author: JOINER, District Judge.

text:
    MOTOBECANE AMERICA, LTD., a New Jersey corporation, Plaintiff, v. PATRICK PETROLEUM COMPANY, a Delaware corporation, and Patrick Oil & Gas Corp., an Ohio corporation, Defendants.
    Civ. A. No. 84CV-7062-AA.
    United States District Court, E.D. Michigan, S.D.
    Jan. 14, 1985.

      Alan R. Dominick, Jackson, Mich., for plaintiff.
    Lawrence R. Abramczyk, Donovan Hammond Ziegelman Roach & Sotiroff, Detroit, Mich., for defendant.
   MEMORANDUM OPINION AND ORDER

JOINER, District Judge.

This case is before the court on cross-motions for summary judgment. For the reasons stated herein, the motion of defendants is granted, and the motion of plaintiff is denied. The following is a summary of the facts (about which there appears to be no basic disagreement between the parties) as related primarily by plaintiff in its motion for summary judgment.

FACTS

On June 26, 1979, plaintiff Motobecane entered into an agreement with an individual named Peter Burns. Burns personally guaranteed the payment of certain obligations of Burns Three, Inc. to Motobecane, and granted Motobecane a security interest in his partnership participation (hereafter the “limited partnership interest”) in the Patrick Oil and Gas 1972 Combination Partnership (hereafter the “1972 partnership”) to secure the payment of his guaranty.

Defendant Patrick Oil & Gas (hereafter “Patrick Oil”) was the general partner in the 1972 partnership. Defendant Patrick Petroleum is a wholly-owned subsidiary of Patrick Oil. By letter dated September 12, 1979, plaintiff notified Patrick Oil of its security interest in Burns’ limited partnership interest in the 1972 partnership. By letter dated September 28, 1979, an officer of Patrick Oil represented to Motobecane that Patrick Oil had noted Motobecane’s security interest on its records.

By letter dated August 27, 1981, Motobecane inquired of Patrick Oil of the status of its security interest. Patrick Oil responded by letter dated September 11, 1981, advising that Burns’ limited partnership interest had been exchanged for stock of Patrick Petroleum, which stock was mailed to Burns on January 9, 1980. Defendants’ counsel represented at the hearing on these motions that the 1972 partnership was dissolved on that date, and its assets, consisting of oil and gas reserves, were liquidated. Limited partners such as Burns received Patrick Petroleum stock in exchange for their equity interest in the 1972 partnership. The September 11 letter from Patrick Oil was Motobecane’s first indication that its security interest had been compromised. When it determined that Burns and Burns Three, Inc. were uncollectible, it initiated this action against the instant defendants.

DISCUSSION

Motobecane alleges that defendants, having represented that they had noted the existence of the former’s security interest on their records, are now estopped from denying the existence of that security interest. It further alleges that defendants failed to advise it of the exchange of the limited partnership interest for the Patrick Petroleum stock, in violation of M.C.L.A. § 440.8403, the pertinent portions of which provide as follows:

Sec. 8403. (1) An issuer to whom a security is presented.for registration is under a duty to inquire into adverse claims if
(a) a written notification of an adverse claim is received at a time and in a manner which affords the issuer a reasonable opportunity to act on it prior to the issuance of a new, reissued or reregistered security and the notification identifies the claimant, the registered owner and the issue of which the security is a part and provides an address for communications directed to the claimant; or
(b) the issuer is charged with notice of an adverse claim from a controlling instrument which it has elected to require under subsection (4) of section 8402. (2) The issuer may discharge any duty of inquiry by any reasonable means, including notifying an adverse claimant by registered mail, or certified mail, if the receipt of mailing is postmarked, at the address furnished by him or if there be no such address at his residence or regular place of business that the security has been presented for registration of transfer by a named person, and that the transfer will be registered unless within 30 days from the date of mailing the notification, either
(a) an appropriate restraining order, injunction or other process issues from a court of competent jurisdiction; or
(b) an indemnity bond sufficient in the issuer’s judgment to protect the issuer and any transfer agent, registrar or other agent of the issuer involved, from any loss which it or they may suffer by complying with the adverse claim is filed with the issuer.

Consequently, Motobecane contends that it is entitled to recover from the defendants the monetary value of the Patrick Petroleum stock up to the amount necessary to satisfy the obligation running from Burns to Motobecane.

Estoppel

Motobecane argues that defendants should be estopped from denying that they had notice of Motobecane’s security interest in Burn’s limited partnership interest in the 1972 partnership. This argument is predicated upon Motobecane’s reliance on the September 28 letter from Patrick Oil, in which the latter acknowledged receipt of Motobecane’s notice of the security interest.

The elements of promissory estoppel are set forth in McMath v. Ford Motor Co., 77 Mich.App. 721, 725, 259 N.W.2d 140 as follows:

(1) a promise, (2) that the promisor should reasonably have expected to induce action of a definite and substantial character on the part of the promisee, (3) which in fact produced reliance or forbearance of that nature, (4) in circumstances such that the promise must be enforced if injustice is to be avoided.

In this case, it is difficult to discern the nature of the promise on which Motobecane relied. Motobecane argues that Patrick Oil’s acknowledgement of the notice of Motobecane’s security interest in Burns’ limited partnership interest constituted an implied promise that Patrick Oil would not subsequently deny having received notice of the existence of the security interest. If that was the sum total of Motobecane’s position, it might satisfy the conditions for obtaining an estoppel to this extent. However, Motobecane further argues that the acknowledgement now prevents defendants from denying that they had an obligation to protect Motobecane’s security interest. No such promise appears in the September 28 letter, nor can the court infer one from the plain meaning of the language of the letter. An estoppel can not rest upon an alleged promise which the court can not discern from the statements made by the defendant, cf. Association of Hebrew Teachers of Metropolitan Detroit v. Jewish Welfare Federation of Detroit, 62 Mich.App. 54, 233 N.W.2d 184 (1975) (holding that estoppel will not lie upon a promise that is too indefinite to permit the court to determine the scope of the alleged obligation).

The court therefore holds that defendant’s transmission of the September 28 letter prevents them from denying notice of Motobecane’s security interest in the 1972 partnership. Any obligation that Motobecane seeks to impose upon defendants to notify it of events that might compromise that security interest must arise from a separate contractual, statutory, or common law source. Motobecane relies upon the statute cited above, M.C.L.A. § 440.-8403 as the source of this obligation.

Application of M.C.L.A. § kh0.8k03

Defendants raise two principal arguments against Motobecane’s contention that § 440.8403 imposed upon them a duty to notify Motobecane of the exchange of Burns’ limited partnership interest for Patrick Petroleum stock. First, they argue that the limited partnership interest was not a “security” for purposes of Article Eight of the Uniform Commercial Code, of which § 440.8403 is a part. In connection with this position, defendants further argue that Motobecane had no security interest in the Patrick Petroleum stock, which is conceded by the defendants to be a “security” for purposes of Article Eight, at the time that it was presented to Patrick Petroleum for registration. Second, defendants argue that Motobecane did not give notice of an “adverse claim” in the limited partnership interest, as that term is used in § 440.8403.

With respect to the first argument, the definition of a “security” under Article Eight is provided by M.C.L.A. § 440.8102(l(a)), which reads as follows: Sec. 8102. (1) In this article unless the context otherwise requires (a) A “security” is an instrument which

(i) is issued in bearer or registered form; and
(ii) is of a type commonly dealt in upon securities exchanges or markets or commonly recognized in any area in which it is issued or dealt in as a medium for investment; and
(iii) is either one of a class or series or by its terms is divisible into a class or series of instruments; and
(iv) evidences a share, participation, or other interest in property or in an enterprise or evidences an obligation of the issuer.

The court agrees with defendants that Burns’ limited partnership interest in the 1972 partnership was not a “security” as that term is defined in Article Eight. Rather the interest is merely a contract right, a creature of the limited partnership agreement to which Burns and Patrick Petroleum were parties. One of the key differences of this distinction concerns transfer of the two kinds of property interests. While the rules for transfer of securities is governed by Article 8, transfer of a limited partnership interest is often governed, as it is in this case, by the partnership agreement itself. Article XV of the agreement that created the 1972 partnership specifically provided that a limited partner such as Burns could not transfer or assign his interest without gaining the approval of the general partner. Securities, on the other hand, can usually be transferred by endorsement of the owner or holder, without the consent of the issuer of the security. Motobecane’s counsel conceded at oral argument that the limited partnership interest does not constitute a “security” for purposes of § 440.8403. Nonetheless, it argues that its security interest attached to the Patrick Petroleum stock immediately upon the exchange of the limited partnership interest for the stock, by virtue of M.C.L.A. § 440.9306, which provides in pertinent part as follows:

Sec. 9306. (1) “proceeds” includes whatever is received upon the sale, exchange, collection or other disposition of collateral, or proceeds. Insurance payable by reason of loss or damage to the collateral is proceeds, except to the extent that it is payable to a person other than a party to the security agreement. Money, checks, deposit accounts, and the like are “cash proceeds.” All other proceeds are “noncash proceeds”.
(2) Except where this article otherwise provides, a security interest continues in collateral notwithstanding sale, exchange or other disposition thereof unless the disposition was authorized by the secured party in the security agreement or otherwise, and also continues in any identifiable proceeds including collections received by the debtor.

Defendants concede that Motobecane’s security interest attached to the Patrick Petroleum stock upon the exchange of the limited partnership interest for the stock. They argue, nonetheless, that at the time that the stock was tendered by the 1972 partnership to Patrick Petroleum for registration, that stock was owned by the partnership, and not by Burns as a limited partner of that entity. Thus, Motobecane’s security interest in the stock, as proceeds of the limited partnership interest, did not attach until after the stock had been registered. Because the notification obligation imposed upon the issuer by § 440.8403 applies only to stock for which the issuer has received notice of an adverse claim at the time that it is tendered for registration, the obligation did not arise with respect to the Petroleum stock, according to defendants.

The court concludes that this hyper-technical construction of the statute is at odds with its purposes. The record indicates that Patrick Oil had notice of Motobecane’s security interest in Burns’ limited partnership interest. Patrick Oil also knew of course that Burns had received the Patrick Petroleum stock in exchange for that limited partnership interest. Patrick Oil is further charged with constructive knowledge that Motobecane’s security interest attached to the Patrick Petroleum stock at the moment of the exchange, by operation of § 440.9306.

Defendants’ position, in essence, is that the timing of the relevant events, particularly the registration of the stock, and the transfer of the stock from 1972 partnership to its limited partners, is dispositive of the issue of whether or not the defendants had notice of Motobecane’s security interest in the stock. Such a conclusion violates the well-worn but hardy prohibition against exulting form over substance. In particular, the timing of the relevant events, which was orchestrated entirely by the defendants, who were engaged in a reorganization of the various entities that they controlled, should not defeat Motobecane’s right to be notified of events that might compromise its security interest, if such a right were found to exist. Regardless of who was the owner of the stock at the moment that it was tendered to Patrick Petroleum for registration, Patrick Oil had notice that Motobecane had a presently existing security interest that would attach immediately to the stock upon transfer to Burns. The court concludes that this confluence of events was sufficient to apprise defendants of Motobecane’s interest in the stock.

Absence of an “Adverse Claim”

The court further concludes, however, that defendants were not obligated to notify Motobecane of the exchange because Motobecane had not provided them with notice of an “adverse claim” as that term is used in § 440.8403. Section 440.8301 describes an adverse claim as “a claim that a transfer was or would be wrongful or that a particular adverse person is the owner of a or has an interest in the security.” Comment 4 to that provision elaborates as follows:

4. An adverse claim may be either legal or equitable, e.g., that the claimant is the beneficial owner of a security, though not the legal owner of it, or that it has been or is proposed to be transferred in breach of trust or a valid restriction on transfer.

Motobecane can not demonstrate that the exchange of the limited partnership interest for the Patrick Petroleum stock constituted a breach of trust or violated a valid restriction on transfer. Not only did the security agreement between Motobecane and Burns fail to prohibit the alienation of the collateral, but the very nature of the security agreement was such that Motobecane’s and Burns’ interests in the collateral were not adverse at the time of the transfer.

Because the June 26 letter from Burns to Motobecane (see note 5, supra), which appears from the present record to constitute the sum total of the security agreement between the parties, is silent on the scope of Motobecane’s rights as secured creditor, the court will assume, for the sake of this motion, that Motobecane would be entitled to ownership of the assets embraced by the limited partnership interest upon Burns’ default on his obligations to Motobecane. Such is the operation of the traditional security agreement. Motobecane does not allege that Burns had defaulted at the time of the exchange of the limited partnership interest in the Patrick Petroleum stock, however. Consequently, it does not argue that it had rights of ownership or control of the limited partnership interest at that time. From this silence in the pleadings and in the papers submitted in support of its motion, the court presumes that Motobecane concedes the right of Burns to take title in the Patrick Petroleum stock in his own name at the time of the transfer. By exchanging the limited partnership interest for the stock, defendants were merely changing the form of Burns’ investment. Indeed, defendants do not deny that they “cashed out” Burns’ partnership interest with full knowledge that Motobecane had a viable security agreement in that partnership interest.

Motobecane does not seek to exercise its rights under the security agreement against these defendants in this action, however. This case does not present a priority dispute between a secured creditor and the transferee of the secured collateral from the debtor. Rather, Motobecane alleges that defendants failed to meet their statutory obligation, as issuers of the Patrick Petroleum stock, to inform an “adverse claimant” of a proposed transfer and registration of the stock. Motobecane has simply failed to demonstrate to the satisfaction of this court that it was “adverse claimant” to Burns with respect to the stock at the time of the transfer. Section 440.8403 typically applies to situations where a stock certificate has been lost or stolen, or has been fraudulently or improperly transferred by endorsement, see Official Comment 1. In such a case, the person claiming to have been improperly divested of possession and the person in possession of the certificate will have adverse claims to the stock, i.e. both will assert rights of ownership. The rights of such rival claimants are mutually exclusive, and the statute at issue provides the issuer with guidance in resolving such competing claims. In the instant case, however, Motobecane does not contend that its security interest in the partnership interest, or in the Patrick Petroleum stock, could not co-exist with Burns’ simultaneously existing rights to ownership of the stock and possession of the certificates. Indeed, this co-existence of the rights of the secured creditor and the debtor in the secured collateral is a central feature of a security interest agreement. Motobecane and Burns were not vying for possession of the certificates or title to the stock at the time of the registration of the stock in Burns’ name. Each had exactly what they were entitled to when defendants exchanged the limited partnership interest for the stock: Burns, title and possession of the stock, and Motobecane a continuing security interest.

Although Motobecane’s security interest in the collateral was compromised to the extent that the Patrick Petroleum stock was more freely negotiable than was the limited partnership interest from which it arose, and Burns was able to more easily put the collateral beyond the reach of his secured creditor, this potential diminution in the strength of Motobecane’s security interest is not the kind of conflict that creates an adverse claim between Burns and Motobecane, in the opinion of this court. That being the case, one of the essential elements for the imposition upon defendants of the duty to notify Motobecane was not fulfilled. The court concludes therefore, as a matter of law, that Motobecane was not entitled under § 440.-8403 to receive notification from the defendants that they would exchange Burns’ limited partnership interest for Patrick Petroleum stock prior to consummating the transfer.

The court further concludes that, there being no persisting genuine questions of material fact in this case, defendants’ motion for summary judgment is granted, and the complaint is dismissed with prejudice. Plaintiff’s motion is denied.

SO ORDERED.

      . That letter stated in full as follows:
      September 12, 1979
      Patrick Oil and Gas Corp.
      744 West Michigan Avenue
      Jackson, Mich. 49201
      Re: 1972 Oil & Gas Combination, Ltd. Partnership no. 2
      Gentlemen:
      Please be advised that Mr. Peter Burns Sr. has granted to our client, Motobecane America, Ltd., a security interest in his partnership participation.
      We understand that this partnership participation is already subject to a prior lien in favor of the New Canaan Bank & Trust Company.
      We would appreciate your advising us what you require, if anything to recognize our client’s security interest. We are enclosing herewith a copy of Mr. Burns’ security grant.
      Very truly yours,
      Richard Kent Bernstein

      . That letter stated in full as follows:
      September 28, 1979
      Richard Kent Bernstein, Esq.
      Bernstein & MacCarthy
      485 Madison Avenue
      New York, New York 10022
      Re: 1972 Oil & Gas Program, Limited Partnership No. 2
      Dear Mr. Bernstein:
      We have noted on our records Mr. Peter Burns Sr. security grant to Motobecane America, Ltd. You have provided adequate documentation for the change.
      Please contact us if we can be of further assistance.
      Sincerely,
      Patrick Oil and Gas Corp.
      (Ms.) Aleta Pippin
      Investor Relations

      . Defendants have raised three additional arguments in support of their position that Motobecane’s claim under § 440.8403 is groundless. First, they argue that Motobecane could have properly protected itself by taking steps to become a creditor of the 1972 partnership, and asserting its rights under the Uniform Limited Partnership Act, M.C.L.A. § 449.223. The short answer to this contention is that any rights that Motobecane might have obtained under the Uniform Limited Partnership Act would be supplemental to, and not exclusive of rights that it might obtain under Article Eight of the Uniform Commercial Code.
      Second, defendants argue that, because Motobecane sent its correspondence to defendant Patrick Oil & Gas only, Patrick Petroleum was not notified of Motobecane’s security interest, and could not incur any obligations under § 440.8403.
      The court concludes that Patrick Petroleum may very well have received "notice in fact” of Motobecane’s security interest, which would have been sufficient to trigger operation of the obligations of § 440.8403 if the other prerequisites of that statute had been met. M.C.L.A. § 440.1201(26) prescribes the kinds of conduct that gives rise to "notice" under the U.C.C. as follows:
      (26) A person "notifies” or “gives” notice or notification to another by taking such steps as may be reasonably required to inform the other in ordinary course whether or not such other actually comes to know of it. A person "receives” a notice or notification when

        (a) it comes to his attention; or

      (b) it is duly delivered at the place of business through which the contact was made or at any other place held out by him as the place for receipt of such communications, (emphasis added)
      Defendants contend that notice to Patrick Oil can not be construed to amount to notice to its wholly-owned subsidiary, Patrick Petroleum, because to do so would amount to disregarding the separate legal existence of the subsidiary corporation. In response, Motobecane adverts to a letter dated April 26, 1982 from the corporate counsel of Patrick Petroleum to counsel for Motobecane. The writer indicates in that letter that Patrick Petroleum did in fact note Motobecane’s security interest on "our records”. Motobecane argues that the letter is evidence that Patrick Petroleum received "notice in fact” of Motobecane’s security interest, and that this is all that is required by § 440.1201(26). The court agrees that the April 26 letter is sufficient to raise a question of material fact about whether or not notice of security interest "came to the attention” of Patrick Petroleum. Consequently, Patrick Petroleum's argument that it is entitled to summary judgment on the grounds of inadequate notice must fail.
      Third, defendants contend that this claim is barred by laches. They argue that, had Motobecane given them notice of Burns’ default prior to dissolution of the 1972 partnership, they might have been able to withhold distribution of the Patrick Petroleum stock to Burns and thereby protect Motobecane’s security interest (although they vigorously argue that they were under no legal obligation to do so). Although this fact is not clear from the present record, it appears that Burns did not default on his obligation to Motobecane until some time after the dissolution of the 1972 partnership. Thus, even had Motobecane promptly notified defendants of Burns’ default, it is not clear that defendants could still have taken steps at that time to prevent distribution of the stock to Burns. Defendants have not established sufficient facts in their own motion for summary judgment that would entitle them to a dismissal of the action under a theory of laches. Further, defendants have not argued that this action is barred by the applicable statute of limitations.

      . The definition of "securities" provided by Article 8 is notably more narrow than those provided by the federal securities laws. For example, section 3 of the 1934 Securities and Exchange Act, 15 U.S.C. § 78c(10) defines a security, in part, as "any note, stock, bond, debenture, certificate of interest or participation in any profit-sharing agreement.” This language has been construed to include within its ambit limited partnership interests, see, e.g. Mason v. Unkeless, 618 F.2d 597 (9th Cir.1980).

      . The court has not been supplied with a copy of a UCC-1 or equivalent standard form document memorializing the security agreement by the parties. It therefore presumes for the purpose of this motion that the terms of the security agreement is set forth in a brief letter from Burns to Motobecane, dated June 26, 1979. The portion of the letter that addressed the security interest provided simply as follows:
      I hereby also grant you a security interest in my partnership participation in Patrick Petroleum 1972-2 Oil and Gas, presently held by the New Canaan Bank and Trust Company and subject to that bank’s prior lien, and I agree to execute such documents as may be necessary to protect your lien.

      . Part 5 of Article 9 of the Uniform Commercial Code governs the secured creditor’s rights upon the occurrence of default. See generally White & Summers, Handbook of the Law under the Uniform Commercial Code, 2d Ed., (1980).


source: Caselaw Access Project

author: ELLEN B. BURNS, District Judge.

license: Public Domain

text:
    INVISIBLE EMPIRE KNIGHTS OF the KU KLUX KLAN v. CITY OF WEST HAVEN.
    Civ. No. N-84-259.
    United States District Court, D. Connecticut.
    Jan. 14, 1985.

      Martha Stone, Civil Liberties Union, Hartford, Conn., for plaintiffs.
    Jonathan J. Einhorn, Corp. Counsel, West Haven, Conn., for defendant.
   RULING ON PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT

ELLEN B. BURNS, District Judge.

Plaintiffs in this action are the Invisible Empire Knights of the Ku Klux Klan (the “Klan”); Bill Wilkinson, “Imperial Wizard” of the Klan; John Dillon, “Great Titan” of the Klan in Connecticut; James Farrands, “Grand Dragon” of the Klan in Connecticut; and William Dunlap, a law professor who is neither a member of, nor sympathizer with, the Klan but who desires to attend a Klan rally. Defendants are the City of West Haven; members of West Haven’s city council (the “Council”); Lawrence Minichino, Mayor of West Haven; Michael D’Errico, West Haven’s Chief of Police; Barbara Barry, West Haven’s Director of the Department of Parks and Recreation (the “Department”); Arthur Orio, Chairman of West Haven’s Parks and Recreation Commission; and the West Haven Parks and Recreation Commission (the “Commission”).

On April 17, 1984, the plaintiffs initiated this action, challenging certain sections of the West Haven ordinance regulating parks and recreation areas (the “Ordinance”) as violating their First Amendment rights to freedom of expression and of assembly. The plaintiffs also requested a temporary restraining order prohibiting the defendants from enforcing the challenged ordinance with respect to a rally that the plaintiffs had planned to hold on the West Haven Green on April 28, 1984, which order was granted on April 23, 1984. The rally was held on April 28, 1984, but at an alternate site agreed to by the parties. The plaintiffs have now moved for summary judgment seeking a declaration that the Ordinance is unconstitutional and an injunction barring its future enforcement. Plaintiffs also seek compensatory and punitive damages.

I. Background

The Ku Klux Klan is an organization dedicated to the ignoble goal of white supremacy. To achieve this goal, the Klan planned a number of rallies throughout the State of Connecticut during the past several years. On two prior occasions, the plaintiff Dillon requested, and was denied, a permit to assemble on the West Haven Green. In anticipation of another Klan rally to be held on the West Haven Green on April 28, 1984, Dillon wrote to the defendant Barry in December, 1983, to request a permit. Barry responded that the Department was not processing applications for the following year and informed Dillon that he should reapply in 1984. Dillon reapplied by letter dated January 20, 1984. No written response was ever received by the Klan. On March 12, 1984, the Council unanimously passed an amendment to the Ordinance, to be effective April 13, 1984, which required, inter alia, that an applicant who anticipates use of city facilities by more than twenty-five persons, or which the Chief of Police reasonably believes will attract more than twenty-five persons, post a bond for the city’s costs of police protection and maintenance.

The plaintiffs were unsuccessful in obtaining the bond required by the Ordinance. Through their attorney the plaintiffs wrote to Chief of Police D’Errico, declaring their belief that the amendment was unconstitutional and requesting a demonstration permit without having to comply with the' amended Ordinance. On April 9 the plaintiffs were informed by the city’s attorney during a telephone conversation that their request for a permit would be denied. The plaintiffs thereafter filed the instant action.

The plaintiffs claim that their First Amendment rights to freedom of speech and of association have been impaired by the enforcement of sections 5D and 5L of the Ordinance. They further assert that the possibility of enforcement of the Ordinance serves to “chill” their First Amendment rights. They, therefore, seek declaratory and injunctive relief to prevent future enforcement of the Ordinance and also seek compensatory and punitive damages.

II. Appropriateness of Summary Judgment

Plaintiffs claim that the challenged provisions of the Ordinance are facially invalid. Summary judgment is appropriate where there is “no genuine issue as to any material fact.” Federal Rules of Civil Procedure 56(c). An attack on a statute as facially invalid may only succeed when the statute would be invalid regardless of the factual situation to which it is applied. See International Society for Krishna Consciousness, Inc. v. Rochford, 425 F.Supp. 734, 738 (N.D.Ill.1977), aff'd in part, rev’d in part, 585 F.2d 263 (7th Cir.1978). Therefore, no material issues of fact preclude this court from granting a motion for summary judgment as to the declaratory and injunctive relief sought. However, as to the relief for damages, material issues of fact exist.

Plaintiffs claim compensatory damages resulting from the defendants’ enforcement of the Ordinance. However, plaintiffs’ complaint and supporting affidavits make no showing that plaintiffs were in fact damaged. The rally occurred as planned and plaintiffs had the opportunity to exercise their First Amendment rights. Plaintiffs have also failed to make any showing of consequential damages resulting from defendants’ actions. Furthermore, the individual defendants, acting as government officials, may well be protected by qualified immunity for their actions. See Harlow v. Fitzgerald, 457 U.S. 800, 102 S.Ct. 2727, 73 L.Ed.2d 396 (1982). Although qualified immunity exists only where the official’s conduct “does not violate clearly established statutory or constitutional rights of which a reasonable person should have known,” Id. at 818, 102 S.Ct. at 2738, an official may plead in defense that he neither knew nor should have known of the relevant legal standard. Id. at 819, 102 S.Ct. at 2739. This court requires a more complete record before deciding that the defendant city officials are not entitled to the defense of qualified immunity-

Plaintiffs further claim that this court should award punitive damages against the individual defendants. As plaintiffs acknowledge, punitive damages are available against officials whose conduct demonstrates “reckless or callous indifference to the federally protected rights of others.” Smith v. Wade, 461 U.S. 30, 56, 103 S.Ct. 1625, 1640, 75 L.Ed.2d 632, 651 (1983). The defendants’ state of mind is therefore an important, in fact crucial, element of an award of punitive damages. Such a determination of state of mind can rarely, if ever, be made on a motion for summary judgment. See Wechsler v. Steinberg, 733 F.2d 1054, 1058 (2d Cir. 1984).

Therefore, plaintiffs’ motion for summary judgment is denied with respect to all claims for damages.

III. Declaratory Judgment

Plaintiffs have now on three occasions sought permission to conduct rallies in the City of West Haven. On each occasion the city denied that permission. The instant action was brought as a result of the last of these denials. If this court were now to dismiss this action because the plaintiffs no longer have a pending application for a permit, the defendants would be able to continue to enforce the challenged ordinances. While plaintiffs could conceivably continue to seek temporary restraining orders to exercise their rights to free public expression of their ideas, the Constitution does not impose such a burden on First Amendment liberties.

In Dombrowski v. Pfister, 380 U.S. 479, 85 S.Ct. 1116, 14 L.Ed.2d 22 (1965), the Supreme Court recognized that an overly broad statute which tended to “seriously inhibit the exercise of protected freedoms” could provide a basis for equitable relief. Id. at 489, 85 S.Ct. at 1122. Similarly, in Steffel v. Thompson, 415 U.S. 452, 94 S.Ct. 1209, 39 L.Ed.2d 505 (1974), the Court unanimously approved issuance of a declaratory judgment to protect the future exercise of the right to free expression.

In the instant case, plaintiffs have demonstrated that their attempts to exercise their First Amendment rights have been previously hindered by the defendants. They have further asserted their intent to hold future rallies in West Haven. However, the prospect of having to engage in continuous litigation, or expose themselves to monetary penalties for violating the Ordinance, certainly imposes a chilling effect on plaintiffs’ First Amendment rights. It is, therefore, appropriate to address the constitutionality of the Ordinance in consideration of the granting of a declaratory judgment. Steffel, supra at 475, 94 S.Ct. at 1223. Cf. Dombrowski v. Pfister, 380 U.S. at 489, 85 S.Ct. at 1122 (injunctive relief appropriate).

A. CONSTITUTIONALITY OF SECTION 5L

Section 5L, which is set out in note 1, requires that an individual or organization obtain a permit from the Department if use of city property by more than twenty-five persons is anticipated. A permit is also required if the Chief of Police reasonably believes that the planned use will attract more than twenty-five people. In order to obtain such a permit, the Ordinance requires that the applicant post a bond for the city’s costs of police protection and maintenance in an amount to be “estimated” by the Chief of Police. If the applicant cannot obtain a bond, he may submit an “individual guarantee of any acceptable person having sufficient financial means to cover such expenses.” The Ordinance makes no mention of any criteria for the granting of a permit other than the bond or surety requirement. It does not, by its terms, require that the Department issue a permit once the bond or surety requirement is met.

Plaintiffs make several facial attacks on section 5L. Among the alleged constitutional deficiencies of the Ordinance is its lack of standards for the granting of permits, its failure to give adequate notice of when a permit is required, its shifting of costs of police protection from the city to the speaker, and its failure to contain a waiver provision for indigents.

Lack of Adequate Standards

The Ordinance provides absolutely no standards by which the Director of Parks and Recreation is to decide whether to issue a permit, even if the applicant has secured the required bond. In Shuttlesworth v. Birmingham, 394 U.S. 147, 89 S.Ct. 935, 22 L.Ed.2d 162 (1969), the Supreme Court overturned the conviction of a defendant who had violated a permit law by parading without first obtaining a permit. The Court noted that, although the Alabama Supreme Court had provided an extremely narrow interpretation' of the statute so as to preserve its constitutionality, at the time of the defendant’s arrest the statute had not been so narrowly construed. The overbreadth of the statute required reversal of the defendant’s conviction.

The Ordinance in question contains no guidelines for the Director of Parks and Recreation to follow in granting or denying a permit. The Ordinance requires an applicant to request a permit from the Department. It provides that no permit may be issued unless the required bond or surety is posted. However, once the bond or surety is posted, the Ordinance is silent as to the standards for approving or disapproving the application.

Courts have consistently treated such standardless prior restraints on expression as invalid. See Shuttlesworth v. Birmingham, 394 U.S. 147, 89 S.Ct. 935, 22 L.Ed.2d 162 (1969). In Heffron v. International Society for Krishna Consciousness, Inc., 452 U.S. 640, 649, 101 S.Ct. 2559, 2564, 69 L.Ed.2d 298 (1982), the Court allowed a time, place, and manner restraint which prevented the exercise of unconstrained discretion, noting that “covert forms of discrimination ... may result when arbitrary discretion is vested in some government authority ... because such discretion has the potential for becoming a means of suppressing a particular point of view.” See also Cox v. Louisiana, 379 U.S. 559, 569, 85 S.Ct. 476, 483, 13 L.Ed.2d 487 (1965).

The lack of clear, reasonable and definite standards is fatal to the challenged Ordinance. Interstate Circuit v. Dallas, 390 U.S. 676, 690, 88 S.Ct. 1298, 1306, 20 L.Ed.2d 225 (1968) (vague standards for motion picture classification). Wolin v. Port of N.Y. Authority, 392 F.2d 83, 93 (2d Cir.1968) (excessive delegation of discretion makes permit regulation unconstitutional). The defendants argue that the Ordinance should not be declared unconstitutional because it is susceptible to a narrowing construction. However, nothing in the Ordinance itself suggests such a limited application. Cf. Eisner v. Stamford Board of Education, 440 F.2d 803, 808 (1971) (guidelines provided to decision maker permit narrow construction of school board policy). It is not the function of courts to act as legislators “to create from whole cloth a complex and completely novel procedure ... for the sole purpose of rescuing a statute from a charge of unconstitutionality.” United States v. Jackson, 390 U.S. 570, 580, 88 S.Ct. 1209, 1215, 20 L.Ed.2d 138 (1968). See also Interstate Circuit, supra 390 U.S. at 690, 88 S.Ct. at 1306 (“[i]t is not our province to draft legislation.”) Because no guidelines are contained in the Ordinance, the only narrowing construction that this court can provide is one that requires the Department to grant a permit to every applicant. Accordingly, section 5L is declared unconstitutional except to the extent that it requires the granting of every application for a permit to use city park and recreation facilities.

Failure to Give Adequate Notice

Plaintiffs also attack that portion of section 5L which requires an applicant to seek a permit when “the Chief of Police reasonably believes [the intended use] will attract more than twenty-five (25) people.” Plaintiffs correctly assert that such a requirement fails to give adequate notice to an applicant as to when a permit is required. If the potential applicant does not anticipate use by more than twenty-five persons, he is forced to predict what the Chief of Police will anticipate. Besides having the potential for discouraging expression and imposing a “chilling effect” on First Amendment rights, Keyishian v. Board of Regents, 385 U.S. 589, 604, 87 S.Ct. 675, 684, 17 L.Ed.2d 629 (1967), such an Ordinance fails to -give adequate notice to one who may eventually be fined for its violation. Although the Chief of Police, through his experience, may know how reasonably to estimate the size of an expected crowd, such knowledge cannot be imputed to individuals who wish to express their views on public property. From the perspective of the person who wishes to exercise his or her First Amendment liberties, the Ordinance is “so vague and indefinite” that it is “repugnant to the guaranty of liberty contained in the Fourteenth Amendment.” Cox v. Louisiana, 379 U.S. at 552, 85 S.Ct. at 463 (quoting Stromberg v. California, 283 U.S. 359, 369, 51 S.Ct. 532, 535, 75 L.Ed. 1117). Therefore, section 5L is unconstitutional to the extent that it makes the requirement of a permit contingent upon the Chief of Police’s estimate of crowd participation.

Bond Requirement

The Ordinance requires an applicant to post “a bond for the city’s costs of police protection and maintenance,” or “substitute ... an individual guarantee of an acceptable person having sufficient financial means to cover such expenses.” It is significant that the bond is to cover costs for police protection, not simply costs for potential injury to private or public property. In effect the bond requirement seeks to impose the cost of police protection on the applicant. This result cannot be permitted. Cf. Buckley v. Valeo, 424 U.S. 1, 49, 96 S.Ct. 612, 649, 46 L.Ed.2d 659 (1976) (“The First Amendment’s protection against governmental abridgement of free expression cannot properly be made to depend on a person’s financial ability to engage in public discussion”).

It is axiomatic that the right to free and uninhibited speech is basic to the fabric of our society. The free exercise of that right is bound, at times, to stir people to anger and provoke high emotions. Cox v. Louisiana, 379 U.S. at 552, 85 S.Ct. at 463. But the exercise of the right to free expression, however unpleasant the expression may be, “will ultimately produce a more capable citizenry and more perfect polity....” Cohen v. California, 403 U.S. 15, 24, 91 S.Ct. 1780, 1788, 29 L.Ed.2d 284 (1971). The Ordinance in question, which imposes a cost on expression, treats the First Amendment as a privilege to be bought rather than a right to be enjoyed. It is society that benefits by the free exchange of ideas, not only the person whose ideas are being shared. In order fully to preserve and protect the people’s right to be informed, it is society that should bear the expense, however great, of guaranteeing that every idea, no matter how offensive, has an opportunity to present itself in the marketplace of ideas. See Cohen v. California, 403 U.S. at 25, 91 S.Ct. at 1788. See also Wolin v. Port of N.Y. Authority, 392 F.2d at 94 (2d Cir.1968) (individuals exercising First Amendment rights “are entitled” to police protection.)

The city has attempted to justify section 5L by analogizing the granting of a permit to hold a political rally to the granting of a license to hold a carnival on public property. Although the city may reasonably expect a fee when it is acting in a proprietary capacity when “leasing” its property to a commercial exercise, the analogy loses its force when applied to the city acting in a governmental capacity in providing access to public forums. For example, few would dispute a state’s right to charge a fee to a commercial user of a state-owned railroad line, or to require such a commercial user to carry adequate liability insurance. However, in Eastern Conn. Citizens Action Group v. Powers, 723 F.2d 1050 (1983), the Second Circuit disallowed both a use fee and an insurance requirement when the planned use of the railroad line was an expression of the plaintiffs’ views on state transportation policy. Although the Powers court did not find it necessary to rule on the facial invalidity of the insurance requirement, it stated that “when the proposed use of state property involves the exercise of constitutional rights, fee and insurance conditions must be carefully scrutinized.” Id. at 1057.

Besides imposing a price on First Amendment rights, section 5L also varies that price according to the estimate of the Chief of Police as to crowd size. The effect is to make the cost of a permit greater for groups that will attract a large audience. This is true whether the audience is one welcomed by the speaker, or one which is hostile to the speaker’s point of view. The result is that, by threatening loud and numerous opposition, an opposing group can make the amount of the bond (and the actual cost of police protection born by the speaker) prohibitive, effectively nullifying the right to free expression of an unpopular idea.

The ability of an opposing group to exercise such a “hecklers’ veto” is contrary to the very nature of the First Amendment. As Judge Edwards ably stated in NAACP Legal Defense and Education Fund v. Devine, 727 F.2d 1247, 1261 (D.C.Cir.1984), “[t]o allow the intolerance (and threats) of a vocal minority (or even the majority) to determine who shall and shall not speak ‘would lead to standardization of ideas,’ Terminiello v. Chicago, 337 U.S. 1, 4, 69 S.Ct. 894, 896, 93 L.Ed. 1131 (1949), and ‘would fictionaliz[e] the rationale of the First Amendment.’ ” (Citations Omitted. Emphasis in original). It is no answer to state that the message of these plaintiffs is so offensive that justice is served by permitting it to be drowned out by a more responsible majority. However distasteful this judge finds plaintiffs’ message to be, it is the duty of this court to reaffirm that speech may not be barred simply because some, or all, in a community find the ideas expressed to be offensive. Street v. New York, 394 U.S. 576, 592, 89 S.Ct. 1354, 1365, 22 L.Ed.2d 572 (1969).

It is only necessary to look back a score of years in our history to find a situation in which speakers who advocated racial equality were denied their freedom of expression because of the angry response of a segment of the community to their message. In Cox v. Louisiana, 379 U.S. 536, 85 S.Ct. 453, 13 L.Ed.2d 471 (1965) the Supreme Court was confronted with a case in which the appellant had been convicted of breach of the peace after leading a protest against the arrest of students who had picketted stores that maintained segregated lunch counters. The state argued that the arrest had been proper because a group that had formed in opposition was growing “agitated” and “tense”. The Court reversed the conviction stating that the “ ‘compelling answer ... is that constitutional rights may not be denied simply because of hostility to their assertion or exercise.’ ” Id. at 536, 85 S.Ct. at 453 (quoting Watson v. Memphis, 373 U.S. 526, 535, 83 S.Ct. 1314, 1319, 10 L.Ed.2d 529). The challenged section of the Ordinance in question similarly allows a hostile group effectively to deny a speaker’s constitutional rights by making the exercise of those rights prohibitively expensive.

Accordingly section 5L is declared unconstitutional insofar as it requires a permit applicant to post a bond for the costs of police protection and maintenance.

Indigency

Even if the city were allowed to impose the costs of police protection on permit applicants, section 5L makes no provision for applicants who, by reason of indigency, cannot provide the necessary financial security. It has been well established in recent years that the exercise of fundamental constitutional rights cannot be conditioned upon an individual’s wealth. See e.g., Bearden v. Georgia, 461 U.S. 660, 103 S.Ct. 2064, 76 L.Ed.2d 221 (1983) (state cannot revoke probation for inability to pay fine or make restitution); Lubin v. Panish, 415 U.S. 709, 94 S.Ct. 1315, 39 L.Ed.2d 702 (1974) (otherwise valid candidate’s filing fee cannot be required of an indigent); Tate v. Short, 401 U.S. 395, 91 S.Ct. 668, 28 L.Ed.2d 130 (1971) (jail term may not be imposed in lieu of fine because of inability to pay fine). To the extent that section 5L requires payment of a bond for costs to those who can demonstrate their inability to obtain such a bond, it is declared unconstitutional.

B. CONSTITUTIONALITY OF SECTION 5D

The plaintiffs have also challenged section 5D of the Ordinance because it requires a permit without providing the decision maker with adequate standards for consideration of a permit application. Section 5D governs permits issued to persons wishing to sell “goods or wares, solicit any contributions, or display any advertisement____” Although section 5D appears to be primarily aimed at “commercial” behavior, its regulation of solicitation of contributions and display of advertisements impacts upon interests protected by the First Amendment.

This case does not present the court with the question of whether the Ordinance improperly affects “commercial speech” by granting standardless discretion to the Department of Parks and Recreation. It does, however, require this court to decide whether the permit requirement is unconstitutional when applied to contribution solicitations and advertisements of a noncommercial nature. See First National Bank of Boston v. Bellotti, 435 U.S. 765, 98 S.Ct. 1407, 55 L.Ed.2d 707, reh. den. 438 U.S. 907, 98 S.Ct. 3126, 57 L.Ed.2d 1150 (1978) (discussing limits on commercial and noncommercial speech).

Section 5D provides no greater standards for the decision maker than does section 5L. Therefore, for the reasons discussed above, section 5D is declared unconstitutional insofar as it applies to noncommercial solicitations and advertisements except to the extent that it requires the granting of every application for a permit to use city park and recreation facilities for such noncommercial uses.

Injunctive Relief

In order to be entitled to injunctive relief, a plaintiff must establish irreparable injury and the lack of an adequate remedy at law. Beacon Theatre v. Westover, 359 U.S. 500, 506, 79 S.Ct. 948, 954, 3 L.Ed.2d 988 (1959). The paramount importance of First Amendment liberties to our system of government makes any unlawful infringement of those liberties an irreparable injury, not only to the speaker, but to society itself. See Elrod v. Burns, 427 U.S. 347, 373, 96 S.Ct. 2673, 2689, 49 L.Ed.2d 547 (1976) (plurality opinion); 414 Theater Corp. v. Murphy, 499 F.2d 1155, 1160 (2d Cir.1974). In this case plaintiffs have already been denied permits for rallies on three occasions. The city has reenacted the challenged Ordinance since the temporary restraining order was issued in this case, indicating its intent to continue enforcement of the Ordinance. The continuing burden on speech imposed by the Ordinance creates a “chilling effect” by requiring a potential speaker repeatedly to seek an order restraining enforcement of the Ordinance, or to violate the Ordinance’s permit requirement and risk possible arrest and fine. The resulting impairment of constitutionally guaranteed liberty constitutes the necessary irreparable injury. Furthermore, the balancing of the plaintiffs’ interest in free speech against the city’s interest in being able to enforce an unconstitutional ordinance clearly establishes that the equities tilt decidedly in favor of the plaintiffs.

CONCLUSION

When the message communicated by a speaker is as offensive as that of these plaintiffs, there is a tendency to respond instinctively to bar further utterance of the offending speech. However, the principles embodied in our Bill of Rights requires that the majority tolerate the expression of unpopular views. This court, as do all courts, has a duty to protect the expression of ideas, no matter how reprehensible, from the instinctive responses of a well-meaning citizenry.

Accordingly, sections 5D and 5L are declared unconstitutional insofar as they apply to noncommercial uses of city park and recreation property except that the city may require a potential user of such property to obtain a permit. However, the Department of Parks and Recreation may not deny any permit applications by noncommercial users. The city may not require the posting of any bond or surety for costs of police protection and maintenance as a condition for the granting of such a permit. The city is enjoined from enforcing the “Ordinance Regulating the Use of Parking Areas, Bathing Beaches, Parks and Recreation Areas Under the Jurisdiction of the Board of Parks and Recreation of the City of West Haven,” enacted by the city council on June 25, 1984, in any way inconsistent with this decision.

SO ORDERED.

      . The amendment was originally added as section 50 of the Ordinance. On June 25, 1984, the city council passed an amended version of the Ordinance. The original section 50 of the old ordinance appears as section 5L of the new ordinance. Section 5L provides:

        Notwithstanding any ordinance to the contrary, any person, persons, legal entity or organization anticipating use of City property by more than twenty-five (25) people or .which the Chief of Police reasonably believes will attract more than twenty-five (25) people shall follow the following procedures:
      1. Said applicants shall request a permit from the Department of Parks and Recreation.
      2. Said permit shall not be issued unless said applications [sic] present to the Director of Parks and Recreation a bond for the City's costs of police protection and maintenance estimated by the Chief of Police and Parks and Recreation Director as associated with said permit.
      3. Any person who is unable to obtain such a bond, may substitute thereby [sic] an individual guarantee of any acceptable person having sufficient financial means to cover such expenses.
      4. Any person aggrieved by the decision of the Director of Parks and Recreation with regard to said decision, may appeal to the Parks and Recreation Commission within'seven (7) business days of receipt of any written decision.
      5. Any person aggrieved from [sic] the decision of the Parks and Recreation Commission, may appeal to the Superior Court for New Haven County at New Haven in the manner provided by law.
      6. For the purpose of this ordinance, any aggrieved person shall include any resident of the City of West Haven.

      . The original complaint alleged that sections 5E, 5N, and 50 unconstitutionally inhibited the plaintiffs’ First Amendment rights. Section 5E required written permission of the Board of Parks and Recreation before anyone could "expose for sale any goods or wares, solicit any contributions, or display any advertisement" in West Haven parks. Section 5N required similar written permission before conducting or addressing "any public gathering, meeting, or assembly or [taking] part in any public debate or discussion.”
      In the revised Ordinance passed on June 25, 1984, section 5E was recodified as section 5D, and section 50 was recodified as section 5L. Section 5N was apparently eliminated. Reference will be made to the sections as they are currently designated in the June 25th Ordinance.

      . Plaintiffs may assert that they were damaged in that they were forced to bring this litigation, thereby incurring attorney's fees. However this element of damages can be remedied by an appropriate motion for attorney’s fees pursuant to 42 U.S.C. § 1988.

      . The Mayor and council members may also benefit from absolute immunity for actions taken in their legislative capacity. Aitchison v. Raffiani, 708 F.2d 96, 98 (3d Cir. 1983). Cf. Tenney v. Bradhove, 341 U.S. 367, 71 S.Ct. 783, 95 L.Ed. 1019 (1951) (state legislators absolutely immune).

      . Section 50 of the Ordinance imposes a $50 fine for each violation.

      . The court notes that the city’s reenactment of the Ordinance, including the challenged sections, after the issuance of the temporary restraining order in April, indicates that the city intends to continue to enforce the Ordinance.

      . Plaintiffs also assert that other aspects of section 5L infringe upon their First Amendment rights. However, because of the ultimate decision in this case the court does not feel compelled to address each of the plaintiffs’ contentions.

      . Because the bond requirement is also unconstitutional, see infra, the failure to obtain the bond required by section 5L cannot be used as a basis for denying a permit.

      . This very narrow construction of section 5L still provides the city with notice of any planned use of city facilities by groups anticipating participation by more than twenty-five people so that it can provide necessary police protection. It should be noted that it is the applicant’s anticipation of the number of participants that controls the need to apply for a permit. See infra.

      . It is important to distinguish between a permit fee which covers the reasonable costs of administering the permit system, and the charge for police protection involved here. Although a permit fee may be allowed for the limited purpose of covering administrative costs, such administrative costs are normally minor and unlikely to inhibit anyone from exercising his or her First Amendment rights. See U.S. Labor Party v. Codd, 527 F.2d 118 (1975). The imposition of police costs, however, will frequently create a substantial financial burden. Such a large burden on exercise of a constitutional right must be subject to strict scrutiny. Bullock v. Carter, 405 U.S. 134, 146, 92 S.Ct. 849, 857, 31 L.Ed.2d 92 (1972). The city's interest in recouping the costs of its already existing duty of protecting its citizens in the exercise of their constitutional rights cannot justify the massive burden § 5L imposes upon those rights. Cf. Bullock, supra at 147-49, 92 S.Ct. at 857-59 (burdens of state financing primaries insufficient to justify imposition of large filing fees).


author: GETZENDANNER, District Judge:

text:
    UNITED STATES of America v. Biagio CIRRINCIONE and Tom Cirrincione, et al.
    No. 82 CR 778.
    United States District Court, N.D. Illinois, E.D.
    Jan. 16, 1985.

      Joseph Hartzler, David Stetler, Asst. U.S. Attys., Chicago, Ill., for plaintiff.
    Edward M. Genson, Jeffrey B. Steinback, Thomas A. Corfman, Genson & Steinback, Chicago, Ill., for defendant Tom Cirrincione.
    Patrick Tuite, David Mejia, Patrick A. Tuite, Ltd., Chicago, Ill., for defendant Biagio Cirrincione.
   MEMORANDUM OPINION AND ORDER

GETZENDANNER, District Judge:

This case is before the court on the motions for release on bond pending appeal of defendants Biagio Cirrincione and Tom Cirrincione. On August 8, 1984, after a jury trial, defendants were found guilty of violations of federal law in connection with the bombing of certain restaurants. On October 18, 1984, the court denied both defendants’ motions for new trial and for judgment of acquittal, and sentenced them to periods of incarceration. Both have filed Notices of Appeal, and now move the court for release on bond pending appeal. Defendants contend that they meet the standards for release under 18 U.S.C. § 3143 of the Bail Reform Act of 1984. Alternatively, defendants have argued that application of the Bail Reform Act to them would violate the ex post facto clause, Article I, § 9 of the Constitution.

Standards Governing Bond Pending Appeal

On October 12, 1984, the President signed into law the continuing appropriations resolution, Public Law No. 98-473, 98 Stat. 1837. Title II of that Public Law is the Comprehensive Crime Control Act of 1984, Chapter I of which contains substantial revisions of the law governing bond pending appeal. See Bail Reform Act of 1984, §§ 202-210 (codified at 18 U.S.C. §§ 3141-3150, 3041-3043, 3062) (the “Act”). As the Act contains no effective date, it is clear that it became effective on October 12, 1984, the date of enactment. United States v. Gavrilovic, 551 F.2d 1099, 1103 (8th Cir.1977) (citing Arnold v. United States, 13 U.S. (9 Cranch) 103, 119 (1815)). See U.S. Department of Justice, Handbook on the Comprehensive Crime Control Act of 1984 and Other Criminal Statutes Enacted by the 98th Congress, at 27 (Dec. 1984).

The new standards governing bond pending appeal provide that in a case such as this, bond shall be denied unless the court finds:

(1) by clear and convincing evidence that the person is not likely to flee or pose a danger to the safety of any other person or the community if released ...; and
(2) that the appeal is not for purpose of delay and raises a substantial question of law or fact likely to result in reversal or an order for a new trial.

18 U.S.C. § 3143(b). This substantially changes the standards governing bond pending appeal. Before the Act became effective, bond pending appeal could be denied in this case only if “a risk of flight or danger [to any other person or to the community] is believed to exist, or if it appears that an appeal is frivolous or taken for delay....” 18 U.S.C. § 3148, repealed by Bail Reform Act of 1984, § 203(a). In addition, while the burden of establishing that the defendant will not flee or pose a danger to another person or the community rested with the defendant, Fed.R.App.P. 9(c), amended by Bail Reform Act of 1984, § 210, the burden of establishing that the appeal was frivolous or taken for delay rested with the government. Id. at advisory committee note.

The new standards for bond pending appeal substantially increase the Cirrinciones’ burden on this motion. First, amended Appellate Rule 9(c) provides that the defendants carry the burden of establishing, by clear and convincing evidence, both elements of § 3143(b). Second, § 3143(b)(2) requires them to show that their appeal raises a “substantial question of law or fact likely to result in reversal.” This is a more stringent test than the previous “frivolous” standard. The legislative history makes clear that the change in wording represents an intentional change in the standard. A Senate Report gives this description of a predecessor to § 3143(b):

Subsection (b) deals with release after sentence of a defendant who has filed an appeal or a petition for a writ of certiorari. Such a person is ... to be detained unless the judicial officer finds by clear and convincing evidence that the defendant is not likely to flee or pose a danger to the safety of any other person or the community. In addition, the court must affirmatively find that the appeal is not taken for the purpose of delay and that it raises a substantial question of law or fact likely to result in reversal or an order for a new trial. This is a further restriction on post-conviction release. Under the current 18 U.S.C. § 1348, release can be denied if it appears that the appeal is frivolous or taken for delay. The change in subsection (b) requires an affirmative finding that the chance of reversal is substantial. This gives recognition to the basic principle that a conviction is presumed to be correct.

S.Rep. No. 97-317, at 57, 97th Cong., 2d Sess. (1982) (concerning S. 1554); see also S.Rep. No. 98-147, at 52-54, 98th Cong., 1st Sess. (1983) (concerning S. 215). The United States Department of Justice, quoting the Senate Report, has also interpreted this change as requiring “[a]n affirmative finding ... that the chance for a reversal is substantial.” U.S. Department of Justice, Handbook on the Comprehensive Crime Control Act of 1984 and Other Criminal Statutes Enacted by the 98th Congress, at 10.

The defendants argue that the Act requires nothing more than a nonfrivolous issue on appeal which, if successful, would result in a reversal or an order for a new trial. The Act requires more. It requires either a likelihood — that is something more than a 50% chance — of reversal, or a substantial chance of reversal, or at least a substantial question of law or fact which has not been foreclosed on appeal, for example, by a specific Seventh Circuit precedent which is unlikely to be changed by the Court of Appeals or considered by the Supreme Court.

In their post-trial motions, the defendants raised what the court has called a “serious” issue based on the fact that the defendants were represented by the same lawyer. Dual representation generally raises a serious legal question. However, for the reasons stated in the court’s opinion of October 18, 1984 denying the post-trial motions, the attorney’s conflict of interest was knowingly waived by the defendants. The issue is not substantial and the chance for reversal or a new trial order is neither likely nor substantial. Since the defendants cannot succeed under any of these possible standards, the court declines to define more specifically the requirements of the Act.

The government has also urged that Biagio Cirrincione has not demonstrated by clear and convincing evidence that he is not likely to flee. The court has reserved ruling on this issue pending receipt of further information from the parties.

The court is convinced, and the government does not disagree, that Tom Cirrincione neither poses a danger to the community nor a risk of flight. The sole reason for denying Tom Cirrincione’s motion would be his failure to demonstrate a likelihood or a substantial chance of reversal on appeal. Hence, in his case, application of the Bail Reform Act of 1984 results in incarceration pending appeal where he would otherwise be released. This requires the court to examine the argument that application of the new provisions concerning bond pending appeal in this case violates the federal ex post facto clause.

Ex Post Facto Clause

Article I, § 9 of the United States Constitution prohibits Congress from passing any “ex post facto” law. This clause was adopted to protect an individual’s right to fair notice when the government changes “that conduct which will give rise to criminal penalties,” Marks v. United States, 430 U.S. 188, 191, 97 S.Ct. 990, 992, 51 L.Ed.2d 260 (1977); or “increases punishment beyond what was prescribed when the crime was committed,” Weaver v. Graham, 450 U.S. 24, 30, 101 S.Ct. 960, 965, 67 L.Ed.2d 17 (1981); or “deprives one charged with crime of any defense available according to law at the time when the act was committed.” Beazell v. Ohio, 269 U.S. 167, 169-70, 46 S.Ct. 68, 68, 70 L.Ed.2d 216 (1925).

In the most recent ex post facto case decided by the Supreme Court, Weaver v. Graham, 450 U.S. at 29, 101 S.Ct. at 964 (1981), the Court noted that two critical elements must be present for a criminal or penal iaw to be held ex post facto: it must apply to criminal acts occuring before its enactment into law, and it must disadvantage the offender affected by it. The Bail Reform Act of 1984 facially fits these criteria. First, the Act retrospectively affects all defendants whose crimes occurred before the effective date of the Act, October 12, 1984. Secondly, the Act severely limits the availability of bond pending appeal and is disadvantageous to defendants who routinely seek to delay commencement of their sentences by obtaining release on bail pending appeal.

The Supreme Court has repeatedly recognized, however, that no ex post facto violation occurs by retrospective operation of a purely procedural change in the law even though a particular criminal defendant is thereby disadvantaged. In Dobbert v. Florida, 432 U.S. 282, 97 S.Ct. 2290, 53 L.Ed.2d 344 (1977), the Court upheld retroactive application of a statute reversing the roles of judge and jury in determining a sentence of death, despite the fact that the new statute allowed the judge to disregard a jury recommendation of mercy which would have been binding under previous law. In Beazell v. Ohio, 269 U.S. 167, 46 S.Ct. 68, 70 L.Ed. 216 (1925), the Court upheld retroactive application of a statutory amendment eliminating an earlier prohibition against joint trials, despite the contentions of the defendants in those cases that they were thereby prejudiced. Finally, in Hopt v. Utah, 110 U.S. 574, 4 S.Ct. 202, 28 L.Ed. 262 (1884), the Court found no ex post facto problem in retrospective operation of a statute allowing convicted felons to serve as competent witnesses. In all these cases, the Court reasoned that purely procedural changes in the law are not ex post facto unless these changes make criminal a previously innocent act, change the proof necessary to convict, or increase the punishment for a particular crime. See, e.g., Hopt, 110 U.S. at 589, 4 S.Ct. at 209.

In other cases, however, the Supreme Court has recognized that procedural changes in the criminal law may so affect substantial rights as to fall within the ex post facto prohibition. In Kring v. Missouri, 107 U.S. 221, 2 S.Ct. 443, 27 L.Ed. 506 (1882), the Court invalidated retrospective application of a state constitutional amendment allowing a defendant to be tried for first-degree murder after a previous conviction for second-degree murder had been reversed on appeal. Under the law in effect at the time the offense was committed, the conviction for second-degree murder would have amounted to an acquittal of the first-degree murder charge regardless of events on appeal. The Court held that the defendant’s right to plead the second-degree murder conviction as a bar to more serious charges could not be taken away retrospectively.

Similarly, in Thompson v. Utah, 170 U.S. 343, 18 S.Ct. 620, 42 L.Ed. 1061 (1898), the Court held that a Utah constitutional provision allowing trial by a jury of eight in non-capital cases was ex post facto in application to crimes committed within its limits while Utah was still a federal territory, since Utah was at that time subject to the then constitutional requirement that juries in felony cases be composed of twelve persons. The Court recognized that matters of procedure generally do not trigger ex post facto concerns but reasoned that the decrease in the number of jurors necessary to convict “materially impaired] the right of the accused to have the question of his guilt determined according to the law as it was when the offense was committed.” Id. at 351, 18 S.Ct. at 623. Subsequent cases, however, have limited the rationale of Thompson to changes in constitutional procedural rights by stating that a defendant is disadvantaged only when a procedural right is taken away, not when a change in procedure advantages the prosecution. See Note, Ex Post Facto Limitations on Legislative Power, 73 Mich.L.Rev. 1491, 1510-11 (1975).

Defendants have argued that application of the Bail Reform Act to them would both increase punishment and take away substantial rights in violation of the ex post facto clause. The latter argument responds to the government’s contention that the Act is “merely procedural” and derives from the following passage in Beazell v. Ohio, 269 U.S. 167, 171, 46 S.Ct. 68, 69, 70 L.Ed. 216 (1925):

Just what alterations of procedure will be held to be of sufficient moment to transgress the constitutional prohibition cannot be embraced within a formula or stated in a general proposition. The distinction is one of degree. But the constitutional provision was intended to secure substantial personal rights against arbitrary and oppressive legislation, and not to limit the legislative control of remedies and modes of procedure which do not affect matters of substance.

In no case, however, has a procedural change in the law been held to have ex post facto implications absent an increase in punishment or a change in the quantity and degree of proof necessary to establish a defendant’s guilt. Thus, the “substantial rights” language of Beazell is just another way of stating that alterations in what constitutes criminal conduct or the limits of punishment for a recognized crime will not escape ex post facto scrutiny merely because enacted in “a seemingly procedural form.” Weaver v. Graham, 450 U.S. 24, 29 n. 12, 101 S.Ct. 960, 964 n. 12, 67 L.Ed.2d 17 (1981).

Since the Bail Reform Act does not criminalize conduct that was innocent when done or otherwise affect the question of defendants’ guilt or innocence, it is clear that the Act is ex post facto only if the denial of release on bail pending appeal amounts to a retroactive enhancement of punishment, i.e., if accelerating the time when imprisonment commences for defendants who choose to appeal and could establish eligibility for post-conviction release under the old but not the new statute constitutes an “increase” in punishment.

Defendants have cited several state law cases in support of this contention, but none of them is particularly instructive. The first, Parker v. State, 667 P.2d 1272 (Alaska Ct.App.1983), relied on a state statute prohibiting retrospective application of statutes in order to avoid reaching the federal question. In Ellis v. State, 544 S.W.2d 908 (Tenn.Ct.Crim.App.1976), the court held that a statute denying bail pending appeal had “ex post facto” overtones but cited no cases nor discussed any reasons for its holding. In Greene v. State, 238 So.2d 296 (Fla.1970), the Florida Supreme Court held that retroactive application of a statute denying post-conviction bail to repeat offenders was ex post facto as to defendants both of whose felonies were committed before the statute’s effective date, but cited no federal case law in support of its conclusion. Greene was then followed in Cunningham v. State, 423 So.2d 580 (Fla.Dist.Ct.App.1982), in which the appellate court, citing Weaver v. Graham, 450 U.S. 24, 101 S.Ct. 960, 67 L.Ed.2d 17 (1981), concluded without explanation that a retrospective restriction on eligibility for release on appeal bond is fully analogous to a penal provision “more onerous than the law in effect on the date of the offense.” 423 So.2d at 581.

Cases which have upheld the retroactive application of bail reform statutes are somewhat more lucid, but not necessarily more persuasive. In Spitznas v. State, 648 P.2d 1271 (Okla.Ct.Crim.App.1982), the court conclusorily held that denial of bail while appeal is pending is neither an increase in punishment nor an “alteration of ... substantive rights on appeal” which would' bring the ex post facto clause into play. In State ex rel. Dorton v. Circuit Court, 274 Ind. 373, 412 N.E.2d 72 (1980), the Indiana Supreme Court noted that the right to bail pending appeal does not affect a criminal defendant’s “substantial rights concerning proof of the offense or the time to be served upon conviction therefor.” Id. at 74. The Dorton court also relied on the ground that the “opportunity for release on appeal bond is a status which must be determined at the time a convicted person seeks such relief” and therefore does not “vest” at the time an offense is committed. Id. at 75. To the extent that Dorton relies on a “vested rights” analysis, however, its reasoning is without merit. See Weaver, 450 U.S. at 30, 101 S.Ct. at 965 (“The presence or absence of an affirmative, enforceable right is not relevant ... to the ex post facto prohibition....”)

Only two federal cases to this court’s knowledge have addressed the precise issue before the court. In United States v. Davis, 598 F.Supp. 453 (S.D.N.Y.1984) (available on WESTLAW), Judge Charles Haight rejected the defendant’s ex post facto objections and granted a government motion to revoke bail pending appeal based on the intervening passage of the Bail Reform Act. Relying on Dobbert v. Florida, 432 U.S. 282, 97 S.Ct. 2290, 53 L.Ed.2d 344 (1977), and Portley v. Grossman, 444 U.S. 1311, 100 S.Ct. 714, 62 L.Ed.2d 723 (1980) (Rehnquist, Circuit Justice), Judge Haight held that the Bail Reform Act’s new standards for obtaining post-conviction bail constituted “modes of procedure” which do not affect a defendant’s “substantive personal rights, in contesting his guilt or pressing an appeal.” At 468. The court did not address whether the new standards increase punishment in any way. In United States v. Dante Gill, No. Crim. 84-87 (W.D.Pa.1984), Judge Gustav Diamond reached the opposite conclusion. In a bench opinion, Judge Diamond found that the provisions restricting bail pending appeal constituted “a substantive and substantial change in the law” which was ex post facto as to defendants whose crimes were committed prior to the statute’s enactment. Judge Diamond also found the shift of the burden of proof regarding entitlement to bail to be ex post facto.

Defendants initially argue that the standards for release pending appeal mandated by the new Act are “more onerous” than the standards in effect at the time they committed their crimes and therefore cannot be applied retroactively. This conclusion is not so apparent as defendants maintain. While the Supreme Court has held retrospective restrictions on parole eligibility to be ex post facto, it has done so only where operation of the new restriction effectively lengthened the' term of incarceration to which defendants were subject at the time they committed their crimes. In Weaver v. Graham, 450 U.S. 24, 101 S.Ct. 960, 67 L.Ed.2d 17 (1981), for example, the Supreme Court held that changes in Florida’s statutory formula for computing “gain time” credits could not apply retrospectively. The Court reasoned that, whether or not “gain-time” credits had vested at the time of a prisoner’s sentencing, the prospect for such credit “in fact is one determinant” of the length of a prisoner's incarceration so as to alter the “quantum of punishment” and thereby implicate ex post facto concerns. Id. at 30-33, 101 S.Ct. at 965-966.

While the Supreme Court has on at least one occasion found alterations in punitive conditions outside the sentence to be ex post facto, see, e.g., In re Medley, 134 U.S. 160, 169, 10 S.Ct. 384, 386, 33 L.Ed. 835 (1890) (statute requiring solitary confinement prior to execution for all prisoners sentenced to death), the rationale of Weaver is tied to changes in the actual term of incarceration. Under the Bail Reform Act, defendants’ period of incarceration remains the same as it was before. Thus, there is no change in the “quantum” of punishment, and it is unclear at best whether Weaver applies.

Defendants seek to escape this conclusion by pointing to the effect that detention pending appeal will have on their ability to obtain a reduction in sentence under Fed.R. Cr.P. 35(b). Generally, Rule 35(b) motions to reduce may be made any time after sentencing up to 120 days after affirmance on appeal. A defendant who has been released pending appeal and evidenced good behavior during that time may be able to demonstrate the changed circumstances which would convince a court to reduce an earlier sentence, whereas a defendant who has been incarcerated throughout the same period might not be able to make such a showing.

The court recognizes that application of the Bail Reform Act significantly changes the calculus behind filing a Rule 35(b) motion and that district courts sometimes reduce sentences, or completely eliminate any period of incarceration, if during the appeal period the defendant’s circumstances have changed or he has demonstrated good behavior or other positive qualities. The court also recognizes that defendants’ Rule 35(b) rights cannot be disregarded simply because they have not vested. See, supra page 11. Nonetheless, defendants still have the right to make a Rule 35(b) motion for reduction of sentence within 120 days of. sentencing and then again within 120 days of affirmance on appeal. Any shift in their actual ability to obtain a sentence reduction is speculative. Any effect of the Bail Reform Act on the actual length of incarceration is therefore too remote to justify the kind of reliance on criminal penalties with which the ex post facto clause is concerned.

The government has argued that the Bail Reform Act does not increase punishment by analogy to case law upholding retroactive application of the pretrial detention provisions of the Bail Reform Act and similar legislation. United States v. Hazzard, 598 F.Supp. 1442 (N.D.Ill.1984); DeVeau v. United States, 454 A.2d 1308, 1314 (D.C.Ct.App.1982), cert. denied, 460 U.S. 1087, 103 S.Ct. 1781, 76 L.Ed.2d 351 (1983). In Hazzard, Judge William T. Hart reasoned that pretrial detention under the new Act is imposed on a defendant not for having committed criminal acts, but because of the defendant’s status as an arrestee whose pretrial release presents a threat to community safety which no conditions on release can reasonably prevent. At 1454-1455. Judge Hart therefore concluded that the Act’s pretrial detention provisions are regulatory rather than punitive. Judge Hart also concluded that these provisions are not retrospective since the eligibility for release on bail is determined according to present status and not acts occurring before the passage of the statute. Id. Judge Hart then likened the Bail Reform Act to habitual offender statutes and legislation prohibiting previously convicted felons from undertaking certain activities, both of which have withstood ex post facto scrutiny. At 1454-1455. See DeVeau v. Braisted, 363 U.S. 144, 160, 80 S.Ct. 1146, 1154, 4 L.Ed.2d 1109 (1960) (law prohibiting previously convicted felons from participating in waterfront labor unions not ex post facto increase in punishment); McDonald v. Massachusetts, 180 U.S. 311, 21 S.Ct. 389, 45 L.Ed. 542 (1901) (laws creating aggravated penalties for recidivist criminal activity not ex post facto even though predicate offense predates statute); United States v. Sutton, 521 F.2d 1385, 1390-91 (7th Cir.1975) (Congress constitutionally allowed to restrict criminals whose felonies occurred in the past from receiving firearms).

To the extent that the post-conviction bail provision of the new Act is regulatory and not punitive, it necessarily falls outside the prohibitions of the ex post facto clause:

The mark of an ex post facto law is the imposition of what can fairly be designated punishment for past acts. The question in each case where unpleasant consequences are brought to bear upon an individual for prior conduct, is whether the legislative aim was to punish that individual for past activity, or whether the restriction comes about as a relevant incident to a regulation of a present situation ____

DeVeau v. Braisted, 363 U.S. 144, 160, 80 S.Ct. 1146, 1154, 4 L.Ed.2d 1109 (1960). However, unlike the pretrial detention provisions which are concerned solely with safety of the community, the post-conviction bail restrictions are not unrelated to punishment nor merely incidental to regulation of a present situation. In the legislative history accompanying § 3143, Congress expressed the notion that swifter punishment is a greater deterrent to criminal conduct: “release of a criminal defendant into the community after conviction may undermine the deterrent effect of the criminal law, especially in those situations where an appeal of the conviction may drag on for many months or even years.” S.Rep. No. 98-225, at 26, 98th Cong., 2d Sess. (1984); S.Rep. No. 98-147, at 562, 98th Cong., 1st Sess. (1983); S.Rep. No. 97-317, at 56, 97th Cong., 2d Sess. (1982). Congress therefore specified that the former presumption in favor of bail pending appeal was to be eliminated, and that defendants must establish a substantial chance or likelihood of reversal before post-conviction release pending appeal will be ordered.

By viewing the restrictions on release pending appeal to be a deterrent to crime, Congress must have concluded that a sentence which commences immediately upon conviction is somehow more severe than a sentence which commences only after appeal. Certainly, a sentence which commences before, rather than after, appeal, is more certain to be served. For example, the defendant may die during the interim period. Not all procedural changes increasing the certainty of conviction, however, will be ex post facto when applied to prior criminal acts. See, e.g., United States ex rel. Massarella v. Elrod, 682 F.2d 688, 689 (7th Cir.1982) (extension of statutes of limitation before a given prosecution is barred). Certainly, if Congress were to increase prosecutorial capacity to investigate crime, the law achieving that increase could be applied to crimes committed before its effective date without offending the ex post facto clause. That a criminal defendant might escape punishment altogether for reasons unrelated to his guilt or to the process of justice is not an expectation worthy of protection against retroactive impairment.

On the other hand, that people generally value the present more than the future cannot be ignored for ex post facto purposes. One need not be an economist to believe that a sentence which commences, for example, two years from now is less onerous than a sentence which commences today. By amending former § 3148 to help deter crime, Congress has implicitly recognized that criminals consider the date on which a period of imprisonment commences to be part of the price paid for unlawful activity. While the Supreme Court has not always been clear on the underlying rationales for the ex post facto clause, certainly one rationale is that an individual who acts in reliance upon the known criminal penalties for his acts must be punished in accordance with that reliance. That rationale, by Congress’s own determination, is fully implicated here.

More importantly, however, at least some of the reasons that defendants seek bail pending appeal are entitled to protection from retroactive impairment. A defendant sentenced to imprisonment who chooses to appeal his conviction has hope, however unjustified by the statistics, of reversing that conviction or even obtaining a judgment .of acquittal. Under former § 3148, those defendants within this class whose appeals were not shown to be frivolous also had an expectation that success on appeal would mean a release from punishment altogether. By restricting eligibility for release pending appeal, the new Act takes away that expectation.

This expectation — while not always reasonable — is of longstanding historical importance. As long ago as 1895, the Supreme Court noted that the statutes of the government “have been framed upon the theory that a person accused of a crime shall not, until he has been fully adjudged guilty in the court of last resort, be absolutely compelled to undergo imprisonment or punishment, but may be admitted to bail, not only after arrest and before trial, but after conviction and pending a writ of error.” Hudson v. Parker, 156 U.S. 277, 285, 15 S.Ct. 450, 453, 39 L.Ed. 424 (1895). Accord, United States v. Motlow, 10 F.2d 657, 662 (7th Cir.1926). The right to bail pending appeal, while not itself constitutionally guaranteed, has nonetheless been deemed necessary in order to make the defendant’s right to appeal fully effective and is therefore more than “merely procedural.” See Patterson v. United States, 75 S.Ct. 256, 257, 99 L.Ed. 1296 (1954) (Frankfurter, Circuit Justice) (“[T]he actual operation of the appellate procedure should not be allowed, through the denial of bail, to render the right to appeal nugatory.”) Unlike rules regarding the competency of witnesses or the vesting of sentencing discretion in judge as opposed to jury, eligibility for release pending appeal is a right personal to the defendant the retroactive restriction of which can only work to his or her detriment.

While the Supreme Court has never addressed the issue directly, support for this conclusion can be gleaned from Rooney v. North Dakota, 196 U.S. 319, 25 S.Ct. 264, 49 L.Ed. 494 (1905). In Rooney, the Supreme Court held that extending the time before a death sentence can be executed is a mitigation in punishment. The language of the case is revealing:

The giving, by the later statute, of three months’ additional time to live, after the rendition of judgment, was clearly to [the prisoner’s] advantage, for the court must assume that every rational person desires to live as long as he may. If the shortening of the time of confinement ... before execution, would have increased, as undoubtedly it would have increased, the punishment to the disadvantage of a criminal sentenced to be hung, the enlargement of such time must be deemed a change for his benefit.

196 U.S. at 325, 25 S.Ct. at 266 (emphasis added). The court further noted that the extension of the time to live not only increased the prisoner’s life, however, but also “increased the opportunity of the accused to obtain a pardon or commutation from the governor of the-state before his execution.” Id. at 325-26, 25 S.Ct. at 265-66.

Rooney is distinguishable in that a defendant sentenced to death whose execution of sentence is postponed thereby gains longer life whereas defendants who postpone a period of incarceration merely exchange time today for time tomorrow. Even so, the court finds that most rational persons desire to put off punishment as long as they may. While countervailing considerations, such as family, income, or the desire to resume a normal life, may cause some criminals to choose punishment now, similar countervailing factors may cause a defendant sentenced to death to choose execution now and avoid prolonged anxiety. More importantly, however, the new Act does not affect defendants who wish to commence their sentences immediately upon conviction; only those who seek release pending appeal are disadvantaged.

The second rationale of Rooney — that enlargement of the time before execution increases the possibility of a commutation or pardon — is, of course, fully applicable to the present situation. The defendant who is on release pending appeal thereby increases the possibility that a Rule 35(b) motion for reduction of sentence might be granted which would prevent his or her ever being sent to prison. As noted earlier, the possibility that this will happen is speculative, but certainly no more so than the possibility that a prisoner sentenced to death will obtain a governor’s pardon. The language of Rooney —admittedly dictum— thus suggests an additional ground for finding that application of the Bail Reform Act of 1984 to the Cirrinciones offends ex post facto prohibitions.

In light of all these factors, the court, concludes that the Bail Reform Act’s standards for release pending appeal cannot be applied to offenses committed before October 12, 1984 without offending the ex post facto clause. The apparent purposes of the Act — to eliminate dilatory appeals and to help deter crime — are laudatory ones, but may not be used to enhance punishment of those who committed unlawful acts in possible reliance on previous standards. Since the Cirrinciones’ crimes took place prior to October 12, 1984, their eligibility for release on appeal must be governed by former 18 U.S.C. § 3148. As already explained, Tom Cirrincione meets those standards and his motion for release on bond pending appeal is therefore granted. Defendant Biagio Cirrincione’s motion is taken under advisement pending the receipt of further information as to whether he is a flight risk.

Accordingly, defendant Tom Cirrincione’s motion for release on bond pending appeal is granted. Defendant Biagio Cirrineione’s motion for release on bond pending appeal is taken under advisement.

It is so ordered.

      . This ruling was brought to the court's attention in a Supplemental Memorandum filed by defendants with this court on January 15, 1985. In that memorandum, defendants also raise new constitutional issues for the first time regarding the due process clause and the eighth amendment. Despite defendants' effort to characterize these arguments as having been raised previously, the court notes that defendants’ earlier objections were raised as a matter of statutory construction, and not as constitutional arguments. Since defendants were given leave to file supplemental authority, not to introduce new legal theories, the court declines to entertain these arguments. In light of this court’s disposition of the ex post facto issue, defendants are hardly prejudiced by this decision.

      . People’s preference for the present over the future has been documented by several economists. Mancur Olson and Martin Bailey concluded in a 1981 study that the case for positive time preference is absolutely compelling. Positive Time Preference, 89 J.Pol.Econ. 1 (1981). See also Easterbrook, Criminal Procedure as a Market System, 12 J. Legal Studies 289, 294-95 (1983):
      [PJeople discount the future.... The threat of spending next year in jail is more serious than the threat of spending one year in jail ten years from now. For many people, the opportunities of the present seem more important than those of the future, and even people who weigh years of their lives equally will consider the possibility that the state will relent or they will die before the tenth year arrives. Prison disrupts the formation of human capital and also creates a stigma that may reduce future income substantially. Although it is not possible to know the size of this discount with certainty — for some people there are countervailing considerations, such as growth of income, that may make prison in the future especially onerous compared to prison now — it seems reasonable to assume that the discount and risk factors together are significant.