author: WILLIAM C. LEE, District Judge.

text:
    Anna WILSON, Plaintiff, v. MONTGOMERY WARD & CO., INC., Defendant.
    Civ. No. F 84-112.
    United States District Court, N.D. Indiana, Fort Wayne Division.
    June 13, 1985.

      Paul 0. Sauerteig, Snow & Sauerteig, Mark Paul Smith, Krueckeberg & Smith, Fort Wayne, Ind., for plaintiff.
    James P. Fenton and Bert J. Dahm, Barrett, Barrett & MeNagy, Fort Wayne, Ind., for defendant.
   MEMORANDUM OPINION AND JUDGMENT

WILLIAM C. LEE, District Judge.

This matter is before the court for a decision on the merits following a bench trial. This case deals with the breach of an alleged oral contract and a violation of certain Indiana wage statutes, I.C. 22-2-5-1, et seq. This court, having examined and considered the entire record and having determined the credibility of the witnesses, after viewing their demeanor and considering their interests, and being duly advised, hereby enters the following Findings of Fact and Conclusions of Law pursuant to Rule 52(a) of the Federal Rules of Civil Procedure.

FINDINGS OF FACT

The plaintiff Anna Wilson (“Wilson”) is a citizen and resident of Florida, although she was a citizen of Indiana at the time she filed this action. Wilson was employed by the defendant (“Wards”), an Illinois corporation, for approximately twenty-six years, from 1957 to April, 1983. In September, 1979, Wilson became the Operations Manager of the Wards store at the Northcrest Shopping Center in Fort Wayne, Indiana (the “Fort Wayne North” store). The Operations Manager is considered the “second in command” in the managerial structure of a Wards store, subordinate only to the Store Manager.

On January 20, 1983, Wards announced that it would be closing four stores, including the Fort Wayne North store. Approximately four days later, the Store Manager for the Fort Wayne North store quit, effectively leaving Wilson in charge of the management of the store.

On February 11, 1983, Wards held a meeting at its Merrillville, Indiana store. Present at the meeting were the Store and Operations Managers for the other three stores being closed, as well as Wilson, who alone represented the Fort Wayne North store management. The purpose of the meeting was to explain the many procedures for closing down a store. These procedures were outlined in a manual given to each store representative.

At the Merrillville meeting, Gerry Van Booven, then the Assistant District Manager for Wards’ Chicago District, spoke to the store representatives about personnel policy during the closing process. At the time of the Merrillville meeting, there was in effect a severance policy for Wards management employees which calculated a manager’s severance pay as one week’s pay for each full year of service up to a maximum of thirteen week’s pay. Wards desired to keep its management personnel on the job through the store closings. As an incentive to induce the Store and Operations Managers at the meeting to remain in their positions until the stores were closed, Van Booven promised that if the managers stayed on and assisted in the closing of the stores, the managers would receive “severance pay,” i.e., an amount of additional compensation calculated in the same manner as severance pay. Albert Thomas Lawrence, the Operations Manager at the Lafayette, Indiana Wards store, asked Van Booven at the meeting, with Wilson in attendance, whether Van Booven meant that this offer for “severance pay” was such that even if the managers were offered another position in the company and refused to take it, those managers would still receive this additional pay. Van Booven replied affirmatively. Lawrence asked Van Booven the same question after the meeting to make sure that he understood the incentive outlined by Van Booven. In Wilson’s presence, Van Booven reiterated his earlier response.

As both first and second in command, Wilson assumed several additional duties and responsibilities in the store closing process. The closing process itself required additional work to insure security over the store’s assets, mark down prices and advertise close-out sales, pack and ship merchandise to other Wards stores, and to wind down the store’s operations in general. In addition, Wilson played an active role in assisting the store personnel to cope with the closing, including counseling employees, sponsoring a workshop and buying materials at her own expense to assist employees in finding other employment, and calculating severance pay.

On April 13, 1983, the Fort Wayne North store closed. At that time, Bob Baker, the Area District Manager, offered Wilson a position as Customer Service Manager at Ward’s store in Skokie, Illinois. Wilson refused the position, and Baker then informed Wilson that she would receive no severance pay because she had been offered another position in the company and had refused to take it. However, Pat Niedermeyer, the Personnel Supervisor at the Fort Wayne North store, and Betty Berry, the Sales Manager at the store, were both asked whether they would want to transfer to another store, turned down the opportunity, and yet received full severance pay. In the case of Betty Berry, Bob Baker told her that Wards had a position available, but she told him she was not interested in transferring to another store.

The parties stipulated at trial that the amount of money due under the severance pay formula for Wilson is Six Thousand Nine Hundred Fifty Dollars ($6,950.00).

CONCLUSIONS OF LAW

At the close of the plaintiff’s evidence, Wards moved for an involuntary dismissal under Federal Rule of Civil Procedure 41(b). The motion was renewed at the close of all the evidence. The motions were taken under advisement, and the court begins by ruling on this motion.

A. Motion for Involuntary Dismissal

Rule 41(b) allows a defendant, at the close of the plaintiff’s evidence, to “move for a dismissal on the ground that upon the facts and the law the plaintiff has shown no right to relief.” Wards here attacked Wilson’s Wage Statute claim under I.C. 22-2-5-1, et seq. by arguing that the statute does not apply because it is intended only to require semi-monthly payment of wages. Wards attacks the breach of contract claim by arguing that no contract was formed because (1) Wilson did not give additional consideration, and (2) the statute of frauds bars the contract claim because the written severance policy should control the payment of severance pay.

Indiana Wage Statute

Plaintiff sues under I.C. 22-2-5-1. That statute provides that

Every person, firm, corporation, or association ... whatsoever doing business in this state shall pay each employee thereof at least semi-monthly or bi-weekly, if requested, the amount due each employee____

Failure to pay employees in this manner activates the penalty provisions of I.C. 22-2-5-2, which allow an employee to recover his unpaid wages plus a penalty of up to double the amount of unpaid wages, as well as attorney fees and costs.

I.C. . 22-2-5-1, et seq. is a penal statute which, being in derogation of the common law, must be strictly construed. Palmer v. Stockberger, 135 Ind.App. 263, 193 N.E.2d 384, 387 (1963). A close examination of the language of the statute makes clear that it is concerned with the time of payment of wages. Its thrust is to create a statutory requirement that wages be paid semi-monthly or bi-weekly if so requested by the employee. This limited scope becomes more evident when one considers the remainder of the statute, which sets out when an employer need pay wages due after the employee terminates his employment. Thus, the statute under which Wilson sues is one designed to insure the regularity and frequency of wage payments.

The court concludes that Wilson’s claim under the statute for the unpaid amounts promised at the Merrillville meeting fails for at least three reasons. The first is that the amount promised was not “wages” within the meaning of I.C. 22-2-5-1. Wilson has argued repeatedly that the amount promised is a wage because it falls within the broad definition of “wages” set out in I.C. 22-2-9-1, which defines the term as “all amounts at which the labor or service rendered is recompensed, whether the amount is fixed or ascertained on a time, task, piece or commission basis, or in any other method of calculating such amount.” However, I.C. 22-2-9-1 does not purport to define the term for all Indiana wage statutes; in fact, it is part of an Act dealing with wage claims that was passed in 1939, while the Act which created I.C. 22-2-5-1 was passed in 1933. Wilson's counsel mistakenly believes that these two statutes are somehow related simply because they appear together in the statute book. In fact, I.C. 22-2-9-1 specifically limits the definitions to the 1939 Act.

Rather, the “wages” contemplated by I.C. 22-2-5-1 are something akin to the wages paid on a regular, periodic basis for regular work done by the employee — the paycheck which compensates for the work done in the previous two weeks. Here, Wilson seeks something far different. The promise made by Van Booven was for an amount above arid beyond the regular paychecks Wilson received; it was a kind of bonus offered as an incentive to stay on until the store closed. It was measured in an unconventional way — based on years of service — which had no relation to the time worked (thirteen weeks’ pay for nine weeks of work). It is more appropriate to view the promise of the Merrillville meeting as a promise to pay a “bonus” — something extra — in return for staying on and closing the stores. The court in Die & Mold, Inc. v. Western, 448 N.E.2d 44, 47-48 (Ind.App.1983), a case repeatedly cited by Wilson, found that a bonus is not “regular compensation.” The court therefore concludes that Wilson’s Wage Statute claim must fail because wages are not involved here.

The second rationale for rejecting the claim lies in the fact that, even if the promised payment is a wage under I.C. 22-2-5-1 or the expansive definition proffered by Wilson, it does not mean that the Wage Statute applies. Accepting for the moment Wilson’s definition of wages as “any compensation for services rendered,” it is clear that not all forms of compensation fall under I.C. 22-2-5-1. There are certainly many forms of compensation which, by their very nature, are not payable in semimonthly or bi-weekly payments. Health or retirement benefits are part of the “compensation for services rendered,” yet it makes no sense to say that failure to pay such compensation on a semi-monthly or bi-weekly basis gives rise to a cause of action under I.C. 22-2-5-1. The time of payment contemplated by both employer and employee is some time other than the regular payday at regular intervals. Such is the case here. Both Wards and Wilson contemplated that payment would be after the Fort Wayne North store closed, a time some three months in the future. It was a lump sum payment conditioned upon working through the store closing. It is not the type of wage contemplated by I.C. 22-2-5-1, so that Wilson’s claim falls outside it.

Finally, even if the promised payment is a wage falling under the ambit of I.C. 22-2-5-1, Wilson’s claim fails because there was no evidence that Wilson requested payment in semi-monthly or bi-weekly payout or that any request was made prior to the time this dispute arose. The court in Palmer v. Stockberger, 193 N.E.2d at 388, construing an earlier version of I.C. 22-2-5-1, stated:

statutes fixing the time for payment of wages require strict compliance for a request or demand for payment of wages and that such request or demand must be directly related to the contract of employment and must be made prior to or concurrent with the period of employment as to the matter of the time for payment of wages and not after a wage dispute has arisen.

Wilson made no demand for payment until this dispute arose; subsequently, she fails to satisfy the provisions of I.C. 22-2-5-1, and her claim must fail. The court will therefore grant the Rule 41(b) motion as to Wilson’s Wage Statute claim.

Breach of Contract

Wards attacks the breach of contract claim by arguing that no valid contract was formed. The premise of the argument is that Wilson intended to work at Wards during the closing down period, so that her staying on and assisting in the closing of the store was nothing more than what she would have done anyway. This, Wards concludes, constitutes a failure of consideration on Wilson’s part, and thus the oral contract formed at the Merrillville meeting is void.

The record, however, is replete with testimony of how much new and added responsibility Wilson assumed in agreeing to close the store. The Store Manager had left, and thus agreeing to stay on and close the store was, from Wilson’s perspective, agreeing to do the work of two people. The manual on store closing procedures created many new tasks for both the Store Manager and Operations Manager. These new, added responsibilities were set out at the Merrillville meeting, accompanied by the promise that if the managers stayed on and assisted in the closing, they would receive additional pay equal in amount to severance pay. Wilson’s performance of those added responsibilities constitutes more than sufficient consideration to support the oral contract. Wards’ Rule 41(b) motion on this ground must therefore be denied.

The second ground for dismissing the contract claim was referred to as the “statute of frauds.” However, the statute of frauds is not implicated here at all. In fact, in framing this argument, counsel for Wards made clear that the real basis for this argument is the belief that Wilson is seeking severance pay, which should be governed by the written severance policy in effect at the time of the Fort Wayne North store closing. In effect, Wards argues that the written severance policy should override any oral representations about severance pay.

Wards’ argument misconceives the nature of Wilson’s claim. This is not an action to recover severance pay. Rather, it is an action to recover a contractually promised amount of money which is to be computed in the same manner as severance pay. The distinction is crucial. Wilson claims that Wards promised her an amount of money as an incentive to stay on and help close the Fort Wayne North store. Van Booven’s promise at the Merrillville meeting constituted a contract offer above and beyond the provisions of Wilson’s employment contract, and Wilson accepted the offer by performing her half of the bargain. What has confused both sides is that the amount promised by Van Booven was “severance pay,” and that both Wilson and Thomas Lawrence testified about “getting severance pay.”

The problem is purely semantical. Wilson argued, and the court has found as a matter of fact, that Wards wanted to keep its management people in place through the store closings. Wards therefore decided to offer an incentive, in the form of additional compensation, to induce managers to stay on until the stores closed. This incentive had to be something other than severance pay under the severance policy, because that policy was extant at the time of the Merrillville meeting, so that a mere offer of severance pay under the policy would not have been much of an incentive. Rather, Wards offered something more, and the fact that Van Booven promised payment even if a manager was offered another position in the company and refused it (which is in direct conflict with the severance policy) establishes that the additional compensation promised was something other than pay under the severance policy. The court concludes that Van Booven’s promise to pay “severance pay” was a promise to pay an amount that would be computed in the same manner as severance pay. The written severance policy is therefore irrelevant to this action except to the extent that it details a method of computation. Wards’ Rule 41(b) motion based on the written severance policy must therefore be denied.

B. Decision on the Merits

The court finds that it has jurisdiction over this cause by virtue of 28 U.S.C. § 1332, on the basis of diversity of citizenship.

This is a diversity action over an oral contract which is governed by Indiana law. An express contract may be oral or written, Pence v. Beckman, 11 Ind.App. 263, 39 N.E. 169, 170 (1894). A contract, whether oral or written, requires offer, acceptance, and consideration. Economy Leasing Co., Ltd. v. Wood, 427 N.E.2d 483, 487 (Ind.App.1981).

All essential elements are present in this case. At the Merrillville meeting, Van Booven promised that Wards would pay an amount equal to severance pay to all managers present at the meeting if they assisted in closing the stores. Wilson accepted this offer by staying on through the closing of the Fort Wayne North store and performing the duties of both Store Manager and Operating Manager. That performance of managerial duties in both roles constituted more than sufficient consideration on Wilson’s part to support the oral contract. The court therefore concludes that an oral contract was formed between Wilson and Wards (through its representative, Van Booven) to pay Wilson an amount equal to severance pay if she remained cn through the closing of the Fort Wayne North store. Wilson completely performed her obligations under the contract, and therefore Wards’ failure to pay the promised amount constituted a breach of the oral contract.

The parties have stipulated that the amount due under the severance pay formula adopted by the oral contract is six thousand nine hundred fifty dollars ($6,950.00). This amount constitutes the compensatory damages due Wilson. In addition, Indiana law recognizes that amounts which are due and which are specific, liquidated in amount, or subject to calculation allow for the assessment of prejudgment interest. Price v. Amoco Oil Co., 524 F.Supp. 364, 372 (S.D.Ind.1981); Courtesy Enterprises, Inc. v. Richards Laboratories, 457 N.E.2d 572, 580 (Ind.App.1983); Abex Corp. v. Vehling, 443 N.E.2d 1248, 1260 (Ind.App.1983). The rationale behind this rule is that the plaintiff has lost the use of the money during the period of time needed to vindicate her rights; prejudgment interest therefore serves as additional damages which achieve full compensation of the plaintiff. See Argonaut Ins. Co. v. Town of Cloverdale, Ind., 699 F.2d 417, 421 (7th Cir.1983); Indiana Ins. Co. v. Sentry Ins. Co., 437 N.E.2d 1381 (Ind.App.1982).

Title 28, United States Code, § 1961, provides for an award of interest on a money judgment whenever the law of the state in which the court sits permits such an award. Although § 1961 explicitly refers only to post-judgment interest, the Seventh Circuit has held that this statutory reference is not intended to affect a plaintiff’s entitlement to prejudgment interest under state law. Simmons, Inc. v. Pinkerton’s, Inc., 762 F.2d 591, 607 (7th Cir.1985). See also In re Air Crash Disaster Near Chicago, Illinois, 480 F.Supp. 1280, 1282 (N.D.Ill.1979), affd, 644 F.2d 633 (7th Cir.1981). Prejudgment interest pursuant to Indiana law is allowable on judgments in diversity cases. Simmons, at 607; Price v. Amoco Oil Co., 524 F.Supp. at 372.

Prejudgment interest is computed from the time the principal amount was demanded or due. Abex Corp. v. Vehling, 443 N.E.2d at 1260; Indiana Tel. Corp. v. Indiana Bell Tel. Co., 171 Ind.App. 616, 358 N.E.2d 218, 219, 229 (1976). The rate of prejudgment interest is set by statute, see Matter of Estate of Kingseed, 413 N.E.2d 917, 935 (Ind.App.1981); I.C. 24-4.-6-1-102 allows for a rate of eight percent (8%).

Here, the amount due on the contract was specific — one week’s pay for each year of service up to thirteen weeks. Given Wilson’s twenty-six years with the company, she was clearly entitled to thirteen weeks pay, or $6,950.00. Therefore, Wilson is entitled to eight percent interest on $6,950.00 from April 14, 1983, the date the Fort Wayne North store closed, Wilson’s performance under the oral contract was complete, and the amount promised by Wards became due.

Wilson’s request for punitive damages has not been seriously advanced by the plaintiff since the filing of the first complaint. The evidence in this action showed no egregious actions by Wards; this appears to be a dispute arising out of the mistaken belief that Wards’ severance policy applied here. To the extent that Wilson’s request for punitive damages is still present in this case, the court will not award any punitive damages.

CONCLUSION

It is therefore CONSIDERED, ORDERED and ADJUDGED that the plaintiff, Anna Wilson, recover of and from the defendant, Montgomery Ward & Co., Inc., damages in the amount of $6,950.00, plus prejudgment interest dating from April 14, 1983. Plaintiff’s claim under the Indiana Wage Statute, I.C. 22-2-5-1, is hereby DISMISSED on defendant’s motion. This Memorandum Opinion contains the court’s Findings of Fact and Conclusions of Law pursuant to Rule 52 of the Federal Rules of Civil Procedure. See Rucker v. Higher Educational Aids Board, 669 F.2d 1179, 1183-84 (7th Cir.1982).

      . It is textbook law that the statute of frauds is designed to insure that certain types of contracts be written in order to be enforceable. The contracts covered by the statute — contracts of marriage, contracts of more than a year, contracts concerning land, contracts of executors or administrators, contracts for the sale of goods in excess of five hundred dollars, and contracts of suretyship — are not implicated here at all. The whole issue of the statute of frauds appears to have been interjected here when plaintiff argued in her trial brief that the oral contract was enforceable because plaintiff had fully performed her half of the bargain and "equity will regard the case as being removed from the operation of the statute [of frauds] and will enforce the contract." Plaintiff's Trial Brief, p. 1. From that irrelevant reference, the parties have been chasing this red herring throughout the trial.

      . Even if the written severance policy was somehow involved in this case beyond the method of calculation provisions, the fact that the policy was written would not bar Wilson’s claim. Under Indiana law, a written contract may be modified by a subsequent oral contract, provided the new contract is supported by consideration. Terry v. International Dairy Queen, Inc., 554 F.Supp. 1088, 1094 (N.D.Ind.1983); Myers v. Maris, 164 Ind.App. 34, 326 N.E.2d 577 (1975). Here, Van Booven’s promise of compensation at the Merrillville meeting would be a modification of the severance policy, and Wilson's performance of all store closing responsibilities was more than adequate consideration. Thus, the court could find a valid modification to the written severance policy, and Wilson could collect her "severance pay.”
      Furthermore, Wards did not consistently follow its own policy. The testimony of Pat Niedermeyer and Betty Berry established that both were offered other positions with the company, refused them, and were nevertheless paid severance pay. In light of these events, the argument that the severance policy precludes Wilson from recovering severance pay because she was offered the Skokie position and refused it loses much of its validity.


source: Caselaw Access Project

author: WARREN, District Judge.

license: Public Domain

text:
    Joann M. FEHRMANN, Plaintiff, v. Lawrence M. PHILLIPS, Suzanne J. Collins, and John R. Stack, Defendants.
    No. 84-C-0351.
    United States District Court, E.D. Wisconsin.
    June 13, 1985.
    Joann M. Fehrman, pro se.
    Joel R. Levin, Asst. U.S. Atty., Milwaukee, Wis., for defendants.
   DECISION AND ORDER

WARREN, District Judge.

This lawsuit represents another example of the wholly frivolous and downright vexatious tax protestor litigation that has unfortunately clogged the trial courts of this and other federal circuits in recent months. Despite the unequivocal warnings of both the district and circuit courts that the wholesale abuse of the judicial process embodied in these meritless actions will not be tolerated further but will, instead, result in the imposition of harsh sanctions, see, e.g., Granzow v. C.I.R., 739 F.2d 265, 269-270 (7th Cir.1984) (“... [W]e can no longer tolerate abuse of the judicial review process by irresponsible taxpayers who press stale and frivolous arguments, without hope of success on the merits, in order to delay or harass the collection of public revenues or for other nonworthy purposes”); United States v. Ekblad, 732 F.2d 562, 563-564 (7th Cir.1984) (awarding the government double costs and reasonable attorneys’ fees in the wake of a frivolous and unsuccessful appeal by the taxpayer-defendant), misguided litigants, like the present plaintiff, with perverted views of their rights and responsibilities with respect to the payment of federal income tax and distorted notions of the role of the federal judiciary in remedying so-called civil rights violations of constitutional dimension, continue to initiate these hapless actions. Although the courthouse doors remain open to all serious civil litigants, the time has plainly come to place on notice those taxpayers, motivated not by a legitimate interest in the equitable resolution of claims but prompted to action solely out of malice and an unbounded sense of self-importance, that their previously unfettered access to the courts is narrowing. With today’s order, the Court provides such unequivocal, if informal, notice.

The rambling — and, in some portions, virtually unintelligible — complaint in this case was filed against three employees of the federal Internal Revenue Service on March 14, 1984. Although the complaint incorporates wholly irrelevant discussions of, among other things, the doctrine of separation of church and state and the fundamentals of so-called “positive law,” it appears that the principal allegations contained therein are that the named defendants entered into a conspiracy to deprive the plaintiff of her due process rights by assessing various penalties against her for filing frivolous tax returns and false withholding statements. Invoking the language of the federal civil rights statutes — specifically, 42 U.S.C. § 1983 & 1985 — and certain provisions of the federal criminal code — namely, 18 U.S.C. § 241 & 242 — the plaintiff complains that various levies made on her wages by the Internal Revenue Service in payment of the penalty assessments collectively constitute an “unlawful taking of Plaintiff’s monies against Plaintiff’s will [and a] deprivation of Plaintiff’s right to due process of law before being deprived of property.” Plaintiff’s Complaint at 6 & 7 (March 14, 1984). While her ad damnum clause is not a model of pleading clarity, it appears that she seeks declaratory judgment that the several assessments and subsequent levies on her wages were unconstitutional, injunctive relief preventing the named defendants from issuing and pursuing recovery on further tax penalties, and total damages in the amount of $89,580.22.

Presently before the Court in this matter is the defendants’ motion of May 25, 1984, to dismiss the complaint in its entirety, pursuant to Rule 12(b) of the Federal Rules of Civil Procedure, and for an award of those attorney’s fees and costs incurred in the defense of this matter. In their supporting memorandum, the defendants describe with some precision the factual circumstances upon which this lawsuit is premised and argue, among other things, that the Court lacks subject matter jurisdiction over the action, that the plaintiff is precluded from prosecuting her claims against any of the named defendants pursuant to the doctrine of sovereign immunity, and, in any event, that the complaint wholly fails to state a claim upon which any sort of relief might be granted. The defendants’ companion request for an award of attorney’s fees is based on the plaintiff’s purported exhibition of bad faith in the initiation and prosecution of this action.

Although the plaintiff has filed a memorandum in opposition to the pending Rule 12(b) motion, it is nothing more than an overwrought and largely irrelevant discussion of the role of divinity in the establishment of government, the limitations on the powers of the government to tax its citizens, the fallen status and present shame of the federal judiciary, and the hoax perpetrated by the Internal Revenue Service under the guise of false notions about income and property. Like her complaint, the plaintiffs responsive brief provides the Court with absolutely no assistance whatsoever in resolving this matter fairly and serves only to underscore the supreme contempt that this litigant feels toward the very institution to which she has turned in an effort to remedy what she perceives as significant violations of her constitutional rights.

Having carefully reviewed the colorful record compiled in this case to date, the Court is reminded of the simple yet powerful words of the Court of Appeals for the Seventh Circuit in reaction to a similar suit by taxpayers seeking, among other things, an injunction barring the further withholding of taxes and the return of those amounts previously withheld: In Edgar v. Inland Steel Company, 744 F.2d 1276, 1278 (7th Cir.1984), the Court of Appeals rejected as meritless

a patently frivolous appeal filed by abusers of the tax system merely to delay and harass the collection of public revenues. Employees have no causes of action against employers to recover wages withheld and paid over to the government in satisfaction of federal income tax liability. 26 U.S.C. § 3403. See Pascoe v. Internal Revenue Service, 580 F.Supp. 649, 654 (E.D.Mich.1984); Lonsdale v. Smelser, 553 F.Supp. 259 (N.D.Tex.1982); Chandler v. Perini Power Constructors, Inc., 520 F.Supp. 1152 (D.N.H.1981). Even assuming that this statute does not bar plaintiffs’ action, which it does, plaintiffs cannot recover under 42 U.S.C. § 1983. Section 1983 creates a remedy to redress deprivations under color of state law, of any right, privilege or immunity secured by the Constitution of the United States. The statute, by its express terms, is directed only to state wrongdoing. At best, defendant acted under color of federal law when it complied with the IRS instructions; but section 1983 does not protect against such acts. See Hubbert v. U.S. Parole Commission, 585 F.2d 857 (7th Cir.1978); City of Milwaukee v. Saxbe, 546 F.2d 693 (7th Cir.1976); Smith v. U.S. Civil Service Commission, 520 F.2d 731 (7th Cir.1975). See also Zernial v. United States, 714 F.2d 431 (5th Cir. 1983) (levying of wages by IRS accomplished pursuant to federal law by federal agents and private parties, and therefore taxpayer failed to state cause of action under 42 U.S.C. § 1983 because this section only provides redress for actions taken under color of state law).

Although the present action is filed against those employees of the Internal Revenue Service purportedly responsible for effecting the several levies against the plaintiff’s wages and not, as in Edgar, against the taxpayer’s employer itself, the Court is confident in concluding that the allegations in the present complaint are no more meritorious than those articulated by the plaintiff in Edgar. Principal among the obvious defects in the plaintiff’s cause of action is her wholesale failure to establish the Court’s subject matter jurisdiction: While she alleges that her claims are brought pursuant to the Fourth, Fifth, Seventh, Ninth, and Fourteenth Amendments to the federal constitution, her complaint is so insubstantial on a factual basis and so completely lacking in any legal substance as to preclude any proper finding of subject matter jurisdiction under either 28 U.S.C. § 1331, establishing the Court’s authority to hear cases involving federal questions, or any other statute prescribing the boundaries of the federal judicial authority.

Although the Court opines that this unmistakable frivolity of the plaintiff’s case is sufficient, by itself, to justify an order of dismissal, it also notes that the action is wholly barred pursuant to the doctrine of sovereign immunity. Despite the suggestions in the complaint to the contrary, it is clear that the three, named defendants are sued in their capacities as employees of the Internal Revenue Service; the action is thus properly captioned as one against the United States as defendant. In turn, it is well established that the United States, as a sovereign, may be sued only to the extent that it has so consented; moreover, any waiver of this immunity must be explicit and strictly construed. Since there is no showing whatsoever that the United States consented to be sued in matters such as these or might properly be deemed by statute to have waived its immunity for present purposes, the action is, as indicated above, fatally defective under the doctrine of sovereign immunity.

Furthermore, to the extent that the plaintiff seeks an injunction preventing the named defendants from assessing any additional penalties or collecting federal taxes from her, the prayer runs headlong into the considerable impediment posed by the federal Anti-Injunction Act, 26 U.S.C. § 7421(a), prohibiting the prosecution of any action to restrain the assessment or collection of taxes. Although the Courts have generally recognized a narrowly circumscribed exception to the unmistakable import of the Act, see Enochs v. Williams Packing & Navigation Company, 370 U.S. 1, 7, 82 S.Ct. 1125, 1129, 8 L.Ed.2d 292 (1962) (exception valid only where taxpayer demonstrates that the government could not ultimately prevail under any circumstances and irreparable injury will result to him or her absent requested injunctive relief); Shaffer v. C.I.R., 515 F.Supp. 748, 752 (E.D.La.1981) (likewise), there is nothing in the record of this case to indicate that the preclusive force of the Anti-Injunction Act, 26 U.S.C. § 7421(a), should not be afforded its full effect.

Similarly, to the extent that the plaintiff seeks judgment declaring the defendants’ acts in violation of federal constitutional provisions, the so-called Declaratory Judgment Act, 28 U.S.C. § 2201, wholly precludes such relief: With the exception of a limited exception not relevant under the circumstances of this case, the statute specifically bars lawsuits for declaratory relief with respect to the collection of federal taxes. Lapadula & Villani, Inc. v. United States, 563 F.Supp. 782, 784 (S.D.N.Y.1983); Handeland v. C.I.R., 519 F.2d 327, 329 (9th Cir.1975). As such, it effectively renders meaningless the plaintiff’s prayer for declaratory judgment.

The final, insurmountable jurisdictional defect presented by the plaintiff’s cause of action is that she has plainly failed to pursue those administrative remedies available to her as a means of contesting liability for those penalties imposed under 26 U.S.C. § 6702. Among other things, § 6703(c) of Title 26 establishes, as a prerequisite to the initiation of a federal court action, that the taxpayer pay at least fifteen percent of the penalty and thereafter file a claim for refund within thirty days of notice and demand. The plaintiff’s apparent decision not to pursue this extrajudicial option— and, not insignificantly, her companion failure not to file for a refund after full payment of the assessed penalties, pursuant to 26 U.S.C. § 6682(a) — effectively robs this Court of any jurisdiction to entertain her cause of action.

The defendants accurately note in their brief that they are further entitled to absolute immunity for any wrongs allegedly perpetrated in the performance of their duties as employees of the Internal Revenue Service. They also observe, as the Court has already noted supra at 6, that the factual averments in the complaint — to the extent that they can be identified apart from the purely conclusory legal allegations incorporated therein — wholly fail to support any cause of action under the federal civil rights statutes, 42 U.S.C. §§ 1983 & 1985, or pursuant to 18 U.S.C. §§ 241 & 242, statutory provisions establishing criminal penalties but not civil liability for conspiratorial deprivations of constitutional rights. These overt, substantive shortcomings to the plaintiff’s cause of action only underscore the complete lack of merit to this lawsuit and the consequent necessity that it be dismissed in its entirety.

In Lepucki v. Van Wormer and Pazdur v. Blaw-Knox Foundry And Mill Machinery, 765 F.2d 86 (7th Cir.1985), the Court of Appeals for the Seventh Circuit was faced with the consolidated appeals of two, not entirely dissimilar taxpayer actions challenging certain practices and rulings of the Internal Revenue Service. Affirming, among other things, the district courts’ orders dismissing the actions and awarding costs, the Court of Appeals described a class of federal lawsuits of which the present action is a member:

Our system of jurisprudence is designed to ensure that all disputants with colorble claims have access to the courthouse. Relatively low barriers to entry have, however, generated an undesirable result — a diluge of frivolous or vexatious claims filed by the uninformed, the misinformed, and the unscrupulous. These claims clog court dockets and threaten to undermine the ability of the judiciary to efficiently administer the press of cases properly before it____

Lepucki v. Van Wormer and Pazdur v. Blaw-Knox Foundry And Mill Machinery, 765 F.2d 86, 87 (7th Cir.1985).

As this Court’s explanation of the utterly frivolous nature of the present lawsuit demonstrates, the plaintiff’s motivation for the initiation and prosecution of her case is perhaps described best as wanton. In fact, on the basis of the extensive record compiled to date, the Court is inclined to believe that the complaint was filed not to remedy any perceived violations of constitutional rights but instead to harass the Internal Revenue Service and its employees in the proper exercise of their responsibilities. The utterly irresponsible and vexatious nature of this action obligates the Court to impose a sanction commensurate with the disruption this plaintiff has caused to the proper functioning of the judicial and executive branches of the federal government. See Lovell v. United States, 755 F.2d 517, 519 (7th Cir.1984) (“This Court recently warned taxpayers who put forth frivolous arguments in bad faith that we would not hesitate to impose sanctions... ”). Accordingly, the Court will assess against the plaintiff those reasonable attorney’s fees and costs expended by the defendants in their defense of the charges against them.

The Court’s award is not only intended as a sanction against the present plaintiff but is also meant to place on notice other would-be litigants that vacuous tax protests such as this simply will not be countenanced. The extraordinary abuse of the judicial process demonstrated by this and other frivolous lawsuits cries out for nothing but the strongest of sanctions and the most severe disapprobation.

CONCLUSION

For the several reasons articulated herein, the Court hereby GRANTS the defendants’ motion to dismiss this action in toto, pursuant to Rule 12(b) of the Federal Rules of Civil Procedure. The Court further AWARDS the defendants those reasonable costs and attorney’s fees incurred in the defense of this matter, to be assessed against the plaintiff.

Counsel for the defendant is hereby INSTRUCTED to file and serve an affidavit and thorough accounting of those expenses incurred to date in the litigation of this case. Upon its receipt and review of counsel’s submission, the Court will enter a supplemental order, awarding the defendants those amounts it deems appropriate.

      . During the tumultuous fifteen months of this litigation, the plaintiff has also submitted various documents of dubious legal import seeking, among other things, the entry of default judgment against defendants Lawrence M. Phillips and Suzanne J. Collins; an investigation into the actions of personnel in the Office of the Clerk of Court, undertaken with respect to the docketing of the plaintiff's various submissions; and information with respect to certain grand jury proceedings conducted in this district. The Court has reviewed each of these admittedly innovative petitions and finds them to be as meritless as the complaint from which they purportedly spring. To the extent that any one of the plaintiff’s documents seeks some affirmative form of relief, the Court denies it as utterly frivolous and wholly mooted by today’s decision to dismiss the complaint in its entirety.


text:
    Anant Kumar TRIPATI, individually and in behalf of Fort Lincoln Group, Inc., in its corporate capacity, Plaintiffs, v. Milton Rice POLLAND, individually and as actuarial consultant; McMillen Trust, a Delaware Trust with Wilmington Trust Delaware as Trustee; British American Insurance Company, Ltd.; George Ragsdale, individually and as corporate representative; David Thurlow, individually and as corporate representative; Fiji Islands Insurance Commission; Clive Amputch, Deputy Insurance Commissioner, individually and in his official capacity, Defendants.
    No. 85-C-0637.
    United States District Court, E.D. Wisconsin.
    June 13, 1985.
    Anant Kumar Tripati, pro se.
   MEMORANDUM AND ORDER

WARREN, District Judge.

This action was initiated on April 24, 1985, when the plaintiffs filed their pro se complaint against the several individual, corporate, and governmental defendants. Although the complaint is not a model of pleading clarity, it appears that the principal claims spring from the plaintiffs’ attempt to acquire one of the named defendants, the British American Insurance Company, Ltd. (“BAICL”). Acting as the plaintiffs’ legal and business representative, defendant Milton Rice Polland allegedly met with BAICL president, David Thurlow, in March of 1983 in Malaysia for the purpose of discussing the proposed takeover; one month later, those defendants were joined by co-defendant George Ragsdale, BAICL’s United States representative, in drafting an investment agreement for the purchase of the BAICL by plaintiff Fort Lincoln Group, Inc.

Pursuant to the terms of that contract, the plaintiffs were purportedly to receive all of BAICL’s assets upon payment of $2,000,000.00 in United States currency. In order to facilitate that acquisition, BAICL agents were to provide the Fort Lincoln Group, Inc. with all information and data necessary for licensing the company operations, along with the power of attorney to permit this plaintiff to operate BAICL until all regulatory approvals were secured. The final draft of the contract was allegedly signed by representatives of both defendant BAICL and plaintiff Fort Lincoln Group, Inc. in May of 1983.

The plaintiffs claim that, subsequent to the execution of that contract, they made payment of the $2,000,000.00 purchase price by way of a cashier’s check written against their account in the Imperial Bank of Los Angeles, California, and delivered by their agent, defendant Polland, to a BAICL representative at the Bank of America, also in Los Angeles, California. The complaint charges that, despite receipt of the $2,000,000.00 purchase price, BAICL “inadvertently failed to produce or provide the necessary required documents and data [to] enable the contracting company, Fort Lincoln Group, to obtain regulatory approvals in which to operate the Fiji Island based British American Insurance Company, Ltd.” Plaintiffs’ Complaint at 8 (April 24, 1985). The plaintiffs further allege that, in November of 1983, BAICL withdrew or revoked its obligation to convey its power of attorney, thus abrogating the operational licensing provision of the investment contract.

Later that month, defendant Fiji Island Insurance Commission, aided by Insurance Commissioner Clive Amputch, purportedly took control and seized all of BAICL’s assets and, some two months later, tendered and sold those assets without approval by or compensation for the plaintiffs.

The substantive allegations of the complaint are that defendant BAICL, along with co-defendants Ragsdale, Thurlow, and Polland, conspired together to induce the plaintiffs’ monetary investment, knowing that the “contractual agreement and promise was a sham, perpetrated through improper actuarial analysis.” Plaintiffs’ Complaint at 10 (April 24, 1985). According to the plaintiffs, these conspiratorial acts were undertaken in violation of established fiduciary duties and effected a breach of the contract between the parties, all to the unjust enrichment of the named corporate and individual defendants. Significantly, the complaint also charges that the defendants’ actions were in violation of the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. § 1961 et seq., and that the seizure and subsequent sale of BAICL assets by defendants Fiji Island Insurance Commission and Clive Amputch were “intentional, deliberate, willful, wanton, and [undertaken] with a conscious and reckless disregard for the right[s] of plaintiffs,” all in violation of international law. Plaintiffs’ Complaint at 18 (April 24, 1985).

By their ad damnum clause, the plaintiffs seek to enjoin defendants BAICL and the Fiji Island Insurance Commission from dispersing any sums held by them in connection with the transaction upon which this lawsuit is premised; they also seek compensatory and punitive damages against all named defendants, rescission of the investment contract executed by the parties, and an accounting of those monies received by the defendants in connection with the plaintiffs’ investment.

Presently before the Court in this matter is the plaintiffs’ motion for the appointment of counsel, presumably pursuant to 28 U.S.C. § 1915(d). In support of this petition, plaintiff Anant Kumar Tripati has provided the Court with an affidavit of his financial condition, plainly indicating his indigency status. In addition, this plaintiff contends that the allegations articulated in his complaint are colorable; that all of the plaintiffs’ assets are “frozen”; and that “[d]ue to incarceration in a prison in Tucson the number of hours available to research are limited.” Plaintiff’s Motion for the Appointment of Counsel (May 23, 1985).

Of course, there is no constitutional right to appointed counsel in a civil case. Caruth v. Pinkney, 683 F.2d 1044, 1048 (7th Cir.1982), cert. denied, 459 U.S. 1214, 103 S.Ct. 1212, 75 L.Ed.2d 451 (1983); Ehrlich v. Van Epps, 428 F.2d 363, 364 (7th Cir.1970). Nonetheless, federal courts are empowered by statute to appoint counsel when the circumstances justify it; section 1915(d) of the Title 28 of the United States Code specifically authorizes the Court to request an attorney to represent an indigent party in its prosecution of a civil action.

In general, the Court has broad discretion to appoint counsel for indigents under 28 U.S.C. § 1915(d), McKeever v. Israel, 689 F.2d 1315, 1318 (7th Cir.1982); Maclin v. Freake, 650 F.2d 885, 886 (7th Cir.1981), and its denial of counsel will not be overturned unless it would result in fundamental unfairness impinging on due process rights. LaClair v. United States, 374 F.2d 486, 489 (7th Cir.1967); Heidelberg v. Hammer, 577 F.2d 429, 431 (7th Cir.1978). However, discretionary choices are not left to the Court’s inclination but to its judgment, and its judgment is to be guided by sound legal principles. Caruth v. Pinkney, 683 F.2d 1044, 1048 (7th Cir.1982), cert. denied, 459 U.S. 1214, 103 S.Ct. 1212, 75 L.Ed.2d 451 (1983); Ekanem v. Health & Hospital Corporation of Marion County, 589 F.2d 316, 319 (7th Cir.1978).

It is within this context that the Court of Appeals has fashioned standards for the exercise of discretion in considering whether court-appointed counsel for indigent civil litigants is appropriate. These five non-exclusive factors are:

1. whether the merits of the indigent's claim are colorable;
2. the ability of the indigent plaintiff to investigate crucial facts;
3. whether the nature of the evidence indicates that the truth will more likely be exposed where both sides are represented by counsel;
4. the capability of the indigent litigant to present the case; and
5. the complexity of the legal issues raised by the complaint.

Merritt v. Faulkner, 697 F.2d 761, 764 (7th Cir.1983), cert. denied, — U.S. -, 104 S.Ct. 434, 78 L.Ed.2d 366 (1983); Maclin v. Freake, 650 F.2d 885, 887-889 (7th Cir.1981).

While the district court is obliged to consider each of these factors in determining whether the appointment of counsel is appropriate under the circumstances, it is well established that Caruth v. Pinkney, 688 F.2d 1044, 1048, 1049-1050 (7th Cir.1982), cert. denied, 459 U.S. 1214, 103 S.Ct. 1212, 75 L.Ed.2d 451 (1983) (emphasis original).

[fjoremost among the “certain factors” that an appointing court must consider is an analysis of the merits of the indigent litigant’s claim from both a factual and legal standpoint. Maclin [v. Freake] makes clear that a court need not appoint counsel when it considers the indigent’s chances of success to be extremely slim____
When justifying a decision to appoint, a district court must apply the Maclin standards to the facts of each case and if counsel is both warranted and available, the court should request representation____ As noted, of primary importance in an indigent’s request for counsel is an evaluation of the factual and legal merits of the claim and its chances for success.

As the Court has already noted, the allegations articulated in the plaintiffs’ complaint, while hardly unintelligible, do not rise to the level of clarity envisioned by the architects of the federal pleading rules. Although federal trial judges are admonished to view and interpret with liberality the complaints filed by pro se litigants unschooled in the law, this Court’s concerns with respect to the technical sufficiency of the present cause of action are heightened by the exotic nature and broad scope of the allegations advanced by the plaintiffs. While the Court is not presently in a position to issue any dispositive rulings with respect to the substantive merits of this lawsuit, it is inclined to believe that any order appointing counsel to represent the plaintiffs in the prosecution of their colorful claims would, at this stage in the proceedings, prove premature. It may well be that the interests of all parties to this action would be best served if the plaintiffs’ case were prosecuted by an attorney; that determination however, premised principally on the paramount interest in the equitable resolution of all outstanding claims, is, in the Court’s view, best reserved until the defendants are afforded the opportunity to respond to — and, in so doing, define more narrowly — the charges against them, even if only in their answers, affirmative defenses, or preliminary procedural or dis-positive motions.

The Court’s considerable reservations with respect to the appointment of counsel at this juncture are further underscored by its uncertainty with respect to the jurisdictional posture of this action. Among other apparent facial difficulties with the plaintiffs’ complaint, the Court notes that only the respective residences— and not citizenships — of several of the named defendants are set forth therein. Although it appears that both plaintiffs are residents of states other than those in which each of the named defendants resides, it is well established that residence alone is not sufficient to establish the diversity of citizenship necessary to invoke the jurisdiction of the federal trial courts under 28 U.S.C. § 1332(a). Banks v. St. Mary’s Hospital & Medical Center, 558 F.Supp. 1334, 1335 (D.Col.1983); Wilson v. Pickens, 444 F.Supp. 53, 55 (W.D.Okla.1977). Absent a more clear showing of the diversity of both named plaintiffs from all named defendants — some of whom are presumably citizens of foreign states — the Court would be reluctant to undertake the significant step of appointing counsel for the plaintiffs.

Moreover, even if the plaintiff is successful in establishing the Court’s diversity jurisdiction over this matter, there appears to be, at first blush, a significant question with respect to the propriety of venue in this district.- According to the unequivocal factual averments of the complaint, the precise terms of the intended corporate acquisition were negotiated in Malaysia in March of 1983; although the actual situs of the execution of the agreement some two months later is not stated, the plaintiffs claim that the transfer of the $2,000,000.00 purchase price was effected entirely in Los Angeles, California. The only apparent connection to the Eastern District of Wisconsin is that defendant Milton Rice Polland is a citizen of the state; at the same time, there is no allegation that any of the transactions upon which this lawsuit is based took place in this district.

Pursuant to 28 U.S.C. § 1391(a), prescribing the proper situs of venue for actions founded solely on diversity of citizenship, this case is properly brought only in the judicial district in which all plaintiffs or all defendants reside or in which the claim arose. The lack of commonality of residency among any of the parties to this action limits the critical issue to a determination of the situs in which the claim arose. As indicated above, the Court has considerable reason to believe that the present cause of action springs from some location — domestic or international — other than the Eastern District of Wisconsin. If so, and this matter is properly transferred to another federal district, the trial judge to whom the ease is reassigned would be in the best position to address the merits of the plaintiffs’ present request. In any event, the Court opines that it would prove ill-advised to grant the plaintiffs’ motion for appointment of counsel prior to a full exposition and resolution of these significant, jurisdictional and venue-related issues.

Accordingly, for the reasons set forth above, the Court hereby DENIES the plaintiffs’ motion of May 23, 1985, for the appointment of counsel, pursuant to 28 U.S.C. § 1915(d). At the same time, it does so without prejudice to the plaintiff’s repetitioning this or some other court for appointment of counsel to represent him at a later stage in these proceedings, should it become clear that his cause of action is, in fact, significantly more meritorious — both on jurisdictional and substantive grounds— than the Court now believes it to be and the particular legal and factual issues presented by the litigation .of this matter take on such complexity as to preclude a thorough and meaningful prosecution by one unschooled in the law.


author: GLASSER, District Judge:

text:
    COUNCIL FOR THE HEARING IMPAIRED LONG ISLAND, INC., et al., Plaintiffs, v. Gordon AMBACH, individually and as Commissioner of Education of the State of New York, et al., Defendants.
    No. 79 Civ. 1020.
    United States District Court, E.D. New York.
    June 13, 1985.

      John H. Mulvehill, Cold Spring Harbor, N.Y., for plaintiffs.
    Susan M. Rogers, Asst. U.S. Atty., E.D. New York, Kenneth Pawson, Robert P. Stone, Albany, N.Y., for defendants.
   GLASSER, District Judge:

Plaintiffs, the State defendants and the Federal defendants, have all moved or cross-moved for summary judgment on plaintiffs’ claims concerning alleged salary differentials between teachers in the so-called “4201” schools and teachers in regular public schools in New York. For the reasons that follow, the State defendants’ and the Federal defendants’ motions for summary judgment dismissing plaintiffs’ Education of the Handicapped Act (“EHA”) claims are granted. The State defendants’ motion for summary judgment dismissing plaintiffs’ First and Ninth Amendment claims is granted, as is the State defendants’ motion to dismiss plaintiffs’ Fourteenth Amendment equal protection claims insofar as those claims challenge a denial of plaintiffs’ right to an appropriate free public education. The Federal defendants’ motions for summary judgment are granted with respect to all constitutional claims and any claims raised under 42 U.S.C. § 1983. With respect to plaintiffs’ claims under § 504 of the Rehabilitation Act, 29 U.S.C. § 794, against both the State and Federal defendants and the related Fourteenth Amendment claims against the State defendants, I find that questions of material fact preclude the grant of summary judgment.

Background

This case has been the subject of an extraordinary amount of motion practice during its six year history. It is assumed that the reader is familiar with the underlying facts of this case, which are set forth in an earlier Memorandum and Order of this Court, dated November 21, 1983. To put the present motions into their proper context, I will briefly summarize the recent procedural history of this case.

In the Memorandum and Order of November 21, 1983, I denied motions brought under Fed.R.Civ.P. 12(b)(6) which raised issues that are essentially identical to many of the issues raised by the present motions. I also granted both the State and Federal defendants’ motions to dismiss plaintiffs’ termination of appointment claims, and granted plaintiffs’ motion for class certification.

Shortly thereafter, plaintiffs moved for leave to amend the complaint to assert an additional claim challenging the State defendants’ procedures for designating handicapped children to 4201 schools. At that time, plaintiffs also sought summary judgment on the teachers’ salary issue. Leave to amend was granted. The State defendants then cross-moved for summary judgment, asserting essentially the same arguments as were presented on the prior 12(b)(6) motion, without any further development of the underlying facts. At a status conference in May 1984, it was agreed that the parties would prepare and submit a stipulation of the facts necessary to resolve the teachers’ salary issue, and that the summary judgment motions would be held in abeyance pending submission of the stipulation. By agreement of the parties, the stipulation and pending summary judgment motions would address only the teachers’ salary claims.

The stipulation of facts was submitted in December 1984. The stipulation speaks for itself in its brevity and vagueness. Plaintiffs and the State defendants subsequently renewed their summary judgment motions on the teachers’ salary claim, and the Federal defendants moved for summary judgment asserting lack of standing, failure to state a claim, and lack of subject matter jurisdiction.

It is noteworthy that no significant discovery has taken place in this six year old case. None of the parties submitted affidavits or other appropriate material in support of their motions for summary judgment. Thus, the stipulation is the only source of facts outside the pleadings which was made available for my consideration in deciding the pending motions for summary judgment.

Discussion

1. The EHA Claims

The EHA, 20 U.S.C. § 1401, et seq., establishes a comprehensive program for providing Federal funds to assist the States in educating handicapped children. The eligibility requirements for Federal assistance under the EHA provide, inter alia, that the recipient state have a “policy that assures all handicapped children the right to a free appropriate public education.” 20 U.S.C. § 1412(1). The Act also requires that the recipient state establish certain procedural safeguards to protect the rights of handicapped children. 20 U.S.C. § 1415.

The crux of plaintiffs’ claims is that, pursuant to certain regulations promulgated by the Commissioner of Education of the State of New York, teachers of privately operated 4201 schools in New York are paid lower salaries than teachers in public schools for the non-handicapped, and that this in turn causes higher rates of staff turnover in 4201 schools than in regular public schools. Amended Complaint j[][ 29, 30. The primary regulation in question, popularly known as the Rome Standard, provides as follows:

Aidable operating expenses means the necessary expenditures for approved educational programs provided to State-appointed pupils, and shall be determined in accordance with the following provisions:
sfc jH % s)< #
(d) Review of all budgets submitted by the State-supported schools will be guided by the expenditures at the State-operated schools for the deaf and blind. The portion of the salary of each employee which exceeds the salary of an employee having similar duties at State-operated schools for the deaf and blind shall not be an aidable operating expense of such State-supported private schools, except that a location paid differential, in the amount provided for in any contract or contracts between the State of New York and the certified or recognized employee organization or organizations representing State employees at the State-operated schools for the deaf and blind will be included as an aidable operating expense of schools located in the geographical areas to which such location pay differential applies.

8 N.Y.C.R.R. § 200.10 (formerly 8 N.Y.C. R.R. § 200.6(b)(4)). Plaintiffs’ claims concerning this regulation are essentially summed up in two paragraphs of the Amended Complaint. Paragraph 31 alleges that high rates of turnover among teachers at 4201 schools “disrupt the educational continuity and impair the accomplishment of the objectives of the educational programs of the class.” Paragraph 32 alleges that the educational programs offered to plaintiffs in 4201 schools “fail to meet their educational needs as adequately as the needs of non-handicapped persons are met and are therefore not appropriate.”

To the extent that plaintiffs are claiming only that the allegedly lower salaries paid to teachers in 4201 schools result in a lower quality education for 4201 students, plaintiffs do not state a claim under the EHA. In the leading case of Board of Education of the Hendrick Hudson School District v. Rowley, 458 U.S. 176, 198, 102 S.Ct. 3034, 3046, 73 L.Ed.2d 690 (1982), the Court held that the EHA does not require that handicapped students be furnished with opportunities or services equal to those provided for non-handicapped students. In Rowley, a deaf student challenged her school’s refusal to provide a sign language interpreter. The district court had found that without the interpreter, the handicapped student performed “above average” for her class, but not as well as she would have performed without her handicap. Id. at 185, 102 S.Ct. at 3040. After a lengthy analysis of the legislative history behind the EHA, the Supreme Court noted that the primary purpose of the EHA was to assure that all handicapped children have access to education. The Court concluded that the statutory requirement of a “free appropriate public education” for the handicapped requires that the State provide a “basic floor of opportunity” consisting of specialized instruction and services which are designed to provide “educational benefit to the child.” Id. at 201, 102 S.Ct. at 3048. The Court held that this requirement is satisfied if the State provides personalized instruction with support services that permit the child to “benefit educationally” from the instruction. Id. at 203, 102 S.Ct. at 3049.

Consistent with Rowley, the Second Circuit has recently noted that the term “free appropriate public education” in the EHA is “defined to mean educational instruction designed pursuant to an IEP [Individualized Education Program] and supported by such services as are necessary to permit the child to benefit from the instruction.” Karl v. Board of Education of Geneseo Central School District, 736 F.2d 873, 876 (2d Cir.1984). The Second Circuit specifically warned that the sole purpose of federal court review under the EHA “is to ensure that handicapped children are not being denied access to their State’s educational system____ We are explicitly cautioned not to impose a particular substantive educational standard on a State or to require equality of opportunity for handicapped children in education.” Id., citing Rowley, 458 U.S. at 191-203, 102 S.Ct. at 3043-3049 (emphasis added).

When viewed under the standards set forth in Rowley and Karl, the lack of equality alleged in Paragraph 32 of the Amended Complaint, purportedly supported by the stipulation, plainly fails to state a claim under the EHA. Plaintiffs do not allege that they are being denied access to an education, nor do they claim that students in 4201 schools derive no educational benefit from their respective programs. Plaintiffs allege only that their educational needs are not met as “adequately as the needs of non-handicapped persons are met.” Amended Complaint, Paragraph 32. This is precisely the type of claim that was rejected in both Rowley and Karl. Accordingly, plaintiffs’ EHA claims must be dismissed.

2. The Rehabilitation Act § 504 and, Constitutional Claims

(a) State Defendants

The Amended Complaint also asserts claims under the Rehabilitation Act § 504, 29 U.S.C. § 794, and under 42 U.S.C. § 1983 for alleged violations of the First, Ninth and Fourteenth Amendments to the United States Constitution. I note at the outset that plaintiffs have not attempted to identify the First or Ninth Amendments rights that were allegedly violated by the State or Federal defendants. The Amended Complaint states only that “defendants have failed to give the class an appropriate free education designed to meet the educational needs of handicapped persons, all of which is in violation of the First; Ninth and Fourteenth Amendments to the Constitution of the United States.” Amended Complaint, 33. There is no explanation of the First or Ninth Amendment claims in any of plaintiffs’ memoranda of law. Under such circumstances, the Amended Complaint fails to state a claim under the First and Ninth Amendments and, therefore, those claims are dismissed. Persico v. Gunnell, 560 F.Supp. 1128, 1138 (S.D.N.Y.1983).

The Supreme Court has recently held that “where the EHA is available to a handicapped child asserting a right to a free appropriate public education under either the EHA or the Equal Protection Clause of the Fourteenth Amendment, the EHA is the exclusive avenue through which the child and his parents or guardians can pursue the claim.” Smith v. Robinson, — U.S.-, 104 S.Ct. 3457, 3470, 82 L.Ed.2d 746 (1984). The Court noted that Congress intended that remedies under the EHA preempt parallel remedies under § 1983. It is therefore appropriate to grant summary judgment dismissing the Fourteenth Amendment § 1983 claims insofar as they challenge the alleged failure to provide a free appropriate public education.

Section 504 of the Rehabilitation Act generally prohibits discrimination against the handicapped in any program or activity receiving federal financial assistance. 29 U.S.C. § 794. In Robinson, the Court held that the EHA preempts remedies under § 504 in situations where § 504 merely provides the same substantive rights as those that are available under the EHA. 104 5. Ct. at 3473-74. Accord, Irving Independent School District v. Tatro, — U.S. -, 104 S.Ct. 3371, 3379, 82 L.Ed.2d 664 (1984) (“Section 504 is inapplicable when relief is available under the Education of the Handicapped Act to remedy a denial of educational services”). This holding was limited by the observation that where the State provided “services beyond those required by EHA, but discriminatorily denied those services to a handicapped child, § 504 would remain available” as a source of relief. Robinson, 104 S.Ct. at 3473 note 22.

In deciding the State defendants’ motion for summary judgment, all inferences to be drawn from the facts asserted in the State defendants’ papers must be viewed in the light most favorable to plaintiffs. Adickes v. S.H. Kress & Company, 398 U.S. 144, 158-59, 90 S.Ct. 1598, 1608-09, 26 L.Ed.2d 142 (1970). Furthermore, the factual allegations in the Amended Complaint, to the extent supported by the stipulation, should be regarded as true. See Burtnieks v. City of New York, 716 F.2d 982, 984 (2d Cir.1983). If it is accordingly assumed that the State of New York provides teacher services to public schools beyond that which would be required by the EHA, the allegedly discriminatory denial of those services to 4201 students, through lower teacher salaries, could possibly state a claim under § 504. This conclusion is supported by the Secretary of Education’s regulations interpreting § 504. The regulations provide that an “appropriate education” is one that “meet[s] the educational needs of handicapped persons as adequately as the needs of non-handicapped persons are met____” 34 C.F.R. § 104.33(b)(i). Under the authority of footnote 22 in the Robinson opinion and 34 C.F.R. § 104.33(b)(i), I believe that the Amended Complaint states a claim under § 504.

Under this same theory, I conclude that the Amended Complaint also states a claim under § 1983 for alleged violations of the Equal Protection Clause of the Fourteenth Amendment insofar as the Amended Complaint alleges that the State provides educational services to non-handicapped students beyond those required by the EHA, but discriminatorily denies those services to handicapped children. In Robinson, the Court held only that the EHA preempts equal protection claims under § 1983 when a handicapped child is asserting a right to an appropriate free public education. 104 S.Ct. at 3470. Prior to the decision in Robinson, the Second Circuit had similarly concluded that the EHA preempts parallel remedies under § 1983, but held that a handicapped child could seek relief under § 1983 when relief was not available under the EHA. Quackenbush v. Johnson City School District, 716 F.2d 141, 147-49 (2d Cir.1983). In the present case, plaintiffs’ claim for equal educational services is not remediable under the EHA, and therefore may be actionable under § 1983.

The next problem is how to resolve the cross-motions for summary judgment with respect to the § 504 claims and parallel equal protection claims. I find that there are numerous questions of material fact, not resolved by the stipulation, which plainly preclude granting plaintiffs’ motion for summary judgment on these claims. The stipulation contains only the broadest assertions of certain facts that do not even come close to resolving the critical factual questions that must be resolved in this case. I will note only the most essential of the many unresolved questions of material fact. First, the most fundamental question is whether teachers at 4201 schools are in fact paid less than teachers at public schools in New York State. This, in turn, requires resolution of two subsidiary questions: (a) What are teachers paid in New York public schools? In this regard, it is noteworthy that paragraph 6 of the stipulation says only that “[tjhere are different salary schedules prevailing” for teachers working in various specified public and private educational programs. (Emphasis added). There is no indication that 4201 teachers’ salaries are necessarily lower than the salaries paid to teachers in the public schools, (b) Whether 4201 schools in fact reduce or eliminate any possible disparities in pay by supplementing 4201 teachers’ salaries with the school’s own funds or funds from other sources? The second major question concerns causation. Specifically, whether it can be shown that the education in 4201 schools is, in fact, inferior to education in public schools because of the alleged salary differentials. This requires resolution of such questions as whether there is, in fact, higher teacher turnover in 4201 schools, and if so, whether this turnover has actually diminished the quality of education in 4201 schools.

Where questions of material fact are not resolved by a stipulation, or the stipulation is equivocal, summary judgment must be denied. 10A C. Wright, A. Miller, and M. Kane, Federal Practice and Procedure, § 2724, at 75 (1983). Accordingly, plaintiffs’ motion for summary judgment must be denied.

In opposition to the State defendants’ motion for summary judgment, plaintiff has offered only the conclusory allegations in the Amended Complaint and the inconclusive facts set forth in the stipulation. While such a showing would normally be inadequate to resist a properly supported motion for summary judgment, see 10A Wright, Miller and Kane, § 2727 at 148, the State defendants have not properly supported their motion for summary judgment. They have not offered any evidence beyond the stipulation to show the absence of any questions of material fact. Consequently, the State defendants’ motion never triggered plaintiffs’ obligation to present evidence in opposition to the motion for summary judgment. Id. at 138-42. The State defendants' motion for summary judgment must also be denied with respect to the § 504 claims and related equal protection claims.

(b) The Federal Defendants

The Federal defendants have also moved for summary judgment dismissing the claims against them for lack of standing, lack of subject matter jurisdiction, and failure to state a claim upon which relief can be granted.

On the standing issue, the Federal defendants raise essentially the same arguments that were raised and rejected on their prior Rule 12(b)(6) motion. The stipulation does not contain any facts bearing on the unresolved standing issues: whether plaintiffs have suffered distinct and personal injuries, and whether those injuries could be redressed by any relief against the Federal defendants; nor have the Federal defendants offered any new evidence in support of their summary judgment motion. Again, where neither party has put forth evidence showing the absence of questions of material fact, summary judgment must be denied.

The Federal defendants also seek dismissal on the grounds that neither the EHA nor § 504 implies a private right of action against the Federal government to compel a cut-off of financial assistance to State agencies. This argument was also raised and rejected on the prior Rule 12(b)(6) motion. The Federal defendants cite only one additional case that was not considered in conjunction with the prior motion, Brandon v. Wisconsin Department of Public Instruction, 595 F.Supp. 740 (E.D.Wis.1984). In Brandon, the court summarily-held that 20 U.S.C. § 1416 [the EHA] does not empower an individual to institute an action to compel the Federal government to withhold funds paid to a state under the EHA. The court did not cite any authority nor offer any explanation for this holding. Furthermore, Brandon does not address plaintiffs’ only surviving statutory claims against the Federal defendants: the § 504 claims. Accordingly, I do not believe that Brandon constitutes such persuasive authority as would compel me to reverse my prior decision by now granting summary judgment to the Federal defendants on the § 504 claims.

Lastly, the Federal defendants seek summary judgment dismissing the constitutional claims. As noted above, the Amended Complaint seeks relief under the First, Ninth and Fourteenth Amendments, and 42 U.S.C. § 1983. The Federal defendants persuasively argue that claims under § 1983 and the Fourteenth Amendment cannot be brought against federal agencies or officials because such parties are not acting under color of state law. There is no allegation of violations of the Fifth Amendment in the Amended Complaint. Likewise, as discussed above, I can see no basis in the Amended Complaint for claims under the First or Ninth Amendments, nor have plaintiffs explained the basis for such claims. Accordingly, the Federal defendants’ motion for summary judgment is granted with respect to all of the constitutional claims and the claims under § 1983.

Concluding Observations

These various motions and the denial of parts thereof make it clear that the core problem in this case is essentially the lack of prosecution. Six years have elapsed since this case was commenced, but none of the parties have yet engaged in any meaningful discovery. Plaintiffs have been content to file repetitive motions with this Court without developing the factual bases necessary to support their claims. In the interests of finally spurring the parties into progress on in this case, I am now setting a firm discovery deadline and date for a pretrial conference. All discovery in this matter shall be completed by no later than October 4, 1985, and the parties shall appear before the Court for a pretrial conference on November 5, 1985 at 4:30 P.M. Plaintiffs are hereby advised that if renewed motions for summary judgment are presented after the date of the discovery deadline, and plaintiffs fail to come forward with any new evidence establishing the factual bases for their claims, I will consider dismissing this action for lack of prosecution.

SO ORDERED.

      . The "4201” schools are institutions for the instruction of the deaf and the blind that are listed in section 4201 of the New York Education Law. The parties have stipulated that the schools listed in section 4201 are all private institutions, except for the New York State School for the Blind and the “New York State School for the Deaf,” both of which are state-operated schools. The stipulation may create some confusion in that section 4201 lists a school called “The New York school for the deaf,” but does not list a school called the “New York State School for the Deaf.” This inconsistency is of no moment at the present time. To avoid potential problems in the future, the parties are directed to submit a supplementary stipulation indicating whether the “New York State School for the Deaf" referred to in their stipulation is indeed the “New York School for the deaf' listed in Section 4201.

      . The stipulation provides:

        Issue

      Is there a violation of constitutional or statutory mandates where salary differentials exist between 4201 teachers and teachers in surrounding school districts?

        Facts

      1. The schools enumerated in Education Law Section 4201, except for the New York State School for the Blind and the New York State School for the Deaf, both of which are state-operated schools, are private institutions "for the instruction of the deaf and of the blind.”
      2. Pupils in such institutions attend without cost to them, and the institutions receiving funding, from New York State tax levy money, for their attendance [sic].
      3. Other programs, both private and public, exist for children who are deaf, hard of hearing or visually impaired, as defined in 8 NYCRR 200.1(cc).
      4. In calculating the amount of aid to pay such institutions "(t)he portion of the salary of each employee which exceeds the salary of an employee having similar duties at the State-operated schools for the deaf and blind shall not be an aidable operating expense” (8 NYCRR 200.10(d)[) ].
      5. These State-supported schools are free to pay their employees a higher salary but would have to use any private funds which they may have, i.e., donations from benefactors to pay any such higher salaries.
      6. There are different salary schedules prevailing for teachers working for the State-supported schools, surrounding school districts, boards of cooperative educational services, other State agencies which operate educational programs, and pri-ate [sic] schools other than the State-supported schools.
      7. Teachers in the State-supported schools are required to meet the same teacher certification requirements as public school teachers are required to meet. Teachers in those schools are certified to New York State standards.
      8. Seven (7) of the eight (8) State-supported schools for the deaf use the total communication approach, which depends upon gesture, body language, voice amplification and very largely sign language as a primary means of education in the classroom.
      9. In order to obtain New York State certification to teach deaf children, a person need not have received training nor demonstrate proficiency in sign language.

      . Plaintiffs did submit the affidavit of their attorney, John Mulvehill. That affidavit merely summarized some of plaintiffs’ legal arguments, but did not contain any statements of fact that would aid the Court in resolving a motion for summary judgment. See Fed.R.Civ.P. 56(e).

      . In their Reply Memorandum of Law, plaintiffs seem to raise the additional claim that the State defendants have not met the statutory requirement that, when handicapped children are placed in private schools, those schools must meet the State's educational standards. 20 U.S.C. § 1413(a)(4). Paragraph 7 of the stipulation recites that all 4201 teachers meet the same certification requirements as public school teachers. Paragraph 8 of the stipulation indicates that sign language is a primary means of education in seven of the eight State-supported schools for the deaf, and paragraph 9 states that a person need not have received training nor demonstrate proficiency in sign language in order to obtain New York State certification to teach deaf children. From these facts, plaintiffs make the convoluted argument that 4201 teachers should be paid more than teachers of non-handicapped students, but since they are paid less than other teachers, teachers in 4201 schools are not competent and therefore do not meet the standards that apply to local educational agencies as required by § 1413(a)(4). This "competency” claim is not raised in the Amended Complaint. A new claim cannot be properly interposed in a Reply Memorandum. Accordingly, I see no reason to address the teacher competency claim on its merits.

      . There are relatively few cases recognizing specific justiciable rights arising from the Ninth Amendment. One line of authority does recognize that the Ninth Amendment protects certain fundamental rights not enumerated in the Constitution. See, e.g., Griswold v. Connecticut, 381 U.S. 479, 496, 85 S.Ct. 1678, 1688, 14 L.Ed.2d 510 (1965) (Goldberg, J. concurring); Keeler v. Consolidated Rail Corporation, 582 F.Supp. 1546, 1551 (Regional Rail Reorg.Ct.1984); Gasper v. Louisiana Stadium & Exposition District, 418 F.Supp. 716, 721 (E.D.La.1976), aff’d 577 F.2d 897 (5th Cir.1978), cert. denied 439 U.S. 1073, 99 S.Ct. 846, 59 L.Ed.2d 40 (1979). The only conceivable basis for plaintiffs' Ninth Amendment claim is an argument that handicapped children have a fundamental right to a free appropriate public education. The Supreme Court has expressly held, however, that disparities in funding for the education of various groups of students does not impair any fundamental rights. San Antonio School District v. Rodriguez, 411 U.S. 1, 37, 93 S.Ct. 1278, 1299, 36 L.Ed.2d 16 (1973). “Whatever merit [the] argument might have if a state’s financial system occasioned an absolute denial of educational opportunities to any of its children, that argument provides no basis for finding an interference with fundamental rights where only relative differences in spending levels are involved____" Id. As there is no allegation that plaintiffs in the present case were absolutely denied educational opportunities, they do not state a Ninth Amendment claim for denial of a fundamental right.
      It is even more difficult to conceive of any possible basis for plaintiffs’ First Amendment claims. There is simply no allegation in the Amended Complaint nor statements in the stipulation indicating that the defendants’ conduct in setting salaries for teachers at 4201 schools in any way impairs plaintiffs’ various rights guaranteed by the First Amendment.

      . As noted above, the EHA requires only that the State provide handicapped students with such instruction and support services that will enable the students to "benefit educationally” from the instruction. Rowley, 458 U.S. at 203, 102 S.Ct. at 3049.