaining an order from this Court which would cause the Midland branch in New York and the Mo-ntagu agency to compel their principals in London to violate British law by disgorging in London and transferring to their New York offices, documents which plaintiff would like to see, none of which are now or ever were located in New York. This is clearly an improper abuse of the subpoena power of this Court, and should not be permitted.

In reaching the foregoing conclusion we need not consider whether the Hague Convention is always the exclusive method of discovery against a non-party, nor do we consider the case where the discovery is sought from a party plaintiff, cf. Coface v. Phillips Petroleum Co., 81 Civ. 4463-JFK (S.D.N.Y. December 11, 1984), or even from a defendant.

Both motions are granted, and the subpoenas are each vacated. No costs.

So Ordered.


author: HUYETT, District Judge.

text:
    MEDIQ MANAGEMENT SERVICES, DIVISION OF MEDIQ, INC. v. Donald KERNS.
    Civ. A. No. 85-575.
    United States District Court, E.D. Pennsylvania.
    March 25, 1985.
    Frank L. Tamulonis, Pottsville, Pa., for plaintiff.
    Claude A.L. Shields, Pottsville, Pa., for defendant.
   MEMORANDUM AND ORDER

HUYETT, District Judge.

Presently pending before me is defendant’s motion to dismiss. For the reasons set forth below, this motion will be denied.

Plaintiff alleges in its complaint that it is a Delaware Corporation with its principal place of business in New Jersey. It apparently entered into a contract to perform certain services for the County of Schuylkill, Pennsylvania. As part of this contract, plaintiff was to submit monthly invoices and was to be paid on a monthly basis.

On November 7,1984, the defendant who is the Schuylkill County Controller, refused to pay certain of these invoices. On December 19, 1984, the Schuylkill County Commissioners voted to direct the Controller to make these payments. Notwithstanding this vote, defendant has failed to pay the invoices submitted by plaintiff. This suit was brought pursuant to 16 Pa. Stat.Ann. § 1752 (Purdon 1956) for an order directing defendant to pay these invoices.

Defendant has asserted three arguments in support of his motion. Each of these is without merit. Defendant’s first argument is that the complaint fails to state a claim upon which relief can be granted. Specifically, defendant contends that the complaint is fatally defective because it failed to plead facts sufficient to show that a legal wrong has been committed. The complaint alleges that plaintiff entered into a valid contract with Schuylkill County, that it performed the required services, and that the defendant has refused to pay the valid invoices he has received in spite of the fact that the commissioners have voted to pay the bills. Plaintiff did not name either the county, or the county commissioner as defendants. Defendant contends that because plaintiff has not alleged that the controller “owed plaintiff any duty to pay the invoices,” the complaint must be dismissed.

Defendant’s argument might have merit if this were a straightforward breach of contract suit. It is not. Plaintiff is seeking to proceed under 16 Pa.Stat.Ann. § 1752 (Purdon 1956) which states:

If the controller does not approve a claim, bill or demand presented to him, he shall within thirty days forward it to the county commissioners together with his notice that he has refused to approve the same and his reasons therefor. The county commissioners shall consider the claim, bill or demand and, if they consider that it should be paid by the county, they shall so notify the controller. If the controller thereafter continues to refuse his approval no payment shall be made thereon by the county except pursuant to an order of court upon a proper issue thereto directing the controller to approve payment.

Defendant has completely failed to address the application of this statute to the facts of this lawsuit and has directed me to no authority which would lead me to conclude that plaintiff has not stated a valid claim under this section. The facts as alleged certainly seem to fit the scenario contemplated by this section.

In spite of defendant’s silence on this matter, it is not entirely clear to me from the face of this statute that it is designed to provide a cause of action by a citizen against a county controller for what is essentially breach of contract. As a logical matter, it would seem unlikely that the legislature would contemplate that a plaintiff could get a mandatory order seeking payment from a county controller without first having been adjudicated deserving of that payment. If this reasoning is correct, then defendant’s argument is well taken and plaintiff has failed to name the necessary defendants. On the other hand, the language of the statute is susceptible of the construction urged by plaintiff. The phrase “except pursuant to an order of Court upon a proper issue thereto directing the controller to approve payment” may be construed as allowing a cause of action for equitable relief against a controller independent of existing breach of contract claims.

Since its passage in 1955, section 1752 has been discussed in exactly one case. In Smith, Jr. v. Adams, 24 Pa.D. & C.2d 394, 49 Del.Co. 113 (1962), the plaintiff brought an action in mandamus to force the controller of Delaware County to pay certain payroll checks he claimed were owed to him. The parties disputed the right of the controller to set-off certain allegedly unauthorized mileage claims against the amount of the payroll checks. The parties apparently also disputed the amount of those mileage charges. The Court of Common Pleas of Delaware County held that the mandamus action was not ripe until the controller had fulfilled the requirements of § 1752. Although Smith is sufficiently different from the present case to make its application here somewhat tenuous, the court did state at one point:

The question of whether or not the basis used in determining the mileage was proper is not and has never been a part of this case. It may eventually become the duty of the court in another action to determine whether the mileage allowed to these plaintiffs has been properly calculated, and in the present case whether or not the controller can, in any event, set off an unliquidated claim against a salary check.

Id., 24 Pa.D. & C.2d at 395. One interpretation of this passage is that a cause of action exists under § 1752 separate from that for breach of contract.

In the last analysis, I think that defendant’s argument must fail here because plaintiff has alleged sufficient facts to assert a cause of action for breach of contract against defendant even if it is not entitled to relief under § 1752 until it has been determined that a breach has occurred. As a county controller, defendant is allowed under statute to refuse claims made against a county under certain circumstances. 16 Pa.Stat.Ann. § 1750 (Purdon 1956). As such, the controller can decide to dishonor claims made pursuant to a contract made by the commissioners. In such a ease, the commissioners have not committed any action which could be considered a breach. The controller, on the other hand, can be said to have caused the breach, should it be determined that a breach has occurred. Thus, the failure to include the commissioners as defendants in this suit is not a fatal flaw because although it is alleged that the commissioners made the contract, it is not alleged that they in any way breached the contract.

Defendant’s second argument is somewhat related. He argues that the commissioners are indispensable parties who must be joined under Fed.R.Civ.P. 19. Defendant goes on to argue that these parties cannot be joined because doing so would destroy diversity of citizenship which is the sole ground for federal subject matter jurisdiction over this case. I have reviewed the allegations contained in the complaint in light- of defendant’s arguments. I can see no merit in defendant’s arguments that the commissioners are indispensable to this lawsuit. First, defendant’s argument that an adverse judgment in this case could lead to substantial liability on the part of the commissioners is somewhat disingenous in light of the commissioner’s vote to pay plaintiff the money owed on December 19, 1984. Second, the relief sought in this suit is an order compelling the payment of the invoices under § 1752. In this suit I would anticipate that the defendant will offer some justification for the withholding of payment which presumably will go to the formation of the contract or plaintiff’s performance thereunder. The bald, conclusory statements contained in plaintiff’s motion are simply not enough “argument” in favor of his position to force me to conclude that this action should be dismissed for failure to join an indispensable party. Should it become apparent during the course of this suit that the commissioners are necessary then defendant can assert whatever cross-claims are available to him under the Rules of Civil Procedure.

Defendant’s last argument is that this court lacks subject matter jurisdiction because the parties are not diverse. In its complaint, plaintiff alleged that it is a Delaware Corporation with its principal place of business in New Jersey. Defendant is a Pennsylvania citizen. On its face this would seem to be a clear case of diversity (at least at this stage of the proceedings). Defendant makes a somewhat preposterous argument that plaintiffs principal place of business is Pennsylvania. If this were true, diversity would not exist. 28 U.S.C. § 1332(c). Defendant seems to argue that because plaintiff entered into a contract in Pennsylvania to be performed in Pennsylvania, its principal place of business must be Pennsylvania. That this argument is without merit goes without saying.

Based on the foregoing, I will deny defendant’s motion to dismiss. An appropriate order follows.

      . Because this is a motion to dismiss under Fed.R.Civ.P. 12, I must accept all well-pleaded allegations of the complaint as true. A motion to dismiss can be granted only where it is clear that plaintiff can prove no set of facts sufficient to entitle it to relief.

      . I do not understand how the addition of the county commissioners would destroy diversity even if I were to conclude that they were indispensable. Defendant is a Pennsylvania citizen as are, presumably, the county commissioners. Their addition would therefore not destroy diversity.


author: McMILLAN, District Judge.

text:
    Arvie Lou HAMBY, Plaintiff, v. Margaret M. HECKLER, Secretary, United States Department of Health and Human Services, Defendant.
    No. ST-C-83-67.
    United States District Court, W.D. North Carolina, Statesville Division.
    March 25, 1985.

      Charles M. Sasser, Legal Services of the Blue Ridge, Boone, N.C., for plaintiff.
    Clifford C. Marshall, Asst. U.S. Atty., Asheville, N.C., for defendant.
   ORDER

McMILLAN, District Judge.

Plaintiff Arvie Lou Hamby was born on February 22, 1931, and has a fifth-grade education. In the 1970’s, she completed a high school program through Wilkes Community College. On December 7, 1981, she filed an application for widows’ benefits based on the earnings of her former husband, Max A. Hamby, who died fully insured on September 8, 1970. She alleges disability due to musculoskeletal and neurological impairment involving the back, legs and shoulders and to hypertension. The alleged onset date is September 12, 1978, on which date the plaintiff was in an automobile accident which aggravated her existing scoliosis of the spine and a leg weakness which had resulted from adolescent polio.

After initial administrative denials, a hearing was held on July 14, 1982, before an Administrative Law Judge (ALJ) who, on August 20, 1982, found that plaintiff had the impairments set out above but found

4. That the evidence fails to establish that the claimant had or has an impairment or impairments listed in the Secretary’s regulations or that she had or .has an impairment or impairments the equivalent thereof; and
5. That the claimant has failed to establish that she is precluded from engaging in any gainful activity.
Tr. 16. Entitlement to widow’s insurance benefits based on disability under Section 202(e) of the Social Security Act, as amended, was therefore denied.

A final decision by the Appeals Council was issued on February 22,1983, upholding the ALJ’s decision to deny benefits. Plaintiff thereafter filed this complaint pursuant to 42 U.S.C. § 405(g) seeking review of the Secretary’s decision. The parties have filed cross-motions for summary judgment.

In making his decision, the ALJ had the following evidence before him:

Plaintiff testified extensively on her own behalf at the hearing. She described severe headaches and back pains and swelling of her legs and pain in her arms and shoulders. She says she is unable to walk without the aid of a walker and cannot sit for more than fifteen minutes nor lift more than five pounds because of the back pain. The only household chores she is able to accomplish are putting clothes in the washing machine and ironing while sitting down. She attends church and handicapped organization meetings when she can get rides, and she enjoys crafts. She had to leave her last job in 1978, because of the severe pain after her accident.

Plaintiff’s former supervisor testified that she made special arrangements, for her to work sitting down (such as providing a chair which rolled between the tables on which her work was placed) and for her to do only hand work, but that after the 1978 accident, plaintiff could not do even that limited amount of work (Tr. 65-66).

A October 7, 1980, letter from Dr. John Bond stated that since her accident in 1978, plaintiff had had repeated examinations, injection and medications from which she had “improved at times only to regress.” He stated that she had a 30% disability of the lumbar spine (Tr. 137).

Dr. Hawkins reported on December 18, 1981, that he had seen the plaintiff for hypertension and that she also had had a car accident in 1978. She had atrophy of both lower extremities, severe anxiety, exogenous obesity and a hernia (Tr. 120-121).

A one-time consultative examination was performed by Dr. Stanley Wallace on January 12, 1982. Plaintiff complained to him of a history of pain in the shoulders, elbows, lumbar and cervical spine for years and symptoms of stiffness and pain with difficulty standing, walking, bending or lifting. She also has a history of hypertension with “vague symptoms” of dizziness and headaches. Little evidence of “serious damage.”

Dr. Wallace found plaintiffs mental status to be normal. He found no muscle weakness; sensation grossly normal; knee and ankle jerk reflexes decreased bilaterally; mild atrophy of both calves and mild motor weakness of left lower extremity (4/s) and moderate motor weakness of right lower extremity (3+/s). Full range of motion of all joints except lumbar spine where there is 60° flexion and 20° extension with motion associated with pain. Impression: hypertension, arthralgias chronic low back pain and status post polio at age 13 (Tr. 122-123).

An EKG showed “left axis deviation secondary to left anterior hemiblock,” “un-complete right bundle branch block,” and “possible old lateral wall myocardial infarction.” X-ray of the lumbar spine showed mild osteophyte formation, severe scoliosis centered at L2. Chest x-ray showed lung fields clear, soft tissues normal but heart enlarged and kyphoscoliosis of the bony thorax (Tr. 125).

On February 18, 1982, Dr. Richard Adams, an orthopedist, reported that he had seen plaintiff for almost a year. She had complained of pain in the mid-lumbar and infrascapular areas of the back. He noted that she had marked weakness and atrophy of the right lower leg and severe dorsal and lumbar scoliosis. He was treating her with an anti-inflammatory medication. He felt that the back pain was a combination of the scoliosis and the injury from the accident in 1978. She was ambulatory with a walker with periodic swelling in her feet. Additionally, she had developed adhesive capsulitis of the left shoulder being treated with local injections. He found that “Although she requires a walker for ambulation, her upper extremities appear to be normal. I feel that perhaps sedentary work in which she uses her hands only could probably be accomplished by her” (Tr. 129).

On April 8, 1982, Dr. Adams expressed his opinion that plaintiff is “probably disabled from performing any gainful activity on a regular basis due to the difficulty [she] would have getting to and from work, as well as due to the chronic back pain [she has]” (Tr. 138).

Again, on April 22, 1982, Dr. Adams reviewed the history of plaintiffs problems and stated that the bursitis in her left shoulder, treated with an injection and medication, “has gradually improved.” Last seen on April 19, 1982, plaintiff complained of more back pain and radiation of that pain into the left leg. A physical examination showed tenderness over the left iliovertebral angle and marked scoliosis with the left hip being higher than the right hip. Straight leg raising was to 75°, reflexes equal and active, right leg weak secondary to polio. Treatment consisted of an injection into the low back and advice to continue use of walker.

In summary, this lady had a chronic problem with her back and leg due to polio, but had been functional prior to an auto accident in 1978, which resulted in a worsening of her condition of her back, but no overall change in her neurological status. It is my opinion that she has severe limitations in function secondary to her back and secondary to weakness in the right leg.

Tr. 140.

The rest of the file evidence includes letters from plaintiffs former co-workers, pastors and friends supporting her claim for benefits and corroborating her testimony as to her pain and her difficulty “getting around.” Diane K. Harper, Coordinator of Special Needs at Wilkes Community College discussed her work with plaintiff and stated that

In my opinion, Mrs. Hamby would have a very difficult time trying to maintain any employment. The pain which she suffers as a result of damage to her back and lower extremities would prohibit any kind of work which requires constant sitting, yet it would be virtually impossible for her to work at a job in any other position.

Tr. 142.

The Social Security Act provides that a widow is eligible for disability benefits if her impairments are “of a level of severity which under regulations prescribed by the Secretary is deemed to be sufficient to preclude an individual from engaging in any gainful activity.” 42 U.S.C. § 423(d)(2)(B). The Secretary’s regulations governing the medical criteria for widows’ disability determinations are set forth in the Listing of Impairments, 20 C.F.R., Sub-part B, Appendix 1. A widow will be considered disabled, and unable to engage in any gainful activity, if her impairment is found in the Listing of Impairments, or if her condition is the medical equivalent of a listed impairment. 20 C.F.R. § 404.1578(a). The Secretary must also consider' whether the combination of several impairments which do riot meet the specific criteria of the listed impairments constitutes the medical equivalent of a listed impairment. Id.

The AU found that plaintiff’s impairments do not meet the listings in Appendix 1. At the hearing, Dr. James C. Bruce, an internist and medical advisor for the Secretary, testified generally that plaintiff’s impairments did not meet or equal any of the listings in Appendix 1 and specifically that plaintiff’s back problem did not meet the listing at Section 1.05(C), disorders of the spine, because there was no evidence of sensory or reflex loss (Tr. 75, 79) as required by that listing. The AU noted the requirements of, but did not make specific findings as to, listings at Section 1.03 (arthritis of major weight-bearing joint) and Section 1.04 (arthritis of one major joint in each of the upper extremities).

The AU’s finding that plaintiff’s impairments do not equal a listing is not supported by substantial evidence and must be reversed. The “core” of the medical equivalence test is whether the claimant is “capable of any gainful activity.” Paris v. Schweiker, 674 F.2d 707, 710 (8th Cir.1982). Any other interpretation would fly in the face of Congress’ requirement that disability benefits be paid to widows (of wage earners) who have impairments severe enough to “preclude an individual from engaging in any gainful activity.”

The determination of “medical equivalence” must include consideration of laboratory findings, medically observable facts and the claimant’s subjective description of impairments. 20 C.F.R. § 404.1528-9. In addition, there is no exemption from the requirement that the opinion of the treating physician be given “great weight” and must not be disregarded in the absence of “persuasive contradictory evidence.” Mitchell v. Schweiker, 699 F.2d 185 (4th Cir.1983). In fact, where vocational, age and educational factors may not be considered, such as in this case, the doctor’s opinion as to the disabling effects of the impairments is all the more vital.

The AU failed even to mention plaintiff’s treating physician’s opinion that plaintiff is disabled from performing any gainful activity because of her chronic low back pain and her difficulty moving and walking. His opinion that she has “severe limitations” is supported by specific findings as to the existence and causes of the damage to her back and lower extremities.

Plaintiff did not just quit work at the time of her accident which changed her already difficult physical condition (due to childhood polio) into a much more painful and limiting condition. Instead, she attempted to return to her job which from all descriptions may have more closely met the definition of “sheltered work” than “gainful activity” in terms of the many modifications made on her behalf by her employer. Because of her increased pain and even further limited movement, she was unable to do even that work, and her employer was forced to discharge her.

While not all of the evidence of record shows that plaintiff’s impairments meet specific listings in Appendix 1, there is no evidence in the record that plaintiff can do any gainful activity. Plaintiff can do less than what is required in order to be able to do “sedentary work” as defined by the Secretary at 20 C.F.R. § 404.1567(a); she is not able to sit continuously for the periods of time required to do that work; she is not able to stand without great effort and use of a walker; and she is not able to carry any objects while walking because of her need to use a walker at all times.

It may well be true that widows do not have the same right as wage earners to have vocational, age and educational factors considered if their impairments are not found to meet or equal a listing. Nevertheless, the Secretary may not impose a harsher burden on widows who have shown, without reliance on vocational, age and educational factors, that they can do no gainful activity.

The evidence shows that plaintiffs impairments may not meet a listing of “disorders of the spine” because of the lack of evidence of sensory and reflex problems. However, plaintiff has the additional impairments of hypertension, disuse (for all vocationally-relevant purposes) of her lower extremities, and bursitis and tendinitis and the resulting pain in her shoulders. The ALJ’s finding that these impairments, in combination do not “equal” a listing is not supported by substantial evidence. The laboratory and clinical findings, the treating physician’s opinion and plaintiff’s subjective testimony, overwhelmingly supported by former co-workers, friends and ministers, show that plaintiff’s impairments are of such severity as to preclude any gainful activity, and that plaintiff, therefore, is disabled.

. IT IS THEREFORE ORDERED, that the final decision of the Secretary denying disability benefits is REVERSED.