author: STAPLETON, Chief Judge.

text:
    EQUAL EMPLOYMENT OPPORTUNITY COMMISSION, Plaintiff, v. STATE OF DELAWARE DEPARTMENT OF HEALTH AND SOCIAL SERVICES, et al., Defendants.
    Civ. A. No. 83-412-WKS.
    United States District Court, D. Delaware.
    Sept. 24, 1984.

      Joseph J. Faman, Jr., U.S. Atty., Wilmington, Del., David L. Slate, Gen. Counsel, Michael A. Middleton, Associate Gen. Counsel, Daniel M. Williams, Jr., Paul D. Brenner, Sr. Trial Attys., E.E.O.C., Washington, D.C., Spencer H. Lewis, Jr., Regional Atty., Issie L. Jenkins, Supervisory Trial Atty., Lanier E. Williams, Trial Atty., Carol Lunine, Trial Atty., E.E.O.C., Philadelphia, Pa., for plaintiff.
    Regina M. Mullen, Deputy Atty. Gen., Dept, of Justice, Wilmington, Del., for defendants Dillman, Olsen and Golding.
    Susan H. Kirk-Ryan, Deputy Atty. Gen., Dept, of Justice, Wilmington, Del., for defendant Dept, of Health and Social Services.
   OPINION

STAPLETON, Chief Judge.

Plaintiff, the Equal Employment Opportunity Commission (“EEOC”) brought this civil action to enforce the Equal Pay Act of 1963 (“EPA”), 29 U.S.C. § 206. EEOC alleges that defendant, Delaware Department of Health and Social Services (“DHSS”), is violating the EPA by paying lower wage rates to female employees than it pays to male employees performing substantially equal work. The EEOC seeks to enjoin defendant from further violating the Act and to recover back wages for employees affected by the defendant’s past wage violations. EEOC asserts authority to enforce the provisions of the EPA pursuant to Sections 16(c) and 17 of the Fair Labor Standards Act, 29 U.S.C. §§ 216(c), 217, as amended by Section 1 of the Reorganization Plan No. 1 of 1978, 92 Stat. 3781.

The action is currently before the Court on defendant’s motion to dismiss the complaint on the ground that the EEOC lacks proper authority to enforce the EPA. Defendant asserts that the EEOC was empowered to enforce the EPA by legislation that is unconstitutional because it contains a one House legislative veto provision.

The authority to enforce the EPA, and other equal employment opportunity legislation, was transferred from the Secretary of Labor to the EEOC by Reorganization Plan No. 1 of 1978. This Plan was created pursuant to the Reorganization Act of 1977, 5 U.S.C. § 901-12. The Reorganization Act authorized the President to make certain changes in the Executive Branch and its agencies. The Act, however, included a legislative veto provision that permitted either House, acting alone, to block any Executive reorganization proposal by passing a resolution of disapproval. 5 U.S.C. § 906.

Defendant’s motion to dismiss is predicated on the landmark decision, INS v. Chadha, 462 U.S. 919, 103 S.Ct. 2764, 77 L.Ed.2d 317 (1983), in which the Supreme Court declared unconstitutional the legislative veto provision of the Immigration and Naturalization Act, 8 U.S.C. § 1254(c)(2), which authorized either House of Congress to invalidate the Attorney General’s decision to allow a particular deportable alien to remain in the United States. The Court held that the one House veto constituted legislative action that violated the express prescription for the enactment of laws contained in Article I of the Constitution — passage by a majority of both Houses of Congress and presentment to the President. 103 S.Ct. at 2787.

Defendant argues that, unlike the situation in Chadha where the unconstitutional veto provision was found severable from the remainder of the Immigration Act, the presence of the legislative veto provision in the Reorganization Act renders the entire Reorganization Act unconstitutional, thereby invalidating the transfer of authority from the Secretary of Labor to the EEOC under the 1978 Plan. If defendant is correct, the complaint must be dismissed since the EEOC would not be properly authorized to enforce the EPA. The EEOC counters with two major arguments: first, EEOC concedes that the Reorganization Act’s legislative veto provision, 5 U.S.C. § 906(a), is invalid under Chadha, but argues that it is severable, and that the remainder of the Act is a constitutional delegation of legislative power to the President; second, EEOC argues in the alternative that even if the entire Act must fall with its legislative veto provision Congress has ratified the Reorganization Plan No. 1 of 1978, and the transfer of EPA enforcement authority contained therein, by appropriation of funds.

To date, one circuit court and a number of district courts have addressed this precise issue. The Fifth Circuit and a large majority of lower courts have held that the EEOC has valid enforcement authority. However, at least four district courts have concluded that the EEOC is without authority to enforce the EPA or related equal employment opportunity legislation on the ground that the Reorganization Act is invalid by virtue of its legislative veto provision.

I.

The Reorganization Act of 1977, unlike the statute at issue in Chadha, does not contain a severability provision. The presence of the severability clause in the Immigration and Naturalization Act at issue in Chadha gave rise to a strong presumption that its legislative veto provision was severable from the remainder of the statute. 103 S.Ct. at 2774. DDHS attempts to argue the converse, namely that the absence of a severability provision in the Reorganization Act entitles DDHS to the presumption that the Act’s legislative veto provision is not severable. The Supreme Court, however, has stated, “But whatever relevance such an explicit clause might have in creating a presumption of severability, the ultimate determination of severability will rarely turn on the presence or absence of such a clause.” United States v. Jackson, 390 U.S. 570, 585 n. 27, 88 S.Ct. 1209, 1218 n. 27, 20 L.Ed.2d 138 (1968) (citation omitted). Rather, the question of severability is answered by inquiring whether Congress would have enacted the remainder of the statute without the unconstitutional provision. Consumer Energy Council v. FERC, 673 F.2d 425, 442 (D.C.Cir.1982), aff'd without opinion, — U.S.-, 103 S.Ct. 3556, 77 L.Ed.2d 1402 (1983). The Supreme Court has articulated a standard for determining whether a challenged provision is severable: “Unless it is evident that the legislature would not have enacted those provisions which are within its power, independently of that which is not, the invalid part may be dropped if what is left is fully operative as a law.” Buckley v. Valeo, 424 U.S. 1, 108-09, 96 S.Ct. 612, 677, 46 L.Ed.2d 659 (1976) (quoting Champlin Refining Co. v. Corporation Commission, 286 U.S. 210, 234, 52 S.Ct. 559, 564, 76 L.Ed. 1062 (1932)). In addition to acknowledging the presence of a severability clause, the Supreme Court in Chadha analyzed two factors to determine if the legislative veto provision was severable: first, the legislative history; and, second, if what remained after severance was “fully operative as a law.” INS v. Chadha, 103 S.Ct. at 2274-75.

At the outset, it must be emphasized that the legislative history of the Reorganization Act of 1977 appears to contain only one explicit remark concerning the sever-ability of the Act’s legislative veto provision. In a separate opinion appended to the House Committee Report, Congressman Robert Drinan stated, “It must be remembered that H.R. 5045 intentionally does not contain a severability clause. The one House veto provision is deemed to be an integral and necessary part of the legislative scheme for reorganization. That is a proposition to which we all agree.” H.R. Rep. No. 105, 95th Cong., 1st Sess. 42, reprinted in, 1977 U.S.Code Cong. & Ad. News 41, 69 (hereinafter H.R. No. 105, reprinted in 1977 USCCAN 41). With the exception of Representative Drinan’s remark, however, there is no indication in the legislative history that Congress even considered the issue of severability. While Representative Drinan’s statement is some evidence that Congress may not have intended the Act’s legislative veto to be severable, I cannot conclude on the basis of one individual’s remarks that it is “evident” that Congress would not have enacted the Reorganization Act of 1977 independently of its legislative veto provisions. Buckley v. Valeo, 424 U.S. at 108-9, 96 S.Ct. at 677-678. Recently, the Fifth Circuit also held that Congressman Drinan’s statement was not sufficient to demonstrate that Congress considered the Reorganization Act’s legislative veto indispensable to the remainder of the statute. EEOC v. Hernando Bank, Inc., 724 F.2d 1188, 1191 (5th Cir. 1984).

One of the central messages communicated by the Reorganization Act of 1977 and its legislative history was the pressing public need for governmental reorganization and the advantages, in terms of time and efficiency, to be gained from bypassing the ordinary legislative process. The Act itself declares that its purpose of government reorganization “may be accomplished in great measure by proceeding under this chapter, and can be accomplished more speedily thereby than by the enactment of specific legislation.” 5 U.S.C. § 901(b). The House Committee Report also acknowledges the advantages of a procedure that permits reorganization outside of the time constraints imposed by ordinary legislation: “The Committee recognizes that a mechanism may be needed which is speedier than the normal legislative process, and has historically supported efforts by the President to make the Executive Branch more responsive to the needs of the American public.” H.R. No. 105 at 4, reprinted in 1977 USCCAN at 44. The Senate Report advocated the need for a streamlined reorganization procedure more forcefully:

The present size and complexity of the Federal Government makes it imperative that in reorganizing the government Congress and the President be able to utilize the expedited procedures established in the Reorganization Act. There are too many agencies performing too many diverse tasks to make it practicable to reorganize each agency through separate legislation.

Sen.Rep. No. 32, 95th Cong., 1st Sess. 2 (1977). Similarly, the floor debate in both Houses emphasized the urgent need for legislation that would empower the President to effect government reorganization.

In addition to the above, a significant portion of the legislative history of the Act addresses the rather unique features of the Act’s legislative veto. One of the major objectives of the sponsors of the Reorganization Act of 1977 was to develop a legislative veto procedure under which a vote by Congress would be assured on virtually every executive proposal. Such an opportunity for Congressional control of the reorganization process had not been available under previous reorganization procedures including those that had contained legislative vetos. H.R. No. 105 at 8, reprinted in 1977 USCCAN at 48. The legislative veto provision of the Act was specially designed so that both Houses of Congress were provided the opportunity to vote on a resolution of disapproval for every reorganization proposal submitted by the President, thereby “virtually guaranteepng] a vote” by Congress in all cases. H.R. No. 105 at 9, reprinted in 1977 USCCAN at 48. In short, the legislative veto provision in question provided Congress with much greater control over the reorganization process than had theretofore been available.

Two closely related issues apparently motivated Congress to increase its participation in the reorganization process via a more exacting legislative veto procedure; first, many in Congress believed that the traditional legislative veto was unconstitutional; and, second, many in Congress desired to limit the President’s authority in the reorganization arena. H.R. No. 105 at 9-18, reprinted in 1977 USCCAN at 49-57. Thus, by modifying the legislative veto in the Reorganization Act of 1977, Congress hoped to cure the veto of possible unconstitutionality and to limit the President’s reorganization power. H.R. No. 105 at 3, 17, reprinted in 1977 USCCAN at 42-43, 57.

Not surprisingly, a number of statements in the House report and in debate applaud Congress’s attempt to design a legislative veto that would pass constitutional muster and that would check Presidential control over the reorganization process. Because these statements demonstrate that Congress intended to maintain substantial control over reorganization, defendant, DDHS, argues that Congress intended the legislative veto to be indispensable to the rest of the Act.

I do not disagree with defendant’s argument that Congress intended to ensure its control over Presidential reorganization; Congressional control over executive action is inherent in any legislative veto. And, admittedly, Congress took special pains in this case to create a legislative veto that would increase its opportunity to carefully consider all executive reorganization proposals. But statements by members of Congress that the legislative veto of the Reorganization Act was designed to ensure substantial control over changes in the executive branch of the government simply do not satisfy the Buckley v. Valeo standard; that is, these statements do not make it “evident” that Congress would not have enacted the Reorganization Act of 1977 independently of its legislative veto. This is particularly so when statements about the importance of the veto are measured against the legislative history’s clear message that immediate government reorganization was necessary and should occur via a procedure less cumbersome than ordinary legislation.

That Congress clearly felt the legislative veto of the Act to be important does not mean that Congress found the veto indispensable. The legislative history clearly reflects Congress’s desire to effectuate government reorganization without resorting to ordinary legislation for each reorganization plan. On these facts, I conclude that it is not “evident that the legislature would not have enacted” the Reorganization Act without its legislative veto. Buckley v. Valeo, 424 U.S. at 108, 96 S.Ct. at 677. Because the Reorganization Act is also “fully operative as law” without its legislative veto provision, Chadha, 103 5. Ct. at 2772, 1 find that the veto provision is severable from the remainder of the Act.

II.

Even if the legislative veto of the Equal Pay Act is not severable, the EEOC contends that the Presidential transfer of functions challenged here has been subsequently ratified by Congressional actions that satisfy the constitutional requirements of bicameralism and presentment. I agree.

It is well settled that Congress may be subsequent enactment “give the force of law to official action unauthorized when taken.” Swayne Hoyt v. United States, 300 U.S. 297, 302, 57 S.Ct. 478, 480, 81 L.Ed. 659 (1937). Congress may ratify unauthorized Presidential acts by appropriating funds to implement the executive action in question or by reference to the executive order in subsequent legislation. Isbrandtsen-Moller Co. v. United States, 300 U.S. 139, 147-48, 57 S.Ct. 407, 411-412, 81 L.Ed. 562 (1937). Isbrandtsen-Moller involved the legitimacy of an executive order abolishing the Shipping Board and transferring its function to the Secretary of Commerce. The Secretary of Commerce subsequently ordered the plaintiff shipping company to file certain documents with the Secretary. The shipping company argued that the Secretary’s order was unauthorized because Congress did not intend that the President abolish the Shipping Board and transfer its functions to the Secretary of Commerce. Id. at 146-47, 57 S.Ct. at 411. The Supreme Court held that Congress ratified the President’s action through subsequent appropriation acts that provided funds to the Department of Commerce to carry out the provisions of the Shipping Act and that made reference to the challenged executive order. Id. at 147, 57 S.Ct. at 411. In addition, the Supreme Court found further evidence of ratification in the Merchant Marine Act of 1936, which explicitly noted that the functions of the Shipping Board had passed to the Department of Commerce pursuant to the executive order in question. Id. at 147-48, 57 S.Ct. at 411-412.

Isbrandtsen-Moller is analogous to the case at bar. In 1982 and 1983, Congress passed appropriation acts that explicitly indicate that funds appropriated to the EEOC are to be used, in part, to enforce the Equal Pay Act, 29 U.S.C. § 206(d). Act of November 28, 1983, Pub.L. No. 98-166, 97 Stat. 1071, 1088 (1983); Act of December 21, 1982, Pub.L. No. 97-377, 96 Stat. 1830, 1874 (1982). Notably, the 1983 appropriation act was passed after the Supreme Court’s decision in Chadha declaring the one House legislative veto unconstitutional; in other words, in 1983, Congress ratified Reorganization Plan Number 1 through the ordinary legislative process aware of the Chadha decision and the possibility, therefore, that Reorganization Plan Number 1 was put into effect pursuant to an unconstitutional statute.

DHSS argues that Greene v. McElroy, 360 U.S. 474, 79 S.Ct. 1400, 3 L.Ed.2d 1377 (1959), rather than Isbrandtsen-Moller, should determine the outcome of the present controversy. I disagree. In Greene v. McElroy, the Supreme Court declined to find congressional ratification of an allegedly unauthorized Department of Defense security clearance program merely on the ground that Congress had appropriated funds to finance one aspect of it. Central to the Supreme Court’s decision in rejecting the ratification argument was the doubtful constitutionality of the security program itself — employees of private corporations performing work for the military could be denied security clearance by the government, and thereby lose their jobs, without the opportunity to confront and cross-examine their accusers. Id. at 493, 79 S.Ct. at 1411. Since the allegedly unauthorized security clearance program appeared to violate individual due process rights, the Supreme Court held that the program required authorization from an act of Congress more explicit than the mere appropriation of funds. Id. at 506-507, 79 S.Ct. at 1418-1419. The present case is readily distinguishable. Reorganization Plan Number 1 has not by its transference of duties from the Department of Labor to the EEOC established a program of questionable constitutionality “which is in conflict with our long accepted notions of fair procedures.” Id. at 506-507, 79 S.Ct. at 1418-1419. Rather, the executive order challenged here, like the executive order at issue in Isbrandtsen-Moller, merely transferred certain duties from one executive agency to another, and does not involve the serious due process concerns of Greene v. McElroy.

DHSS also argues that more recent Supreme Court decisions, such as Tennessee Valley Authority v. Hill, 437 U.S. 153, 98 S.Ct. 2279, 57 L.Ed.2d 117 (1978), refuse to accept congressional appropriations as proof of ratification. Tennessee Valley, however, is simply not a ratification case, and involves the very different question whether congressional appropriations to a federal project may impliedly repeal duly enacted legislation that bars completion of the project. Id. at 189-90, 98 S.Ct. at 2299-2300 (emphasis added). By pointing to later appropriations in this case, however, EEOC does not seek to overthrow any properly enacted prior legislation, but merely seeks to show that Congress subsequently ratified Reorganization Plan Number 1.

Accordingly, I will deny defendant DHSS’s motion to dismiss this action.

      . Many of these cases concern the EEOC's authority to enforce the Age Discrimination in Employment Act of 1967 ("ADEA”), 29 U.S.C. § 621 et seq. The Reorganization Plan No. 1 transferred to the EEOC authority to enforce the ADEA as well as the EPA. Since the Plan authorized the EPA to enforce both the EPA and the ADEA pursuant to the Reorganization Act, it is immaterial that these cases arise out of EEOC efforts to enforce the ADEA rather than the EPA.

      . EEOC v. Hernando Bank, Inc., 724 F.2d 1188 (5th Cir.1984); e.g., EEOC v. Allegheny, No. 79-1531 (W.D.Pa. April 24, 1984); EEOC v. McCarthy, No. 76-2149-Z (D.Ma. April 18, 1984); EEOC v. Ingersoll Johnson Steel Co., 583 F.Supp. 983 (S.D.Ind.1984); EEOC v. U.S. Steel Corp., No. 10403 (W.D.Pa. April 5, 1984); Holecek v. Lincoln St. Louis, No. 83-0721 C (5) (E.D.Mo. March 27, 1984); EEOC v. Plessey, Inc., No. 78-1383 (D.Kan. March 9, 1984); EEOC v. Radio Montgomery, Inc., 588 F.Supp. 567 (W.D.Va. 1984); EEOC v. Memphis,581 F.Supp. 179 (W.D. Tenn.1983); Mullen Optical Co. v. EEOC, 574 F.Supp. 946 (W.D.Tenn.1983).

      . EEOC v. Allstate Insurance Co., 570 F.Supp. 1224 (S.D.Miss.1983), the leading case for the proposition that the EEOC lacks enforcement authority, would appear to have been silently overruled by the Fifth Circuit’s decision, EEOC v. Hernando Bank, Inc., 724 F.2d 1188 (5th Cir. 1984); EEOC v. Martin Industries, Inc., 581 F.Supp. 1029 (N.D.Ala.1984); EEOC v. Chrysler Corp., No. 81-72347 (E.D.Mich. Jan. 23, 1984); EEOC v. Westinghouse Electric Corp., 33 FEP Cases 1232 (W.D.Pa.1984).

      . Remarks of Sen. Percy, 123 Cong.Rec. 6145 (1977) ("I feel that there is an overwhelming desire in the country at large to make the Federal Government more efficient and more responsive to the real needs of all Americans."); Remarks of Sen. Muskie, 123 Cong.Rec. 6151 (1977) ("The need for these tools is all too obvious.”); Remarks of Rep. Horton, 123 Cong.Rec. 9345 (1977) (“The American people are literally crying for effective reorganization of their government."); Remarks of Rep. Levitas, 123 Cong.Rec. 9348 (1977) (“There is a definite, a crying need for this legislation."); Remarks of Rep. Fountain, 123 Cong.Rec. 9345 (1977) ("If we ... requir[ed] that each plan be submitted in the traditional form of a legislative proposal, the President could too easily be blocked from accomplishing goals which are essential to more effective, efficient, economical and responsible operations of the executive agencies of Government.").

      . Remarks of Rep. Horton, 123 Cong.Rec. 9345 (1977) (“I, of course, recognize the objection of some that it provides only for a very limited participation by the Congress, but my point is that it does provide for some degree of participation. For those of us who feel strongly that Congress should not forfeit its constitutional role on the question of reorganization, that is an important and meaningful provision.”); Remarks of Rep. Boland, 123 Cong.Rec. 9352 (1977) (“This bill would give the President the authority to make government efficient — it will definitely not give him emperor-like power over all government.”); Remarks of Rep. Levitas, 123 Cong.Rec. 9348 (1977) (“There will be substantial congressional control over reorganization. Not only will the President have to submit each plan to the Congress, and only three at one time can be pending, but either House of the Congress will be able to reject any plan that the President submits.”).

      . During debate a proposed amendment was introduced that would have required any court holding the legislative veto of the Act unconstitutional to invalidate only the plan before the court, rather than all plans adopted pursuant to the Act. Thus, representatives debating the amendment referred to it as a “doctrine of nonretroactivity" provision. Several lower courts have inferred from debate of the amendment that Congress must have assumed the inseverability of the legislative veto provision, for discussion of a nonretroactivity amendment would hardly be necessary if the Act’s legislative veto was thought to be severable. E.g., EEOC v. Allstate Insurance Co., 570 F.Supp. 1224, 1231—1232 (S.D.Miss.1983). Again, I am constrained by the plain language of the Buckley standard. The evidence of inseverability must be "evident”. The inference that may be drawn from the debate in question, neither alone, nor coupled with any other evidence already considered, meets the strict Buckley standard.


source: Caselaw Access Project

author: LAMEROS, District Judge.

license: Public Domain

text:
    COMMISSION HOUSE DRIVERS, HELPERS, AND EMPLOYEE’S UNION, LOCAL 400, International Brotherhood of Teamsters, Chauffeurs, Warehousemen, and Helpers of America, Plaintiff, v. TEAMSTERS JOINT COUNCIL NO. 41, International Brotherhood of Teamsters, Chauffeurs, Warehousemen, and Helpers of America, et al., Defendants.
    No. C 80-770.
    United States District Court, N.D. Ohio, E.D.
    Sept. 24, 1984.

      Lawrence M. Oberdank, and Anthony W. Hackenberg, Cleveland, Ohio, for plaintiff.
    Robert M. Baptiste, and Joseph E. Santucci, Washington, D.C., and Sorrell Logothetis, Dayton, Ohio, for defendants.
   MEMORANDUM OPINION AND ORDER

LAMEROS, District Judge.

Plaintiff Commission House Drivers, Helpers, and Employee’s Union, Local 400, International Brotherhood of Teamsters, Chauffeurs, Warehousemen, and Helpers of America (Local 400) formerly represented approximately 450 employees of American Seaway Foods, Inc. (Seaway). On October 5, 1979 defendant Teamsters Joint Council No. 41, International Brotherhood of Teamsters, Chauffeurs, Warehousemen, and Helpers of America (Joint Council 41), an unincorporated association of approximately 30 Teamsters locals, transferred control over Seaway’s employees from Local 400 to Teamsters Union Local 507, International Brotherhood of Teamsters, Chauffeurs, Warehousemen, and Helpers of America (Local 507). On October 11, 1979 Local 400, after unsuccessfully seeking relief from the National Labor Relations Board (NLRB), appealed Joint Council 41’s decision to the General Executive Board of defendant International Brotherhood of Teamsters, Chauffeurs, Ware-housemen, and Helpers of America (International). On January 29, 1980 the General Executive Board affirmed the decision of Joint Council 41. Local 400 then filed this action in which it seeks damages and an injunction requiring defendants to revest it with control over Seaway’s employees. This case is presently before this Court on defendants’ motions for summary judgment.

I. Facts

Rule 56(e) of the Federal Rules of Civil Procedure provides that a district court may grant summary judgment only if the “pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits ... show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.” “In ruling on a motion for summary judgment, the court must construe the evidence in its most favorable light in favor of the party opposing the motion and against the movant.” Bohn Aluminum & Brass Corp. v. Storm King Corp., 303 F.2d 425, 427 (6th Cir.1962). Moreover, “ ‘on summary judgment the inferences to be drawn from the underlying facts contained in [the moving party’s] materials must be viewed in the light most favorable to the party opposing the motion.’ ” Adickes v. S.H. Kress Co., 398 U.S. 144, 158-59, 90 S.Ct. 1598, 1608-10, 26 L.Ed.2d 142 (1970) (quoting United States v. Diebold, 369 U.S. 654, 655, 82 S.Ct. 993, 994, 8 L.Ed.2d 176 (1962) (per curiam)).

Under these standards of review, the record in this case reveals the following pertinent facts. Prior to 1979 Local 400 had long served as the exclusive bargaining representative for Seaway’s employees. Local 507 had not represented any of Seaway’s employees but, during the years preceding the outbreak of this dispute, it had absorbed the employees of a number of other Cleveland-area grocery businesses.

During the early summer of 1979 Local 400 commenced its efforts to negotiate a new collective bargaining agreement with Seaway. Local 400 failed, however, to obtain a new contract by June 30, 1979 — the date on which the old contract was scheduled to expire. On June 30th the officers of Local 400 met with Seaway’s employees to discuss the members' contract demands. At this meeting Charles Cimino, Jr., Vice President of Local 400, reminded the members that the Teamsters constitution prohibited them from striking without first obtaining approval from the Joint Council and the International. Despite this admonition, on July 1st Local 400’s members went out on a one day wildcat strike.

On July 2nd Local 400 received a mail-gram from International President Frank E. Fitzsimmons in which he authorized a strike by Local 400 but conditioned his approval upon Local 400 obtaining strike approval from International Vice President Jackie Presser. It should be noted that Jackie Presser was also Vice President of Joint Council 41 and President of Local 507. Presser did not respond to Local 400’s numerous strike authorization requests. Thus, Local 400 was placed between a rock and a hard place: if it failed to strike its members would perceive it as being unresponsive to their demands; if it struck it would violate President Fitzsimmon’s command.

In the meantime, Jackie Presser, his brother William (President of Joint Council 41), and other members of Joint Council 41 met with 7 dissident members of Local 400. This was the first in a series of meetings at which Seaway employees voiced their dissatisfaction with Local 400 and discussed methods for obtaining adequate representation. Local 400’s officers were excluded from several of these meetings. Moreover, at the meetings they were allowed to attend, Local 400’s officers were denied a reasonable opportunity to respond to the charges leveled against them. This series of meetings culminated with a gathering of most of Local 400’s members on September 30, 1979. At that meeting the members voted by secret ballot to determine whether the majority preferred to continue to be represented by Local 400 or wished to switch to another local. According to the defendants’ uncontradicted affidavit, Local 400’s members cast 15 votes in favor of Local 400, 33 votes in favor of Local 407, and 281 votes in favor of Local 507.

Shortly after this meeting, a panel appointed by the Executive Board of Joint Council 41 recommended to the Board that it transfer control over Seaway’s employees from Local- 400 to Local 507. The Board then voted unanimously to adopt the panel’s recommendation. On December 11, 1979 Local 507 and Seaway entered into a collective bargaining agreement governing the former members of Local 400. This arrangement received the International’s tacit approval when, on January 29, 1980, it rejected Local 400’s appeal.

II. Law

Local 400’s basic theory of this case is that the Joint Council and the International did not accord it a reasonable hearing before divesting it of control over Seaway’s employees. Local 400 maintains that it was entitled to the procedural safeguards provided by the Labor-Management Reporting and Disclosure Act of 1959, 73 Stat. 519, 29 U.S.C. §§ 401-531 (LMRDA), and by the Teamsters constitution.

A. Local 400’s Claim Under LMRDA

Potentially, LMRDA provides Local 400 with substantial procedural safeguards. The statute provides in pertinent part,

No member of any labor organization may be fined, suspended, expelled, or otherwise disciplined except for nonpayment of dues by such organization or by any officer thereof unless such member has been (A) served with written specific charges; (B) given a reasonable time to prepare his defense; (C) afforded a full and fair hearing.

29 U.S.C. § 411(a)(5).

It is essential to note that § 411(a)(5) of LMRDA only applies to “member[s] of labor organization[s].” In Finnegan v. Leu, 456 U.S. 431, 102 S.Ct. 1867, 72 L.Ed.2d 239 (1982), the Supreme Court considered an LMRDA action by the former business agent of a Teamsters local who alleged that the newly elected local president had discharged him because he had supported the Local’s incumbent president. The Court, construing §§ 411(a)(1), 411(a)(2), and § 529, held that the business agent was not protected by these sections because, inter alia, he was not a “member of a labor organization” within the meaning of the Act. Finnegan, 456 U.S. at 442, 102 S.Ct. at 1873. Similarly, in Cehaich v. International Union, United, Automobile, Aerospace, and Agricultural Implement Workers, 710 F.2d 234, 240 (6th Cir.1983), the United States Court of Appeals for the Sixth Circuit held that a union benefits representative was not protected against summary dismissal by his union because, in his position as a union officer, he was not a “member of a labor organization” within the meaning of various sections of LMRDA including § 411(a)(5).

This Court believes that Finnegan and Cehaich control this case and oblige it to hold that Local 400 is not a “member of a labor organization” within the meaning of § 411(a)(5). This holding accords with Congress’s intent in passing LMRDA; the statute was only intended to protect “rank and file union members.” Finnegan, 456 U.S. at 437, 102 S.Ct. at 1871. A union local, just like a union officer, is a higher component of the union’s organizational structure, not a member of the rank and file. Given this Court’s holding that Local 400 is not a “member of a labor organization” under § 411(a)(5), this Court also holds that Local 400 is not entitled to the procedural safeguards of LMRDA.

B. Local 400's Claim Under the Teamsters Constitution

Local 400’s second theory of relief is that the Joint Council and the International violated the Teamsters constitution by assigning Seaway’s employees to Local 507. See United Association of Journeymen and Apprentices of the Plumbing and Pipefitting Industry v. Local 334 United Association of Journeymen and Apprentices of the Plumbing and Pipefitting Industry, 452 U.S. 615, 627, 101 S.Ct. 2546, 2553, 69 L.Ed.2d 280 (1981) (federal court had jurisdiction under the Labor-Management Relations Act of 1947, 61 Stat. 156, 29 U.S.C. § 185(a) (LMRA), to entertain an action by a union local alleging that the parent union had breached the union’s constitution).

Local 400 has presented alternative theories on how defendants violated the Teamsters’ constitution. In its complaint, Local 400 asserted that defendants breached the constitution by failing to adhere to the procedures provided by art. XII, § 12 of the constitution which governs the resolution of “jurisdictional disputes.” In its brief in response to defendants’ motion for summary judgment, plaintiff downplays this argument and asserts that defendants’ actions were void because they were not authorized by the Teamsters constitution.

Plaintiff’s decision not to rely on art. XII, § 12 of the Teamsters constitution is understandable in light of the scope of that provision. It governs cases “where two (2) or more Local Unions are in dispute concerning jurisdiction.” This case is distinguishable from the traditional jurisdictional dispute between two locals envisioned by this constitutional provision. True, Local 507 played a role in Local 400’s fall from power. The members of Local 400, however, played a far more important role. The members’ role is most apparent in the vote of September 30, 1979 when they voted overwhelmingly in favor of moving to Local 507. This was the principal fact that caused counsel for the NLRB to recommend to the regional director that the Board should not charge Seaway with an unfair labor practice for ceasing to bargain with Local 400 and for bargaining with Local 507. See Memorandum from Harold J. Tatz, Associate Counsel to the NLRB, to Bernard Levine, Director of Region 8 for the NLRB, page 7 (April 30, 1980) (contained in defendant’s exhibit S). This vote also compels this Court to hold that the instant dispute was not a “jurisdictional dispute” as envisioned by art. XII, § 12 of the constitution but instead was a dispute between a local and its members. As this Court holds that art. XII, § 12 is inapplicable to this case, it must also hold that Local 400 cannot lay claim to the procedural safeguards provided by that provision.

This Court is confronted finally with plaintiff’s contention that defendants’ conduct was ultra vires. Article IX, § 1 of the Teamsters constitution provides,

Such powers, duties and authority as are not otherwise delegated to the General President and General Secretary-Treasurer of the International Union shall be exercised, acted upon, and determined by the General Executive Board. The General Executive Board shall have the authority to interpret and apply the Constitution and laws of the International Union and to decide all questions of law thereunder subject to appeal to the next Convention. The General Executive Board shall have governing authority over the International Union and its subordinate bodies to the end of upholding the laws and policies of the Brotherhood as expressed in this Constitution.

This Court believes that the General Executive Board acted in conformity with art. IX, § 1 of the constitution when it granted Local 507 control over Seaway’s employees. The General Executive Board confronted a unique situation that demanded a unique response. Absent a specific limitation in a union constitution, this Court will not interfere with the efforts of a union’s leaders to manage the affairs of their organization. Accordingly, this Court holds that the International did not commit an ultra vires act by vesting control over Seaway’s employees in Local 507. This Court also holds that Joint Council 41 did not violate the Teamsters constitution because its actions were ratified by the General Executive Board of the International. See Operative Plasters’ and Cement Masons’ International Ass’n., Local 202 v. Metropolitan New York Dry Wall Contractors Ass’n., 543 F.Supp. 301, 311 (E.D.N.Y.1983) (parent union had inherent power under its constitution to withdraw jurisdiction over drywall plastering from one local and vest jurisdiction in another local).

In light of the foregoing opinion, defendants’ motions for summary judgment are granted.

This action is terminated. IT IS SO ORDERED.


author: CAFFREY, Chief Judge.

text:
    Michael COHEN, et al., Plaintiffs, v. Richard D. HATHAWAY, et al., Defendants.
    Civ. A. No. 83-4087-C.
    United States District Court, D. Massachusetts.
    Sept. 25, 1984.

      Neal S. Weinstock, Dedham, Mass., for plaintiffs.
    John R. Jennings, Wrentham, Mass., for defendant R.D. Hathaway.
    Ivo Meisner, Montgomery, Meisner, Reynolds & O’Brien, Edgartown, Mass., for defendant Vineyard Conservation Soc., Inc.
    John H. Montgomery, Jr., Montgomery, Meisner, Reynolds & O’Brien, Edgartown, Mass., for defendant Martha’s Vineyard Nat’l Bank.
    Kathryn M. Bettencourt, Edgartown, Mass., for defendant Dukes County Sav. Bank.
   OPINION

CAFFREY, Chief Judge.

This is a civil action brought by plaintiffs Michael Cohen, a New York resident, and A.B.D. Sword, Inc. (“Sword”), a Delaware corporation, against defendant Richard D. Hathaway, a Massachusetts resident. The subject matter of this lawsuit is the sale of certain property, namely a vessel named “America,” from plaintiffs to defendant. Plaintiffs assert in their complaint that defendant has breached the sales contract and defaulted on three promissory notes payable to plaintiffs. Plaintiffs seek payment on the notes, plus interest, costs and attorneys fees. Defendant has filed counterclaims for breach of implied warranties. He requests damages and other appropriate relief.

This case was tried without a jury on June 21, 1984. Plaintiffs offered the testimony of two witnesses: Michael Cohen and William P. Aikens, president of Sword. Defendant also presented two witnesses: Richard Hathaway and Peter Jackson, an Edgartown, Massachusetts landscaper. Plaintiffs offered six exhibits and defendant introduced three. Both parties have filed proposed findings of fact and rulings of law.

Based on the testimony and exhibits offered at trial, I make the following findings of fact. Plaintiff Michael Cohen was a commercial fisherman at Long Island, New York, who owned the vessel “America” for three years. In March 1981, he sold the “America” to Sword. Sword purchased the vessel with the intention of rigging it for swordfishing. The purchase price was $37,500.00. Plaintiff Cohen received $10,000.00 in cash and the remainder in promissory notes.

William P. Aikens, president of Sword, inspected and tested the vessel prior to purchasing it. Also, as is standard business practice, he engaged a marine survey- or Chuck Blume, to survey the vessel. A survey was needed to acquire insurance once the “America” was purchased. Aikens determined, on the basis of his inspection and the report of the surveyor, that the “America” was in good condition and was “sailable,” though it needed certain cosmetic work. Aikens purchased the “America” and sailed it to Lewes, Delaware, where work was performed on it for the next two months. The vessel was, among other things, reconditioned, sandblasted, refastened and recaulked; the decks and topsides were redone and new antifouling paint was applied. The completed written survey, dated April 13, 1981, reflected this work performed on the “America.” In his final remarks, Mr. Blume wrote:

In this surveyor’s opinion, ... at the time of the survey, [the] vessel [“America”] appeared sound, clean and in good order. [The] vessel has been overhauled and can be considered a good fire and maritime risk. Estimated present market value [is] $50,000.00.

Sword used the vessel for commercial fishing. The evidence shows that the “America” performed well for Sword and that Sword encountered no major problems with the “America” during the time it owned her. Sword did, however, experience financial problems and was unable to make the required payments on the note to Cohen. Aikens decided to sell the vessel. He listed the “America” with a broker, the Karp Marine Agency (“Karp”), in September 1981, and an advertisement was placed in the National Fishermen Magazine by Karp, advertising the vessel for sale as follows:

57' Stonington Wood Longline, 6/71, hyd. hauler, electronics, fishing daily, new gear, with winch, nets, doors ........ $55,000.00

Sword continued to fish with the “America” until November 1981. For the following few months, while the “America” sat unused, Sword had her rigged for crabbing.

Defendant Hathaway saw the advertisement and became interested in the “America” in early 1982. Hathaway was a fisherman at the time and already owned a twenty foot boat. He telephoned Karp, and then travelled to Delaware with a friend, Peter Jackson, to inspect the vessel. At that time, the vessel was located at a marina slip. The “America” was sitting in water the depth of which was just great enough to allow one to move the vessel in and out of the slip at low tide. Hathaway and Jackson went with Karp to the vessel in the evening and took a cursory look. The next morning, Aikens took Hathaway and Jackson to the “America” and they inspected her at the slip. Hathaway and Jackson noticed a little water in the bilges, but were otherwise pleased with what they saw. The engine was already running when they arrived, but they did not take the “America” out for a test sail. They did not attempt to have the vessel hauled, nor did they have a surveyor inspect the “America.” Aikens showed the two men the Blume survey and explained that the survey had been recently done and that procuring insurance was no problem. Aikens never told Hathaway that, contrary to the advertisement, the vessel had not been fishing daily for many months.

Relying on the Blume survey, the contents of the Karp advertisement, and his own limited observations, Hathaway decided to purchase the “America.” A purchase price of $52,000.00 was agreed upon and Karp made arrangements for the sale to occur at Long Island, New York, on March 30, 1982. Cohen was present at the meeting and was a party to the transaction because it was learned that the bill of sale from Cohen to Sword had never been properly registered and, therefore, Cohen still remained the owner of record of the “America.” Cohen signed the bill of sale to Hathaway. Hathaway gave $15,000.00 to Sword. In addition to the money paid, Hathaway signed a note for $10,735.00 payable to Cohen (“Note A”), and two notes payable to Sword, one for $8,015.00 (“Note B”) and one for $18,750.00 (“Note C”). Each of these notes required payments of interest to commence on May 1, 1982, with interest accruing at the rate of 15% per annum. Note A and Note B were to be paid in full by January 15, 1983, and Note C by January 15, 1984.

After the closing, Aikens and an employee of Sword transported Hathaway and Jackson down to Lewes, Delaware. Hathaway and Jackson arrived at the dock on April 1, 1982, with the intention of assuming control of the vessel. The engine was already running when Hathaway and Jackson took control of the vessel. Jackson, who has fourteen years of sailing experience, acted as skipper of the “America” when the two set sail from Delaware. The weather at the time was less than favorable, though Hathaway and Jackson left Delaware before the storm which was anticipated arrived.

Approximately thirty miles offshore of Atlantic City, New Jersey, and six hours into the trip, Hathaway and Jackson encountered problems with the “America.” The bilge pump stopped working and the vessel began taking on significant amounts of water. Hathaway and Jackson had to call the Coast Guard for aid. The “America” was towed into Atlantic City by the Coast Guard. The Coast Guard gave Hathaway a citation because the “America” did not have the safety equipment required by law.

Hathaway telephoned Aikens and Aikens, Cohen and employees of Sword went to New Jersey to assist the new owner. The vessel was in Atlantic City for a number of days. The water was pumped out and the vessel was hauled, and then re-hauled, to prevent further leaking. Also, certain equipment, such as the generator had to be replaced. Hathaway then sailed the “America” to Massachusetts where further work was done on the vessel to put it in good sailing condition.

Once the “America” was in good shape, Hathaway took it out on a fishing trip. Hathaway’s attempt to fish with the “America” was frustrated, however, when the winch used to haul the nets broke off. This defect also had to be remedied. Hathaway used the vessel for fishing only one other time, in July, and he made $600.00. Hathaway has not fished with the vessel since that time because it requires further work to make it a good, safe fishing vessel.

Hathaway submitted to the Court the bills for the work performed on the “America.” The bills reflect a total of $7,931.57. Hathaway testified at trial that the vessel still required work. Specifically, he testified that it needed a new propellor which would cost $3,000.00.

Because of the problems he has had with the vessel, Hathaway has not made the required payments on the notes to Cohen and Sword. Hathaway made an interest payment of $134.00 to Cohen in July 1982. No other payments of interest or principal have been made. Hathaway made one interest payment of $334.00 to Sword in July 1982 and has made no other payments of interest or principal to Sword.

Preliminarily, the Court must determine the law to be applied to these facts. Defendant suggests in his answer to plaintiff’s complaint that this is a suit in admiralty. Suits in admiralty are governed by federal substantive and procedural law. Kermarec v. Compagnie Generate Transatlantique, 358 U.S. 625, 79 S.Ct. 406, 3 L.Ed.2d 550 (1959). Most courts have held, however, that contracts to purchase a vessel are outside admiralty jurisdiction. See, e.g., CTI—Container Leasing Corp. v. Oceanic Operations Corp., 682 F.2d 377 (2d Cir.1982). Accordingly, I rule that this is not an action in admiralty, but an action at law. As such, it is to be governed by state law.

The question then becomes whether the law of Massachusetts, the law of New York, or the law of Delaware applies to this case. Plaintiffs assert in their proposed findings of fact and conclusions of law that the law of Massachusetts applies. I rule that it would be inappropriate to apply Massachusetts law to this case because the only connection the Commonwealth has to this dispute is that the defendant resides here. This contact alone is not enough. Under the traditional choice of law test, New York law would apply because New York is the place where the contract was made. Cameron v. Gunstock Acres, Inc., 370 Mass. 378, 381-82, 348 N.E.2d 791 (1976). The Massachusetts Supreme Judicial Court has noted, however, that “reference to the law of the place of making can produce awkward or arbitrary results where that place had no or little other connection with the contract or the parties____” Choate, Hall & Stewart v. SCA Services, Inc., 378 Mass. 535, 541, 392 N.E.2d 1045 (1979). Under the facts of this case, New York has little other contact with the transaction other than that it was the place of making and plaintiff Cohen resides there. Sword, the second plaintiff, is a Delaware corporation. Moreover, the contract was primarily negotiated and performed in Delaware. Further, the subject matter of the contract, the vessel “America,” was located at nearly all relevant times in Lewes, Delaware. For these reasons, I rule that the law of Delaware applies to this case. See Restatement (Second) of Conflicts of Laws § 188 (1971); Choate, Hall & Stewart v. SCA Services, Inc., 378 Mass. 535, 540-41, 392 N.E.2d 1045 (1979); Pevoski v. Pevoski, 371 Mass. 358, 358 N.E.2d 416 (1976).

I turn now to the claims brought in this lawsuit. Plaintiffs claim that defendant has breached the sales contract and defaulted on three promissory notes payable to plaintiffs Cohen and Sword. Plaintiffs seek a ruling by this Court that defendant is liable to Cohen in the amount of $10,735.00 in principal plus interest at 15% per annum, or an additional $3,863.25, for a total of $14,598.25. Plaintiffs seek a second ruling by this Court that defendant is liable to Sword in the amount of $26,765.00 in principal plus interest at 15% per annum, or an additional $9,632.04, for a total of $35,397.04. Defendant does not dispute his liability on the notes. Rather, he counterclaims for damages which would offset all, or at least a portion, of defendant’s liability on the promissory notes. Accordingly, I rule that defendant is liable to Cohen on Note A in the amount of $14,598.25. I further rule that defendant is liable to Sword on Notes B and C in the amount of $36,397.04.

The Court must now consider defendant’s counterclaims to determine to what damages, if any, defendant is entitled. Although the parties stipulate that the bill of sale from Cohen to Hathaway contained no express warranties, defendant alleges that the plaintiffs breached certain implied warranties. Defendant’s first counterclaim is for breach of the implied warranty of seaworthiness of a vessel. While an implied warranty of seaworthiness of a vessel does not exist per se, defendant asserts, in essence, that plaintiffs have breached an implied warranty of merchantability. Del.Code Ann.Tit. 6 § 2-314 (Uniform Commercial Code). Title 6 § 2-314 of the Delaware Code provides, in relevant part:

... a warranty that the goods shall be merchantable is implied in a contract for their sale if the seller is a merchant with respect to goods of that kind____

To recover under this section, defendant must prove by a preponderance of the evidence that plaintiffs Cohen and Sword were merchants with respect to fishing vessels at the time of the disputed transaction. I rule that the defendant has failed to meet his burden of proof. I find that the evidence at trial shows that, at the time of the sale, Cohen and Sword were each in the commercial fishing business and that there was no evidence that they were vessel merchants. I rule therefore that no warranty of merchantability should be implied in the sales contract between Cohen and Hathaway for the vessel “America.” I rule that plaintiffs are entitled to judgment on defendant’s counterclaim count 1.

Defendant’s second counterclaim is for breach of the implied warranty of fitness for a particular purpose. Title 6 § 2-315 of the Delaware Code provides:

Where the seller at the time of contracting has reason to know any particular purpose for which the goods are required and that the buyer is relying on the seller’s skill or judgment to select or furnish suitable goods, there is ... an implied warranty that the goods shall be fit for such purpose.

To establish the existence of a warranty under § 2-315, then, plaintiff must prove by a preponderance of the evidence the following elements: first, that the seller had reason to know any particular purpose for which the goods are required; second, that the seller had reason to know that the buyer is relying on the seller’s skill or judgment to select or furnish suitable goods; third, that the buyer in fact relied upon the seller’s skill or judgment. Unlike § 2-314, § 2-315 does not require that the seller be a merchant. “Although normally the warranty will only arise where the seller is a merchant with the appropriate ‘skill or judgment,’ it can arise as to non-merchants where this is justified by the particular circumstances.” Uniform Commercial Code § 2-315, Comment 4.

After considering the circumstances of this case, I rule that this is an appropriate situation in which to imply a warranty of fitness for a particular purpose. First, the evidence at trial showed that plaintiffs had reason to know that Hathaway was purchasing the “America” for the particular purpose of fishing with it. “[T]he buyer need not bring home to the seller actual knowledge of the particular purpose for which the goods are intended or of his reliance on the seller’s skill and judgment, if the circumstances are such that the seller has reason to realize the purpose intended or that the reliance exists.” U.C.C. § 2-815, Comment 1. At the time of the transaction, Hathaway was a fisherman who owned a small fishing vessel. He became interested in the “America” when he saw the advertisement describing the vessel as “fishing daily,” with a “hyd[raulic] hauler, ... new gear, with winch, nets and doors.” Though there was no evidence that Hathaway specifically told plaintiffs that he intended to use the vessel as a dragger, proof of actual knowledge by the seller of the buyer’s intended purpose is not required. Plaintiffs had reason to know from the circumstances that Hathaway bought the “America” for use as a fishing vessel.

Second, defendant proved at trial that the plaintiffs had reason to know that Hathaway was relying on plaintiffs’ judgment to sell him a vessel suitable for fishing. Plaintiffs were aware that Hathaway and his friend Jackson examined the vessel on two occasions, but that they did not perform a thorough examination. Plaintiffs offered Hathaway the Blume survey and represented that it was an expert’s recent evaluation of the condition of the vessel. Plaintiffs knew that Hathaway did not, thereafter, have a survey done prior to buying the “America.” Plaintiffs also did not disclose to Hathaway that the description contained in the magazine advertisement was no longer accurate. Plaintiffs portrayed the “America” to Hathaway as a newly-refurbished fishing vessel that was fishing daily at the time of the sale. These circumstances plainly indicate that plaintiffs had reason to know that defendant was relying on plaintiffs’ judgment with respect to the vessel.

Third, the evidence presented at trial demonstrates that Hathaway did, in fact, rely on the plaintiffs’ judgment. Defendant himself testified that he so relied, and his testimony is supported by the circumstances surrounding the sales transaction, which were discussed above. Accordingly, I rule that defendant has proved all three required elements.

The next question is whether plaintiffs breached the implied warranty of fitness for a particular purpose. The evidence at trial showed that the “America” was not suitable for fishing at the time it was purchased. The vessel began to sink within six hours of its leaving Delaware under the control of the new owner. The vessel required extensive work before it was in a safe sailing condition. Furthermore, even when the vessel was ready to sail, the equipment used to fish did not function properly and had to be repaired. On the basis of these facts, I rule that defendant has proved that plaintiffs breached the implied warranty of fitness for a particular purpose.

The final issue with respect to this counterclaim is damages. Defendant must prove the damages resulting from plaintiffs’ breach by a preponderance of the evidence. Defendant has submitted to the Court bills for work performed on the vessel totalling $7,931.57. Defendant Hathaway also testified that the vessel would need a new propellor costing $3,000.00 before it would be in good shape to fish. Defendant’s documentary and verbal proof with respect to damages was not rebutted by plaintiffs. Accordingly, I rule that defendant has proved that, as a result of plaintiffs’ breach, he suffered damages in the amount of $10,931.57. This sum is to be divided into two equal parts and offset against defendant’s liability to each of the two plaintiffs.

In his third counterclaim, defendant seeks punitive damages for the breaches of implied warranties which he sets forth in counts I and II. I rule that punitive damages should not be granted in this case. Del.Code Ann. tit. 6, § 1-106(1) makes clear that relief given under the Delaware Commercial Code is to be limited to compensatory damages, unless additional damages are specifically authorized by some other rule of law. No such law has been found and I rule that the damages which this Court has awarded defendant compensate him fully for plaintiffs breach, and that the defendant is not entitled to any further damages.

Order accordingly.


author: LAFFITTE, District Judge.

text:
    Carlos R. Rivera CARBANA, Plaintiff, v. Dr. Ramon A. CRUZ, etc., Defendants.
    Civ. No. 83-0929 HL.
    United States District Court, D. Puerto Rico.
    Sept. 25, 1984.

      Carlos R. Rivera Carbana, Bayamón, P.R., pro-se.
    Willian Estrella, San Juan, P.R., for defendants.
   OPINION AND ORDER

LAFFITTE, District Judge.

On July 10, 1984, this Court filed its Opinion and Order dismissing plaintiffs pro se complaint, predicated on alleged civil rights violations. 588 F.Supp. 80. Because plaintiffs claim was frivolous and groundless, as well as unreasonable in the light of prior litigation involving the same issues, both in the insular and federal courts, in the sound exercise of the discretion afforded by the Civil Rights Attorneys Fees Award Act, 42 U.S.C. § 1988, the Court ruled that defendants were entitled, as prevailing parties, to an award of attorney’s fees. Christiansburg Garment Co. v. E.E.O.C., 434 U.S. 412, 98 S.Ct. 694, 54 L.Ed.2d 648 (1978).

Defendants filed their application for fees and a hearing thereon was set for September 4, 1984, following denials of plaintiff’s post judgment motions.

On August 28, 1984, plaintiff filed a motion to disqualify the undersigned judge on the grounds of personal bias and prejudice against plaintiff “or in favor of any adverse party.”

I.

TIMELINESS AND SUFFICIENCY OF AFFIDAVIT.

We start with the proposition that it is the primary duty of the judge against whom an affidavit of bias or prejudice is filed to pass on the legal sufficiency of the facts alleged in the affidavit, and its timeliness. Action Realty Co. v. Well, 427 F.2d 843 (7th Cir.1970). To safeguard the judiciary from frivolous attacks on its dignity and integrity, affidavits of disqualification for bias are to be strictly construed for form, timeliness and sufficiency. Radamacher v. City of Phoenix, 442 F.Supp. 27 (D.C.Ariz.1977); Bumpus v. Uniroyal Tire Co., 385 F.Supp. 711 (D.C.Pa.1974); Town of East Haven v. Eastern Air Lines, Inc., 304 F.Supp. 1223 (D.C.Conn.1969); U.S. v. Moore, 405 F.Supp. 771 (D.C.W.Va.1976).

A. TIMELINESS.

The motion to recuse comes after judgment was entered and post trial motions were denied. The Opinion and Order dismissing the complaint was filed on July 10, 1984, and judgment was entered thereon on July 20, 1984. The motion for recusal was filed on August 28, 1984, subsequent to this Court’s order of August 22, 1984, scheduling a hearing on defendant’s application for attorneys’ fees. In order to disqualify a judge, a timely objection must be made, otherwise the objection is waived. U.S. v. Hall, 424 F.Supp. 508, affmd., 536 F.2d 313, cert. den., 429 U.S. 919, 97 S.Ct. 313, 50 L.Ed.2d 285; Andrews, Mosburg, Davis, Elam, Legg & Bixter, Inc. v. General Ins. Co. of America, 418 F.Supp. 304 (D.C.Okl.1976). Accordingly, a motion for disqualification is untimely and becomes moot when filed after judgment. Kent v. Regional Office of Am. Friends Service Committee, 497 F.2d 1325, 1330 (9th Cir. 1974); Weber v. Coney, 642 F.2d 91, 92 (5th Cir.1981); U.S. v. Hall, 424 F.Supp. 508, affmd., 536 F.2d 313; Davis v. Cities Service Oil Co., 420 F.2d 1278 (10th Cir.1970). Plaintiffs motion filed 19 days after entry of Judgment is clearly untimely.

B. SUFFICIENCY OF AFFIDAVIT.

Plaintiff’s affidavit is a mixture of conclusory allegations, legal arguments, hearsay speculations, non sequiteurs, and irrelevant matters. Plaintiff asserts that attorney Harvey Nachman, a former law partner of the undersigned judge, is at present counsel for the undersigned judge. Plaintiff further alleges that: “Attorney William Estrella, representing defendants in the above captioned case, and Attorney Harvey Nachman, have been law partners for many years, and they too enjoy an ongoing professional relationship, jointly litigating cases in the Federal District Court. Attorney William Estrella, Harvey Nachman, and District Judge Héctor Laffitte are so closely connected, that District Judge impartiality might be reasonably questioned.” Plaintiff does not specify or detail the nature, time, conditions, or circumstances of such “connection” between said attorneys and undersigned judge.

Another allegation made by plaintiff asserts: “... but this Judge, that according to the News Media, has been somehow linked to that Agency [F.B.I.], prior to his appointment, ignore plaintiff’s requests to the extent that plaintiff claim to the Inconstitutionality of Section 1782 was completely ignored by this Court... ” Finally, plaintiff asserts that certain findings in the Court’s Opinion and Order in support of the fee award, constitute grounds for recusal. Plaintiff then concludes: “Plaintiff attribute attitude of District Judge to his pro-se status.”

An examination of plaintiff’s affidavit for disqualification shows that it is legally insufficient. It contains conclusory allegations devoid of sufficient facts. It fails to set forth adequate and specific circumstances to support the allegation that the undersigned judge is personally biased or prejudiced, or that the undersigned judge’s impartiality might reasonably and objectively be questioned. In Re United States, 666 F.2d 690 (1st Cir.1981); Brody v. Pres, of Fellows of Harvard College, 664 F.2d 10 (1st Cir.1981); Home Placement Service, Inc. v. Providence Journal Company, 739 F.2d 671 (1st Cir.1984). Thus, a party cannot subjectively say that a judge is prejudiced and thereby, ipso facto, disqualify a judge. Instead, facts must be presented that, assuming their truth, would lead a reasonable person to believe that the judge’s impartiality or fairness may be questioned. U.S. v. Cowden, 545 F.2d 257 (1st Cir.1976); cert. den. 430 U.S. 909, 97 S.Ct. 1181, 51 L.Ed.2d 585; Blizard v. Frechette, 601 F.2d 1217, 1220 (1st Cir.1979).

“... appellant argues that the Judge’s recitation of record support for all of his less-than-complimentary findings of fact demonstrates a subjective, self-justifying approach to the section 455(a) issue where an objective evaluation of the appearance created by his prior words and acts was called for. We disagree. As a finder of fact ..., a trial judge must give his candid evaluation of plaintiff’s case. If a case is weak to the point of frivolousness, it is appropriate to say so. (Emphasis added.) Id., at 1220.

Accordingly, disqualification is not required if an allegation that a judge might not be impartial is only speculative, conclusory, spurious, or vague. Smith v. Pepsico, 434 F.Supp. 524 (S.D.Fla.1977); Mavis v. Commercial Carriers, 408 F.Supp. 55 (C.D.Cal. 1975); Wounded Knee Legal Defense Offense Committee v. F.B.I., 507 F.2d 1281 (1974). In short, when an affidavit of prejudice does not meet the requirements imposed by 28 U.S.C. § 144 or 28 U.S.C. § 455, the Judge has no obligation to disqualify himself. U.S. v. Anderson, 433 F.2d 856 (8th Cir.1970). As a matter of law, the trial judge is equally obligated not to recuse himself when the facts do not give support to a charge of prejudgment. U.S. v. Dioro, 451 F.2d 21 (2nd Cir.1971), cert. den. 405 U.S. 955, 92 S.Ct. 1173, 31 L.Ed.2d 232; U.S. v. Devlin, 284 F.Supp. 477 (1968).

Plaintiff, a disgruntled and pertinacious litigant, seeks a review of the Court’s Opinion and Order filed on July 10, 1984. The foregoing is apparent from plaintiff’s affidavit closing remarks, to wit: “... so the District Court erred in his [sic] remarks against plaintiff in Opinion and Order the 9th of July, 1984.” The short answer to this inarticulate allegation is that the disqualification statutes were never meant to serve as a substitute for reexamination, review, or appeal, where the alleged bias is predicated on adverse ruling or decision in the past or possible expectation that a pending or present matter might be decided adversely. Sperry Rand Corp. v. Pentromix, Inc., 403 F.Supp. 367 (D.C.Pa.1975). It is significant that the motion for disqualification comes on the eve of a hearing to assess attorney’s fees against plaintiff.

The insufficiency of plaintiff’s affidavit as to timeliness, facts, and form mandates denial of the motion to recuse. Plaintiff’s affidavit of judicial prejudice is procedurally incorrect and legally insufficient. Selfridge v. Gynecol, Inc., 564 F.Supp. 57 (D.C.Mass.1983). To borrow the words of Judge Nelson in Selfridge v. Gynecol, Inc., supra, the conduct of plaintiff — a pro se litigant — “manifests an appalling degree of irresponsibility.” During oral argument plaintiff stated that he did not know the nature of the relationship between counsel Nachman and counsel Estrella, even though he asserted under oath that they have been law partners; that he had just read in the June 28, 1984 edition of the newspaper El Mundo, that there was a $50,000 jury award in a prisoner’s case where the complaint was filed by Mr. Nachman and Mr. Estrella; that said case was totally unrelated to this case and tried before another judge of this Court. As to the alleged relationship of this judge, while practicing law, with the F.B.I., plaintiff’s allegations shed no light, are incongruous, vague, and unrelated to this case. The Court feels tempted to impose additional attorney’s fees on plaintiff. However, the Court has noted that plaintiff, a veteran, may not completely comprehend the seriousness of his allegations.

II.

DEFENDANT’S APPLICATION FOR ATTORNEYS’ FEES UNDER THE CIVIL RIGHTS ATTORNEYS FEES ACT.

The Court having previously determined that defendant, as a prevailing party, was entitled to an award of attorneys fees under 42 U.S.C. § 1988, held a hearing on this matter. Defendant submitted the number of documented hours of services rendered in this case, totalling 31.5 hours, which is to be multiplied by a reasonable hourly rate. The Court finds that counsel Estrella’s rate of $60.00 per hour is very reasonable, and as a matter of fact, is below the hourly rate charged in this jurisdiction by other attorneys of equal competence and experience. Accordingly, the Court awards defendants attorney’s fees in the sum of $1,890.00. Hensley v. Eckerhart, 461 U.S. 424, 103 S.Ct. 1933, 76 L.Ed.2d 40 (1983); Blum v. Stenson, 104 S.Ct. 1541 (1984); Lamphere v. Brown University, 610 F.2d 46 (1st Cir.1979).

WHEREFORE, the motion for disqualification is hereby DENIED, and defendants are awarded the sum of $1,890.00 in attorney’s fees.

IT IS SO ORDERED.

APPENDIX

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF PUERTO RICO

GUILLERMINA CORTEZ QUIÑONES and ALBERTO ALMODOVAR MEDINA, Plaintiffs v. CHARLES JIMENEZ NETTLESHIP, et al., Defendants

CIVIL NO. 82-3063 (HL)

OPINION AND ORDER

Following my induction to this Court, the above entitled case was transfered to me. After reviewing said case, I hereby disqualify myself for the following reasons:

Mr. Harvey B. Nachman, counsel for the plaintiff herein, acted as attorney for the undersigned judge in the recently decided case of In Re Rafael Hernández Colon, et al. Misc. No. 80-0052, U.S. District Court of Puerto Rico, a disbarment proceeding against said respondents, wherein Mr. Nachman was sole counsel for the undersigned judge, Petitioner therein. In addition thereto, Mr. Nachman had been a former law partner of the undersigned judge from 1966 to 1969.

The mere fact that the undersigned judge had been law partner of plaintiffs counsel, without more, would have been insufficient to trigger this order. However, the combination of these two factors, creates a question in the mind of the undersigned judge about the propriety of his sitting in Mr. Nachman’s cases in this Court, at least for a certain period of time.

The goal of the judicial disqualification statute is to foster the appearance of impartiality, and any inconvenience that might be caused to my brethren by disqualification thereunder, “is more than outweighed by the need to protect the dignity and integrity of the judicial process.” Potashnick v. Port City Construction Co., 609 F.2d 1101, 1112 (5th Cir.1980). See also, In Re United States, 666 F.2d 690 (1st Cir.1981); Brody v. Pres. & Fellows of Harvard College, 664 F.2d 10 (1st Cir. 1981).

In line with the foregoing, the undersigned judge, although he expressly finds that he has no personal bias or prejudice concerning any party to this litigation, nor has any personal knowledge of disputed evidentiary facts, nor does he have any personal interest in the proceedings herein which would tend to disqualify him, nevertheless finds that because of the combined effect of Mr. Nachman’s former law partner status and counsel to the undersigned judge in a recently ended litigation, this judge’s impartiality might reasonably be questioned by an objective knowledgeable member of the public, as provided by 28 U.S.C. § 455(a). Even though waiver by the parties is permitted under Section 455(a) the undersigned judge shall disqualify himself in Mr. Nachman’s cases before this Court for a period of two years from the date of this judge’s induction. Smith v. Sikorsky Aircraft, 420 F.Supp. 661 (D.C. Calif.1976).

Wherefore, I hereby disqualify myself from this case. The Clerk is hereby instructed to return the case to the assigning judge.

IT IS SO ORDERED.

In San Juan, Puerto Rico, this 21st day of September, 1983.

/s/ Hector M. Laffitte

Hector ,M. Laffitte

U.S. District Judge

      . The statute provides in relevant part:
      "In any action or proceeding to enforce a provision of ... the court, in its discretion, may allow the prevailing party, other than the United States, a reasonable attorney’s fees as part of the costs.”

      . The Court must focus on the legal sufficiency of the affidavit, but cannot consider the truth or falsity of the allegations. Berger v. United States, 255 U.S. 22, 41 S.Ct. 230, 65 L.Ed. 481 (1921); U.S. v. Clark, 605 F.2d 939 (5th Cir. 1979).

      . Mr. Harvey Nachman is not and has not acted as counsel in this case in any manner, as the record of this case shows. The undersigned judge, upon taking office, issued an order disqualifying himself in Mr. Nachman’s cases as per the attached Opinion and Order in Civil case 82-3063 (HL), dated September 2, 1983, which is annexed hereto as an Appendix.

      . A hearing on this Court’s ruling awarding attorneys’ fees to defendant was scheduled for September 4, 1984, exactly seven days prior to the filing of plaintiffs motion to recuse.

      . The recent revision of Rule 11 of the Federal Rules of Civil Procedure emphasizes that an attorney or a pro se litigant must have good grounds, after reasonable inquiry, when filing pleadings with the Court requesting relief. See, Burnett, et al., v. Grattan, — U.S.-, 104 S.Ct. 2924, 82 L.Ed.2d 36 (1984).

      . It has been ruled that: "To hold otherwise would mean that judges would have to recuse themselves in every case in which litigants could point to the single fact of a prior association with a party or his attorney and would set a precedent that would certainly prove troublesome, to say the least, to every member of the Federal Judiciary." Bumpers v. Uniroyal Tire Co., Division of Uniroyal Inc., 385 F.Supp. 711, 714 (D.C.Pa.1974).

      . The federal judicial disqualification statute is 28 U.S.C. § 455. But see also 28 U.S.C. § 144.

      . See W. Clay Jackson Enterprises v. Greyhound Leasing 467 F.Supp. 801 (D.C.P.R.1979).

      . In Re United States, supra.


author: JAMES HARVEY, District Judge.

text:
    Charles SYLLA, Plaintiff, v. MASSEY-FERGUSON INC., Defendant.
    Civ. A. No. 80-CV-30029 PH.
    United States District Court, E.D. Michigan, S.D.
    Sept. 25, 1984.
    Dennis M. Day, Plunkett, Cooney, Rutt, Watters, Stanczyk & Pedersen, Detroit, Mich., for plaintiff.'
    Ronald R. Pawlak, P.C., Birmingham, Mich., for defendant.
   MEMORANDUM OPINION AND ORDER

JAMES HARVEY, District Judge.

Plaintiff brought this action seeking to recover damages from the defendant because a farm tractor purchased from EMC, Inc., a dealer in farm equipment, allegedly did not perform properly. This matter was previously referred to United States Magistrate, Harvey D. Walker as Special Master. Magistrate Walker conducted a hearing on the matter in October, 1982. Upon defendant’s objection to the Magistrate’s recommendation, the Court vacated the recommendation of the Magistrate/Special Master and placed the case on this Court’s docket for further proceedings. The matter is now before the Court on the following motions:

(1) Defendant’s motion for summary judgment;

(2) Defendant’s motion for pre-trial status conference.

The Court will address each of these motions in the order listed above.

I. Defendant’s Motion for Summary Judgment

Defendant contends that summary judgment should be granted pursuant to F.R. Civ.P. 56 because (1) plaintiff has failed to establish that the alleged defect came into existence before it left defendant’s hands; (2) the Michigan statute of limitations for warranty has run; (3) the express warranty given to and accepted by the plaintiff excluded inconsistent implied warranties; (4) the express warranty given to plaintiff specifically excluded consequential damages. Plaintiff in a rather untimely response (see Local Rule 17(g)) maintains that (1) plaintiff did not read any documents regarding a warranty until 6 months after the sale; (2) defendant has waived a statute of limitations defense; and (3) plaintiff’s damages included damage to other property, i.e., his crops. In support of his position, plaintiff maintains that he should be allowed to proceed under a product liability-negligence theory despite this Court’s earlier determination that “under Michigan law, parties suffering direct and consequential economic loss may not proceed against the manufacturer under product liability theories.” In addition, plaintiff characterizes his suit as one including claims based upon “negligence, UCC and common law implied warranty.”

Having reviewed the file in this matter as well as the briefs and supporting case law the Court will address the issues necessary for a determination in this matter, below.

A. Negligence-Product Liability Claim
The Court determined in the February 13, 1984 Memorandum Opinion and Order in this matter that Michigan law comports with the majority rule in not permitting tort actions in cases of pure economic loss. Therefore, the Court concluded that: “under Michigan law, a party suffering direct and consequential economic loss may not proceed against the manufacturer under product liability theories. The Uniform Commercial Code provides the source of a plaintiff’s rights when he suffers pure economic loss.” The Court does not believe this position has been altered by the decision in Auto-Owners Insurance Company v. Chrysler Corporation, 129 Mich.App. 38, 341 N.W.2d 223 (1983). The Court finds Auto-Owners Insurance distinguishable on the basis of the facts present in the instant case, particularly as to the application of the warranty provided by defendant. In addition, the Court finds its prior view on this issue supported by the Michigan Court of Appeals decision in A. C. Hoyle Company v. Sperry Rand Corp., 128 Mich.App. 557, 340 N.W.2d 326 (1983).
Plaintiff’s argument that crop loss constitutes property damage is not persuasive. Any damage to the crops would constitute consequential damage based on the tractor’s alleged malfunction preventing plaintiff from planting the crops. As such, any effect on the crops or crop loss would be economic and consequential because the product did not harm the crops themselves.
Based upon the Court’s findings noted above plaintiff may not proceed on a negligence-product liability theory in this case.
B. UCC Application and the Statute of Limitations
Plaintiff has made claims pursuant to provisions of the Michigan Uniform Commercial Code covering warranties. Defendant has asserted that plaintiff’s UCC claims are barred by the 4-year statute of limitations contained in M.S.A. § 19.2725(2); M.C.L.A. § 440.2725(2). Plaintiff maintains that defendant has waived the statute of limitations defense by failing to assert it in the answer pursuant to FR Civ.P. 8(c).
The Court finds that although defendant should have asserted such a defense in the answer pursuant to Rule 8, the Courts have allowed such a defense at later stages, before trial, either by amendment pursuant to Rule 15 or by motion. See Pierce v. County of Oakland, 652 F.2d 671 (6th Cir.1981); Estes v. Kentucky Utilities Co., 636 F.2d 1131 (6th Cir.1980); Woods v. City of Dayton, Ohio, 574 F.Supp. 689 (S.D.OH 1983). In the instant case, defendant raised this defense in March, 1982, as an amendment to a summary judgment motion and again before Magistrate Walker before the Magistrate held a hearing on the matter. The Magistrate appears to have overlooked the defense and defendant now raises it again in this motion.
The tractor at issue in this matter was delivered on April 24, 1976, with the express warranty provided. The lawsuit was filed on May 20, 1980. Since more than 4 years passed before the case was filed and no exception or tolling period is applicable to the facts in this case, the Court finds the statute of limitations has run and plaintiff has no cause of action pursuant to the UCC. M.S.A. § 19.2725; M.C.L.A. § 440.2725. See also Holdridge v. Heyer-Schulte Corp., 440 F.Supp. 1088 (SD NY 1977); Centennial Insurance v. General Electric, 74 Mich. App. 169, 253 N.W.2d 696 (1977).
C. Common Law Implied Warranty Claim
Plaintiff maintains that he has asserted a claim based upon a theory of common law implied warranty. Although this claim is not readily apparent in plaintiff’s complaint the Court will address the claim assuming that plaintiff has or could properly assert it. Defendant has argued that the express warranty given plaintiff in this case by the dealer, clearly disclaimed any implied warranties.
The UCC specifically provides that an express warranty may exclude any implied warranties. M.S.A. § 19.2316; M.C.L.A. § 440.2316. The statute provides that such a disclaimer or exclusion must be clear and conspicuous. Id. The Court has already established above that the UCC applies to the instant case. In addition, the Court finds that the express warranty provided to the plaintiff by the dealer for defendant on April 24, 1976, clearly and conspicuously excluded all other warranties, express or implied, including any warranties of merchantability and fitness. Plaintiff has admitted under oath that he read and understood the warranty upon signing for and accepting the product. Thus, the Court must conclude that any common law implied warranty claim in this matter is barred by defendant’s warranty disclaimer pursuant to the provisions of the UCC.

The Court does not find it necessary to address each issue raised in defendant’s motion because the issues addressed are determinative. For the reasons stated above, defendant’s motion for summary judgment is GRANTED.

II. Defendant’s Motion for Pre-trial Status Conference

Defendant’s motion for pre-trial status conference has been rendered moot by the Court’s decision to grant summary judgment. Accordingly, defendant’s second motion is DENIED.

III. Conclusion

For the reasons set forth above, the Court rules as follows:

(1) Defendant’s motion for summary judgment is GRANTED;

(2) Defendant’s motion for pre-trial status conference is DENIED as moot.

Accordingly, this case is hereby DISMISSED.

IT IS SO ORDERED.


author: CURTIN, Chief Judge.

text:
    BUFFALO FORGE COMPANY, Ampco-Pittsburgh Corporation, and Ampco-Pittsburgh Securities II Corporation, Plaintiffs, v. OGDEN CORPORATION, David R. Newcomb, Raymond J. Popp, Thomas W. Burke, Edward W. Duffy, John H. Gregory, and Frederick S. Pierce, Defendants.
    No. CIV-81-29C.
    United States District Court, W.D. New York.
    Sept. 25, 1984.
    Paul, Weiss, Rifkind, Wharton & Garrison, New York City (Andrew J. Peck, New York City, of counsel), for plaintiffs.
    Phillips, Lytle, Blaine, Hitchcock & Huber, Buffalo, N.Y. (Charles G. Blaine, and Michael J. Laucello, Buffalo, of counsel), for defendant Frederick S. Pierce.
   CURTIN, Chief Judge.

Frederick S. Pierce, one of the individual directors of Buffalo Forge Company, has now moved for attorneys’ fees. He asserts that as a result of obtaining counsel for his own defense, he has incurred attorneys’ fees of $8,532.47, which he claims should be paid by Buffalo Forge Company pursuant to section 725 of the New York Business Corporation Law. Buffalo Forge opposes, claiming first that the motion is untimely, and second that only state court could have jurisdiction over this request.

Section 725(a) provides:

(a) Notwithstanding the failure of a corporation to provide indemnification, and despite any contrary resolution of the board or of the shareholders in the specific case under section 724 (Payment of indemnification other than by court award), indemnification shall be awarded by a court to the extent authorized under sections 722 (Authorization for indemnification of directors and officers in actions by or in the right of a corporation to procure a judgment in its favor), 723 (Authorization for indemnification of directors and officers in actions or proceedings other than by or in the right of a corporation to procure a judgment in its favor), and paragraph (a) of section 724. Application therefor may be made, in every case, either:
(1) In the civil action or proceeding in which the expenses were incurred or other amounts were paid, or
(2) To the supreme court in a separate proceeding, in which case the application shall set forth the disposition of any previous application made to any court for the same or similar relief and also reasonable cause for the failure to make application for such relief in the action or proceeding in which the expenses were incurred or other amounts were paid.

Section 722(a) of the New York Business Corporation Law provides:

(a) A corporation may indemnify any person, made a party to an action by or in the right of the corporation to procure a judgment in its favor by reason of the fact that he, his testator or intestate, is or was a director or officer of the corporation, against the reasonable expenses, including attorneys’ fees, actually and necessarily incurred by him in connection with the defense of such action, or in connection with an appeal therein, except in relation to matters as to which such director or officer is adjudged to have breached his duty to the corporation under section 717 (Duty of directors) or under paragraph (h) of section 715 (Officers).

Certainly, the statute directs that motions for attorneys’ fees may be brought before the court where the claimed fees were incurred. There is no question that Mr. Pierce incurred the expense of legal representation before this court. Hence, jurisdiction is proper.

Buffalo Forge’s objection to the timeliness is equally insubstantial. Mr. Pierce’s attorney wrote to Buffalo Forge and requested indemnification on February 1, 1982. That request was denied on February 11, 1982. The instant motion for fees was not made until April 27, 1984. During that intervening time, the lawsuit followed a course which proceeded from this court to the United States Court of Appeals for the Second Circuit and finally to the United States Supreme Court. Buffalo Forge Co. v. Ogden Corp., 555 F.Supp. 892 (W.D.N.Y.1983); aff'd, 717 F.2d 757 (2d Cir.1983), cert. denied, — U.S.-, 104 S.Ct. 550, 78 L.Ed.2d 724 (1983). Certiorari was denied on December 29, 1983. Judgment was satisfied on January 11, 1984. Buffalo Forge now claims that because this motion was filed after satisfaction of the judgment, the lack of pendency of the lawsuit destroys any rights Mr. Pierce may have had for indemnification. However, Section 724(a) provides in pertinent part that:

A person who has been wholly successful, on the merits or otherwise, in the defense of a civil or criminal action or proceeding of the character described in section 722 ... shall be entitled to indemnification as authorized [therein].

Clearly, Mr. Pierce was “wholly successful” at the time this motion was filed. Nowhere does the statute require pendency of an action as a basis for an attorneys’ fees motion.

Finally, Buffalo Forge comments that these requested fees “were neither ‘reasonable’ nor ‘necessarily incurred.’ ” (Peck Affidavit, Docket Item 211, p. 3.) Yet, Buffalo Forge refused to address that issue at this juncture. Id.

Mr. Pierce has filed an affidavit explaining his status as both director and major shareholder and explaining his misgivings about the legal representation provided to the directors by Buffalo Forge. It appears that his request is warranted. He has also supported his request with a complete accounting of what appears to be a modest indebtedness in view of the size and complexity of this lawsuit.

Unless Buffalo Forge is anticipating some sort of request for reconsideration, it is curious that discussion of the “merits” has been withheld.

For the reasons discussed, Mr. Pierce’s motion is granted.

So ordered.