author: LYNCH, District Judge.

text:
    Kenneth Vincent NICHOLAS, Petitioner, v. SUPERIOR COURT OF the STATE OF CALIFORNIA FOR the COUNTY OF MARIN; Charles P. Prandi, Marin County Sheriff; Daniel J. McCarthy, Director of the California Department of Corrections; John K. Van de Kamp, Attorney General of the State of California, Respondents.
    No. C-85-1696 EFL.
    United States District Court, N.D. California.
    June 10, 1985.

      Diana Samuelson, Serra, Perelson & Met-calf, San Francisco, Cal., for petitioner.
    Clifford K. Thompson, Jr., Deputy Atty. Gen., San Francisco, Cal., for respondents.
   ORDER DENYING PETITION FOR WRIT OF HABEAS CORPUS

LYNCH, District Judge.

Petitioner Kenneth Vincent Nicholas seeks a federal writ of habeas corpus on the sole ground that the judicially-created defense of entrapment under California state law violates the Due Process Clause of the Fourteenth Amendment. For the reasons discussed below, the petition is denied.

I. Background

On January 14, 1982, petitioner and his co-defendant, Gene Michael Kelly, were found guilty by a jury in Marin County Superior Court of two counts of selling cocaine (Cal.Health & Safety Code § 11852). Petitioner was sentenced to three years in state prison on each count, to be served concurrently. Petitioner and co-defendant jointly appealed their convictions, challenging, among other things, the jury instructions given by the trial court on their entrapment defense. Petitioner was granted bail pending his appeal. On July 16, 1984, the Court of Appeal affirmed the convictions. In a published opinion, the appellate court reviewed all of the appellants’ claims, including their argument that the prosecution was required to prove absence of entrapment beyond a reasonable doubt. People v. Kelley, 158 Cal.App.3d 1085, 205 Cal.Rptr. 283 (1984). Petitioner applied for a hearing in the California Supreme Court, which denied review on October 4, 1984. In his application to the California Supreme Court, the petitioner did not renew his contention that the prosecution must bear the burden of proof on the issue of entrapment.

On November 16, 1984, the trial court granted petitioner’s request for a stay of execution of his sentence, continuing his release' on bail until March 4, 1985. On February 21, 1985, petitioner filed this petition and an application for continuation of release on bail. Since the petition raised a constitutional issue of first impression in the federal courts, the Court granted the petitioner a continuation of his release on bail pending its review of the petition and immediately issued an order to show cause.

II. Procedural Default

Before discussing the merits of petitioner’s claim, the Court must first address the respondents’ argument that the Court has no jurisdiction to hear the claim because of a procedural default at the state level. The respondents contend that the petitioner waived his right to seek federal habeas review of the claim presented here because of his failure to assert this claim in his petition to the California Supreme Court. See Jackson v. Cupp, 693 F.2d 867, 869 (9th Cir.1982). The Ninth Circuit has indicated, however, that where, as here, the claim presented in the habeas petition “has been briefed and argued before the Court of Appeal, failure to assert it in the petition to the California Supreme Court does not normally waive the claim.” Maxwell v. Sumner, 673 F.2d 1031, 1034 n. 1 (9th Cir.1982) (dicta). The court in Maxwell noted that all of the issues raised on direct appeal in a criminal case may not, as a matter of strategy, be included in the petition to the California Supreme Court since the purpose of the petition is merely to persuade that court to hear the case. Once the California Supreme Court grants a hearing, it may consider any issue in the record worthy of its attention. While this interpretation of California appellate procedure is subject to change, the Court is satisfied that the petitioner here exhausted his state remedies without procedural default, thus permitting habeas corpus review.

III. Due Process

The requirement that the prosecution establish beyond a reasonable doubt every element necessary to constitute the crime with which the defendant has been charged is a fundamental principle of due process. An important issue which has not been definitively resolved by the Supreme Court is the extent to which states may alter the burden of persuasion as to some matters of defense. See Patterson v. New York, 432 U.S. 197, 97 S.Ct. 2319, 53 L.Ed.2d 281 (1977); Mullaney v. Wilbur, 421 U.S. 684, 95 S.Ct. 1881, 44 L.Ed.2d 508 (1975); In re Winship, 397 U.S. 358, 90 S.Ct. 1068, 25 L.Ed.2d 368 (1970). Although there are constitutional limits on the power of the states to reallocate burdens of proof by casting certain elements of a crime in the guise of “defenses” to the charge, the Supreme Court explicitly declined to hold in Patterson “that a State must disprove beyond a reasonable doubt every fact constituting any and all affirmative defenses related to the culpability of the accused.” 432 U.S. at 210, 97 S.Ct. at 2327.

While the Patterson, Mullaney, and Winship line of cases leaves open some uncertainty as to the type of exculpatory facts which the defendant may not be burdened with proving, this case does not come close to presenting a situation in which the state forced the defendant to prove an essential element of his offense. California’s entrapment defense is based on an objective test, which unlike the defense of entrapment in federal court, see United States v. Russell, 411 U.S. 423, 93 S.Ct. 1637, 36 L.Ed.2d 366 (1973), focuses on the conduct of the law enforcement officers involved in the case rather than on the intent of the person accused of the crime. People v. Barraza, 23 Cal.3d 675, 153 Cal.Rptr. 459, 591 P.2d 947 (1979). The test of entrapment in California is whether “the conduct of the law enforcement agent [was] likely to induce a normally law abiding person to commit the offense.” Id. at 689-90, 153 Cal.Rptr. 459, 591 P.2d 947. Under this formulation of the meaning of entrapment, the individual characteristics of the defendant or his predisposition to commit the offense are irrelevant. Id. at 688, 153 Cal.Rptr. 459, 591 P.2d 947. As stated by the California Supreme Court in In re Foss, 10 Cal.3d 910, 112 Cal.Rptr. 649, 519 P.2d 1073 (1974), “[t]he successful assertion of the defense does not establish that the defendant lacked the requisite criminal intent and was thus innocent of a criminal offense, but merely that he should not be punished for the crime he in fact committed because of improper police conduct.” Id. at 932, 112 Cal.Rptr. 649, 519 P.2d 1073. Since the prosecution must still prove every element of the offense, including intent, beyond a reasonable doubt, the Court has no difficulty concluding that it is within California’s constitutional powers to place the burden of persuasion as to this issue on the defendant.

ACCORDINGLY, IT IS THEREFORE ORDERED that the petition for a writ of habeas corpus be and hereby is denied. Petitioner’s release on the present conditions of bail is continued until June 24, 1985, so that the petitioner may apply to the Ninth Circuit for bail pending appeal.

      . Defendant urges the Court to consider Maxwell in light of voter approval of Proposition 32, which amended article VI, section 12 of the California Constitution to authorize the Supreme Court to review all or part of a decision of the Court of Appeal. This Court need not consider the impact of this new amendment in the present case since the amendment is not yet in effect and had no bearing on the California Supreme Court’s consideration of Nicholas’ petition.


source: Caselaw Access Project

author: McLAUGHLIN, District Judge.

license: Public Domain

text:
    Vincent LONGO and Rose Longo, Plaintiffs, v. ALLIED VAN LINES, INC., and “John Doe,” as driver, Defendants.
    No. 83 CV 0646.
    United States District Court, E.D. New York.
    June 12, 1985.
    Eugene Litman, New York City, for plaintiffs.
    Gladstein & Isaac, New York City (Michael E. Stern, New York City, of counsel), for defendants.
   MEMORANDUM AND ORDER

McLAUGHLIN, District Judge.

This diversity action for personal injuries, loss of consortium, and property damage was removed to this Court from New York Supreme Court, Kings County. 28 U.S.C. § 1441(a). Plaintiffs, residents of New York, sued defendant, a foreign corporation, and its driver, for injuries suffered in an automobile accident in Gallup, New Mexico, on July 31, 1981.

Defendant Allied Van Lines has now moved for summary judgment, Fed.R. Civ.P. 56, claiming it did not own, operate or control the trailer that collided with plaintiffs’ car. In the alternative, defendant seeks dismissal for plaintiffs’ repetitive failures to comply with discovery orders. Fed.R.Civ.P. 37. Defendant-driver, “John Doe,” has never even been identified, much less served with a summons and complaint. He is not a party to this motion. For the reasons developed below, the motion by Allied Van Lines for summary judgment is granted.

The undisputed material facts are as follows. Plaintiffs were injured on July 31, 1981 when their car, traveling in Gallup, New Mexico, was struck from behind and pushed off the road. A witness to the accident told plaintiffs that the trailer which struck their car bore Texas license plate number 19R 369. Plaintiffs’ Answers to Interrogatories 60(b). A report dated December 17, 1981, from the Texas State Department of Highways and Public Transportation, discloses that from August 25, 1978 to the date of the report, the trailer was registered to Graebel/Lighting Movers, Inc., of Phoenix Arizona. Exhibit D to Affidavit of Michael E. Stern.

Defendant, a Delaware corporation with its principal place of business in Illinois, owns no stock of, and has no affiliation with Graebel/Lighting Movers. Defendant owns no trailers operated by or leased to Graebel/Lighting, and none of defendant’s employees drives for Graebel/Lighting. Exhibit E (Affidavit of Robert J. Henry, Assistant Secretary, Allied Van Lines) to Affidavit of Michael E. Stern.

In opposition to the motion, plaintiffs state only that they “strenuously feel” that defendant was the owner and/or operator of the truck. And, notwithstanding their previous sworn statement that the license plate number was 19R 369, plaintiffs — confronted with the report from the Texas Highway Department — now claim to be unsure of the plate number.

Discussion

Nothing is more fundamental than the rule that the party resisting a properly supported summary judgment motion cannot rely upon bare assertions, or affidavits made upon “information and belief” or an “understanding.” See Fed.R.Civ.P. 56(e); Wyler v. United States, 725 F.2d 156, 160 (2d Cir.1983); Sames v. Gable, 100 F.R.D. 749, 751 (E.D.Pa.1983). A wan hope that an issue of material fact may exist is insufficient to defeat a motion under Rule 56. Quinn v. Syracuse Model Neighborhood Corp., 613 F.2d 438, 444 (2d Cir.1980); Harlee v. Hagen, 538 F.Supp. 389, 393 (E.D.N.Y.1982).

Plaintiffs’ papers in opposition to the motion create no issue as to the ownership of the trailer that struck their car. Their “strenuous belief” that an issue of fact exists is but an act of faith. The undisputed material facts disclose that defendant or its agent did not own, operate or control the trailer. Defendant had no relationship with the record owner of the trailer at the time of the accident — Graebel/Lighting Movers, Inc. — that could support the imposition of liability for the accident. It is obvious that plaintiffs simply sued the wrong party — and waited four years to remedy the defect.

For the foregoing reasons, defendant’s motion for summary judgment is granted. There is thus no need to rule on defendant’s motion to dismiss under Rule 37. The Clerk of the Court is hereby ORDERED to enter judgment for defendant Allied Van Lines and to dismiss plaintiffs’ complaint as to this defendant.

Plaintiffs having failed to serve defendant “John Doe” with a summons and complaint within 120 days of the commencement of this action, it is hereby ORDERED that the complaint is dismissed as to this defendant without prejudice. 4(j)-Fed.R.Civ.P.

SO ORDERED.

      . This absence of evidence in opposition to the motion is hardly surprising. Plaintiffs have consistently failed to comply with discovery orders in this action, forcing defendant to move twice for sanctions or orders compelling discovery. Indeed, were summary judgment not so plainly appropriate here, the Court would be inclined to dismiss the action under Rule 37.


author: WARREN, District Judge.

text:
    Osie COOK, Jr., and Lisa A. Cook, his wife, Plaintiffs, v. INTERNATIONAL HARVESTER COMPANY, a foreign corporation, and Mid-Century Insurance Company, a foreign corporation, Defendants.
    No. 85-C-0609.
    United States District Court, E.D. Wisconsin.
    June 12, 1985.

      Michael F. Hupy, Milwaukee, Wis., for plaintiffs.
    Timothy J. McDermott and Michael D. Flanagan, Whyte & Hirschboeck, S.C., Milwaukee, Wis., for defendants.
   DECISION AND ORDER

WARREN, District Judge.

Presently before the Court in this matter is the principal defendant’s motion for a change of venue to the United States District Court for the Southern District of Indiana, pursuant to 28 U.S.C. § 1404(a). Having carefully considered the legal memoranda and affidavits filed by the parties in support of and in opposition to the present motion, the Court concludes, for the reasons articulated below, that the motion should be granted.

BACKGROUND

This action was initiated on April 2, 1985, when the plaintiffs, both citizens of the State of Wisconsin, filed their complaint in the Wisconsin Circuit Court for Milwaukee County against the principal defendant, International Harvester Company, a foreign corporation with its principal office and place of business in Illinois, and its worker’s compensation insurer, Mid-Century Insurance Company, also a foreign corporation with its principal office and place of business in California. According to the central factual averment of the complaint, plaintiff Osie Cook, Jr., was injured on or about July 26, 1983, in Indiana while using a certain truck and climbing system designed and manufactured by defendant International Harvester Company.

As a result of this accident, this plaintiff purportedly sustained severe and permanent injuries, including past and future medical expenses, a loss of earnings and earning capacity, and pain, suffering, and disability. In addition, his wife, co-plaintiff Lisa A. Cook, has allegedly suffered a loss of society, companionship, and the aid and comfort of her husband as a result of his injuries. By the three, discrete causes of action set forth in their complaint, the plaintiffs charge that defendant International Harvester Company was negligent in failing to safely design the subject truck and climbing system, in failing to adequately test and inspect that equipment to make it safe for its intended and foreseeable use, and in failing to provide users with adequate warning of the dangers attendant upon work with the system. They further allege that, when the truck left the possession of defendant International Harvester Company, it was in such a defective condition as to render it unreasonably dangerous to the ordinary user. It is the plaintiffs’ position that the negligence of the principal defendant and the defects in the truck and climbing system that it designed, manufactured, and sold were a substantial cause of their injuries. Accordingly, by their ad damnum clause, the plaintiffs together seek $3,150,000.00 in compensatory damages, along with the costs and disbursements of prosecuting this case and such other relief as the Court might deem just and equitable.

By its petition of April 18, 1985, defendant International Harvester Company removed this action to the United States District Court for the Eastern District of Wisconsin, based on the Court’s diversity jurisdiction, as established by 28 U.S.C. § 1332(a). As required by 28 U.S.C. § 1446(d), the removing defendant filed with its petition a $250.00 surety bond, effectively guaranteeing payment of “all costs and disbursements incurred by reason of the removal proceedings should it be determined that the case was not removable or was improperly removed.”

Some five days later, on April 23, 1985, International Harvester Company filed its answer to the plaintiffs’ complaint, denying all material allegations incorporated therein and raising some five affirmative defenses — namely, that the complaint fails to state a claim upon which relief can be granted, that the plaintiffs have failed to mitigate their damages, that their injuries were further caused by their own negligence for which the defendant is not responsible, that they are barred from any recovery in this matter based on their assumption of risk with respect to the subject accident, and, significantly, that this lawsuit is not properly venued in the Eastern District of Wisconsin. Based on these general denials and affirmative defenses, the defendant seeks dismissal of this action with prejudice, in addition to its costs and expenses and such other relief as the Court might deem appropriate.

By its present motion, defendant International Harvester Company, as indicated above, seeks a change of venue to the United States District Court for the Southern District of Indiana, pursuant to 28 U.S.C. § 1404(a). Invoking the relevant standards to be applied by federal trial judges in assessing the merits of transfer requests such as this, the movant contends that the convenience of the parties and relevant witnesses and the paramount interests of justice warrant a change of venue for all further proceedings. The defendant neatly summarizes its position as follows:

The accident precipitating this action occurred in or near Attica, Fountain County, Indiana. The vehicle in question was manufactured at an International Harvester plant located in Fort Wayne, Indiana. Many of International Harvester’s engineers are employed at International Harvester’s offices in Fort Wayne, Indiana, including engineers that International Harvester may be required to call at trial to testify regarding the design of the truck in question. In addition, many of the transactional witnesses, such as police officers, accident witnesses, treating medical personnel or other individuals who may have witnessed or investigated the accident in question, in all likelihood reside in Indiana.

Defendants’ Memorandum in Support of Motion for Change of Venue at 2 (May 3, 1985). Perhaps parenthetically, the movant also suggests that the significant legal issues raised by this lawsuit might be resolved with greater facility by an Indiana federal court, arguably obliged to resolve the parties’ claims under Indiana law; that the prosecution and defense of this matter in Indiana would promote the availability of compulsory process for the attendance of unwilling witnesses and decrease the appearance costs of potential willing witnesses; and that the prospect of a jury view of the accident site would be made more realistic if the trial were conducted in the Southern District of Indiana.

Predictably, the plaintiffs oppose the present motion for a change of venue. Noting, as a threshold matter, that there is no legal impediment to venue in this district under the requirements set forth in 28 U.S.C. § 1391(a), the plaintiffs contend that the proposed transfer would not only substantially increase their inconvenience in prosecuting this case but would, moreover, place a considerable burden upon those lay and expert witnesses they will likely call to testify as to the personal impact of the subject accident and the scope and nature of the medical treatments necessitated thereby. In this context, it is the plaintiffs’ position that the movant has failed to demonstrate any inconvenience to its own witnesses if this matter is permitted to proceed to trial in this district.

The plaintiffs also dispute the movant’s contention that the interests of justice necessitate transfer: Citing those factors typically invoked by the federal trial courts in determining whether justice mandates a change of venue, the plaintiffs argue that, as the parties petitioning for relief, their choice of forum deserves paramount consideration; that the ease of access to relevant sources of proof — including the attendance of all witnesses — would not be promoted but would, in fact, be jeopardized by the proposed transfer; and that nothing about the trial in this matter, including its practical administration and the prospect for a view of the tractor itself, suggests that the trial in this matter would be expedited in the Southern District of Indiana. Finally, the plaintiffs identify nothing in the record to indicate that Indiana and not Wisconsin law would prove dispositive of the resolution of the parties’ respective claims. Accordingly, the plaintiffs request that the pending motion be denied and the lawsuit be permitted to proceed as presently venued.

28 U.S.C. § 1404(a) AND THE DEFENDANT’S MOTION FOR A CHANGE OF VENUE

As both parties to this action recognize, § 1404(a) of Title 28 of the United States Code empowers the trial judge to “transfer any civil action to any other district or division where it might have been brought ... [f]or the convenience of parties and witnesses, in the interest of justice____” The statute is properly invoked to prevent a waste of time, money, and energy in the prosecution and defense of civil actions and to protect litigants, witnesses, and the public in general against unnecessary inconvenience and expense. Monihen v. Oliver Machinery Company, 502 F.Supp. 36, 37-38 (E.D.Pa.1980); Carter v. Houston Chronicle Publishing Company, 514 F.Supp. 12, 15 (W.D.Okla. 1980).

In resolving a motion such as the present, the trial judge is vested with broad discretion to weigh all relevant factors in determining if, on balance, the action would proceed more expeditiously and the ends of justice would be better served if transfer were effected. Kline v. Consolidated Rail Corporation, 461 F.Supp. 326, 327 (E.D.Pa.1978); Harley-Davidson Motor Company v. Strada, 78 F.R.D. 521, 526 (E.D.Wis.1978). . Although § 1404(a) incorporates only three factors to be considered in determining whether to grant or deny a motion to transfer — namely, the convenience of the parties, the convenience of the witnesses, and the interests of justice — the trial judge is not limited to those rather broad generalities but may consider other factors subsumed by the broad purposes of the statute — among them, the ease of access to sources of proof, the availability of compulsory process to compel the attendance of unwilling witnesses, the amount of expense attendant upon the production of willing witnesses, the relative congestion of calendars of the potential transferee and transferor courts, and other practical aspects of expeditiously and conveniently conducting the trial. Securities & Exchange Commission v. Page Airways, Inc., 464 F.Supp. 461, 463 (D.D.C.1978); Car-Freshner Corporation v. Auto Aid Manufacturing Corporation, 438 F.Supp. 82, 85 (N.D.N.Y.1977).

Although, as a general rule, the plaintiff’s choice of forum is favored in resolving disputes under § 1404(a), Ginsey Industries, Inc. v. I.T.K. Plastics, Inc., 545 F.Supp. 78, 80 (E.D.Pa.1982); Burbank International, Ltd. v. Gulf Consolidated In temational, Inc., 441 F.Supp. 819, 822 (N.D.Tex.1977), it is no longer accorded the overriding consideration it may have once enjoyed under the former doctrine of forum non conveniens. Y Design, Ltd. v. Regensteiner Publishing Enterprises, Inc., 428 F.Supp. 1067, 1070 (S.D.N.Y.1977); Herman v. Doug Frank Development Corporation, 385 F.Supp. 767, 769 (S.D.N.Y.1974). Indeed, the trial judge may justifiably find the effect of the plaintiff’s choice to be outweighed by other, more compelling considerations, including convenience. Moore v. Telfon Communications Corporation, 589 F.2d 959, 968 (9th Cir.1978); Monaco v. G.D. Searle & Company, 506 F.Supp. 695, 696 (N.D.Ill. 1979).

Applying these general standards to the circumstances of the present action, the Court notes at the outset that the question presented is a close one. As plaintiffs’ counsel states in his affidavit of May 15, 1985, both plaintiffs reside in Langlade County, Wisconsin, and the witnesses likely to be called to testify with respect to plaintiff Osie Cook, Jr.’s pain, suffering, and disability are likewise residents of the State of Wisconsin. In addition, counsel indicates that the principal medical testimony presented at trial will be that of physicians practicing within the state. With respect to these considerations, then, there is little doubt that transfer of this matter to the Southern District of Indiana may pose some inconvenience to the plaintiffs and their several witnesses.

At the same time, the Court opines that the plaintiff’s choice of forum in this matter is properly overridden based on the considerable interests and contacts identified within the Southern District of Indiana. This Court’s recent experience with personal injury and products liability actions such as this has convinced it of the wisdom of trying these matters, when possible, in close proximity to the point of manufacture and sale of the product, the situs of the subject accident, and, perhaps most significantly, the residence of the critical design engineers. In the present case, these three touchstones signal the propriety of transfer to the Southern District of Indiana.

While the plaintiffs’ companion confirmations of no accident eyewitnesses and no medical treatment in the State of Indiana are plainly subject to some consideration, the Court is unprepared, at this pre-discovery stage of the proceedings, to determine conclusively that no additional relevant contacts or interests in Southern Indiana will not be identified prior to the time of trial. In this context, the Court is also of the view that the record compiled to date is not sufficiently clear to establish that a jury view of the scene — as opposed to the vehicle alone — might not significantly aid the trier of fact in reaching a verdict. Likewise, the Court finds persuasive the prospect that the trial judge might well be compelled to invoke Indiana law in resolving the purely legal issues presented in this lawsuit; in this undertaking, the federal trial judges sitting in Indiana are surely more familiar with the procedural and substantive aspects of the state laws of that jurisdiction. In the end, the Court is convinced, if only narrowly, that the balance of party and witness convenience and the paramount interests of justice do, indeed, augur in favor of transfer of this action to the Southern District of Indiana.

Of course, as the movant accurately notes in its supporting memorandum, a fundamental requirement to transfer under § 1404(a) is a finding that the plaintiff had the unqualified right to bring the action in the transferee court at the time the lawsuit was commenced. Bashir v. United States Attorney General, 508 F.Supp. 1108, 1109 (E.D.Va.1981); Pierce v. Atlas Powder Company, 430 F.Supp. 79, 81 (D.Del.1977). In addressing this critical issue for present purposes, the Court invokes the relevant portion of the federal venue statute, 28 U.S.C. § 1391(a), which reads as follows:

A civil action wherein jurisdiction is founded only on diversity of citizenship may, except as otherwise provided by law, be brought only in the judicial district where all plaintiffs or all defendants reside, or in which the claim arose.

Under this statute, it is generally held that a claim is deemed to have arisen in that judicial district where the relevant contacts are most significant or, stated differently, where a substantial part of the events or omissions giving rise to the cause of action occurred. United States Fidelity & Guaranty Company v. Alexander, 463 F.Supp. 687, 690 (S.D.Ga.1979); Oce-Industries, Inc. v. Coleman, 487 F.Supp. 548, 552 (N.D.Ill.1980). More specifically, the place where injury from some tortious conduct is suffered is typically deemed to be the place where the claim arose for purposes of § 1391(a). Aluminal Industries, Inc. v. Newtown Commercial Associates, 89 F.R.D. 326, 330 (S.D.N.Y.1980); Harder v. Dembinski, 498 F.Supp. 1323, 1324 (N.D.Ill.1980).

Although there is no dispute that this action is properly venued for § 1391(a) purposes in this forum, it is equally clear that the action might have been initiated in the United States District Court for the Southern District of Indiana, where the truck accident occurred and the consequent injuries were apparently suffered. The Court’s finding as to the propriety of venue in that forum thus removes the final hurdle to the transfer of this case to the Southern District of Indiana for all further proceedings.

CONCLUSION

For the reasons stated above, the Court hereby GRANTS the motion of defendant International Harvester Company to transfer this action in its entirety to the United States District Court for the Southern District of Indiana, pursuant to 28 U.S.C. § 1404(a).


author: La PLATA, District Judge.

text:
    Loretta JOHNSON, on Behalf of Dennis BRYANT, Plaintiff v. SECRETARY OF HEALTH AND HUMAN SERVICES, Defendant
    No. 84-CV-4053-DT.
    United States District Court, E.D. Michigan, S.D.
    June 12, 1985.

      Jack A. Nolish, Southfield, Mich., for plaintiff.
    Ronald W. Rice, Detroit, Mich., for defendant.
   OPINION AND ORDER DENYING PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT AND DISMISSING PLAINTIFF’S COMPLAINT

La PLATA, District Judge.

On October 4, 1982, Plaintiff, Loretta Johnson, filed a Complaint in this Court, under 42 U.S.C. § 405(a), seeking review of a final decision of Defendant, Secretary of Health and Human Services, which denied Plaintiff’s application for child’s insurance benefits under the Social Security Act. The Administrative Law Judge (AU) held that the claimant, Dennis Bryant, a posthumous, illegitimate child, was not entitled to social security benefits. On July 81, 1984, the Appeals Council affirmed the decision of AU.

At the administrative hearing, held on September 15, 1983, Plaintiff testified that the claimant was born on August 30, 1971, seven months after the death of the wage earner and putative father, Dennis Hicks. Plaintiff claimed that Hicks was responsible for her pregnancy. She also testified that when she and Hicks discovered that she was pregnant, they planned to marry sometime before the child’s anticipated birthdate.

Prior to and after Johnson’s pregnancy was discovered, Hicks transported her to and from high school and visited her at her parents’ home, both on a daily basis. On January 25, 1971, more than seven months before the claimant was born, Hicks was fatally shot in Hamtramck, Michigan. No evidence was presented that Hicks provided any support to Johnson or the claimant.

The AU specifically found that Hicks was the biological father of the child. Nevertheless, he held that the claimant was not entitled to child’s survivors benefits, since the evidence failed to establish the second of the two-prong test for an illegitimate child.

The issue before the AU was whether the claimant was a “child” of the deceased wage earner so as to be entitled to child’s survivor benefits under 42 U.S.C. § 402(d)(1). Pursuant to 42 U.S.C. § 402(d)(l)(C)(ii), a child of an insured deceased individual is entitled to child’s insurance benefits if the child was dependent upon the insured at the time of the latter’s death. While a legitimate child is presumed to be dependent upon his natural parents, an illegitimate child must satisfy one or more additional qualifying provisions in 42 U.S.C. § 402(d)(3) and 416(h).

An illegitimate child shall be deemed to be the legitimate child of an insured under the Social Security Act if the insured had either (1) acknowledged paternity of the child in writing; (2) been decreed by a court to be the father of the child; or (3) been ordered by a court to contribute to the child’s support. Additionally, one may be deemed to be the child of a deceased insured individual under the following circumstances:

“Such insured individual is shown by evidence satisfactory to the Secretary to have been the father of the applicant, and such insured individual was living with or contributing to the support of the applicant at the time such insured individual died.” 42 U.S.C. § 416(h)(3)(C)(ii).

In his findings of fact, the AU determined that the first tier of the foregoing standard was satisfied, as substantial evidence was adduced showing Hicks to be the biological father of the claimant. On the basis that the decedent neither lived with the Plaintiff nor contributed to the support of either the Plaintiff or the claimant prior to his death, the AU denied the application for child’s insurance benefits.

In reviewing a decision of an administrative law judge and The Appeals Council, this Court is bound by the findings of fact as long as they are supported by substantial evidence. Rose v. Cohen, 406 F.2d 753, 755 (6th Cir.1969). If the final decision of the agency is supported by substantial evidence, it must be affirmed even where evidence exists in the record that may have supported a finding in favor of the claimant. Stillwell v. Cohen, 411 F.2d 574, 575-576 (5th Cir.1969).

On appeal to this Court, Plaintiff maintained that the AU did not base his decision on substantial evidence and failed to apply the correct standards in determining whether the claimant was entitled to insurance benefits. On January 14, 1985, Plaintiff filed a Motion for Summary Judgment, under Fed.R.Civ.P. 56, claiming that the following particulars require a reversal of the Secretary’s denial of benefits: (1) the decedent intended to marry her at a date preceding the claimant’s birth; (2) prior to his death, the decedent visited Plaintiff on a daily basis; and (3) the decedent’s contributions to the unborn child were commensurate with the child’s needs.

A case primarily relied upon by Plaintiff, Adams v. Weinberger, 521 F.2d 656 (2nd Cir.1975), revolved around whether a posthumous, illegitimate child was entitled to child’s survivors benefits. There, the insured wage earner, Peter McGinn, who was married and the father of four children, entered into a “close personal relationship” with Rossini Adams, during which the two parties shared an apartment. When Adams became pregnant, the wage earner contributed an amount estimated to be $300.00 over a seven month period. He also provided her with a $100.00 registration fee for a hospital room. McGinn was murdered eight days before the claimant was born.

In determining that the claimant was entitled to benefits, the Adams Court held that the child’s father contributed a maximum amount of support in view of his financial posture. Adams at 660-661. The Court considered a relevant test of the support requirement to be an inquiry into whether the support by a father for an unborn child was equivalent with the needs of that child at the time of the father’s death:

An unborn child is totally dependent upon its mother for its human needs. Thus, a legal requirement that the father’s support of the unborn child must be “regular” and “continuous” is purposeless. Support for an unborn child cannot be measured on that basis. Such a test would prevent almost all posthumous children from qualifying under 42 U.S.C. § 416(h)(3)(C)(ii), a result clearly not warranted, given the purposes of the insurance provisions of the SSA. Applying the “regular” and “continuous” test to the measure of support given Ms. Adams is improper since the dependency of the mother is not at issue.
In determining whether or not the insured, wage earning father was contributing to the support of the illegitimate, posthumous child applicant at the time of the father’s death, a more relevant test is called for. We must ask whether the support by the father for the unborn child was commensurate with the needs of the unborn child at the time of the father’s death. If it was, then the statutory requirements have been met. Adams at 659-660.

In Boyland v. Califano, 633 F.2d 430 (6th Cir.1980), the mother of the minor claimants filed an action in District Court for review of a final administrative decision that the children were not entitled to surviving children’s benefits under the Social Security Act. The wage earner died in 1965, when the two minor claimants were one and six years of age. On numerous instances, he gave five to ten dollars to each of the claimants or to others on their behalf, purchased clothing and presents for them, and permitted them to stay at his home for weeks at a time. Remanding the case for an award of insurance benefits, the Boyland Court held that the contributions made by the decedent fulfilled the requirements of the governing statute:

The lack-of economic well-being or regular income does not eliminate the statutory requirement of “contribution.” However, where the resources of the wage earner are scarce and the contributions to his children important to them, the statutory requirements can be satisfied. We emphasize that the periodic contributions were made to the wage earner’s own children albeit born out of wedlock. The children should not be denied benefits because the wage earner could only afford small irregular payments. Boyland at 634.

The Sixth Circuit Court of Appeals in Kohut v. Secretary of Health, Education, and Welfare, 664 F.2d 120 (6th Cir.1981), affirmed the denial of benefits to an illegitimate minor child of an insured wage earner. There, the Court held that the evidence adduced at the administrative hearing failed to establish that the decedent contributed to the minor’s support. Additionally, the decedent neither lived with the child nor the child’s mother.

In the matter at bar, the decedent, despite holding a part-time employment position, did not contribute any support to his unborn child. While the decedent only was aware of the impending birth for a limited period of time, estimated to be less than one month, he did not contribute any support during that period, such as providing Ms. Johnson with money for medical bills or for the unborn child’s needs. Furthermore, he did not set aside funds for the anticipated hospitalization costs.

Since this case, like Adams, supra, involves a posthumous, illegitimate child, child’s survivors benefits are awardable, under Section 416(h)(3)(A)(ii), only when the insured is shown to be the father, and was contributing to the support, of the claimant. This Court affirms the Secretary’s denial of benefits, on the basis that Plaintiff failed to establish that the decedent contributed any support to either the mother or the unborn child in connection with the pregnancy. This ease may be distinguished from Adams, supra, for the wage earner therein made nominal contributions of support and paid for a hospitalization fee. Although Hicks may have intended to marry Plaintiff and support the claimant, his unfulfilled intentions do not give rise to actual support of the claimant. See Norton v. Richardson, 352 F.Supp. 596, 600 (D.Md.1972).

Had Congress intended for a posthumous, illegitimate child to receive child’s survivors benefits solely premised on proof that the decedent was the father, it either would (1) not have required proof that the insured wage earner had contributed support for the unborn child or (2) have prescribed in a separate clause that such a child only needs to prove that the decedent was the biological father. In reaching its conclusion, this Court specifically declines to follow the reasoning and holding of Morgan v. Schweiker, 558 F.Supp. 331 (S.D.Ohio 1983).

WHEREFORE, this Court affirms the holding of the Administrative Law Judge and the Appeals Council. IT IS HEREBY ORDERED that Plaintiff’s Motion for Summary Judgment be DENIED and that Plaintiff’s Complaint be DISMISSED.

So Ordered.


author: SHADUR, District Judge.

text:
    Averie Stromberg LEVAL, Plaintiff, v. PRUDENTIAL HEALTH CARE PLAN, INC., et al., Defendants.
    No. 85 C 3378.
    United States District Court, N.D. Illinois, E.D.
    June 12, 1985.

      Richard C. Smilgoff, Chicago, Ill., for plaintiff.
    James B. Davidson, Peterson, Ross, Schloerb & Seidel, Chicago, Ill., for defendants.
   MEMORANDUM OPINION AND ORDER

SHADUR, District Judge.

Averie Stromberg Leval (“Leval”) sued Prudential Health Care Plan, Inc. (“PruCare”) and The Prudential Insurance Company of America (“Prudential”) in the Circuit Court of Cook County, charging violation of Leval’s privacy rights and breach of contract. Defendants removed the action to this District Court on diversity-of-citizenship grounds and have now filed two motions:

1. Prudential moves for dismissal.
2. PruCare seeks summary judgment under Fed.R.Civ.P. 56.

For the reasons stated in this memorandum opinion and order, this Court sua sponte remands the action to the state court for want of subject matter jurisdiction.

Facts

PruCare, a wholly-owned subsidiary of Prudential, is engaged in the health care services business in this area (Complaint UK 1-2). Leval is a former employee of PruCare (Complaint jj 3) whose photograph was used without her knowledge or consent on an advertising promotional poster displayed in PruCare’s Lincoln Park Health Center (Complaint ([ 9). Leval complained, and PruCare agreed to Leval’s demand not to use her photo or likeness again without her prior permission and consent (Complaint uu 10-11).

Despite that promise PruCare published a promotional booklet (Complaint Ex. 1), on the back cover of which a postage-stamp-size photograph (lVis inches X 1 inch) including Leval was reproduced. In the photo Leval (in a white uniform) and a child (obviously an outpatient) are shown in an office, in the course of what appears to be taking an x-ray of the child’s arm.

Though the child’s face is visible in the photograph (despite its tiny size), because Leval is leaning forward toward the camera with her head bent down, all that is really visible as a means of “identification” —even in miniature — is her hairstyle. Even under a magnifying glass, so little of her face is discernible as to defy any real identification of the person as Leval (except perhaps by someone who already knows she is in the photograph).

Lack of Subject Matter Jurisdiction

Leval’s state court complaint asks for compensatory and punitive damages “in a sum in excess of this Court’s minimum jurisdictional amount” — apparently a reference to the $15,000 required to avoid hearing in the Circuit Court’s Municipal Department (Circuit Court of Cook County General Order 2.2(b)). Ordinarily such a statement of the amount in controversy, if asserted in good faith by a plaintiff, is not open to challenge. St. Paul Mercury Indemnity Co. v. Red Cab Co., 303 U.S. 283, 288, 58 S.Ct. 586, 590, 82 L.Ed. 845 (1938) still states that controlling rule as to jurisdictional amount:

The rule governing dismissal for want of jurisdiction in cases brought in the federal court is that, unless the law gives a different rule, the sum claimed by the plaintiff controls if the claim is apparently made in good faith.
It must appear to a legal certainty that the claim is really for less than the jurisdictional amount to justify dismissal.

In Jeffries v. Silvercup Bakers, Inc., 434 F.2d 310, 312 (7th Cir.1970) our Court of Appeals stated a slight variant:

t is sufficient if there is a probability that the value of the matter in controversy exceeds the jurisdictional amount.

But what the Prudential and PruCare motions demonstrate is Leval’s total inability to surmount even that low threshold. Only brief discussion is needed to show that conclusion is compelled by Le-val’s own allegations.

Prudential’s motion states with total accuracy the Complaint says nothing about that corporation except that it is PruCare’s parent. No allegations required for piercing the corporate veil (Van Dorn Co. v. Future Chemical and Oil Corp., 753 F.2d 565, 569-70 (7th Cir.1985)) or any other predicates for Prudential’s claimed liability are even hinted at. Though that could well lead to Prudential’s dismissal under Rule 12(b)(6), for present purposes it clearly shows the absence of the required amount in controversy as to Prudential.

As for PruCare, its summary judgment motion points to uniform (and understandable) case law in the right-of-privacy field, teaching a plaintiff cannot recover for a defendant’s commercial use of a photograph that lacks a clear and identifiable likeness of the plaintiff recognizable from the photograph itself. Branson v. Fawcett Publications, Inc., 124 F.Supp. 429 (E.D.Ill.1954) (applying Illinois law); Rawls v. Conde Nast Publications, Inc., 446 F.2d 313, 318 (5th Cir.1971) (citing Branson among other cases); Negri v. Sobering Corp., 333 F.Supp. 101, 103 (S.D.N.Y.1971). It is true PruCare’s motion ignores — in a way that would be fatal to summary judgment in its favor — the alternative breach-of-contract basis advanced by Leval. But on that score the nonrecoverability of punitive damages for a contract claim, plus the clear insupportability of any' conceivable compensatory damages (other than perhaps a nominal amount) for the contract breach, cement the conclusion $10,000 cannot be at stake.

Our Court of Appeals has dealt with a comparable jurisdictional question in Ross v. Inter-Ocean Insurance Co., 693 F.2d 659 (7th Cir.1982). It held that even after a judgment on the merits the removed case had to be remanded. Much of what the Court said in Ross could have been written for this case (id. at 662-63):

We conclude that when it removed this case the defendant knew with about as close an approach to certainty as one finds in these matters that the plaintiff could not prove damages, including attorney’s fees, in excess of $10,000, as required by the diversity statute____ Just as a plaintiff may not invoke the diversity jurisdiction unless he believes in good faith that the amount in controversy exceeds $10,000, so a defendant in a state court action may not remove the action to federal court unless he believes in good faith that the amount in controversy exceeds $10,000. Ordinarily a defendant can rely on the ad damnum in the complaint. But this is not an ordinary ease.
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We emphasize that mere suspicion on the part of the defendant that the plaintiff could not prove a vexatious and unreasonable refusal to pay would not be enough to defeat removal. If there is a reasonable possibility that the plaintiff can recover more than $10,000 on his claim, the jurisdictional minimum is satisfied; otherwise every case that a defendant won on the merits would be dismissed on jurisdictional grounds, allowing the plaintiff to start over in state court. Hixon v. Sherwin-Williams Co., 671 F.2d 1005, 1007 (7th Cir.1982). But where it is obvious to the defendant that even if the plaintiff can establish liability he cannot obtain a judgment for more than $10,000, exclusive of interests and costs, then the defendant cannot remove the case; and if it is obvious to the district court or the court of appeals that the defendant knew from the outset that the jurisdictional minimum was not present, the case must be remanded.

No subject matter jurisdiction exists in this District Court. In' statutory terms “it appears that the case was removed improvidently and without jurisdiction” (28 U.S.C. § 1447(c)), and this action is remanded to the Circuit Court of Cook County.

      . Leval's Complaint (the "Complaint”) does not label her claims in that or any other fashion, instead simply (and properly) limiting its allegations to facts. This opinion’s categorization of the claims is based on the Complaint’s factual allegations.

      . This recital is drawn from the Complaint. Naturally it implies no findings of fact.

      . Of course magnification, as with every halftone, enlarges the dots and spaces that make up the photograph so much as to cut down on definition, thus rendering identification even more difficult.

      . When PruCare’s motion was presented on the motion call and this Court indicated the likelihood of remand, PruCare’s counsel questioned the consideration for the promise sued upon. Under Hishon v. King & Spalding, — U.S.-, 104 S.Ct. 2229, 2233, 81 L.Ed.2d 59 (1984) this Court is constrained to uphold a complaint if any set of facts consistent with its allegations would state a cause of action. Certainly Leval’s refraining from suit on the first unauthorized publication could reasonably be inferred from the Complaint and would be consideration for PruCare’s promise not to do it again.


text:
    Robert S. BLOCK, Plaintiff, v. Marvin L. FISHMAN, Defendant.
    No. 85-C-0186.
    United States District Court, E.D. Wisconsin.
    June 13, 1985.

      Paula Minniear, Milwaukee, Wis., for plaintiff.
    John A. Busch, Milwaukee, Wis., for defendant.
   MEMORANDUM AND ORDER

WARREN, District Judge.

This action was initiated on February 6, 1985, when the plaintiff, an adult resident of the State of California, filed his complaint against the defendant, an adult resident of the State of Wisconsin, seeking compensatory damages in the amount of $32,600.00 and punitive damages in the amount of $1,000,000.00, in addition to those costs and disbursements incurred in the prosecution of this matter. The central, factual averment of the complaint is that the plaintiff, as an officer, director, and principal shareholder of a corporation now known as SelecTY of Wisconsin, Inc., caused that corporation to issue and deliver to the defendant a promissory note in the principal sum of $15,000.00, acting under the mistaken belief that certain loans and advances in that amount from the corporation had not been duly evidenced by some written obligation. In fact, according to the charges of the complaint, the corporation had previously issued and delivered to the defendant a promissory note, evidencing its indebtedness in the amount of some $15,272.06.

Upon his subsequent sale of all interest in the corporation, the plaintiff apparently warranted and represented to the purchasers the total amount of corporate indebtedness and, in this undertaking, agreed to indemnify them against any loss they might suffer in reliance upon his representations. Thereafter, the defendant, allegedly with full knowledge that both the initial and subsequent promissory notes had been issued to evidence the same indebtedness, presented those notes to the corporation for payment of some $30,272.06 in principal and $35,569.00 in interest. Significantly, the plaintiff charges that “as a result of the presentation for payment by Defendant of both the First Note and Second Note, the Defendant collected from the corporation twice the amount actually due and owing to him.” Plaintiff’s Complaint at 4 (February 6, 1985).

In turn, the plaintiff purportedly indemnified the corporation in the total amount of the second note, all as a result of which the defendant was unjustly enriched in the amount of $32,600,00, or so the plaintiff claims. The complaint further charges that, despite the plaintiff’s demands for reimbursement, the defendant has refused and neglected to pay the amount he received pursuant to the supplemental promissory note. Among other things, the plaintiff alleges that, as subrogee and assignee of the corporation’s claims for reimbursement, he has been harmed directly by the defendant’s fraud and false representations upon presentment of the second note.

On March 22, 1985, the defendant filed his answer to the plaintiff’s complaint, denying all material allegations incorporated therein and alleging affirmatively that the action “in whole or part is frivolous.” Defendant’s Answer at 3 (March 22, 1985). Accordingly, the defendant seeks judgment against the plaintiff dismissing the complaint, together with his costs and attorney’s fees incurred in the defense of this matter.

Nearly eight weeks later, on May 13, 1985, the plaintiff, pursuant to Rule 38(b) of the Federal Rules of Civil Procedure, filed a notice of demand for a jury trial. Three days later, on May 16, 1985, the defendant filed the present motion to strike as untimely the plaintiff’s jury demand, pursuant to Rules 12 and 38 of the Federal Rules of Civil Procedure. Although the plaintiff has been afforded the requisite fourteen-day period in which to file any responsive memorandum, pursuant to Local Rule 6.01, he has failed to date to notice any opposition to the defendant’s pending motion. Accordingly, the Court today resolves this matter based solely on the record compiled to date and its own understanding and application of the relevant law to the circumstances of this lawsuit.

As both parties to this action surely recognize, Rule 38(b) plainly establishes the right of any party to “demand a trial by jury of any issue triable of right by a jury by serving upon the other parties a demand therefor in writing at any time after the commencement of the action and not later than 10 days after the service of the last pleading directed to such issue____” Significantly, a party’s failure to serve a timely jury demand constitutes a waiver of trial by jury under Rule 38(d) of the Federal Rules of Civil Procedure. The preclusive effect of this provision is well-recognized by the federal courts. See Scharnhorst v. Independent School District # 710, 686 F.2d 637, 641 (8th Cir.1982), cert. denied, 462 U.S. 1109, 103 S.Ct. 2459, 77 L.Ed.2d 1337 (1983) (holding that a failure to make a timely demand through inadvertence, although unintended and regardless of the explanation or excuse, amounts to waiver); Vesper Construction Company v. Rain for Rent, Inc., 602 F.2d 238, 241 (10th Cir.1979) (concluding that the defendant’s “failure to file a timely jury demand pursuant to [Rule] 38(b) constituted a waiver of its right to jury trial”).

The record in the present case demonstrates clearly that the last pleading for purposes of computation under Rule 38(b) —that is, the defendant’s answer — was filed on March 21, 1985; thus, in order to effect a timely demand for trial by jury, the plaintiff had to have filed his notice no later than early April of 1985, ten days after service of the defendant’s answer. His failure to do so until May 13, 1985, plainly constitutes a waiver under Rule 38(d) and might properly justify an order to strike.

At the same time, Rule 39(b) of the Federal Rules of Civil Procedure empowers the trial judge to exercise his or her discretion by ordering a trial by jury on all issues “notwithstanding the failure of a party to demand a jury in an action in which such demand might have been made of right.” It is generally held that, in the exercise of this discretion, the district court is obliged not to act arbitrarily or capriciously. Todd v. Lutz, 64 F.R.D. 150, 152 (W.D.Pa.1974); Krussman v. Omaha Woodmen Life Insurance Society, 2 F.R.D. 3, 4 (D.Idaho 1941). Instead, the decision to grant a jury trial is appropriate in the absence of some strong or compelling reason to the contrary. Cascone v. Ortho Pharmaceutical Corporation, 94 F.R.D. 333, 339 (S.D.N.Y.1982), affd, 702 F.2d 389 (2d Cir.1983); Davis v. Elkins, 69 F.R.D. 705, 706 (E.D.Tenn.1975).

Despite this liberality in favor of granting requests for jury trials, all relevant authority is clear that the burden of proving the propriety of a discretionary exercise in favor of granting a jury trial rests entirely with the demanding party. Jabco, Inc. v. Bob Smith Construction, 556 F.Supp. 27, 29 (E.D.Tenn.1981); Previn v. Bareli, 14 F.R.D. 466, 468 (E.D.N.Y.1953). In fact, where a timely demand for a jury trial has not been interposed, the Court may not order a trial by jury on its own initiative but must, instead, await a proper motion setting forth the specific grounds upon which the moving party’s filing failure might reasonably be excused. United States v. Perkins, 71 F.R.D. 22, 23 (E.Okla.1975); Container Company v. Carpenter Container Corporation, 9 F.R.D. 89, 93 (D.Del.1949), supplemental opinion, 9 F.R.D. 261, 262 (D.Del.1949).

Applying these general standards to the circumstances of the present case, the Court concludes that the defendant’s motion to strike the untimely jury demand must be granted. As indicated above, the record is clear that the demand was filed in an untimely fashion and, as such, does not entitle the plaintiff to the sort of trial he now seeks. While the Court might have reacted more charitably to the plaintiff’s untimely notice had he contemperaneously filed an appropriate motion under Rule 39(b), his failure to do so prevents the Court from recognizing any validity to his demand. Moreover, the plaintiff was effectively afforded a second opportunity in which to argue his procedural case to the Court in the context of the defendant’s present motion to strike; his complete failure to respond to this petition, perhaps by providing some basis upon which the Court might reasonably exercise its discretion in overlooking his previous oversight or inadvertence, necessitates that the defendant now be granted the relief he seeks. In the Court’s view, the plaintiff’s wholesale failure to provide any justification whatsoever for his untimely notice or any basis upon which his apparent delay might reasonably be excused precludes this party from securing a trial by jury.

Accordingly, for the reasons stated above, the Court hereby GRANTS the defendant’s motion to strike the plaintiff’s jury demand. The pretrial conference in this matter, previously set for 9:00 a.m., on Friday, September 27, 1985, remains on the Court’s calendar as scheduled. As before, the parties are instructed to appear at that hearing fully prepared to discuss their respective clients’ positions on settlement.


author: PETTINE, Senior District Judge.

text:
    DYNAMIC CONCEPTS, INC. v. MODERN CHAIN MFG. CO., INC.
    Civ. A. No. 84-0688 P.
    United States District Court, D. Rhode Island.
    June 13, 1985.

      Vincent T. Cannon, Providence, R.I., for plaintiff.
    Milton Stanzler, Providence, R.I., for defendant.
   MEMORANDUM AND ORDER

PETTINE, Senior District Judge.

This is a diversity action, in which plaintiff Dynamic Concepts, Inc., a Rhode Island corporation, alleges that Modern Chain Manufacturing Co., Inc., a New York corporation, has breached a contract between the two parties. Currently before the Court is defendant’s motion to dismiss for lack of in personam jurisdiction. A hearing was held on this motion on May 13, 1985.

FACTUAL BACKGROUND

The materials filed by the parties in connection with this jurisdictional question establish the following undisputed facts. Sometime in the Spring of 1984, plaintiff’s president, Gerald Shaulson, met with defendant’s president, Ady Edelstein, in Providence, Rhode Island. The parties met to discuss the possibility of plaintiff’s representing the defendant’s line of gold jewelry chain products to the catalogue showroom industry. After the first meeting in Providence, further discussions were conducted by telephone, as well as at additional meetings in New York. On June 28, 1984, in New York, the parties executed a written agreement.

The agreement provides that plaintiff is to become defendant’s exclusive representative to the catalogue showroom industry. The contract states that plaintiff shall also sell to other selected, non-catalogue accounts, but it specifies that plaintiff will be defendant’s exclusive representative to only the catalogue showroom segment of the jewelry industry. For its services, plaintiff is to be paid on a commission basis, in an amount per order set forth in a schedule appended to the agreement. The agreement also provides that plaintiff will receive a nonrefundable monthly draw against its commission earnings, in an amount also set forth in the agreement. A check representing this draw was to be sent each month by defendant to plaintiff at its Rhode Island address.

In return for being designated defendant’s exclusive representative to the catalogue showroom trade, the agreement states that plaintiff will neither represent, nor sell, the gold chain products of any manufacturer other than defendant. The agreement further obligates plaintiff to participate in certain designated exhibiting and promotional activities as part of its efforts to obtain orders for defendant.

In this action, plaintiff alleges that defendant has breached the contract by making only one of the several monthly draw payments to which plaintiff claims it is now entitled. Because it is defendant’s jurisdictional challenge, and not the merits of the contract dispute, that is now before the Court, the central question here is the degree of the defendant’s affiliation with the state of Rhode Island. In addition to the contract with plaintiff, defendant has other, unrelated links to the state. As its response to plaintiff’s interrogatories demonstrate, these separate links are essentially fourfold. First, defendant has a contract to sell gold products to two corporations in this state — Adorno of Warwick, Rhode Island and P & B, also of Warwick, Rhode Island. Between September, 1983 and January 1985, defendant has shipped merchandise to these two corporations on twenty-two occasions, and has received $88,000 in gross profits from these sales. Second, defendant maintains a checking account at The Fleet National Bank in Providence. Third, defendant’s president and one of its employees have attended jewelry shows in the state. Fourth, defendant has purchased gold from the Fleet National Bank in Providence and has purchased gold jewelry machinery from a Rhode Island corporation.

DISCUSSION

Rhode Island law governs the question whether defendant is properly subject to the jurisdiction of this Court. Hahn v. Vermont Law School, 698 F.2d 48, 49 (1st Cir.1983) (citations omitted). Because the Rhode Island longarm statute permits jurisdiction to the fullest extent permitted by the federal constitution, R.I. G.L. § 9-5-33; see Roger Williams General Hospital v. Fall River Trust Co., 423 A.2d 1384 (R.I.1981), the inquiry turns on whether the defendant has minimum contacts with the state sufficient to ensure that compelling it to defend a lawsuit here does not offend traditional notions of fair play and substantial justice. International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95 (1945). A defendant’s contacts may be deemed sufficient where there has been some act by which it has “purposefully availed] itself of the privilege of conducting activities within the forum state, thus invoking the benefits and protections of its laws,” Hanson v. Denckla, 357 U.S. 235, 253, 78 S.Ct. 1228, 1239, 2 L.Ed.2d 1283 (1958), and it is therefore reasonable for the defendant to have anticipated being haled into court in that state, Worldwide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297, 100 S.Ct. 559, 567, 62 L.Ed.2d 490 (1980).

In applying these familiar standards, a court must also determine:

whether the cause of action arises out of or is related to the defendant’s contacts with the forum state. If so, then “specific jurisdiction” may be found based on the relationship among the defendant, the forum, and the litigation. Helicopteros Nacionales de Colombia, S.A. v. Hall, — U.S.-,-& n. 8,104 S.Ct. 1868, 1872 & n. 8, 80 L.Ed.2d 404 (1984), citing Shaffer v. Heitner, 433 U.S. 186, 204, 97 S.Ct. 2569, 2579, 53 L.Ed.2d 683 (1977). If, on the other hand, the cause of action is unrelated to the defendant’s instate activities, the issue becomes one of “general” rather than “specific” jurisdiction. Helicópteros, — U.S. - n. 9, 104 S.Ct. at 1872 n. 9. Although minimum contacts suffice in and of themselves for specific jurisdiction under International Shoe [v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945) J the standard for general jurisdiction is considerably more stringent. See Keeton [v. Hustler Magazine (1984) ] 465 U.S. 770 at-, 104 S.Ct. [1473] at 1480 [79 L.Ed.2d 790]; Seymour v. Parke, Davis & Co., 423 F.2d 584, 587 (1st Cir.1970). Glater v. Eli Lilly & Co., 744 F.2d 213, 215-216 (1st Cir.1984) (footnote omitted).

Here, the plaintiffs contract action arises out of some, but not all of its contacts with Rhode Island. Looking first to the contract-related contacts, I will initially examine the question of “specific jurisdiction.”

The Supreme Court has just recently decided a case that directly addresses the question of when specific jurisdiction may be asserted over a nonresident defendant based on contractual dealings with a forum state plaintiff. In Burger King v. Rudzewicz, — U.S. -, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985), the Court held that Michigan residents who operated a Burger King franchise in their home state could be compelled to defend litigation (arising out of their franchise agreement with Burger King) in Florida, the home state of the franchisor Burger King Corporation. In so holding, the Court made clear that the fact of entering into a contract with a resident of the forum state could not alone subject a nonresident to jurisdiction, but that:

a ‘contract’ is ‘ordinarily but an intermediate step serving to tie up prior business negotiations with future consequences which themselves are the real object of the business transaction’ ... It is these factors — prior negotiations and contemplated future consequences, along with the terms of the contract and the parties’ actual course of dealings — that must be evaluated in determining whether the defendant purposefully established minimum contacts with the forum.
Burger King, — U.S. at-, 105 S.Ct. at 2185 (quoting Hoopeston Canning Co. v. Cullen, 318 U.S. 313, 316-317, 63 S.Ct. 602, 604-605, 87 L.Ed. 777 (1943)).

Assessing these factors in the Burger King case, the Court found jurisdiction based on several aspects of the franchises’ relationship to Burger King’s Florida headquarters: the fact that the franchisees “entered into a carefully structured 20-year relationship that envisioned continuing and wide-reaching contacts with Burger King in Florida,” and derived “the manifold benefits” of “affiliation with a nationwide organization,” id. at 2186; the fact that the franchises carried on a continuous course of direct communications by mail and by telephone with the Florida headquarters and were required to make regular payments there, id. at 2187; and the fact that the franchise agreement expressly provided that Florida law was to govern disputes between the parties, id. at 2189.

Applying the Burger King principles to the facts of the case now before me, I find that jurisdiction is proper based on the contract between the parties. As in Burger King, the defendant here has entered into a “structured relationship,” id. at 2186, with a forum state plaintiff, under which defendant is obligated to remit regular commission payments to Rhode Island. The parties’ contractual relationship likewise contemplated a consistent course of communications, as to the progress of sales and orders. Further, just as the franchisees in Burger King derived commercial benefits from deliberately reaching out to Florida and affiliating themselves with the Burger King Corporation, here the defendants have reached out to Rhode Island to avail themselves of the services of a Rhode Island exclusive sales representative, and to reap the commercial benefits of that Rhode Island party’s efforts. Indeed, I believe the contractual arrangement involved here, in which the plaintiff, as exclusive representative to a portion of the jewelry trade, is obligated to undertake a panoply of activity on defendant’s behalf and to forego representation of all other gold chain manufacturers, weighs even more heavily in favor of jurisdiction than did the franchise arrangement in Burger King. For here, by engaging plaintiff to act for it, in the nature of agent, defendant has manifestly chosen to avail itself of the privilege of conducting activities, through and in concert with plaintiff, in this state, see Samson Cordage Works v. Wellington Puritan Mills, 303 F.Supp. 155, 158-160 (D.R.I.1969); P.P.S., Inc. v. Jewelry Sales Representative, Inc., 392 F.Supp. 375 (S.D.N.Y.1975), and of the benefits and protections of Rhode Island law. Because the creation of such a commercial relationship thereby evidences a “ ‘substantial connection,’ ” Burger King, supra, 105 S.Ct. 2184, n. 18 (quoting McGee v. International Life Insurance Co., 355 U.S. 220, 223, 78 S.Ct. 199, 201, 2 L.Ed.2d 223 (1957)), between defendant and the state of Rhode Island, I do not deem fatal the fact that the parties’ contract did not expressly specify, as did the agreements in Burger King, that the forum state’s law would apply. And while defendant makes much of the fact that the contract here did not call for it to physically travel to Rhode Island, the Burger King Court made plain that the mere lack of physical contacts cannot be determinative of whether jurisdiction may be exercised:

Although territorial presence frequently will enhance a potential defendant’s affiliation with a State and reinforce the reasonable foreseeability of suit there, it is an inescapable fact of modern commercial life that a substantial amount of business is transacted solely by mail and wire communications across state lines, thus obviating the need for physical presence within a State in which business in conducted. So long as a commercial actor’s efforts are “purposefully directed” toward residents of another State, we have consistently rejected the notion that an absence of physical contacts can defeat personal jurisdiction there.
105 S.Ct. at 2184 (citations omitted).

Because I believe that defendant plainly directed its activities purposefully toward Rhode Island, and find no other “compelling” factors, id. at 2188, n. 25, militating against jurisdiction, I hold that specific jurisdiction lies in this case.

Even in the absence of specific jurisdiction, however, it is apparent that this Court may properly exercise general jurisdiction over the defendant. Wholly apart from the contacts created by the contract at issue here, defendant has significantly affiliated itself with this state. It makes regular shipments of merchandise to two corporations here and has, in the past two years, derived considerable revenue — $88,000— from these sales. This fact alone evidences a continuous and deliberate exploitation of the Rhode Island market, see Keeton v. Hustler Magazine, 465 U.S. 770,-, 104 S.Ct. 1473, 1481, 79 L.Ed.2d 790 (1984), and is itself probably sufficient to confer general jurisdiction. Together with the fact that defendant also maintains a checking account in a Rhode Island bank, and purchases gold and equipment here, I find that the record amply supports the conclusion that defendant is engaged in the “continuous and systematic pursuit of general business activities in the forum state.” Glater, supra, 744 F.2d at 216 (citing Perkins v. Benguet Consolidated Mining Co., 342 U.S. 437, 72 S.Ct. 413, 96 L.Ed. 485 (1952)). I therefore find a sufficient basis to sustain this Court’s general jurisdiction over the defendant.

For the foregoing reasons, defendant’s motion to dismiss is denied.

      . These materials include the affidavits of the president of each party-corporation; a copy of the contract; and defendant's answers to plaintiff's interrogatories. In evaluating these materials, the Court is mindful that plaintiff bears the burden of presenting facts necessary to support the assertion of this Court’s jurisdiction. See American Freedom Train Found, v. Spurney, 747 F.2d 1069, 1075 (1st Cir.1984) (citing Escude Cruz v. Ortho Pharmaceutical Corp. 619 F.2d 902, 904 (1st Cir.1980)). In reciting and assessing these facts for the purposes of this jurisdictional inquiry, the Court, of course, intimates no view as to the merits of the contractual dispute.

      . I need not and do not decide whether a formal agency relationship was created here.

      . Certainly, defendant could have looked to the Rhode Island courts to enforce its contract with the plaintiff if it believed plaintiff has failed to meet any of its contractual obligations. As the First Circuit has said in upholding jurisdiction over a nonresident based on its contract with a former state resident, "[t]he primary benefit that any nonresident corporation seeks from the law of a foreign state is enforcement of the contracts it has made with that state’s residents.” Vencedor Mfg. Co., Inc. v. Gougler Industries, 557 F.2d 886, 892 (1st Cir.1977).

      . Nor did the contract provide that New York law would govern disputes between the parties.


author: REYNOLDS, Chief Judge.

text:
    John JACKMAN, Plaintiff, v. WMAC INVESTMENT CORPORATION, Defendant.
    Civ. A. No. 83-C-477.
    United States District Court, E.D. Wisconsin.
    June 14, 1985.
    Terry E. Nilles, Milwaukee, Wis., for plaintiff.
    Gilbert W. Church, Milwaukee, Wis., for defendant.
   DECISION

REYNOLDS, Chief Judge.

This is a diversity action for compensation due under a deferred compensation plan between the defendant and its executive employees. On November 19, 1984, the Court granted the plaintiffs motion in limine excluding extrinsic evidence of the parties’ intent in drafting the agreement. The parties stipulated that this ruling predetermines the outcome of this issue at trial, and stipulated to the entry of judgment to permit the defendant to appeal.

The parties’ stipulation reserved the issue of the plaintiff’s entitlement to an award of attorneys’ fees as “expenses” under § 109.03(6) Wis.Stats. which provides:

(6) Wage claim. In an action by an employe against the employer on a wage claim, no security for payment of costs is required. In any such proceeding the court may allow the prevailing party, in addition to all other costs, a reasonable sum for expenses. No assignee of a wage claim shall be benefited or otherwise affected by this subsection except as expressly provided by § 109.09.

There are no reported decisions construing this statute. Oral argument on the plaintiff's motion was heard on March 29, 1985, and the Court issued a bench decision for the plaintiff which forms the basis for this written decision.

The plaintiff contends that the authorization for a “reasonable sum for expenses” should be construed to include attorneys’ fees, since legal fees comprise the bulk of any employee’s expense in pursuing a wage claim. Moreover, construction of the statute to include attorneys’ fees comports with the common usage of the term “expenses.” Finally, the plaintiff argues that the proposed construction is consistent with the public policy behind the statute, since it recognizes the inequality in bargaining power between employers and their employees and encourages employees to pursue wage claims.

The defendant argues that there is no specific authorization for an award of attorneys’ fees in § 109.03(6), and consequently, an award of fees would be in derogation of the American Rule that requires litigants to bear their own legal expenses. The defendant also contends that the legislative history of this statute demonstrates that the authorization for expenses was never intended to include an award of attorneys’ fees. Finally, the defendant urges the Court to exercise its discretion to deny an award even if the statute is construed to include attorneys’ fees as expenses; since the plaintiff doesn’t need the money, the defendant denied the initial claim in good faith, and the fees requested are excessive under the circumstances.

The parties agree that the plaintiff is the prevailing party at this stage of the litigation, and that the plaintiff’s claim for deferred compensation is a wage claim under § 109.03. Thus, the only issue is whether an award of attorneys’ fees is authorized under § 109.03(6) Wis.Stats.

The legislative history of this statute is not helpful in resolving this dispute. The statute dates back to 1931. The 1931 statute is identical to the present provision, except there was a ten dollar limit on allowable “expenses.” The statute remained essentially unchanged until 1975, when the legislature eliminated the ten dollar limit without comment.

The defendant argues that attorneys’ fees were never contemplated as allowable expenses, since ten dollars was insufficient to pay a party’s legal expenses in 1931. Although the Court questions whether ten dollars was an insignificant award at that time, the decision cannot be based upon the relative value of the dollar in 1931. Statutes must be construed as living documents if they are to remain workable with the passage of time. Thus, the decision to eliminate the ten dollar limit in 1975 must be considered independently, and not simply as an extension of the 1931 legislature’s intent.

Construing the authorization for an award of expenses to include attorneys’ fees is consistent with the common meaning of the term, and reflects the fact that the most significant expense confronting an employee with a wage claim is compensation for an attorney. The majority rule among the states includes attorneys’ fees in an authorization for expenses as opposed to a limited provision for costs. This construction is especially appropriate for a statute governing wage claims which are included in the category of claims where attorneys’ fees are customarily awarded. See the Fair Labor Standards Act, 29 U.S.C. § 216(b).

The American Rule precluding an award of attorneys’ fees to a prevailing party absent express statutory authorization has been gradually eroding. The Wisconsin Supreme Court recently ruled that attorneys’ fees could be awarded under the Wisconsin Fair Employment Act despite the lack of an express authorization, because such an award is consistent with the purpose and the broad remedial language of the statute. Watkins v. Labor & Industry Review Commission, 117 Wis.2d 753, 345 N.W.2d 482 (1984). An award of attorneys’ fees as expenses under § 109.03(6) is also consistent with the statutory purpose.

Having concluded that § 109.03(6) authorizes an award of fees, the Court must consider whether to exercise its discretion to award fees in this case. The fact that this plaintiff may not need the money because of the size of his wage claim and his subsequent employment in a well-paying position does not justify the denial of the motion for fees. The statute does not incorporate a need standard and cannot be construed to apply only to hourly wage earners. The purpose of the statute is to require employers to promptly pay wages when due, and the financial circumstances of the employee have no bearing on the amount of wages due, which would necessarily be reduced by a failure to compensate the prevailing employee for expenses incurred in pursuing the wage claim.

Finally, the Court finds that the fees requested are justified even though the case did not proceed to trial. The plaintiff had to be ready for trial despite the pending motion which ultimately made trial unnecessary, and submitted a detailed final pretrial report which demonstrates substantial trial preparation. The $20,000 request is based on a rate of $70 per hour which is well within the average for similar legal work in this area.

IT IS THEREFORE ORDERED that the plaintiffs motion for an award of attorneys’ fees pursuant to § 109.03(6) is granted.


author: BILLINGS, District Judge.

text:
    UNITED STATES of America v. Sandra P. LANG, Constance A. Tidd, Mary K. Wanger and Peter Wanger.
    Civ. A. No. 84-176.
    United States District Court, D. Vermont.
    June 18, 1985.
    Christopher B. Baril, Asst. U.S. Atty., Rutland, Vt., for plaintiff.
    Norman C. Smith, Bloomberg & Green-berg, Burlington, Vt., for defendant Sandra P. Lang.
    Michael L. Burak, Goldstein, Manello & Burak, Burlington, Vt., for defendants Mary K. Wanger and Peter Wanger.
   OPINION AND ORDER

BILLINGS, District Judge.

This action is brought by the United States on behalf of the Small Business Administration for the alleged failure by various defendants to honor guaranties allegedly made on a promissory note executed on behalf of Neptune Sports Enterprises, Inc. (Neptune Sports). After Nepture Sports defaulted on the note, the United States, as was its' right under 9A V.S.A. § 9-504, sold the assets of the Nautilus Alternative, the collateral which had secured the government’s rights under the note. Since the government did not recover from the sale the full amount owed to it under the note, the government has filed this action against defendant Lang and various other guarantors, seeking a deficiency judgment for the balance owed.

9A V.S.A. § 9-504(3) requires the secured party to give “reasonable notification of the time and place of any public sale or reasonable notification of the time after which any private sale or other intended disposition is to be made” to the debtor before the sale occurs. The parties are agreed that defendant Lang, as guarantor of the note, is a “debtor” within the meaning of § 9-504(3) and, as such, was entitled to reasonable notice before this sale occurred.

Defendant Lang has moved for summary judgment as to the claim against herself, asserting that she received no notice of the sale. The government apparently admits that no actual notice was ever given, but responds that constructive notice is sufficient under the statute. The government further maintains that, even if proper notice was not given, such failure does not, in itself, preclude the secured party from recovering a deficiency judgment.

We find no evidence in the record of any notice, either actual or constructive, and thus must conclude that the statute’s notice requirement has not been met. Furthermore, we hold notice is a prerequisite to recovery of a deficiency judgment under § 9-504(3). Accordingly, defendant Lang’s motion for summary judgment is GRANTED.

DISCUSSION

A. No Notice Given

Defendant asserts that she received no notice of the sale of the assets securing the note. The government responds simply by citing Adams v. B & D Builders & Developers, Inc., 144 Vt. 353, 477 A.2d 628 (1984) for the proposition that actual notice is not necessary and that constructive notice may be sufficient. However, the government fails to identify, and the record is devoid, of any evidence of constructive notice. In this regard we note that mere conclusory statements are insufficient to avoid a summary judgment against one’s position. DiMauro v. Pavia, 492 F.Supp. 1051, 1058-59 (D.Conn.), affd 614 F.2d 1286 (2d Cir.1979); Hahn v. Sargent, 523 F.2d 461 (1st Cir. 1975), cert. denied, 425 U.S. 904, 96 S.Ct. 1495, 47 L.Ed.2d 754 (1976). If the government wishes us to find that a question of material fact remains as to whether constructive notice was given in this case, the government must submit evidence of that notice sufficient to raise such a question. Since it has failed to do so in this instance, we hold that no notice was given as required by the statute and Vermont case law.

B. Notice a Prerequisite to a Deficiency Judgment

The government next argues that, even where notice is not given, a secured party may recover a deficiency judgment if it can prove by other evidence the value of the collateral sold. In so arguing, the government cites case law from two jurisdictions, Utah and Colorado, which supports this position. First National Bank of Denver v. Cillessen, 622 P.2d 598 (Colo.1980); FMA Finance Corporation v. Pro-Printers, 590 P.2d 803 (Utah 1979). This ignores, however, that there is in fact a split of authority on this question, with many courts holding that proper notice is a prerequisite to a deficiency judgment. See, e.g., Executive Finance Services, Inc. v. Garrison, 722 F.2d 417, 418-19 (8th Cir. 1983) (applying Missouri law); Comfort Trane Air Conditioning Co. v. Trane Co., 592 F.2d 1373, 1387 (5th Cir.1979) (Georgia law); Nixdorf Computer, Inc. v. Jet Forwarding, Inc., 579 F.2d 1175, 1179 (9th Cir.1978) (Calif. law). But see Equico Lessors, Inc. v. Wetsel, 576 F.Supp. 13, 18 (W.D.Okla.1983) (Oklahoma law); First National Bank of Louisville v. Insurance Centers, Inc., 560 F.Supp. 1261, 1264-65 (D.Mo.1983) (New Jersey law); National Acceptance Co. of America v. Medlin, 538 F.Supp. 585, 588 (N.D.Ill.1982) (Illinois law).

More importantly, the government ignores the fact that Vermont’s statute, 9A V.S.A. § 9-504(3), has been construed by the Vermont courts to require that secured parties prove compliance with its terms in order to later obtain a deficiency judgment, Chittenden Trust Co. v. Maryanski, 138 Vt. 240, 415 A.2d 206 (1980), and, more specifically, by the Bankruptcy Court in this jurisdiction to require proof of reasonable notification. In re Wayne Ford-Chrysler, Inc., 38 B.R. 174 (Bankr.D.Vt.1984) . We quote from Maryanski:

Finally, we turn to the consequences of failing to prove reasonable notice and a commercially reasonable disposition of collateral. Again we adopt the majority view, which is that the secured party’s duty to prove compliance with § 9-504(3) is a condition precedent to recovery of a deficiency judgment.

Since Vermont’s statute requires that reasonable notice be given to a guarantor in order to later recover a deficiency judgment against that guarantor, and since there is no evidence in the record of such notice, defendant’s motion for summary judgment must be GRANTED. Plaintiff’s complaint, as against defendant Lang, is hereby DISMISSED with prejudice.

      . At the hearing on this motion, the government represented to the Court that it had evidence to submit on that issue and that it would do so presently. The Court permitted the government leave to make such a filing but, to date, the government has failed to do so. Therefore, the Court assumes the government waives its right to file such evidence.