author: GARRITY, District Judge.

text:
    Claire McDONALD et al., Plaintiffs, v. Margaret M. HECKLER, Secretary of Health and Human Services, Defendant.
    Civ. A. No. 84-2190-G.
    United States District Court, D. Massachusetts.
    June 27, 1985.

      Sarah Anderson, Linda L. Landry, Neighborhood Legal Services, Lynn, Mass., Laura Rosenthal, Mass. Law Reform Institute, Boston, Mass., for plaintiffs.
    Asst. U.S. Atty. Marianne Bowler, U.S. Atty., Boston, Mass., U.S. Atty. Gen., Washington, D.C., for defendant.
   MEMORANDUM AND ORDER ON DEFENDANT’S MOTION TO DISMISS AND ON PLAINTIFFS’ MOTION FOR CLASS CERTIFICATION

GARRITY, District Judge.

Plaintiffs in the instant class action challenge the regulatory policies of the Social Security Administration which are used to deny disability benefits to claimants on the grounds that their impairments are not severe. These policies are found in both the regulations and Social Security rulings. 20 C.F.R. §§ 404.1520(c); 404.1521; 416.920(c); 416.921; SSR 82-55; and SSR 82-56. Plaintiffs claim that these regulations and rulings violate the definition of disability contained in the Social Security Act (“the Act”), 42 U.S.C. § 423(d)(1)(A), as well as plaintiffs’ constitutional rights. Defendant Secretary of Health and Human Services has moved to dismiss this action in light of the Social Security Disability Benefits Reform Act of 1984, Pub.L. 98-460, 98 Stat. 1794 et seq. (“the 1984 Act”), and for lack of jurisdiction. Plaintiffs have moved for class certification. After hearing oral argument and considering the numerous briefs submitted by the parties, the court denies the Secretary’s motion to dismiss in part and grants it in part. Plaintiffs’ motion for class certification is granted.

I. The Secretary’s Severity Policies

In the Social Security Act, the term “disability” is defined as an “inability to engage in any substantial gainful activity by reason of any medically determinable physial or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months.” 42 U.S.C. § 423(d)(1)(A). This definition was clarified in 1967 with the addition of 42 U.S.C. § 423(d)(2)(A), which provides:

(2) For purposes of paragraph (1)(A)— (A) an individual ... shall be determined to be under a disability only if his physical or mental impairment or impairments are of such severity that he is not only unable to do his previous work but cannot, considering his age, education, and work experience, engage in any other kind of substantial gainful work which exists in the national economy, regardless of whether such work exists in the immediate area in which he lives, or whether a specific job vacancy exists for him, or whether he would be hired if he applied for work.

In 1968, the Secretary issued a regulation which provided that “[mjedical consideration alone can justify a finding that the individual is not under a disability when the only impairment is a slight neurosis, slight impairment of sight or hearing or other slight abnormality or combination of slight abnormalities.” 20 C.F.R. § 404.1502(a) (1968). This regulation was replaced in 1978 by the current so-called severity test, which was incorporated as step two of the five step sequential analysis for evaluating disability claims. 20 C.F.R. § 404.1520. The severity test provides:

(c) You must have a severe impairment. If you do not have any impairments) which significantly limits your physical or mental ability to do basic work activities, we will find that you do not have a severe impairment and are therefore, not disabled. We will not consider your age, education, and work experience. However, it is possible for you to have a period of disability for a time in the past even though you do not now have a severe impairment.

“Severe impairment” is defined in 20 C.F.R. § 404.1521, which is set out in the margin. If a claimant is determined not to have a severe impairment at step two, a finding of not disabled is made without further consideration under steps three through five. 20 C.F.R. § 404.1520(a). Finally, 20 C.F.R. § 404.1522 states that the Secretary will not combine two or more unrelated impairments to determine whether the claimant is suffering from a severe impairment; each impairment must meet the severity test independently.

Plaintiffs claim that the severity test is inconsistent with the Social Security Act because it allows the Secretary to deny benefits to claimants without considering their functional limitations and vocational capacities. They object to the use of the severity test as an independent test of eligibility instead of as a de minimus or threshold test that screens out frivolous claims. See Brady v. Heckler, 11 Cir.1984, 724 F.2d 914; Stone v. Heckler, 5 Cir.1985, 752 F.2d 1099. Plaintiffs also challenge the Secretary’s policy of refusing to combine “nonsevere” impairments in determining whether a claimant is disabled.

II. The Secretary’s Motion to Dismiss

a. The 1981 Act

The Secretary has moved to dismiss this action as moot in light of the 1984 Act. Section 4(a)(1) of the 1984 Act amended Section 223(d)(2) of the Social Security Act, 42 U.S.C. § 423(d)(2), by adding a new sub-paragraph (C), which provides as follows:

In determining whether an individual’s physical or mental impairment or impairments are of a sufficient medical severity that such impairment or impairments could be the basis of eligibility under this section, the Secretary shall consider the combined effect of all of the individual’s impairments without regard to whether any such impairment, if considered separately, would be of such severity. If the Secretary does find a medically severe combination of impairments, the combined impact of the impairment shall be considered throughout the disability determination process.

See also 1984 Act §§ 4(a)(2), (b). The amendment therefore requires the Secretary to consider the combined effect of all of an individual’s impairments in determining whether that individual’s condition is of a sufficient medical severity to be entitled to benefits.

This amendment became effective on December 1, 1984 under § 4(c) of the 1984 Act. Therefore, plaintiffs’ claim concerning the Secretary’s policy of not considering the combined effect of non-severe impairments is moot with respect to proposed class members who had not exhausted their administrative remedies as of that date, but not as to those proposed class members who received a final decision from the Secretary prior to the effective date.

The 1984 Act does not moot plaintiffs’ claims regarding the validity of the Secretary’s severity policies. We concur with Judge Garcia’s decision in Smith v. Heckler, Civ. No. S-83-1609 EJG (E.D.Cal. May 1, 1985), that neither the language of the 1984 Act nor its legislative history indicate that Congress validated the Secretary’s regulations and rulings regarding the severity policies. The language of the new subsection added by the 1984 Act does no more than require that the Secretary discontinue her policy of refusing to consider the combined effect of non-severe impairments. Furthermore, the Conference Committee rejected the language of the Senate Finance Committee Report which expressed some support for the Secretary’s severity policies. While the Conference Committee Report endorses the Secretary’s sequential evaluation process, it does not validate the severity test used by the Secretary. Therefore, we find that plaintiffs’ claims concerning the severity test are not mooted by the 1984 Act. See also Johnson v. Heckler, 607 F.Supp. 875 (N.D.Ill.1984); Stone v. Heckler, 5 Cir.1985, 752 F.2d 1099; but see Hall v. Heckler, N.D.Cal.1985, 602 F.Supp. 1169.

b. Jurisdiction

The Secretary has moved to dismiss this case due to lack of subject matter jurisdiction over the claims of the proposed plaintiff class. Plaintiffs allege jurisdiction pursuant to 42 U.S.C. §§ 405(g) and 1383(c)(3) and 28 U.S.C. § 1361.

Jurisdiction under the Act is granted by 42 U.S.C. § 405(g), which provides:

Any individual, after any final decision of the Secretary made after a hearing to which he was a party, irrespective of the amount in controversy, may obtain a review of such decision by a civil action commenced within sixty days after the mailing to him of notice of such decision or within such further time as the Secretary may allow.

The Secretary claims that the court does not have jurisdiction under this statute over four separate groups of potential class members: # 1) those claimants who have not yet exhausted their administrative remedies, i.e., who have not received a final decision of the Secretary; # 2) future claimants of benefits under the Act; # 3) those claimants who have failed to meet the 60 day requirement because they did not exhaust their administrative remedies by applying to the next administrative level within 60 days or because they did not file a court action within 60 days after receiving a final decision of the Secretary; and #4) those claimants who have received a final court decision.

At the December 28, 1984 hearing, the court dismissed the claims of those proposed class members still in the “administrative pipeline” (group # 1) because those individuals were still in a position to challenge the Secretary’s severity policies in light of the statements made by Congress referred to ante in footnote 5 and because the Conference Committee stated that it relied on the Secretary’s assurance that she would reevaluate her current criteria for non-severe impairments. The Secretary has not revised her current severity policies since the 1984 Act was passed last October, and there is no suggestion that she intends to do so. It is no longer appropriate to require these claimants to challenge the severity policies on an individual basis and, therefore, the court reverses its ruling of December 28, 1984.

Furthermore, the court has jurisdiction over these proposed class members who have not exhausted their administrative remedies under 42 U.S.C. § 405(g). There are two jurisdictional requirements to this statute: 1) a claim for benefits must have been filed, and 2) the Secretary must have made a final decision on that claim. Mathews v. Eldridge, 1976, 424 U.S. 319, 328, 96 S.Ct. 893, 899, 47 L.Ed.2d 18. While the first requirement is nonwaivable, the second requirement is waivable by the court when the plaintiffs’ legal claims are collateral to their demand for benéfits and the plaintiff’s interest in prompt judicial review is so great that deference to the agency’s judgment is inappropriate. Id. at 328-30, 96 S.Ct. at 899-900. These proposed class members have met the nonwaivable presentment requirement. The court waives the exhaustion requirement because we find that plaintiffs’ claims are wholly collateral to their individual claims for benefits since plaintiffs challenge a procedure of the Secretary and, therefore, resolution of the issues in their favor will not result in an automatic award of benefits. See Heckler v. Ringer, 466 U.S. 602, 104 S.Ct. 2013, 80 L.Ed.2d 622 (1984). There is also a great need for prompt resolution of plaintiffs’ claims as the severity step is critical to the disability determination process.

Those individuals who have not filed a claim for benefits with the Secretary (group # 2) have not mqt the nonwaivable presentment requirement of § 405(g). This court will not have jurisdiction over their claims until they have made a claim for benefits in some form. See State of New York v. Heckler, 83 Civ. 5903 (S.D.N.Y. March 18, 1985).

The next group of potential class members consists of those individuals who have failed to comply with the 60 day requirement of § 405(g) (group # 3). We hold that this requirement is a statute of limitations which is waivable by the parties and, under certain circumstances, by the court, rather than a jurisdictional requirement. Weinberger v. Salfi, 1975, 422 U.S. 749, 763-4, 95 S.Ct. 2457, 2465-66, 45 L.Ed.2d 522; see also City of New York v. Heckler, 2 Cir.1984, 742 F.2d 729; Lopez v. Heckler, 9 Cir.1984, 725 F.2d 1489; Mental Health Association of Minnesota v. Heckler, 8 Cir.1983, 720 F.2d 965; but see Hunt v. Schweiker, 4 Cir.1982, 685 F.2d 121; Whipp v. Weinberger, 6 Cir.1974, 505 F.2d 800. However, even if this 60 day requirement were waivable by the court where “ ‘deference to the agency’s judgment is inappropriate,’ ” Lopez, supra at 1506 (quoting Mathews v. Eldridge, 424 U.S. at 330, 96 S.Ct. at 900) (waiver appropriate where the Secretary is following a policy of nonacquiescence); City of New York, supra (waiver appropriate where the Secretary has followed a clandestine policy), this, in our opinion, is not such a case. The Secretary’s strong position on the severity test has been evident in her regulations and rulings as well as in the numerous cases raising these issues around the country and therefore has not been clandestine as plaintiffs suggest. We see no other justification for waiver in this case. Hence, the court does not have jurisdiction over their claims under § 405(g).

Nor does the court have jurisdiction over these proposed class members under 28 U.S.C. § 1361. A writ of mandamus “is intended to provide a remedy for a plaintiff only if he has exhausted all other avenues of relief and only if the defendant owes him a clear nondiscretionary duty.” Heckler v. Ringer, supra at 2022-2023. These plaintiffs failed to exhaust their administrative or judicial remedies under § 405(g) and, therefore, this court has no mandamus jurisdiction over their claims. See Hyatt v. Heckler, 4 Cir.1985, 757 F.2d 1455, 1461; but see City of New York, supra at 739. Hence, the claims of these plaintiffs are dismissed for lack of jurisdiction.

Finally, the claims of those proposed class members who have appealed their denial of benefits to the courts and have received a final court decision (group # 4) are dismissed. Res judicata bars these plaintiffs from participation in this action.

III. Plaintiffs’ Motion for Class Certification

Plaintiffs seek to maintain this suit as a class action under F.R.Civ.P. 23(b)(2). We find that plaintiffs have satisfied the requirements of Rule 23 and certify the following class:

All persons residing in Massachusetts who have filed or will file applications for disability benefits under Title II or Title XVI of the Social Security Act, and whose benefits have been or will be de- . nied on the grounds that they do not have a severe impairment, pursuant to the policies set forth in 20 C.F.R. §§ 404.1520(c), 404.1521, 404.1522, 416.-920(c), 416.921, and 416.922 and Social Security Rulings cum. ed. 82-55 and 82-56 (1982).

Plaintiffs have met the four threshold requirements of Rule 23(a). First, the class is so numerous as to make joinder of all members impracticable. While the exact size of this class is unknown, plaintiffs have presented statistics to the court which indicate that the class is extremely large. For example, from January to June of 1984 alone, approximately 3,293 individuals in Massachusetts were denied benefits at the initial and reconsideration levels of the determination process on the basis that their impairment was not severe. This figure represented 31.4 percent of all applications denied in this state during that period. Furthermore, according to the Secretary’s own statistics, 40.3 percent of all claims for benefits were denied on these grounds in 1982. Since she has not changed her policies since that date, it is reasonable to conclude that the same percentage of individuals have been and will continue to be denied benefits for lack of a severe impairment. These individuals claim to be disabled and of low income. It is therefore impracticable for these persons to bring individual lawsuits challenging the Secretary’s policies. Second, there are common questions of law in this case, viz., whether the severity policies of the Secretary violate the Social Security Act, the Administrative Procedure Act, and the United States Constitution. Third, the claims of the named plaintiffs are co-extensive with those of the unnamed class members, thus meeting the typicality requirement. Fourth, there is no antagonism of interests between the representatives and the class and we are confident that the named plaintiffs and their counsel will fairly and adequately protect the interests of the class. Finally, we find that this class action is properly brought pursuant to Rule 23(b)(2), as plaintiffs seek declaratory and injunctive relief with respect to the entire class concerning the policies of the Secretary which have been applied to each class member; and do not seek damages.

IY. Summary and Order

The Secretary’s motion to dismiss is allowed with respect to those proposed class members who failed to meet the 60 day requirement of 42 U.S.C. § 405(g) and those proposed class members who have received a final court decision on their individual claims, but is denied in all other respects. Plaintiffs’ motion for class certification is granted* The issues in this case are ripe for decision on cross-motions for summary judgment. Therefore, the parties shall file by July 8, 1985 a proposed briefing and hearing schedule.

      . The regulations in 20 C.F.R. § 404.1 et seq. relate to Title II of the Social Security Act ("SSI”), the regulations in 20 C.F.R. 416.101 et seq. relate to Title XVI of the Act ("SSDI”). The regulations that relate to the severity policies of the Secretary are identical under SSI and SSDI. For simplicity, the court will refer to SSI regulations only.

      . § 404.1521 What we mean by an impairment that is not severe.
      (a) Non-severe impairment. An impairment is not severe if it does not significantly limit your physical or mental abilities to do basic work activities.
      (b) Basic work activities. When we talk about basic work activities, we mean the abilities and aptitudes necessary to do most jobs. Examples of these include—
      (1) Physical functions such as walking, standing, sitting, lifting, pushing, pulling, reaching, carrying, or handling;
      (2) Capacities for seeing, hearing and speaking;
      (3) Understanding, carrying out, and remembering simple instructions;
      (4) Use of judgment;
      (5) Responding appropriately to supervision, co-workers and usual work situations; and
      (6) Dealing with changes in a routine work setting.

      . Plaintiffs also claim that the severity policies violate their due process rights because they are inherently vague and that they create impermissible classes of disability claimants in violation of their equal protection rights. They also argue that the Secretary has changed her policies in violation of the Administrative Procedures Act, 5 U.S.C. §§ 553, 706(2)(D).

      . The question remains whether the Secretary was required to consider the combined effect of non-severe impairments under the Act prior to the 1984 Amendments. See Johnson v. Heckler, 607 F.Supp. 875 (N.D.Ill.1984) (Secretary required to consider the combined effect of non-severe impairments prior to the 1984 Act); but see Hall v. Heckler, 602 F.Supp. 1169 (W.D.Ark.1985) (adopting Magistrate’s Proposed Findings and Recommendations dated January 4, 1984, which held that the Secretary was not required to consider the combined effect of all impairments prior to the 1984 Act). (The court does not have citations to these and other cases later referred to in this memorandum because copies of the cases were furnished by the parties without official citations.)

      . If anything, the Conference Committee Report indicates that Congress believes that the role of the severity step should be quite limited when it states that "a determination that an individual is not disabled may be based on a judgment that an individual has not impairment, or that the medical severity of his impairment or combination of impairments is slight enough to warrant a presumption even without a full evaluation of vocational factors, that the individual's ability to perform [Substantial Gainful Activity] is not seriously affected" (emphasis added). H.R.Rep. No. 1039, 98th Cong., Sess. 30 (reprinted at 130 Cong.Rec. H 9821, 9829, daily edition September 19, 1984), U.S.Code Cong. & Admin.News 1984, pp. 3038, 3088.

      . The Secretary does not contest the court’s jurisdiction over the claims of those proposed class members who have exhausted their administrative remedies and have either filed a court action within 60 days or were given a final decision of the Secretary within 60 days of the filing of the instant action.

      . The vigor with which the Secretary is fighting cases challenging the severity policies around the country indicates that she strongly supports her current policies.

      . This class definition does not include recipients of benefits whose benefits have been or will be terminated by the Secretary since review of their claims will be done pursuant to section 2 of the 1984 Act, which does not include the severity test. The definition also does not include those proposed class members whose claims have been ordered dismissed in a previous section of this memorandum.


source: Caselaw Access Project

author: GERALD J. WEBER, District Judge.

license: Public Domain

text:
    FINISH ENGINEERING COMPANY, INC. v. ZERPA INDUSTRIES, INC.
    Civ. A. No. 84-202 ERIE.
    United States District Court, W.D. Pennsylvania.
    June 27, 1985.

      David C. Hanson, Webb, Burden, Robinson and Webb, Pittsburgh, Pa., for plaintiff.
    Harry Martin, Erie, Pa., Henry G. Bun-sow, and Gayle Hutchins Gossett, Townsend and Townsend, San Francisco, Cal., for defendant.
   OPINION

GERALD J. WEBER, District Judge.

This is an action under the patent laws of the United States and under the Declaratory Judgment Act seeking a declaratory judgment on the invalidity of a patent issued to defendant and a preliminary and permanent injunction against the enforcement of the patent against an alleged infringement by the plaintiff. The patent involved is Patent No. 4,457,805, “Solvent Recovery Apparatus and Method” issued on the application of the Inventor Pastor, and assigned to the defendant Zerpa Industries, Inc. The patent was applied for on April 22, 1983 and during the pendency of the patent application the defendant notified plaintiff that it was infringing on the claims of the Pastor patent. Plaintiff filed a protest before the Patent Office but the patent was issued on July 3, 1984. This action was filed on the date the patent was issued.

Plaintiff has filed a motion for partial summary judgment addressed to Claims 1 through 7 and Claim 14 of the Pastor patent. Plaintiffs motion asserts that the subject matter of the Pastor patent would have been obvious to one of ordinary skill in the art at the time the invention was made within the meaning of 35 U.S.C. § 103 of the Patent Law.

The Pastor invention is described in the patent as follows:

[57]
ABSTRACT
Apparatus and method for recovering clean solvent from a mixture of solvent and contaminants. The apparatus included an open top tank mounted in a housing below a sink in which articles to be • cleaned with solvent are to be placed. The sink has a tap through which solvent is directed so that the articles can be cleaned by hand in the sink itself. A disposable, plastic bag is receivable in the tank and the tank is closed by a cover. Contaminated solvent can flow from the sink, through the cover and in to the bag in the tank. Contaminated solvent in the bag is heated by heating a liquid surrounding the side wall of the tank and below the bottom of the tank so that the solvent in the bag will vaporize. A tube leading out of the tank carries solvent vapor into a heat exchanger where the vapor is condensed to form clean, liquid solvent, and the liquid solvent is collected in a reservoir. A pump is coupled to the reservoir for pumping liquid solvent to the tap at the sink. The bag can be disposed of after the solvent has been vaporized therefrom.

The claims of the patent in issue here are set forth in the patent as follows (Column 4):

What is claimed is:
1. In a solvent recovery apparatus having means for providing a distilling mode and means for providing an emptying mode, the improvement comprising:
a tank;
means for heating the interior of said tank;
a plastic bag; and
means for mounting said plastic bag within said interior, said means for mounting being designed, positioned and dimensioned for forming a substantially liquid-tight barrier between contaminated solvent within said plastic bag and said means for heating during said distilling mode, and for enabling easy removal and disposal of said plastic bag when containing a substantial quantify of residue remaining from the evaporation of said contaminated solvent during the emptying mode.
2. Solvent recovery apparatus as set forth in claim 1, wherein said bag is a flexible, open top bag which conforms to said tank when filled with solvent.
3. Solvent recovery apparatus as set forth in claim 2, wherein the bag is formed from nylon.
4. Solvent recovery apparatus as set forth in claim 2, wherein said supporting means includes means engageable with the upper end of the bag for releasably holding it to the tank.
5. Solvent recovery apparatus as set forth in claim 4, wherein said holding means includes a resilient member.
6. Solvent recovery apparatus as set forth in claim 1, wherein said tank has a bottom wall, the bag being at least partially supported by the bottom wall when the bag is received in said tank.
7. Solvent recovery apparatus as set forth in claim 6, wherein said heating means is below said bottom wall of the tank.
14. Solvent recovery apparatus as set forth in claim 6, wherein said tank has an open top, and including a cover for removably closing the open top of said tank.

THE STANDARDS FOR DETERMINING OBVIOUSNESS

The determination of obviousness under § 103 has been fully treated in Graham v. John Deere Co., 383 U.S. 1, 86 S.Ct. 684, 15 L.Ed.2d 545 (1966). Three conditions are imposed, each of which must be met to satisfy the requirements of the statute:

While the ultimate question of patent validity is one of law, A. & P. Tea Co. v. Supermarket Corp., [340 U.S. 147, 71 S.Ct. 127, 95 L.Ed. 162 (1950), at 155], the § 103 condition, which is but one of three conditions, each of which must be satisfied, lends itself to several basic factual inquiries. Under § 103, the scope and content of the prior art are to be determined; differences between the prior art and the claims at issue are to be ascertained; and the level of ordinary skill in the pertinent art resolved. Against this background, the obviousness or nonobviousness of the subject matter is determined. Such secondary considerations as commercial success, long felt but unsolved needs, failure of others, etc., might be utilized to give light to the circumstances surrounding the origin of the subject matter sought to be patented. As indicia of obviousness or nonobviousness, these inquiries may have relevancy. (383 U.S. 17-18, 86 S.Ct. 693-694).

SCOPE AND CONTENT OF THE PRIOR ART

Three references to the prior art are cited in the patent and were considered by the Examiner, among others, and plaintiff relies on these three in support of its claims of obviousness. They are:

2,794,570 6/1957 Downs ...220/63
3,890,988 6/1975 Lee......134/10
4,323,429 4/1982 Hoover ... 202/83

We begin our review of the prior art by reference to U.S. Patent No. 3,890,988, the Lee patent, issued June 24, 1975, for a “Cleaning Assembly for Automotive Parts and the like”. This patent describes an apparatus very similar to the construction of the Pastor patent, a faucet and sink for cleaning mounted atop a container for the outflow. It shows the use of a plastic bag lining the container which receives the contaminants. The difference between the Lee patent and the Pastor patent is that the apparatus in Lee contemplates cleaning the contaminants from the solvents by a straining and filtering process, while the Pastor patent contemplates the use of a distillation mode. Otherwise they are remarkably similar as shown by the following quote from the Lee patent:

[57]
ABSTRACT
A metal sink with a faucet sits over a container in which is situated a pump having a screened intake and being connected to the faucet. The pump is supported on a cone or deflector support, and the contaminated solvent discharges by gravity from the sink onto the cone which spreads it circumferentially and acts as a primary separator or filter. A layer of water acts as a trap for grease and oil contaminants and the pump, which is situated in the solvent within the cone, is provided with a relatively fine screen on the intake side thereof. A plastic liner in the container permits disposal of contaminants and the like thereby eliminating undesirable discharge of the contaminants into the sewage disposal system.

This apparatus is remarkably similar to the Pastor invention except for the purification of the contaminated solvent in the container by a distillation process which deposits the clean solvent into a separate receptacle from which it is then pumped to the faucet in the sink. The Lee patent further describes the plastic liner and its use as follows: (references to drawings omitted).

In the embodiment shown ..., a plastic liner or bag is provided for the container ... said liner or bag being placed in the container first whereupon the motor and pump ... and the support is placed on the base of the container. The sink is then placed on top of the container after filling same with the combination of solvent and water as hereinbefore described.
When it is desired to remove heavy contamination from the container, the relatively clean solvent is pumped from the container through the nozzle ... it being observed that the lower end of the screen intake ... is always situated within the solvent layer but spaced from the base of the container. Once the solvent has been removed for further use, the sink can be removed together with the pump and motor and its support. At this point the top of the plastic bag can be folded and tied and the water together with the contaminants and a small layer of solvent may be disposed of by regular garbage disposal facilities. By the same token if it is desired to change or renew the solvent, the old solvent can also be disposed of within the liner or plastic bag____ (Column 4, line 66 through column 5, line 19).

The second item of prior art cited by the movant is U.S. Patent No. 2,794,570, Downs, “Lined Tanks” issued June 4,1957. The invention is described in column 1, beginning line 15, as

My invention relates to a tank which includes a replaceable liner. Further, my invention relates to a liner assembly which may be used to protect a tank from damages by the fluid held therein. It is the purpose of my invention to extend the life of fluid-holding tanks by the utilization of a flexible liner which may be easily mounted within a tank and removed and cleaned or disposed of after use for a period of time. It will be appreciated that the various deposits carried by fluids which adhere to tanks may be easily removed and disposed of merely by the removal of my liner assembly. Another advantage is the ability of my liner assembly to withstand extreme heat and other conditions such as solvent and chemical attack, moisture and exposure to rapidly changing temperatures.
My research has discovered that a film, preferably a polyester film produced from a material which is the reaction product of ethylene glycol and terephthalic acid and which is known to the trade by the Du Pont trademark “Mylar”, can be utilized for the protection of tanks by mounting the film on a continuous band-like insert which is in turn adjustably affixed in overlying engagement with the inner face of a flange joint of a tank.

The difference between the Downs patent and the Pastor patent lies in the description of the solid receptacle for the liquid materials. Downs recites a “tank” whereas the receptacle in Pastor is called a “hot still”. Downs discloses a flexible liner for a container for liquids in the same manner that Pastor describes a container for liquids lined by a flexible lining bag. The flexible liner in Pastor has nothing to do with the “distillation mode” of the Pastor apparatus.

A third item of prior art is U.S. Patent No. 4,323,429 Hoover, “Spent Solvent Purification Apparatus”, issued April 6, 1982. This is embodied in a commercial product known as the EPAR (Electrically Powered Solvent Recovery) product. The Pastor patent acknowledges the EPAR solvent recovery system as prior art. This Hoover patent discloses a small batch solvent recovery still described as “a solvent recovery apparatus having means for providing a distilling mode and a means for providing an emptying mode,” ... “a tank”, “means for heating the interior of said tank”. The only features of the Pastor patent which are not shown in the EPAR unit are the “plastic bag” and the “means for mounting said plastic bag...”. The EPAR brochure mentions the residue problem as follows. “If the contaminants would without the solvent, turn solid then the residue will transpose into a solid mass that is non-degradable and easily disposed of.” Pastor on the other hand recites that the contaminants can be thoroughly dessicated by the evaporation process and disposed of in the plastic bag.

THE RELEVANT ART AND THE DIFFERENCE BETWEEN THE PRIOR ART AND THE CLAIMS AT ISSUE

The Examiner determined that the prior reference to the Downs’ patent was nonanalogous art. He made a distinction between “batch still art” and “lined tank art”.

The determination that a reference is from a nonanalogous art is therefore twofold. First, we decide if the reference is within the field of the inventor’s endeavor. If it is not, we proceed to determine whether the reference is reasonably pertinent to the particular problem with which the inventor was involved.

Union Carbide Corp. v. American Can Company, 724 F.2d 1567, 1572 (C.A.F.C.1984).

We find that the Pastor’s endeavor was to design a portable apparatus for cleaning industrial parts with an industrial solvent, and recovering the solvent for reuse in a purified form. This involved principally a sink with a faucet and a receptacle underneath to collect the solvent (a tank) with a means for returning the purified solvent to the faucet for reuse. This is the teaching of Lee. Lee utilized a strainer or filter to clean the solvent before reuse. Hoover utilized an evaporation and distilling process. Essentially both inventors were endeavoring to design a tank. Downs describes a tank with a plastic liner.

The second test of Union Carbide is an examination of the particular problem with which the inventor was involved and the patent in question spells out this problem, “easy removal of residue from tanks”, Pastor patent, column 1, lines 37-38, column 2, lines 1-6, column 2 lines 14 through 20. Because the container underneath the sink in the patent in question was lined with a means for heating the collected residue for evaporation and distillation, the Examiner distinguished this apparatus by designating it as a “hot still” as differentiated from a “tank” despite the use of this terminology in the very patent application which he was considering.

We find the Examiner’s characterization of the prior art to be a departure from the prior law.

The prior art is not to be narrowly confined to the methods and inventor of the subject art, but extends to other analogous arts. Graham, 383 U.S. 1, 19 [86 S.Ct. 684, 694], 148 USPQ 459, 467; Application of Wood, 599 F.2d 1032, 202 USPQ 171 (CCPA 1979). Prior art extends beyond the subject art to arts with similar elements, problems and purposes. Skega Aktiebolag v. B.F. Goodrich Co., 420 F.2d 1358, 164 USPQ 333 (6th Cir.1970); Bontrager v. Steury Corp., 457 F.Supp. 526, 536, 201 USPQ 813, 820-821 (N.D.Ind.1978), aff’d. 624 F.2d 1103 (7th Cir.1979). While many cases illustrate this principle, we cite here some salient examples. Graham, 383 U.S. 1 [86 S.Ct. 684], 148 USPQ 459 (prior art not limited to insecticide containers or sprayer caps, but extends to solutions of mechanical closure problems); I.U. Technology Corp. v. Research-Cottrell Inc., 641 F.2d 298, 209 USPQ 545 (5th Cir.1981) (art of cement chemistry is pertinent prior art to field of scrubber sludge waste disposal where problem is stabilizing waste in cementitious composition); Geo. J. Meyer Manufacturing Company v. San Marino Electronic Corp., 422 F.2d 1285, 165 USPQ 23 (9th Cir.1970), (art of missile detection systems is prior art for device in bottle manufacturing art used to detect foreign particles in glass); Skega Aktiebolag v. B.F. Goodrich Co., 420 F.2d 1358, 164 USPQ 333 (6th Cir., 1970) (art of securing rubber tires to metal rims is prior art for a patented rotary ball mill used for grinding ore, where the common problem is clamping rubber to metal); Bontrager v. Steury Corp., 457 F.Supp. 526, 201 USPQ 813 (N.D.Ind.1978); aff’d. 624 F.2d 1103 (7th Cir.1979) (prior art for patent on lift system on collapsible trailer is broader than vehicles and extends to lift systems and jacks generally); see also cases collected in 23 A.L.R. Fed. 326, 376. It is also true that the more remote prior art is from the context of the subject matter, the less persuasive it becomes on the question of obviousness. Frank W. Egan & Co. v. Modern Plastic Machinery Corp., 387 F.2d 319, 156 USPQ 433 (3d Cir.1967); Colourpictures Publishers, Inc. v. Mike Roberts Color Productions, Inc., 394 F.2d 431, 157 USPQ 659 (1st Cir.) cert. denied, 393 U.S. 848 [89 S.Ct. 134, 21 L.Ed.2d 118], 159 USPQ 799 (1968).

L.D. Schreiber Cheese Company v. Clearfield Cheese Company, 540 F.Supp. 1128, (W.D.Pa.1982), aff'd. 716 F.2d 891 (3d Cir.1983).

It is this narrow distinction which the Patent Examiner made which in his judgment distinguished the relevant arts. He found that the Pastor patent referred to “batch still art” as distinguished from “lined tank art”. The Examiner stated that distinction in his report as follows:

Moreover, the Downs references, drawn to the art of lined tanks, is sufficiently remote from batch still subject matter of the proposed primary references, that, but for the guidance of applicant’s disclosure, the routineer would not be motivated to make the proposed combination, (p. 6, Plaintiff’s Exhibit 7).

We find the Patent Examiner’s distinction legally untenable for reasons which we will elaborate on more fully later.

What is being described in all of the relevant art which we are considering here is a receptacle for a relatively small amount of fluid material. While the Downs invention discusses variable sizes of tanks the Lee patent describes the container as a conventional 45 gallon oil drum or the like and the Hoover and Pastor tanks are designed for holding a comparably small quantity of liquid in that they are described as being portable or rolled about on castors in the industrial plant. The defendant describes the container as a 15-20 gallon receptacle.

The critical element in this case is the use of a plastic bag to line the inside of a metallic container which receives contaminated solvent used to clean industrial parts. In the prior art the contaminated solvents are cleaned by either a straining or filtering process, or by evaporation and distillation as in the present, patent and plaintiff’s competing product, and the remaining residue of solid or heavily contaminated matter is removed from the container by the removal of the plastic bag insert and is disposed of through such disposal methods as are appropriate particularly with reference to present day environmental controls for the disposal of chemical waste. The idea is as simple as the use of plastic bags in the household to line containers for kitchen refuse, garbage cans, waste baskets and the like. Defendant’s patent contemplates a still for the purification of the chemical solvent as does plaintiffs competing product and this requires a plastic container capable of allowing the heat transfer necessary for the operation of a still and the resistance of the plastic material to such heat. The wide-spread use of this idea is illustrated by the common household use of plastic bags for boiling frozen foods and vegetables and for the roasting of meat, such as chickens or turkeys.

Defendant argues that Downs requires a large spherically joined tank liner which is intended to prevent corrosion of the tank rather than for removing residue. Regardless of the intent behind the use of a liner, the Downs patent specifically contemplates the easy removal of the liner and the residue collected therein.

Therefore, we find that the problem facing the inventor in the patent in question is the particular problem illustrated in both the Downs patent and the Lee patent, the easy removal of deposits from containing tanks. We therefore find as a matter of law that the Downs patent and the Lee patent are in the same art or in an art extremely closely analogous to the Pastor patent.

The defendant strongly urges upon us the opinion of the Court of Appeals for the Federal Circuit in Alfred Cooper v. Ford Motor Company, 748 F.2d 677 (C.A.F.C.1984), where the district court was reversed on its grant of summary judgment for obviousness of the invention. In one aspect of its opinion, the Court of Appeals stated:

Although not specified by the district court, it does not appear to have accepted either party’s version of the prior art teachings, because the combination of the Greenberg, O’Neal and Swiss patents, on the basis of which the district court found Cooper’s claimed invention to have been obvious, was not advanced by Ford. We find merit in Cooper’s position that contested material fact issues relate to these patents and their combination.
* * * * *
Cooper asserts that the district court erred in its sua sponte holding of invalidity based on the Swiss patent standing alone.
* * * * * *
Moreover, the Federal Rules do not contemplate that a court may dispose of a cause by summary judgment, when the basis for the judgment was not raised by the movant with sufficient precision for the nonmovant to respond. See Murphy v. Villanova Univ., 520 F.Supp. 560, 563-64 (E.D.Pa.1981). ... Ford’s memorandum in support of its motion discussed the Swiss patent only as support for Ford’s arguments regarding non-infringement, not invalidity, (page 680).

All of this is relevant to the question before us because the court, at the oral argument on the motion, stated that considering the Lee patent (a sink mounted atop a drum in which the contaminated solvent was collected, filtered, and pumped back to the sink), and the Hoover patent (a sink, atop a drum, where the contaminated solvent is heated, distilled and pumped back to the sink), described the Pastor patent in issue here.

The parties had full opportunity to argue the court’s considerations and both had the opportunity to file post argument briefs and supplemental evidentiary material.

The plaintiff had presented the three patents in support of its argument on prior art; Downs, Lee and Hoover. We suggested at argument that Lee and Hoover illuminated the prior art. These are readily understandable references and we find no genuine issue as to what these references show. Where the patent in question and the prior art can be understood without expert testimony we believe the case is appropriate for summary judgment. See Union Carbide v. American Can Co., 724 F.2d 1567 (C.A.F.C.1984).

We find that the defendant’s reliance on Cooper v. Ford Motor Company not to be pertinent because the problem facing the Court there was:

In the instant case the undisputed facts are no more than the existence of the prior art patents. Beyond that, we have no evidence on either side explaining their teachings, which are not clearly evident simply on reading the references____
Expert testimony is not always necessary to explain the prior art, but here reasonable alternative arguments were put forth as to its interpretation. 748 F.2d 679.

The device in Cooper is somewhat complex; the device in question here is simple. The prior art of Lee, Downs and Hoover was raised by plaintiff with sufficient precision for the nonmovant to respond. Full argument on these prior art patents was held before the court, and both parties were given the opportunity to file further briefs and evidentiary materials, which they did.

Many, if not most suits for patent infringement give rise to numerous and complex fact issues, rendering those suits inappropriate for summary disposition. Where no issue of material fact is present, however, courts should not hesitate to avoid an unnecessary trial by proceeding under Fed.R.Civ.P. 56 without regard to the particular type of suit involved.

Chore-Time Equipment, Inc. v. Cumberland Corp., 713 F.2d 774, 778-79 (C.A.F.C.1983).

THE LEVEL OF SKILL IN THE ART

Those skilled in the art involved in the Pastor patent would ordinarily be engineers or technicians involved in the designing and building of chemical processing equipment. They would be knowledgeable in the fields of receiving and holding tanks, pumps for the recirculation of fluids, pot stills, filters and screens. They would be familiar with plastic containers, the properties of plastic films and their ability to transfer heat.

But here we have only to consider a plastic bag to contain liquids and solid residue, capable of withstanding and transferring heat. The common experience of every householder with plastic garbage bag liners and plastic bags for boiling or roasting meat encompass this field.

Since the difference, if any, between the prior art and the claims at issue are clear, the level of ordinary skill is a remaining inquiry on the question of obviousness under Graham. As previously indicated, and as is clear from an examination of the drawing figures contained in the patent, the Pastor patent is an extremely simple device. Also, the structures disclosed in the prior art are simple, requiring no additional explanation. Thus, it is proper for the court to “postulate a minimum of skill in the art as being the same as that of an intelligent layman.” Allen-Bradley Company v. Air Reduction Co., supra, 273 F.Supp. 930 at 936 (W.D.Pa.1967). As the Court of Appeals for the Federal Circuit declared in Chore-Time Equipment, Inc.:

“We hold only that an invention may be held to have been either obvious (or non-obvious) without a specific finding of a particular level of skill or the reception of expert testimony on the level of skill where, as here, the prior art itself reflects an appropriate level and a need for such expert testimony has not been shown.” [affirming the use of a level of skill of the “ordinary layman of average intelligence”]. 713 F.2d at 779, n. 2.

The court clearly does not need expert testimony here to assist it in understanding the patent and the prior art. Thus, it can resolve this issue on the basis of the level of skill of an intelligent layman.

The court is well aware that there is no requirement that an invention be complicated to be patentable. The simplicity of an applicant’s invention does not operate as a bar to its patentability. Globe Linings, Inc. v. City of Corvallis, 555 F.2d 727 (9th Cir.1977).

THE PRESUMPTION OF VALIDITY

Patents issued by the United States Patent Office enjoy a presumption of validity under 35 U.S.C. § 282. This presumption is a procedural device which places the burden of proving invalidity on the party attacking the validity. “The presumption, like all legal presumptions is a procedural device, not substantive law.” Stratoflex, Inc. v. Aeroquip Corp., 713 F.2d 1530, 1534 (C.A.F.C.1983). “A presumption does not enjoy the status of evidence. If a finding on the evidence is made that a presumed fact has been effectively rebutted, the presumed fact ceases to exist. It does not linger on to be weighed against the evidence.” Panduit Corp. v. All States Plastic Mfg. Co., Inc., 744 F.2d 1564 (C.A.F.C.1984).

In assailing the validity of a patent regularly issued by the Patent Office, plaintiff has a heavy burden of proof, and the presumption of validity which attaches to the grant must be overcome by the one asserting invalidity. Moreover, the presumption is strengthened in a case where the prior art relied upon to invalidate the patent was considered and rejected by the Patent Office. Anderson Co. v. Sears, Roebuck & Co., 265 F.2d 755, 761 (C.A.Ill.1959). However, presumptions may not be used to transmute the products of mechanical skill into patentable inventions. Frank Adam Elec. Co. v. Colt Patent Fire Arms Mfg. Co., 148 F.2d 497, 502 (C.C.A.Mo.1945). And the section giving duly issued patents a presumption of validity does not require that presumption be accorded the weight of actual evidence or that use of the presumption affect a decision of invalidity that would otherwise be reached with confidence. Lorenz v. F. W. Woolworth Co., 305 F.2d 102, 105 (C.A.N.Y.1962). The most that can be said of the presumption is that it requires a reasonable doubt to be resolved in favor of the patent holder. Id.

The record before us on this motion for summary judgment is identical to the record established before the Examiner. The thrust of the movant’s argument is that the Examiner misapplied the rule as to analogous art and, therefore, did not give it sufficient weight. It is the Examiner’s legal conclusion on analogous art which is the basis for the attack on his conclusion and the basis for rebutting the presumption of validity which the issuance of the patent confers.

The Patent Examiner distinguished the Downs patent from the Pastor device indicating that “Downs obviously involves a more or less permanent liner and obviously deals with, more or less, minor amounts of deposits.” In fact, the Examiner allowed claim 51 (see Claim 1) of the Pastor application, only after the patentee added “a substantial quantity of [residue]” to the claim to distinguish it from Downs. These distinctions by the Examiner appear illogical.

Downs involves “utilization of a flexible liner which may be easily mounted within a tank and removed and cleaned or disposed of after use for a period of time” while Pastor claims “means for mounting ... enabling easy removal and disposal of the plastic bag.” There does not appear to be any basis in fact or reason for the examiner’s distinction regarding permanence of the liner. Further, the Downs patent says nothing about “minor” and “substantial” amounts of residue, and the Downs patent inherently involves an apparatus capable of removing larger amounts of deposits while the Pastor device may be used to remove either minor or substantial quantities of residue.

COMMERCIAL SUCCESS

Defendant raises the issue of commercial success, but defendant fails to support this success as being the result of its invention. Plaintiff has produced evidence that is not contested of the growing market for small stills because of the great growth of environmental concern against pollutants and the extensive governmental control over their disposal. One need only observe the tremendous growth of the use of plastic disposal bags in every aspect of our current “throw-away” civilization to account for such commercial success.

“Such secondary consideration as commercial success ... might be used to give light to the circumstances surrounding the origin of the subject matter to be patented. As indicia of obviousness or non-obviousness these inquiries may have relevancy.”

Graham v. John Deere Co., 383 U.S. 1, 17-18, 86 S.Ct. 684, 693-694, 15 L.Ed.2d 545 (1966). We find the element of commercial success to be equivocal and of little probative value on the issue of obviousness here.

THE FINISH PATENT APPLICATION

As a final post-hearing argument Zerpa presents documents and briefs showing a patent application submitted by Finish subsequent to the Pastor patent. Initially Finish claimed the use of a plastic liner bag as a patentable invention. Later Finish, by amendment, withdrew its claims to use of a plastic liner bag. Zerpa claims that the withdrawal of these claims by Finish, in the light of the pending Pastor application, constitute an admission by Finish that the use of a liner bag in a solvent recovery still constitutes a patentable invention.

Finish draws our attention to the fact that it never claimed the mere use of the plastic bag an independent claim, but solely as a dependent claim to the claimed invention, a novel heater that did not require heat transfer fluid, on which claim a patent was issued.

A claim in dependent form shall be construed to incorporate by reference all the limitations of the claim to which it refers. 35 U.S.C. § 112.

The claims relating to the uáe of the plastic bag were revealed prior to the Pastor application in Lee and Downs. Therefore, we cannot find that their withdrawal was a recognition of the validity of the Pastor claims. We find no disputed issue of fact here sufficient to bar summary judgment, but solely a matter of counsel’s argument on their legal effect.

The motion for summary judgment will be granted. An appropriate order will issue.

ORDER

AND NOW this 27th day of June, 1985, in accordance with the accompanying opinion, IT IS ORDERED, ADJUDGED and DECREED that:

1. Plaintiff’s motion for summary judgment is GRANTED:
2. Claims 1 through 7 and claim 14 of the Pastor patent issued July 3, 1984, Patent No. 4,457,805 are ADJUDGED invalid;
3. Defendant is permanently ENJOINED from enforcing said patent against plaintiff or any of plaintiff’s customers.


author: DEVINE, Chief Judge.

text:
    Doris WORSOWICZ, Executrix of the Estate of Anthony Worsowicz v. NASHUA CORPORATION.
    Civ. No. 83-386-D.
    United States District Court, D. New Hampshire.
    June 28, 1985.

      Mark T. Broth, Concord, N.H., for plaintiff.
    Charles R. Parrott, Boston, Mass., and Francis L. Cramer, Nashua, N.H., for defendant.
   OPINION

DEVINE, Chief Judge.

In this action plaintiff Doris Worsowicz brings suit against defendant Nashua Corporation (“Nashua”) alleging violation of the Age Discrimination in Employment Act (“ADEA”), 29 U.S.C. § 621, et seq., wrongful discharge, and violation of the Employee Retirement Income Security Act (“ERI-SA”), 29 U.S.C. § 1001, et seq., arising out of Nashua’s decision to terminate the employment of plaintiff’s deceased husband Anthony Worsowicz in December 1982. Jurisdiction exists for the ADEA claim pursuant to 28 U.S.C. § 1331 and 29 U.S.C. § 626, for the wrongful discharge claim under the doctrine of pendent jurisdiction, and for the ERISA claim pursuant to 28 U.S.C. § 1331 and 29 U.S.C. § 1132. The amount in controversy, exclusive of interest and costs, exceeds ten thousand dollars. Currently before the Court are defendant’s motion for partial summary judgment and plaintiff’s objection thereto.

Under Rule 56(c), Fed.R.Civ.P., summary judgment “shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” In this Circuit, the test to which a summary judgment motion' must be put has traditionally been a stringent one. The moving party must affirmatively demonstrate that there is no genuine, relevant factual issue, and the Court must look at the record in the light most favorable to the opposing party and indulge all inferences favorable to that party. Floyd v. Farrell, 765 F.2d 1, 5 (1st Cir.1985); Wilmot H. Simonson Co., Inc., 755 F.2d 217, 220 (1st Cir.1985); General Office Products Corp. v. M.R. Berlin Co., Inc., 750 F.2d 1, 2 (1st Cir.1984); Donovan v. Agnew, 712 F.2d 1509, 1516 (1st Cir.1983); Gual Morales v. Hernandez Vega, 579 F.2d 677, 680-81 (1st Cir.1978).

The pleadings and submitted affidavits reveal the following facts. After some forty years of employment with Nashua, Anthony Worsowicz was terminated on December 28, 1982. Mr. Worsowicz filed suit against Nashua in June 1983 but passed away in March 1984. Doris Worsowicz, his surviving spouse and administratrix of his estate, was subsequently substituted as the complaining party. See Rule 25(a), Fed.R. Civ.P.

While employed at Nashua, Mr. Worsowicz was entitled to group term life insurance, which at the time of his termination amounted to coverage totaling one hundred and thirty-seven thousand dollars ($137,-000). Plaintiff Doris Worsowicz was the named beneficiary under this insurance policy. Five months after his termination, Nashua requested that Mr. Worsowicz elect a retirement date and the form of his pension benefit payments, including conversion of his life insurance to paid-up life insurance in the amount of seventeen thousand four hundred dollars ($17,400). This election was to be made by May 31, 1983, but for reasons in dispute, the election was not made and Mr. Worsowicz was not included in Nashua’s group life insurance program for retirees.

Pursuant to Nashua’s Retirement Plan for Salaried Employees, the Nashua Pension Committee was responsible for administration of the retirement plan with the power to determine pension benefit rights of individuals. A booklet distributed to all salaried employees explained that an individual denied pension benefits could appeal that decision to the Pension Committee. Similarly, another booklet explained employee appeal rights and procedures in the event that life insurance benefits were denied. Mr. Worsowicz did not pursue any of these administrative remedies prior to bringing suit in this court.

After termination, Mr. Worsowicz had difficulty obtaining information regarding his pension rights from Nashua. In January 1983 he sought pension information from Nashua’s Personnel Director without success. As part of his discrimination complaint with the New Hampshire Commission for Human Rights, Mr. Worsowicz requested that the Commission seek this pension information from Nashua. The Commission made the request of Nashua without success in April 1983. Mr. Worsowicz sought pretrial discovery of the pension information in September 1983, but did not receive the information until December 1983.

In its motion for partial summary judgment, Nashua first challenges plaintiff Doris Worsowicz’s claim for damages under the ADEA related to her deceased husband’s life insurance coverage. Plaintiff seeks to recover the full amount of the policy at the time of Mr. Worsowicz’s termination. According to Nashua, plaintiff as administratrix has no claim to the full amount of the life insurance coverage under the ADEA, such claim being limited to the cost to Nashua of providing life insurance coverage. For the following reasons, the Court concludes that plaintiff's claim is limited to the value of the life insurance premiums, not the value of the life insurance proceeds.

After it has been established that an employer has discriminated against an employee in violation of the ADEA resulting in injury to the employee, the Act provides that

[i]n any action brought to enforce this Act the court shall have jurisdiction to grant such legal or equitable relief as may be appropriate to effectuate the purposes of this Act, including without limitation judgments compelling employment, reinstatement or promotion, or enforcing the liability for amounts deemed to be unpaid minimum wages or unpaid overtime compensation under this section.

29 U.S.C. § 626(b). The purpose of the ADEA is to end age discrimination in employment and to restore a victim of age discrimination to the economic position he would have occupied but for the unlawful conduct of the employer, and thus the governing principle in calculating damages is the concept of making the plaintiff whole. Berndt v. Kaiser Aluminum & Chemical Sales, Inc., 604 F.Supp. 962, 964 (E.D.Pa.1985); Merkel v. Scovill, Inc., 570 F.Supp. 141, 144 (S.D.Ohio 1983). Damages available under the ADEA have been discussed in further detail by the First Circuit Court of Appeals in Kolb v. Goldring, 694 F.2d 869, 872 (1st Cir.1982):

n its ‘essential nature’ an ADEA action is identical to a common law suit for back wages for breach of contract____ Unlike the tort plaintiff, the plaintiff suing under ADEA may recover only ‘those pecuniary benefits connected to the job relation.’ ... Damages are meant to put the plaintiff in the economic position he would have occupied but for the discrimination.

The Circuit noted that damages would include items of “pecuniary or economic loss such as wages, fringe, and other job related benefits.” Id., Goldstein v. Manhattan Industries, Inc., 758 F.2d 1435, 1446 (11th Cir.1985); Loeb v. Textron, 600 F.2d 1003, 1021 (1st Cir.1979).

Plaintiff, as administratrix, has succeeded to Mr. Worsowicz’s rights under the ADEA since his cause of action under that Act survived his death. Asklar v. Honeywell, Inc., 95 F.R.D. 419, 423-24 (D.Conn.1982). See, e.g., United States v. Matheson, 400 F.Supp. 1241, 1247 (S.D.N.Y.1975), aff'd 532 F.2d 809 (2d Cir.), cert. denied, 429 U.S. 823, 97 S.Ct. 75, 50 L.Ed.2d 85 (1976) (executor of decedent’s estate stands in the same position as decedent). Accordingly, plaintiff’s recovery under the ADEA is limited to the damages Anthony Worsowicz was entitled to receive as a victim of age discrimination. The Court is concerned herein with the loss of one particular employment benefit, the life insurance provided by Nashua to Anthony Worsowicz, and concludes, as a matter of law, that Anthony Worsowicz, and thus the present plaintiff, would only be entitled to recover the cost to Nashua of providing the life insurance coverage.

The Court finds the analysis in Fariss v. Lynchburg Foundry, 588 F.Supp. 1369 (W.D.Va.1984), persuasive in resolution of this issue. Fariss presents a factual background almost identical to the case sub judice. In Fariss, a terminated employee brought suit under the ADEA but died before trial. The employee’s widow and administratrix was then substituted as the complaining party. The plaintiff in Fariss had received a lump-sum pension payment, and the Court, in order to determine if the plaintiff still had a monetary claim, offset the pension accrued against the wages and employment benefits which the deceased employee would have been entitled to but for the unlawful termination. The plaintiff in Fariss argued that the proceeds from her deceased husband’s life insurance policy should be considered in the offset calculation of plaintiff’s damages. The court rejected this argument, concluding that

life insurance should be valued according to the cost in providing the coverage, and not according to the value of the life insurance proceeds. In an age discrimination lawsuit, the defendant employer should be held responsible for the money which it no longer expends on an employee’s behalf, but not for any pay-out which an insurance company might make to an employee. The insurance company makes its own determination of whether to pay on a particular insurance claim, which determination is independent of any action by the employer.

Id. at 1371.

The Court in the instant action similarly concludes that the pecuniary benefit derived by plaintiff from Nashua’s provision of life insurance coverage is the amount of money plaintiff saved by not having to purchase life insurance coverage. In order, therefore, to make plaintiff whole and restore this lost pecuniary benefit, Nashua should only be obligated to the extent of the value of the life insurance premiums. As noted by one commentator in discussing the ADEA and recovery of damages related to employer-provided insurance policies, courts permit “reimbursement for any health, life or other insurance premiums which the employer would have paid but for the employee’s discharge.” 3 A. Larson and L. Larson, Employment Discrimination § 103.41(b) (1984) (emphasis added). See, e.g., Blackwell v. Sun Electric Gorp., 696 F.2d 1176, 1185-86 (6th Cir.1983) (plaintiff suing under ADEA entitled to cost of health insurance); Jacobson v. Pitman-Moore, Inc., 582 F.Supp. 169, 179 (D.Minn. 1984) (cost of replacing insurance benefits provided by defendant included in ADEA damage award). The Court accordingly grants Nashua’s motion for partial summary judgment with respect to damages under the ADEA.

In its motion for partial summary judgment, Nashua also challenges plaintiff’s claims under ERISA which allege, first, that Nashua failed to provide requested pension information between January and December 1983 in violation of 29 U.S.C. § 1132(c), and, second, that the unlawful withholding of this information resulted in the denial of life insurance benefits for Mr. Worsowicz. According to Nashua, plaintiff is precluded from raising these ERISA claims because of a failure to exhaust administrative remedies.

While it is true that there is no statutory provision in ERISA mandating exhaustion of administrative or internal remedies prior to instituting suit under the Act, courts have generally applied the exhaustion doctrine to suits arising under ERISA. See Wolf v. National Shopmen Pension Fund, 728 F.2d 182, 185 (3d Cir.1984); Amato v. Bernard, 618 F.2d 559, 566-68 (9th Cir.1980); King v. James River-Pepperell, Inc., 592 F.Supp. 54, 55 (D.Mass.1984). The policy reasons for applying the exhaustion doctrine include reduction of frivolous lawsuits, promotion and consistent handling of benefits claims, resolution of claims disputes through non-adversarial proceedings, and avoidance of costly litigation. Amato v. Bernard, supra, 618 F.2d at 567; Taylor v. Bakery and Confectionary Union, 455 F.Supp. 816, 819 (E.D.N.C.1978). There are, however, recognized exceptions to the application of the exhaustion doctrine in ERISA suits. Courts have held that either the futility of pursuing internal or administrative remedies or wrongful denial of access to internal remedies will excuse the requirement of exhaustion. See Amato v. Bernard, supra, 618 F.2d at 568; Lucas v. Warner & Swasey Co., 475 F.Supp. 1071, 1074 (E.D.Pa.1979).

It is undisputed in the instant action that plaintiffs deceased husband did not pursue an administrative appeal of Nashua’s decision to exclude him from its group life insurance program for retirees despite the existence of internal procedures at Nashua for just such an appeal. Plaintiff, while conceding that there was no exhaustion of administrative remedies, argues the futility of pursuing these remedies for two reasons: first, Nashua’s Retirement Plan for Salaried Employees does not provide relief from a violation of 29 U.S.C. § 1132(c), the discretionary power to provide such relief residing with the Court, and, second, Nashua’s failure to provide requested pension information deprived plaintiff of the opportunity to seek relief under the retirement plan’s internal procedures. The Court does not agree with plaintiff’s futility argument, and accordingly finds that the exhaustion doctrine operates to preclude jurisdiction over plaintiff’s ERISA claims.

It is not the Court’s function to determine in the first instance questions of pension plan construction and coverage, these issues being left to pension committees by Congress through enactment of ERISA. Brown v. Babcock and Wilcox Co., 589 F.Supp. 64, 68 (W.D.Tex.1984). Where courts have been confronted with issues of coverage and denial of pension benefits, they have strictly enforced the exhaustion doctrine to permit development of a full factual record prior to a federal suit, to take advantage of internal expertise, and to encourage settlement of the dispute before resorting to federal court. Id.

The Court similarly strictly enforces the exhaustion doctrine in the instant case. Plaintiff’s claim that resort to internal remedies would be futile is not supported by the submitted affidavit. Looking at the facts in the light most favorable to plaintiff, the Court can only discern that Nashua delayed in releasing requested pension information. Nothing submitted leads the Court to conclude that it would have been futile for plaintiff to seek recourse through Nashua’s internal procedures. Had plaintiff appealed to the Nashua Pension Committee, claiming that it missed the opportunity for retirement life insurance due to the pension plan administrator’s dereliction of duty, it is possible that the dispute between the parties would have been resolved and that insurance benefits would have been restored by the Pension Committee. Whether or not the Pension Committee would have so acted, at this point, is open to debate. Delay in releasing information, alone, is not sufficient to establish futility in pursuing administrative remedies. In addition, the policy reasons behind the operation of the exhaustion doctrine, such as encouragement of settlement and development of a factual record, lead the Court to conclude that resort to the judicial remedy under 29 U.S.C. § 1132(c) in the instant case should be predicated upon exhaustion of internal remedies. The Court accordingly grants Nashua’s motion for partial summary judgment with respect to plaintiff’s ERISA claims.

In summary, the Court grants Nashua’s motion for partial summary judgment with respect to damages recoverable under the ADEA claim, Count I, ruling that plaintiff’s claim for life insurance benefits under the ADEA is limited to the cost of providing the life insurance coverage. The Court also grants Nashua’s motion for partial summary judgment with respect to the ERISA claims, Count III, ruling that these claims are barred by plaintiff’s failure to exhaust administrative remedies.

SO ORDERED.

      . Mr. Worsowicz sought the following: all current information relating to "insurance, medical and pension benefits", a "definite statement of the amount and form of the pension", and the "1982 summary annual report". This request was copied to Nashua's Pension Plan Administrator and Director of Marketing.

      . Plaintiffs claim for recovery of the life insurance policy benefits is brought only in her capacity as executrix of the estate and only under the ADEA, and the Court’s ruling herein is accordingly limited to a determination of the parameters of damage recovery under the ADEA. See Plaintiff’s Objection to Defendant Nashua Corporation’s Motion for Partial Summary Judgment, ¶ 2 (Mar. 4, 1985). Because plaintiff states no claim for life insurance benefits in her capacity as beneficiary of the life insurance policy or under the wrongful discharge claim, the Court does not reach the issue of whether plaintiff might be barred from recovery under New Hampshire common law. See Howard v. Dorr Woolen Company, 120 N.H. 295, 414 A.2d 1273 (1980) (in wrongful discharge case, administrator of deceased employee’s estate has no claim to insurance proceeds where decedent’s widow was beneficiary, and widow has no claim to benefits where policy was permitted to lapse).

      . Plaintiff sought information pursuant to 29 U.S.C. § 1024(b)(4) and 29 U.S.C. § 1025(a). According to 29 U.S.C. § 1024(b)(4),
      [t]he administrator shall, upon written request of any participant or beneficiary, furnish a copy of the latest updated summary plan description, plan description, and the latest annual report, any terminal report, the bargaining agreement, trust agreement, contract, or other instruments under which the plan is established or operated. The administrator may make a reasonable charge to cover the cost of furnishing such complete copies. The Secretary may by regulation prescribe the maximum amount which will constitute a reasonable charge under the preceding sentence.
      According to 29 U.S.C. § 1025(a),
      [e]ach administrator of an employee pension benefit plan shall furnish to any plan participant or beneficiary who so requests in writing, a statement indicating, on the basis of the latest available information—
      (1) the total benefits accrued, and
      (2) the nonforfeitable pension benefits, if any, which have accrued, or the earliest date on which benefits will become nonforfeitable.

      . This section provides that
      [a]ny administrator who fails or refuses to comply with a request for any information which such administrator is required by this subchapter to furnish to a participant or beneficiary (unless such failure or refusal results from matters reasonably beyond the control of the administrator) by mailing the materials requested to the last known address of the requesting participant or beneficiary within 30 days after such request may in the court’s discretion be personally liable to such participant or beneficiary in the amount of up to ?100 a day from the date of such failure or refusal, and the court may in its discretion order such other relief as it deems proper.

      . The Court notes in passing that delay in releasing information was considered one factor in a finding of futility sufficient to excuse nonexhaustion of internal remedies in Lieske v. Morlock, 570 F.Supp. 1426, 1429-30 (N.D.Ill.1983). Critical to the decision in Lieske, however, unlike the case sub judice, was the failure by defendant to present evidence of existing administrative procedures adequate to resolve plaintiff's claim. Lieske is accordingly not dis-positive of the issue before the Court.


author: MUIR, District Judge.

text:
    COLUMBIA PICTURES INDUSTRIES, INC., et al., Plaintiffs, v. AVECO, INC., et al., Defendants.
    Civ. No. 84-0774.
    United States District Court, M.D. Pennsylvania.
    June 28, 1985.

      Robert L. Byer, Eckert, Seamans, Cherin & Mellott, Pittsburgh, Pa., C. Kent Price, Lee C. Swartz, Hepford, Swartz, Menaker & Morgan, Harrisburg, Pa., Harvey Shapiro, Burton H. Hanft, Sargoy, Stein & Hanft, New York City, for plaintiffs.
    Edward W. Goebel, Jr., MacDonald, Illig, Jones & Britton, Erie, Pa., Franklin A. Miles, Jr., David E. Lehman, McNees, Wallace & Nurick, Harrisburg, Pa., for defendants.
   OPINION

MUIR, District Judge.

This is a copyright infringement action. The Plaintiffs are the major motion picture producers in the United States. The Defendants operate a business known as “Nickelodeon Video Showcase” in Lock Haven and State College, Pennsylvania (hereinafter collectively referred to as “the Nickelodeon”). Presently pending before the Court are the parties’ cross-motions for summary judgment.

At the Nickelodeon, the Defendants rent video cassette recordings of movies on which the Plaintiffs own copyrights. The Defendants also rent rooms of various sizes that can accommodate between 2 and 25 people which are equipped with couches, television sets, and video cassette players. The Nickelodeon does not hold a public performance license of the type required to be held by a movie theatre. Nickelodeon customers can take advantage of the Nickelodeon’s services in several ways. They can rent a cassette, take the cassette home, and play it on their own video cassette player. They can rent a cassette somewhere other than the Nickelodeon, rent a viewing room at the Nickelodeon and view the cassette there. Customers also can rent both a video cassette and a room at the Nickelodeon. Finally, customers can rent a room at the Nickelodeon and play a video cassette owned by the customer.

The Plaintiffs contend that some of the services provided by the Nickelodeon constitute copyright infringement. In particular, the Plaintiffs object to the Nickelodeon’s renting of video cassettes coupled with renting of viewing rooms which, in the Plaintiffs’ view, is legally indistinguishable from the operation of a traditional movie theatre. The Plaintiffs rely heavily on the recent decision of the Court of Appeals for the Third Circuit in Columbia Pictures, et al. v. Redd Horne, Inc., et al., 749 F.2d 154 (3d Cir.1984) (hereinafter “Redd Horne”) to support their argument that the Defendants’ activities constitute copyright infringement.

Relevant Statutory Provisions.

The Plaintiffs contend that the Defendants have infringed copyrights held by the Plaintiffs by exercising some of the rights granted exclusively to the Plaintiffs under the copyright statute. 17 U.S.C. § 106(4) provides in part that:

... the owner of copyright under this title has the exclusive rights to do and to authorize any of the following:
(4) In the case of ... motion pictures and other audio visual works, to perform the copyrighted work publicly____

The parties agree that either the Defendants or their customers “perform” the copyrighted works involved in this ease. See 17 U.S.C. § 101. The Plaintiffs initially contended that the Defendants performed the copyrighted works but apparently now accept the Defendants’ argument that it is the Nickelodeon’s customers who perform the copyrighted works. The Plaintiffs contend, however, that this distinction is immaterial.

The major dispute between the parties is whether the videocassettes are performed “publicly.” The copyright statute defines this phrase:

To perform ... a work “publicly” means
(1) To perform ... it at a place open to the public or at any place where a substantial number of persons outside of a normal circle of family and its social acquaintances is gathered; or
(2) To transmit or otherwise communicate a performance ... of the work to a place specified by clause (1) or to the public, by means of any device or process, whether the members of the public capable of receiving the performance ... receive it in the same place or in separate places and at the same time or at different times.

17 U.S.C. § 101

The Redd Horne Decision.

The Plaintiffs contend that this case is controlled by the decision of the Court of Appeals for the Third Circuit in Columbia Pictures Industries, Inc., et al. v. Redd Horne, et al., 749 F.2d 154 (3d Cir.1984). Redd Horne involved a claim that the Defendants, individuals and entities involved in the operation of Maxwell’s Video Showcase Ltd. (“Maxwell’s”), infringed the Plaintiffs’ copyrights by publicly performing the works without the Plaintiffs’ permission. Maxwell’s was similar to the Nickelodeon but with the following exceptions. Unlike the Nickelodeon, Maxwell’s did not purport to be involved in two different enterprises, namely, the renting of video cassettes and the renting of viewing rooms. Rather, Maxwell’s charged customers a fee for the rental of a viewing room in which a video cassette movie would be shown. Whereas Nickelodeon customers themselves play the video cassette, Maxwell’s employees played the video cassette for Maxwell’s customers. Finally, at the Nickelodeon each viewing room is equipped with its own video cassette player whereas at Maxwell’s the players were located in the central area in the store and outside of the “private” viewing rooms.

The Defendants in Redd Horne contended that they did not publicly perform the copyrighted movies because the movies were performed in the “private” viewing rooms at Maxwells but the District Court and the Court of Appeals disagreed. The Court of Appeals concluded that Maxwell’s was a “place open to the public” under 17 U.S.C. § 101:

... we agree with the District Court’s conclusion that Maxwell’s was open to the public. On the composition of the audience, the district court noted that “the showcasing operation is not distinguishable in any significant manner from the exhibition of films at a conventional movie theatre.” [Columbia Pictures Indus. v. Redd Horne, Inc.] 568 F.Supp. [494] at 500 [W.D.Pa.1983], Any member of the public can view a motion picture by paying the appropriate fee. The services provided by Maxwell’s are essentially the same as a movie theatre, with the additional feature of privacy. The relevant “place” within the meaning of § 101 is each of Maxwell’s two stores, not each individual booth within each store. Simply because the cassettes can be viewed in private does not mitigate the essential fact that Maxwell’s is unquestionably open to the public.

Redd Horne, 749 F.2d at 159. The Court also stated that “Although Maxwell’s has only one copy of each film, it shows each copy repeatedly to different members of the public. This constitutes a public performance.” Id. Finally, the Court of Appeals held that Maxwell’s publicly performed the cassettes because, in addition to performing them at a place open to the public, they transmitted them within the meaning of sub-section (2) of the definition of “to perform a work publicly” in 17 U.S.C. § 101.

The Court of Appeals also rejected the argument that Maxwell’s activities were protected by the first sale doctrine of 17 U.S.C. § 109(a). “The first sale doctrine prevents the copyright owner from controlling the future transfer of a particular copy once its material ownership has been transferred.” Redd Horne, 749 F.2d at 159. (citations omitted). Although the first sale doctrine prevents the Plaintiffs from controlling future transfer of copies of their video cassettes after they have sold them to a retail operation such as Maxwell’s, sale of the cassette does not result in a waiver of all of the exclusive rights of a copyright holder under 17 U.S.C. § 106 and those exclusive rights include the right to perform the copyrighted work publicly. Id. at 160. In rejecting the Redd Horne Defendants’ argument that their activities were protected by the first sale doctrine, the Court of Appeals stated that the defendants’ activities could not properly be characterized as an “in-store rental” as the Court would have to do in order to accept the defendants’ argument. The Court reviewed the facts and concluded that the defendants did not engage in a true rental of the videocassettes and their activities were therefore not protected by the first sale doctrine:

Maxwell’s never disposed of the tapes in its showcasing operations, nor did the tapes ever leave the store. At all times, Maxwell’s maintained physical dominion and control over the tapes. Its employees actually played the cassettes on its machines. The charges or fees received for viewing the cassettes at Maxwell’s facilities are analytically indistinguishable from admission fees paid by patrons to gain admission to any public theatre. Plainly, in their showcasing operation, the appellants do not sell, rent, or otherwise dispose of the videocassette. On the facts presented, Maxwell’s “showcasing” operation is a public performance which, as a matter of law, constitutes a copyright infringement.

Id. at 160.

The Nickelodeon.

The Defendants had contended that the Plaintiffs had failed to establish that they are the holders of registered copyrights in the works which are the subject of this case. Such registration is a prerequisite to an action for copyright infringement. 17 U.S.C. § 411(a). The Defendants stated in their last brief filed in this action, on May 24, 1985, that “Plaintiffs should be required to submit authenticated copies of the official copyright registration certificates issued by the Registrar of Copyrights for the motion pictures in question.” Defendants’ reply brief at 4. In this Court's order of June 6, 1985 which allowed the Plaintiffs to file the copies of the registration certificates, the Court granted the Defendants an opportunity to file a supplemental brief in opposition to the Plaintiffs’ motion for summary judgment, “... said brief to be restricted to a discussion of the [documents to be filed by the Plaintiffs] and the legal effect thereon on the request for summary judgment.” On June 7, 1985, the Plaintiffs submitted a 4-inch thick document consisting of copies of copyright certificates issued by the Registrar of Copyrights. Because of the large number of works involved, the Court has not attempted to determine whether the Plaintiffs have submitted registration certificates for every one of the works with respect to which the Plaintiffs claim infringement of their copyright. The Defendants have not filed anything to indicate that the Plaintiffs’ submission is inadequate to establish registration of the copyrights in question under § 411(a). We therefore conclude that there is no genuine dispute as to this fact.

The Defendants contend that the facts of this case are distinguishable from the facts in Redd Horne. They note, among others, the following factual distinctions. (1) Maxwell’s rented the viewing rooms only in connection with rental of the videocassettes and therefore, in effect, operated as a type of movie theatre whereas the Nickelodeon

rents the viewing rooms and rents cassettes independently. Rental of the rooms and rental of the cassettes is not necessarily related. (2) Maxwell’s employees played the cassettes for Maxwell’s customers; Nickelodeon customers must play the cassettes they rent themselves. (3) “At all times, Maxwell’s maintained physical dominion and control over the tapes,” Redd Home at 160, but the Nickelodeon yields control of the tapes to the customer and therefore engages in a genuine “in-store rental.” See Id. The Defendants argue that their activities are protected by the first sale doctrine because their activities are closer to rental of videocassettes to home users than to the display of a movie by a movie theatre. Rental of videocassettes to members of the public who play the cassette at home does not constitute copyright infringement and is not objected to by the Plaintiffs.

Also, in response to the Plaintiffs’ original argument that the Defendants were publicly performing the Plaintiffs’ copyrighted works in violation of the Plaintiffs’ exclusive rights under the copyright act, the Defendants argued that their customers, not the Defendants themselves, were performing the copyrighted works. See 17 U.S.C. § 101. The Plaintiffs respond that the Defendants’ operation of the Nickelodeon still constitutes infringement of the Plaintiffs’ copyrights because § 106 of the Copyright Act gives the copyright holder the exclusive right not only to perform the work publicly but also the exclusive right to authorize public performance. Assuming that the copyrighted works are being performed publicly, the Plaintiffs argue that the Defendants are authorizing public performance of the copyrighted works. We agree. The question remains, however, whether the Plaintiffs’ copyrighted works are being publicly performed.

The operation of the Nickelodeon is factually distinguishable from the operation of Maxwell’s which was held to constitute copyright infringement in Redd Home. Nevertheless, in our view, those factual differences do not dictate a legal result different from the result reached in Redd Horne. Redd Horne clearly held that for purposes of the Copyright Act, Maxwell’s viewing rooms and entire store were places “open to the public” and that performance of the cassettes at Maxwell’s therefore constituted “public performances.” The Court of Appeals reached this conclusion despite the fact that when a family or other small group viewed a movie at Maxwell’s, the room in which they viewed the movie was closed to other members of the public. Redd Horne, 749 F.2d at 159. In this respect, we see no difference between the Nickelodeon and Maxwell’s. The factual distinctions pointed to by the Defendants are therefore immaterial.

The Nickelodeon is open to the public just as Maxwell's was open to the public. The cassettes are performed at the Nickelodeon by Nickelodeon customers and the cassettes are therefore publicly performed. The Plaintiffs have not authorized these performances. By enabling its customers to perform the cassettes, the Defendants infringe the Plaintiffs’ exclusive right under § 106 of the Copyright Act to authorize public performance of the movies and therefore infringe the Plaintiffs’ copyrights.

We reject the Defendants’ argument that their activities are protected by the first sale doctrine. The first sale doctrine gives the Defendants the right to rent the videocassettes they have purchased from the Plaintiffs. It does not, however, give them any of the other rights granted exclusively to the Plaintiffs under § 106 including the right to authorize public performances of the movies. As in Redd Horne, “... the Defendants’ ‘first sale’ argument is merely another aspect of their argument that their activities are not public performances.” Redd Horne at 160.

Although there is some superficial appeal to the Defendants’ argument that operation of the Nickelodeon is legally indistinguishable from the concededly legal rental of cassette's to customers for home viewing, this argument has no merit. The Nickelodeon clearly offers a service quite different from the service offered by a store that éngages in rental of video cassettes alone. The Nickelodeon gives an individual who wishes to view a particular movie available on video cassette who does not own or have the ability to rent a video cassette player the opportunity to view the cassette at the Nickelodeon. But for the Defendants’ rental of the Nickelodeon viewing rooms, individuals who rent videocassettes would view them in a private place, i.e., the individual’s home, rather than in a place open to the public such as Maxwell’s or the Nickelodeon. It is this factor that distinguishes the Defendants’ activities from simple rental of videocassettes to home users under the Copyright Act. As pointed out by the Plaintiffs, this difference is of considerable importance to the copyright holders: “... A person’s home is not rented out in two hour shifts to afford separate groups of persons the opportunity to see a variety of motion pictures. Nickelodeon’s rooms are.” Plaintiffs’ reply brief at 7. The operation of the Nickelodeon greatly increases the number of people able to view videocassettes of the Plaintiffs’ copyrighted works.

For the foregoing reasons, we agree with the Plaintiffs that the Defendants’ operation of the Nickelodeon infringes the Plaintiffs’ copyrights in their movies. 17 U.S.C. § 501(a). It therefore appears that the Plaintiffs are entitled to issuance of a permanent injunction restraining the Defendants from infringing the Plaintiffs’ copyrights under 17 U.S.C. § 502. We will grant the Plaintiffs’ motion for partial summary judgment, deny the Defendants’ cross-motion for summary judgment and direct the parties to submit a proposed form of order consistent with this opinion. Determination of the damages, if any, for which the Defendants are liable has not been requested by the Plaintiffs at this point.

The Defendants also request oral argument. This case is not of sufficient complexity to warrant the expenditure of time involved in oral argument. We fully understand Defendants’ contentions.

An appropriate order will be entered.

ORDER

1. The Plaintiffs’ motion for partial summary judgment is granted.

2. The Defendants’ motion for summary judgment is denied.

3. The parties shall jointly submit a proposed form of order consistent with the accompanying opinion within 15 days of the date of this order if they can agree upon it.

4. In the event that the parties are unable to agree upon a proposed form of order, each party shall submit a proposed form of order within 20 days of this order.

5. The Defendants’ request for oral argument is denied.