author: FLANNERY, District Judge.

text:
    Richard KRODEL, Plaintiff, v. Andrew J. YOUNG, et al., Defendants.
    Civ. A. No. 80-3183.
    United States District Court, District of Columbia.
    Oct. 8, 1985.

      Roy J. Bucholtz, Reston, Va., for plaintiff.
    Kathryn Ferger, and Shirley Huang, Civil Div., Dept, of Justice, Washington, D.C., for defendants.
   MEMORANDUM

FLANNERY, District Judge.

This matter comes before the court on plaintiff’s motion for addition to award of attorney’s fees and costs, plaintiff’s motion for interest on award of back pay, and plaintiff’s former attorney Patricia J. Barry’s application for issuance of an order to show cause regarding contempt. For the reasons set forth below, plaintiff’s motions and attorney Barry’s application are denied.

I. Background

On February 9, 1983, this court issued a judgment and order awarding plaintiff back pay under the Age Discrimination in Employment Act (“ADEA”), 29 U.S.C. §§ 621 et seq. (1982) in the amount of the differential, with all increases and benefits, between the salary plaintiff would have earned at Grade 13 and the salary he was paid at Grade 12, retroactive to April 11, 1976.

On December 8, 1983, this court issued a judgment and order awarding plaintiff attorney’s fees under the ADEA in the amount of $33,939.00. This figure represented $29,864.00 in attorney’s fees for Roy J. Bucholtz, $1,950.00 in attorney’s fees for Patricia J. Barry, and $2,125.00 in costs, 576 F.Supp. 390 (1983).

Defendants filed an appeal of this court’s order awarding back pay and, on November 20, 1984, the Court of Appeals issued an opinion affirming the order. Krodel v. Young, 748 F.2d 701 (D.C.Cir.1984).

Though defendants also filed an appeal of the order awarding attorney’s fees and costs, defendants subsequently moved to voluntarily dismiss that appeal in light of the Court of Appeals’ affirmation on the merits. This motion to dismiss was granted on March 15, 1985.

On April 4, 1985, plaintiff filed both a motion for interest on the award of back pay and a motion for an addition to the award of attorney’s fees and costs. Plaintiff argues that the defendant has engaged in unwarranted delay tactics in paying the award and in doing so has damaged plaintiff.

On April 15, 1985, the attorney who initially represented plaintiff in this suit but who was later replaced, Patricia J. Barry, applied to this court for the issuance of an order to show cause regarding contempt against defendants Department of Health and Human Services and its Secretary for failure to pay the award. Barry had been informed by one of defendants’ attorneys that she would be paid by early April.

II. Discussion

The- central question that arises in this case is to what degree a losing defendant in an ADEA case can be held accountable for delay of payment of the amount awarded to plaintiff when defendant is the United States. It is best to deal with the two motions separately.

a. Motion for Interest on Award of Back Pay

With regard to the delay in the payment of the award of back pay, although this court’s judgment granting the award to plaintiff issued on February 9, 1983, defendant pursued a bona fide appeal, completely briefed and argued, which ended on November 20, 1984, with an affirmation by the Court of Appeals of this court’s order. Defendants then sought and received a short extension of time pending a final determination of whether the government would seek further Supreme Court review. The Solicitor General decided not to seek further appellate review, and on February 19, 1985, defendants moved to dismiss voluntarily their attorney’s fees appeal, which was granted by the Court of Appeals on March 15, 1985. Defendants assert that they were prepared at this point to take the proper administrative steps to secure payment of the award to plaintiff, which is normally a six-week process, but were prevented from doing so by the filing on April 4, 1985, of the motions at issue in this memorandum.

In a somewhat inartful memorandum that spends more time discussing attorney’s fees than back pay, plaintiff argues that due to this delay plaintiff is entitled to interest on the back pay since February 9, 1983, to the present because of the damage to plaintiff in not being paid. Such an award would be inappropriate. The General. Accounting Office cannot pay an award until the judgment is final. 28 U.S.C. § 2414 (1982). The award of back pay was not final until the Solicitor General decided on February 19, 1985, that certiorari to the Supreme Court would not be sought. Arguably, the fact that an appeal on the attorney’s fees judgment was still pending until March 15, 1985, and the fact that the motions considered in this memorandum ‘‘are still under consideration until the present time, have no relevance to the finality of the judgment awarding back pay. Therefore, plaintiff would have done much better to argue that interest should be paid from February 19, 1985, to the present.

Yet defendants offer a convincing argument for why even interest from February 19, 1985, to the present should not be granted by this court. Generally, the United States may not be held liable for interest on a claim absent an unequivocal and express waiver of sovereign immunity by contract or by Congress. See 28 U.S.C. § 2516(a) (Supp.1985); United States v. Louisiana, 446 U.S. 253, 264-65, 100 S.Ct. 1618, 1626, 64 L.Ed.2d 196 (1980) (agreement that proceeds of mineral' leases on lands off Louisiana Gulf Coast be held in custody by United States did not give rise to an obligation to pay interest absent an express provision to that affect); Segar v. Smith, 738 F.2d 1249, 1295-96 (D.C.Cir. 1984) (in 1964 Civil Rights Act Title VII action, where classwide back pay was appropriate remedy, pre-judgment interest was not recoverable).

Indeed, there is no support in caselaw for assessing pre-judgment or post-judgment interest on back pay awards against the United States, even in Title VII cases. Blake v. Califano, 626 F.2d 891 (D.C.Cir. 1980) (federal employees who received retroactive promotions and back pay because they were victims of sex discrimination were not entitled to pre-judgment interest or a sum in addition to back pay to reflect inflation).

Plaintiff says that waiver of sovereign immunity of the United States from liability for interest on awards of back pay can be found in Section 15(c) of the ADEA:

Any person aggrieved may bring a civil action to any Federal district court of competent jurisdiction for such legal or equitable relief as will effectuate the purposes of this chapter.

29 U.S.C. § 633a(c) (1975). Plaintiffs only support for reading this as an unequivocal and express waiver regarding interest on back pay is Shaw v. Library of Congress, 747 F.2d 1469 (D.C.Cir.1984). Reliance on Shaw in this case is misplaced, however, because: (1) Shaw dealt with interest as a component of attorney’s fees, not back pay; (2) Shaw dealt with Title VII, and relied heavily on language in Title VII that in addition to a reasonable attorney’s fee, “the United States shall be liable for costs the same as a private person,” 42 U.S.C. § 2000e-5(k) (1982); and (3) Shaw recognized the rule in this circuit that interest on back pay awards may not be assessed against the United States, even in Title VII cases. Shaw, 747 F.2d at 1484, n. 120. Therefore, there is no support for plaintiff’s claim to interest on the award of back pay for any period of time and therefore the plaintiff’s motion with regard to back pay is denied.

b. Motion for Addition to Award of Attorney’s Fees and Costs

[3] With regard to the delay of payment of the award of attorney’s fees and costs, although this court’s judgment granting the award to plaintiff issued on December 8, 1983, defendant argues that it filed a bona fide appeal of that judgment which prevented the judgment from becoming final until March 15, 1985, when the Court of Appeals granted defendants’ voluntary motion to dismiss. Defendants assert that they were prepared at this point to take the proper administrative steps to secure payment of the award to plaintiff, which is normally a six-week process, but were prevented from doing so by plaintiff’s filing on April 4, 1985, of the motions at issue in this memorandum.

Plaintiff argues that due to this delay, plaintiff is entitled to an additional amount of attorney’s fees and costs, which might be considered interest, for the damage to plaintiff in not being paid since December 8, 1983. As with plaintiff’s other motion, such an award would be inappropriate since the General Accounting Office cannot pay such an award until the judgment is final. The award of attorney’s fees and costs was not final until the Court of Appeals dismissed defendants’ appeal on March 15, 1985. Apparently, plaintiff believes that defendant should pay an additional amount for the delay created first in asking for a postponment for briefing but then in never actually submitting briefs, and instead voluntarily moving for dismissal of its own appeal. Yet it is clear from the record that defendant was simply waiting for its appeal on the merits to complete its course before proceeding to deal with the appeal on attorney’s fees, and that once defendant had lost the appeal on the merits, it decided not to proceed with its other appeal.

Arguably, once the appeal on the attorney’s fees judgment was dismissed on March 15, 1985, defendant was obligated to pay the award since the decision was final and any motion by plaintiff for additional attorney’s fees was irrelevant to that finality. Yet defendant again argues that the government has sovereign immunity against any claim for interest absent an unequivocal and express waiver.

Plaintiff’s reliance on Shaw for why such immunity has been waived under the ADEA has more weight in the area of attorney’s fees. Shaw held that Title VII expressly waived immunity of the United States from liability for interest as a component of an attorney’s fees award allowed under Title VII. The Shaw court awarded an addition to attorney’s fees based on the delay by defendant. Since both Title VII and the ADEA contain similar precepts and remedial natures, and since courts have used caselaw under Title VII as a guide in developing caselaw under ADEA, see, e.g., Krodel v. Young, 576 F.Supp. 390 (D.D.C. 1983), aff'd, 748 F.2d 701 (D.C.Cir.1984), plaintiff argues that the ADEA should be construed the way Title VII was in Shaw as allowing an additional award for attorney’s fees when defendant has delayed payment of the claim.

Defendant argues that for several reasons reliance on Shaw is misplaced even with regard to attorney’s fees. First, as noted above, the Shaw court examined Title VII and relied heavily on the language in 42 U.S.C. § 2000e-5(k) to say that since private persons may be held liable for interest as an ingredient of a Title VII attorney’s fees, so should the United States. Shaw, 747 F.2d at 1475-79. Further, the court said that use of such language by Congress relaxes the traditional rigor of the sovereign immunity doctrine. 747 F.2d at 1479-84. Again defendant points out that the ADEA contains no language equating the liability of the United States with that of private parties as appears in Title VII. Instead, when Congress in 1974 amended the ADEA with Section 15 to extend its coverage to federal government employees, Congress “deliberately prescribed a distinct statutory scheme applicable only to the federal sector” and no waiver of sovereign immunity with regard to federal employees can be predicated on the existence of rights and remedies in the enforcement of provisions for private employees. Lehman v. Nakshian, 453 U.S. 156, 166-68, 101 S.Ct. 2698, 2704-05, 69 L.Ed.2d 548 (1981) (Congress, in amending the ADEA so as to bring federal government within the Act’s scope, did not grant right to jury trial to federal employees suing government under the Act).

Second, Shaw rejected non-specific wording such as language entitling parties to “any other equitable relief as the court deems appropriate” as being sufficient to find a waiver of sovereign immunity. Defendant argues that the ADEA Section 15(c) language cited above allowing “such legal or equitable relief as will effectuate the purposes of this chapter” fails this standard of specificity.

Finally, Shaw and most cases deal with pre-judgment interest on attorney’s fees, meaning an upward adjustment in the amount charged by the attorney to reflect the delay between rendering of services and the award of attorney’s fees and costs. Plaintiff cites no authority supporting an award of post-judgment interest. Yet it is clear that Congress has expressly waived immunity of the United States from such claims in other areas when Congress sees fit to do so. See, e.g., 28 U.S.C. § 2411 (1982) (pre- and post-judgment interest payable by the United States in tax refund cases).

c. Application for Issuance of OSC Re: Contempt

This court declines to determine at this time whether attorney Barry has standing to apply to this court for an order to show cause regarding contempt for nonpayment of attorney’s fees. The discussion above shows that payment of the award has been held up by the appeals process and by plaintiff’s motions for additional awards, and not by defendants disregard of this court’s order. Barring further appeals, payment of the awards should now proceed with due diligence on the part of defendants. Therefore, an issuance of an OSC Re: Contempt order at this time would be premature and inappropriate.

III. Conclusion

The passage of time central to plaintiff’s claims is a necessary feature of our system of justice. When an order of this court issues, the defendant has a right to properly notice an appeal of that order. Until such appeal is no longer before the Court of Appeals, the decision is not final for purposes of payment by the United States of any awards, and defendant is not obligated to pay the award. Any delay in payments of the award beyond such an appeal process is only actionable so far as the government has waived its sovereign immunity from further payments. Plaintiff has not shown any congressional intent in the ADEA to permit the collection of post-judgment interest on attorney’s fees. Such an interpretation is not essential to the proper functioning of the act. Instead, whenever there is an unreasonable delay in payment of an award by the court, plaintiff is free to seek an order from this court compelling payment.

There is no indication that the government vindictively or frivolously sought to delay payment of the award. Rather, it genuinely sought a reversal of this court’s order. When the order was affirmed and once all motions for appeal were no longer before the Court of Appeals, defendant says it was willing to pay the award. This Court has no reason to disbelieve defendants, and expects defendants to promptly pursue payment of the original award now that this court has denied plaintiff’s requests for additional awards of back pay, attorney’s fees and costs.


source: Caselaw Access Project

author: HENRY WOODS, District Judge.

license: Public Domain

text:
    Raymond F. STIPSKY, James C. Carrar, and Gordon Loiselle, Plaintiffs, v. NON-COMMISSIONED OFFICERS ASSOCIATION OF AMERICA (NCOA), Ammest Life Insurance Company, Academy Life Insurance Company, and Five Star Affiliate, Inc., Defendants.
    No. LR-C-85-266.
    United States District Court, E.D. Arkansas, W.D.
    Oct. 9, 1985.
    Lesly Mattingly, Jacksonville, Ark., for plaintiffs.
    Edwin L. Lowther, Jr., Wright, Lindsey & Jennings, Little Rock, Ark., for defendants.
   ORDER

HENRY WOODS, District Judge.

Pending before the Court is the defendants’ motion for summary judgment. Defendants assert res judicata relying on a previous summary judgment ruling by the Pulaski County Chancery Court in an injunction action brought by the plaintiffs seeking reinstatement as members of NCOA.

Res judicata is an affirmative defense, Fed.R.Civ.P. 8(c), and the burden of proof is upon the party asserting it. Bryson v. Guarantee Reserve Life Ins. Co., 520 F.2d 563, 566 (8th Cir.1975); May v. Edwards, 258 Ark. 871, 529 S.W.2d 647, 650 (1975); Hurst v. Hurst, 255 Ark. 936, 504 S.W.2d 360, 361 (1974).

The general rule in Arkansas is that in order for the doctrine of res judicata to apply it must appear that the particular matter involved was raised and determined or that it was necessarily within the issue and might have been litigated in the previous action. May v. Edwards, supra, 529 S.W.2d at 650; Pepper v. Bankers Life & Casualty Co., 414 F.2d 356, 358 (8th Cir. 1969) (applying Arkansas law).

The record indicates that the sole issue involved in the prior action in state court was the wrongful termination of plaintiffs as members in the NCOA. The Chancellor appropriately ruled that Arkansas law requires societal remedies be exhausted pri- or to resorting to the courts in fraternal membership disputes. Bonham v. Brotherhood of R.R. Trainmen, 146 Ark. 117, 225 S.W. 335 (1920). However, the holding of the chancery court was more in the nature of a dismissal without prejudice than summary judgment on the merits. Given the facts as plead in the prior action and the record, it is clear that plaintiffs’ procedural remedies were within the NCOA. This is not to say that their action could not have ripened into a justiciable matter at the conclusion of this internal process.

On the other hand, the present action is based on the alleged business harm suffered by the plaintiffs as a result of defendants' withdrawing their status as NCOA counselors and life insurance agents. While it is accurate to state that plaintiffs “might” have litigated this issue in the prior state court action by amending their complaint to include these claims, they were not afforded this opportunity due to the dismissal of their action on procedural grounds. Although not specifically mentioned, “election of remedies” is an essential element of defendants’ contention with respect to res judicata. The Court is of the opinion that plaintiffs’ failure to initially pursue their claim for possible damages is not fatal to their assertion of the claim at this time.

The Restatement of the Law, Judgments, § 65(2) states the rule that “where a judgment is rendered in favor of the defendant because the plaintiff seeks a forum of remedy which is not available to him, the plaintiff is not precluded from subsequently maintaining an action in which he seeks an available remedy.” Comment (g) in subsection (2) further states in pertinent part that “[Wjhere a judgment is rendered against a plaintiff because he sought a remedy which was not available to him ... the judgment is not on the merits, and the plaintiff is not thereby precluded from subsequently maintaining an action to enforce a proper remedy (see § 49).” See Warren v. Neel, 284 F.Supp. 203, 212 (W.D.Ark.1968). In stating the doctrine of res judicata, the courts usually refer to the fact that the judgment sought to be used as a basis of the doctrine was rendered on the merits, since it is a general rule that a judgment rendered on any grounds which do not involve the merits of the action may not be used as a basis for the operation of the doctrine of res judicata. See generally, Warren Co. v. Neel, supra; Cooper v. McCoy, 116 Ark. 501, 173 S.W. 412 (1915); Brooks v. Arkansas Louisiana Pipeline Co., 77 F.2d 965 (8th Cir. 1935); Charles Keechin, Inc. v. Farmers & Merchants Bank of Rogers, 199 F.Supp. 478 (W.D.Ark.1961); and Hogue v. Pellerin Laundry Machnery Sales Co., 353 F.2d 772 (8th Cir.1965). The doctrine of res judicata is based on the assumption that the litigant has already had her day in court. Martin v. Citizens Bank of Beebe, 283 Ark. 145, 672 S.W.2d 754 (1984). Accordingly, defendants have failed to meet their burden of establishing that this action is barred by the prior state court ruling as being on the merits of plaintiffs’ alleged damages claim.

The motion for summary judgment is denied.


author: SWEET, District Judge.

text:
    HYOSUNG (AMERICA), INC., Plaintiff, v. JAPAN AIR LINES CO., LTD. and Flying Tigers, Defendants.
    No. 85 Civ. 2095 (RWS).
    United States District Court, S.D. New York.
    Oct. 23, 1985.
    Bingham Englar Jones & Houston (Chris Christofides, New York City, of counsel), for plaintiff.
    Condon & Forsyth (Katherine B. Posner, Diane W. Wilson, New York City, of counsel), for defendant Japan Air Lines Co., Ltd.
    Donovan, Maloof, Walsh & Kennedy (Joseph A. Scalzo, Paul H. Murphy, New York City, of counsel), for defendant Flying Tigers.
   OPINION

SWEET, District Judge.

Defendant Flying Tigers (“Tiger”) has moved pursuant to Rule 12(h)(3) of the Federal Rules of Civil Procedure to dismiss this case brought by plaintiff Hyosung (America), Inc. (“Hyosung”) for lack of subject matter jurisdiction. Joining Hyosung in opposing the motion is Tiger’s co-defendant Japan Air Lines Co., Ltd. (“JAL”). For the reasons set forth below, the motion is denied.

The allegations in Hyosung’s complaint are, of course, accepted for purposes of this motion. Hyosung, a foreign corporation, is the owner of certain cargo transported from Pusan, Republic of Korea to Boston, Massachusetts under JAL’s air waybill No. 131 PUS 3139 8765. The shipment was handled at Boston’s Logan International Airport by Tiger. In its complaint, Hyosung alleges negligence and wilful misconduct in the defendants’ handling of the shipment and seeks damages of $38,505.26 plus interest.

Hyosung asserts jurisdiction under 28 U.S.C. § 1331, claiming that the air carriage contract is governed by, and therefore its action arises under, the Convention for the Unification of Certain Rules Relating to International Transportation by Air (the “Warsaw Convention” or “Convention”), 49 U.S.C. § 1502 note. The question raised by Tiger’s motion is whether the governments of the United States and the Republic of Korea are in treaty relations with respect to international aviation.

There is no dispute between the parties as to the actions taken by the United States and Korea regarding international agreements to regulate aviation. On July 31, 1934, the United States adhered to the Convention, a multilateral treaty now joined by more than 120 nations. The Republic of Korea adhered to the Hague Protocol amending the Warsaw Convention on July 13, 1967, but did not ratify separately the Convention. The Hague Protocol (Protocol to Amend the Convention for the Unification of Certain Rules Relating to International Carriage by Air, 478 U.N.T.S. 371 (1955)) was the result of a multinational attempt to revise certain portions of the Warsaw Convention, including, most importantly to the United States, the liability limit which restricts recovery for the loss of human life. The Hague Protocol doubled the liability limit for each passenger to $16,600. Despite its participation in the negotiation and signing of the Hague Protocol, the United States never presented the new amendments to the Senate for ratification and therefore is not a party to the Hague Protocol. See In re Korean Airlines Disaster of September 1, 1983, MDL No. 565, slip op. at 2-8 (D.D.C. July 25, 1985) (recounting history of the Warsaw Convention).

To resolve the jurisdictional issue presented, it is necessary to determine whether or not Korea’s adherence to the Hague Protocol without signing the Convention places that country in treaty relations with the United States, a country that signed only the original version of the Warsaw Convention. To support jurisdiction, Hyosung and JAL have relied upon scholarly commentary and international legal source material. These materials suggest that since the Hague Protocol is nothing more than a list of amendments to the Warsaw Convention, a country which adheres to the Hague Protocol has also accepted such a significant portion of the unamended version of the Convention as to establish a treaty relationship with the parties to the Convention itself. The Hague Protocol supports this interpretation by Article XXIII(2) which states that “[ajdherence to this Protocol by any State which is not a Party to the Convention shall have the effect of adherence to the Convention as amended by this Protocol.” This language indicates that the Hague Protocol was not intended to supplant the Convention and that adherence to the Hague Protocol includes adherence to the Convention.

The language in Article XXIII(2) of the Protocol establishes that the Republic of Korea and the United States are not in treaty relations with respect to the amended portions of the Convention, but this does not compel the conclusion that the United States and Korea are not each parties to the unamended portions of the Convention. One international legal source on the interpretation of the treaties suggests that the actions taken by the United States and Korea do establish treaty relations with respect to the unamended sections of the Convention. Article 40 of the Vienna Convention on the Law of Treaties, opened for signature May 23, 1969, — U.N.T.S.-, reprinted in 63 Am.J.Intl.L. 875 (1969), addresses the amendment of multilateral treaties and provides that:

5. Any state which becomes a party to the treaty after the entry into force of the amending agreement shall, failing an expression of a different intention by that state:
(a) be considered as a party to the treaty as amended; and
(b) be considered as a party to the unamended treaty in relation to any party to the treaty not bound by the amending agreement.

One of the reasons cited for such expansive treatment of multilateral agreements is that such an interpretation ensures the “widest possible participation” in a multilateral treaty, T. Elias, The Modern Law of Treaties, 94 (1974), a goal consistent with the Convention which sought to provide the uniform regulation of air coverage throughout the world. See Korean Air Lines Disaster, supra, at 15-16. See also R. Mankiewicz, The Liability Regime of the International Air Carrier 2 (1981).

However, Tiger has cited several authorities which assert that because the Republic of Korea has adhered only to the Warsaw Convention as amended by the Hague Protocol that it is not in treaty relations with the United States. Civil Aeronautics Board, Aeronautical Statutes and Related Material 512 n. 2 (1974) (editor’s note); Kreindler, “Arbitration Law,” N.Y.Law J., Feb. 6, 1984, at 1. A similar conclusion is provided by a May 7, 1985 letter written by an Attorney Advisor on Treaty Affairs for the U.S. State Department which refers to the department’s annual publication entitled Treaties in Force as a reliable source for “providing information on treaties and other international agreements to which the United States has become a party ...” and indicates that the Republic of Korea has not adhered to the Convention in its unamended form. These bare conclusions, however, do not provide any analytical basis for countering the rationale expressed in Article 40 of the Vienna Convention cited above.

Because there is no indication that the Executive has considered the line of reasoning articulated by Article 40 of the Vienna Convention in the context of the Convention and the Hague Protocol, it is less appropriate to regard its interpretation with the great weight generally accorded its construction of international treaties. See Charlton v. Kelly, 229 U.S. 447, 468, 33 S.Ct. 945, 952, 57 L.Ed. 1274 (1913). Of course, in conjunction with a bilateral treaty, the requirement is obvious that the United States and another country must formally ratify the same document in order to establish treaty relations sufficient to support federal jurisdiction. However, the particularities of multilateral treaty negotiation and ratification permit two nations to agree substantially on a treaty which has been amended in the interim between each country’s ratification. It should be noted, of course, that the Hague Protocol amended only certain limited provisions of the Convention and those provisions do not affect the question of jurisdiction at issue here.

Tiger seeks to rebut the substantial agreement theory of Hyosung and JAL by another article of the Vienna Convention. Article 17(1) provides that: “the consent of a state of be bound by part of a treaty is effective only if the treaty so permits or the other contracting states so agree.” Plere, however, the issue is not whether it is proper to allow one state to adhere to a portion of a treaty but whether both states’ adherence to portions of a treaty may be deemed to constitute an agreement between those two nations. Despite its suggestion of the inequity arising from permitting joint adherence to a portion of a treaty, Tiger has not pointed to any portions of the Convention relevant to Hyosung’s claim in this action on which the United States and Korea are not in agreement. Since each country has adhered to unamended portions, the Convention does provide the substantive law governing air carriage disputes concerning carriers from the Republic of Korea and the United States which are within the scope of these sections. To require Korea to execute the Convention in addition to the Protocol adopting the Convention would be to exalt the formality of treaty signatories over the substance of the two nations’ agreement regarding this air carriage contract. Absent a finding that these unamended portions are inseverable from the rest of the treaty because of prejudice to either nation, the unamended sections will be considered a treaty agreement between the United States and Korea.

This conclusion is consistent with the use of the term “treaty” in 28 U.S.C. § 1331. While in the United States the word “treaty” technically refers to those international agreements ratified by two-thirds of the Senate, the word is frequently used internationally to refer to any agreement between nations no matter how the agreement has been formalized. See Weinberger v. Rossi, 456 U.S. 25, 29-30, 102 S.Ct. 1510, 1514, 71 L.Ed.2d 715 (1982). The Supreme Court has, with regard to several statutory provisions, found that Congress intended the word treaty to be used consistent with its broader connotations, rather than tied strictly to its constitutional definition. See id; B. Altman & Co. v. United States, 224 U.S. 583, 601, 32 S.Ct. 593, 597, 56 L.Ed. 894 (1912). One reason for such a liberal construction in jurisdictional statutes is the belief that Congress expected that all multinational agreements to which the United States is a party could have a significant bearing on this country’s international relations and thus should be heard in federal court. Id. at 601, 32 S.Ct. at 597.

Since the United States’ adherence to the unamended portions of the Convention was ratified by the Senate, such a holding does not extend the court’s jurisdiction beyond the control of Congress to those international agreements which are signed solely by the executive department. The articles of the Convention which give rise to a cause of action for damages have not been amended by the Hague Protocol and thus are included in the agreement between the United States and Korea, thereby satisfying the requirement of § 1331 that a treaty must provide private right of action before jurisdiction attaches. See Dreyfus v. Von Finck, 534 F.2d 24, 29-30 (2d Cir.1976); Tel-Oren v. Libyan Arab Republic, 726 F.2d 774, 808-10 (D.C. Cir.1984) (J. Bork, concurring), cert. denied, — U.S. -, 105 S.Ct. 1354, 84 L.Ed.2d 377 (1985).

The only other court which has confronted this jurisdictional issue has found that the Hague Protocol and the Convention cannot be considered to be two independent treaties, since the Hague Protocol cannot stand independently from the basic framework of the Convention. See Korean Air Lines Disaster, supra, at 14-15. The reasoning of the Honorable Aubrey E. Robinson, Jr. and his conclusion that federal jurisdiction properly attaches are also adopted by this opinion.

For the foregoing reasons, Tiger’s motion is denied. The discovery deadline in this action is hereby extended to December 4, 1985 with the pretrial order and trial memoranda due on December 11, 1985.

IT IS SO ORDERED.


author: WANGELIN, District Judge.

text:
    GOLDSTEIN OIL COMPANY, et al., Plaintiffs, v. SUN OIL TRADING COMPANY, Defendant, SUN TRANSPORT, INC., Plaintiff, v. GOLDSTEIN OIL COMPANY, et al., Defendants, GOLDSTEIN OIL COMPANY, et al., Plaintiffs, v. SUN OIL TRADING COMPANY, Defendant.
    Nos. 82-79 C(D), 82-599 A(D) and 82-205 A(D).
    United States District Court, E.D. Missouri, E.D.
    Oct. 24, 1985.
    New trial denied Dec. 2, 1985.

      Richard H. Ulrich, Lee Kline, Shifrin, Treiman, Barken, Dempsey & Ulrich, Clayton, Mo., for plaintiffs.
    John R. McFarland, Christopher F. Jones and Dan Blum, Coburn, Croft & Putzell, St. Louis, Mo., for defendant.
   MEMORANDUM

WANGELIN, District Judge.

These matters are before the Court for a decision on the merits following a four day trial ending November 1, 1984. These cases involve various claims and counterclaims asserted by both parties for product, demurrage, and other charges arising out of oil transactions between the parties.

After consideration of the testimony adduced at trial, the exhibits introduced into evidence, the briefs of the parties, and the applicable law, the Court hereby makes and enters the following Findings of Fact and Conclusions of Law pursuant to Fed.R. Civ.P. 52(a). Any Finding of Fact equally applicable as a Conclusion of Law is hereby adopted as such, and any Conclusion of Law equally applicable as a Finding of Fact is hereby adopted as such.

FINDINGS OF FACT

1. This is an admiralty or maritime claim within the original and exclusive jurisdiction of the United States District Court pursuant to 28 U.S.C. § 1333 and within Rule 9(h) of the Fed.R.Civ.P.

2. Goldstein Oil Company and Novelly Oil Company are Missouri corporations and are general partners of Apex Oil Company (Apex) a Missouri general partnership.

3. Sun Oil Trading Company (Sun) is a Delaware corporation with its principal place of business in the State of Pennsylvania.

4. The first filed suit (new claims) was No. 82-79 C(D) (civil suit). In this case, Apex asserts a Seven Hundred Ninety Two Thousand Two Hundred Forty Six Dollar and Three Cent ($792,246.03) claim for oil sold to Sun on the barge Auntie Mame, and Sun asserts a counterclaim totalling Eight Hundred Twelve Thousand Seven Hundred Fifty Two Dollars and Forty Six Cents ($812,752.46) for various charges incurred in selling oil to Apex on the ship Johs Stove.

5. The second suit (old claims), No. 82-205 A(D) (admiralty suit), is an admiralty action involving six separate demurrage claims. Apex asserts four demurrage claims totalling Sixty Seven Thousand Six Hundred Seventy Six Dollars and Eighty Six Cents ($67,676.86), and Sun asserts two demurrage claims totalling Twenty Seven Thousand Four Dollars and Thirty One Cents ($27,004.31).

6. Long before suit was ever filed, both parties entered into substantial and complicated negotiations to resolve all of the above claims in one settlement.

7. In June of 1981, those negotiations culminated in an accord and satisfaction in the precise amounts now asserted in these two lawsuits.

8. The accord and satisfaction was based upon the following terms:

Auntie Mame/Johs Stove

1. Apex Claim - Auntie Mame cargo invoice $792,246.03

2. Sun Claim - Johs Stove cargo invoice ship demurrage barge demurrage barge freight & heating interest net value of money $141,780.63 $275,926.37 $ 8,717.40 $175,162.89 $202,242.53 $ 8,922.64

Balance Due Sun $812,752.46 -$792,246.03 $ 20,506.43

Demurrage

1. Apex Claims Cove Spirit Gulf Crest Gulf Solar Pt. Julie $ 9,056.34 $ 11,156.76 $ 10,175.78 $ 37,287.98 $ 67,676.36

2. Sun Claims Laconic Mt. Vernon Victory $ 17,004.31 $ 10,000.00 $ 27,004.31

Balance Due Apex $ 67,676.86 -$ 27,004.31 $ 40,672.55

Balance Due Apex $40,672.55

Balance Due Sun - $20,506.43

Net Balance Due Apex $20,166.12

Net Balance Due Apex $20,166.12

6/9/81 Payment to Apex - $20,166.12

FINAL BALANCE 0

9. On June 9, 1981, Sun tendered Twenty Thousand One Hundred Sixty Six Dollars and Twelve Cents ($20,166.12) in a wire transfer as a full satisfaction and accord of both parties claims.

10. Apex accepted this payment and attempted to apply it to demurrage claims which are the subject matter of the above styled action involving the “old claims”.

CONCLUSIONS OF LAW

Missouri law on accord and satisfaction applies to these two cases, even though one is a civil diversity suit, and the other is an admiralty action. Missouri law applies to the diversity case under Erie R.R. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938), and to the admiralty action because there is no inconsistent federal statute or rule. Wilburn Boat Co. v. Firemen’s Fund Ins. Co., 348 U.S. 310, 313, 75 S.Ct. 368, 370, 99 L.Ed. 337 (1955); Continental Oil Co. v. Bonanza Corp., 677 F.2d 455, 461 n. 7 (5th Cir.1982); I/S Stavborg v. National Metal Converters, Inc., 500 F.2d 424, 427 (2d Cir.1974).

An accord and satisfaction is a contract for a settlement of a disputed or unliquidated debt for something other than, or different from, that claimed by the creditor. An accord and satisfaction consists of two elements: (1) an accord or agreement, in which one of the parties agrees to extend to the other, in satisfaction of a claim, something other than, or different from, that to which the other party considers himself entitled; and (2) a satisfaction, consisting of the actual execution or performance of the accord. Bohle v. Sternfels, 261 S.W.2d 936, 941 (Mo.1953); Long v. Weiler, 395 S.W.2d 234, 237 (Mo.App.1965).

There have been “repeated rulings” that, if the creditor accepts the payment tendered on express condition that acceptance thereof shall be deemed to be satisfaction in full of all claims, an accord and satisfaction results. Thus an accord and satisfaction results even though there may not be an actual meeting of the minds between the parties. The law implies the creditor’s acceptance through its knowing retention of the tendered money “notwithstanding protests on [the creditor’s] part. Even his striking out or modification of the condition ... has been held to be ineffective.” Milgram Foods Stores, Inc. v. Gelco Corp., 550 F.Supp. 992, 996 (W.D.Mo.1982) (quoting Henderson v. Eagle Express Co., 483 S.W.2d 767, 768 (Mo.App.1972)). See also Cox v. City of Freeman, 321 F.2d 887, 892 (8th Cir.1963); Collins v. Gaskill, 359 Mo. 171, 221 S.W.2d 181, 187 (1949).

To establish its claim of accord and satisfaction, Sun need only establish that Sun tendered payment for satisfaction of all these claims and that Apex, understanding the conditions of this tender, accepted that payment. Evidence at trial established that Sun tendered payment to satisfy or resolve all of these claims and that Apex, fully understanding these terms, accepted that payment.

The Court finds the trial testimony of Barry Baker and Pat Hagene as dispositive of the issues presented. First, Mr. Baker testified that he wired Apex on June 2, 1981 that Sun was tendering payment of Twenty Thousand One. Hundred Sixty Six Dollars and Twelve Cents ($20,166.12) as a final settlement or “net out” of the Johs Stove, Auntie Mame, and “old claims”. In his telegram, Baker advised Apex that Sun was “closing our books” on the old claims and the Johs Stove/Auntie Mame claims. (Plaintiff’s Exhibit 48.)

Further, Apex fully understood that Sun intended this payment as a settlement of all claims involved in these lawsuits. The Court finds Pat Hagene’s testimony of particular note. Pat Hagene admitted that Apex retained the payment fully understanding that it was intended to settle all claims. (Testimony of Pat Hagene, Vol. I, Transcript of Trial at 103, In. 15-25; p. 104, In. 1-12.)

Having understood Sun’s intention in offering this payment to settle all the claims between Apex and Sun, Apex’s retention of this payment bound it to its terms — a full settlement and accord and satisfaction of all the disputes between the parties. Where a “debtor tenders to the claimant or creditor some amount, upon the condition that its acceptance will be in full settlement of all claims, and the claimant or creditor accepts the tender, an accord and satisfaction results as a mater of law” even though the creditor may protest the adequacy of the amount or even state other conditions of its acceptance. Cox v. City of Freeman, 321 F.2d 887, 892 (8th Cir.1963). Apex fully understood the terms of this Twenty Thousand One Hundred Sixty Six Dollars and Twelve Cents ($20,166.12) tender and decided to accept it. As such, Apex was bound by its terms and an accord and satisfaction was executed by the parties.

Accordingly, judgment will be entered affirming the accord and satisfaction reached between the parties. Based upon the accord and satisfaction, this Court finds that all claims between the parties have been settled and no money need change hands between the parties.


author: DONALD E. O’BRIEN, Chief Judge.

text:
    David JACKSON, Jr., Plaintiff, Margaret HECKLER, Secretary of Health and Human Services of the United States, Defendant.
    No. Civ. 84-786-E.
    United States District Court, S.D. Iowa, C.D.
    Oct. 24, 1985.
    Robert W. Pratt, Des Moines, Iowa, for plaintiff.
    Robert C. Dopf, Asst. U.S. Atty., Des Moines, Iowa, for defendant.
   ORDER

DONALD E. O’BRIEN, Chief Judge.

This matter comes before the Court pursuant to an appeal from the decision of the Secretary of Health and Human Services denying disability insurance benefits to the plaintiff. On September 5, 1985, the Court held a hearing in this matter at which both plaintiff and the Secretary were represented. Based on the briefs and argument of counsel and the entire record herein, the Court remands this matter to the Secretary for further consideration.

The plaintiff filed an application for disability insurance benefits on September 21, 1982. The claim was denied at the initial determination stage on November 8, 1982. Plaintiff filed a second application which was denied on July 22, 1983, followed by a third application on November 29, 1983. This application was denied on February 8, 1984. Plaintiff requested reconsideration which was denied March 7, 1984. Plaintiff then requested a hearing and one was held on May 31, 1984. On July 5, 1984, the Administrative Law Judge denied plaintiffs claim for benefits. The Appeals Council denied plaintiffs request for review on October 22, 1984. Thus, the ALJ’s decision stands as the final decision of the Secretary.

In evaluating a claim of disability, the Social Security Administration is required to follow a fixed decisional framework as set forth in the Code of Federal Regulations, 20 C.F.R. § 404.1520. First, a determination is made whether a disability claimant is currently engaged in substantial gainful activity. If the plaintiff is not engaged in substantial gainful activity, the ALJ proceeds to determine whether he is suffering from a severe impairment. If there is a severe impairment, and it is one listed in Appendix 1 to subpart P of the Social Security regulations, the claimant is found disabled on medical evidence alone. If the impairment is not listed in Appendix 1, the AU proceeds to determine whether the claimant can perform his relevant past work. If the claimant cannot perform his relevant past work, the question then becomes whether he can nevertheless do other jobs that exist in the national economy, despite his having a severe impairment that prevents his return to his previous work. If the claimant is found not disabled at any point in these proceedings, the AU is not required to go any further or to make additional findings.

A decision of the Secretary must be upheld if it is supported by substantial evidence, 42 U.S.C. § 405(g); Richardson v. Perales, 402 U.S. 389, 91 S.Ct. 1420, 28 L.Ed.2d 842 (1971); McGhee v. Harris, 683 F.2d 256 (8th Cir.1982). It is not for the Court to resolve any conflicts in the evidence that may be apparent in the record. Rather, this is within the exclusive province of the Secretary, Janka v. Secretary of HEW, 589 F.2d 365 (8th Cir.1978). The Secretary must take into consideration the aggregate of plaintiff’s impairments, Paris v. Schweiker, 674 F.2d 707 (8th Cir.1982). In this case, the AU found that the plaintiff was unable to perform his past relevant work as a forklift operator in a meatpacking company (Tr. 16). However, the AU erred by failing to explicitly shift the burden of proof to the Secretary when it was found that plaintiff could not return to his old job as required by Fazio v. Heckler, 760 F.2d 187 (8th Cir.1985).

Further, the AU erred by relying on the medical-vocational guidelines (grid). The AU found plaintiff’s allegations of pain to be credible, but concluded that he had learned to live with this discomfort and it would not have a significantly adverse impact on his ability to perform light work. In considering subjective allegations of pain, there must be some objective medical evidence that points to a medical condition that could reasonably explain the pain or there must be some objective medical evidence demonstrating the existence of such pain. See Polaski v. Heckler, 751 F.2d 943, 949 (8th Cir.1984). The record contains objective medical evidence that points to a medical condition that could reasonably explain plaintiff’s pain. In 1981, plaintiff suffered a comminuted fracture of the tibia and patella in his right leg. A bowler’s plate and several screws were used for fixation of the fractures. Medical reports following plaintiff’s operation indicate that he suffered from severe pain (Tr. 161-64).

Plaintiff was involved in another automobile accident in 1982 and complained of lower back pain (Tr. 180). A physical examination revealed muscles spasms over the paraspanious muscles (Tr. 184). Plaintiff’s left leg was injured in 1983 as a result of a gunshot wound to his left thigh, which caused a suberochanteric fracture of his left femur (Tr. 214). A compression screw and long sideplate were inserted for internal fixation of the fracture (Tr. 214). Thus, the above objective medical evidence demonstrates several conditions that could reasonably explain plaintiffs pain. In conjunction with plaintiffs subjective complaints of pain, the record does not support the AU’s determination that plaintiffs pain was not severe enough to foreclose use of the grid. As in Fazio v. Heckler, supra, the AU “glossed over Fazio’s nonexertional pain impairment” and found that the plaintiff could perform light work and therefore applied the grid. This Court is of the opinion that this case should be remanded for the purpose of the taking of testimony of a vocational expert. In so doing, the AU should take care in addressing a hypothetical question to the vocational expert, to include all of plaintiff’s impairments, both exertional and nonexertional.

Upon the foregoing,

IT IS THEREFORE ORDERED that this matter should be remanded to the Secretary of Health and Human Services for further proceedings consistent with this opinion.


author: JAMES McGIRR KELLY, District Judge.

text:
    NORTHEAST WOMEN’S CENTER, INC. v. Robert McMONAGLE, et al.
    Civ. A. No. 85-4845.
    United States District Court, E.D. Pennsylvania.
    Oct. 25, 1985.

      Edmond A. Tiryak, Philadelphia, Pa., for plaintiff.
    Charles F. Volz, Philadelphia, Pa., for defendants.
   MEMORANDUM AND ORDER

JAMES McGIRR KELLY, District Judge.

The plaintiff in this action is the Northeast Women’s Center, Inc., a Pennsylvania corporation, which provides pregnancy testing, gynecological care, counseling and abortions to its clients. The defendants are a group of thirteen individuals, identified in their memorandum of law as “pro-life activists who have disrupted plaintiff’s business activities.” (defendants’ memo at 1). The plaintiff has filed a complaint which lists actions by the defendants in furtherance of an alleged “conspiracy which has as its goal the destruction of plaintiff’s business and property.” (defendants’ complaint at 1). The plaintiff is seeking injunctive relief and damages.

The defendants have filed a motion to dismiss the plaintiff’s complaint under Rule 12 of the Federal Rules of Civil Procedure. The defendants contend that the court lacks subject matter jurisdiction under Rule 12(b)(1), that the complaint fails to state a claim under which relief can be granted under Rule 12(b)(6), and that the court should not hear the plaintiff’s pendent state law claims in view of the absence of cognizable federal claims. For the following reasons, the court finds the defendants’ contentions to be without merit and will deny the motion.

A complaint should not be dismissed for failure to state a claim upon which relief can be granted “unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claims which would entitle him to relief.” Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 101-02, 2 L.Ed.2d 80 (1957). In deciding whether to dismiss under Rule 12(b)(6), “factual allegations of the complaint are to be accepted as true”, and “reasonable factual inferences will be drawn to aid the pleader.” D.P. Enterprises v. Bucks County Community College, 725 F.2d 943, 944 (3d Cir.1984). In order to dismiss under Rule 12(b)(1) for want of subject matter jurisdiction, the claims must be “... so insubstantial, implausible, foreclosed by prior decisions of this court or otherwise so completely devoid of merit so as not to involve a federal controversy within the jurisdiction of the District Court.” Oneida Indian Nation v. County of Oneida, 414 U.S. 661, 666-67, 94 S.Ct. 772, 776-77, 39 L.Ed.2d 73 (1974).

The plaintiff’s complaint includes three counts: a claim under the Racketeer Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C. § 1961, et seq., a claim pursuant to the antitrust laws, 15 U.S.C. §§ 1, 15; and pendent claims involving state law torts.

RICO COUNT

The defendants argue that the plaintiffs RICO count should be dismissed because the plaintiff fails to allege the defendants (1) committed predicate offenses, and (2) invested in an enterprise.

Section 1962' of the RICO Act provides that
It shall be unlawful for any person employed or associated with any enterprise engaged in, or the activities of which affect, interstate or foreign commerce, to conduct or participate, directly or indirectly, in the conduct of such enterprises’ affairs through a pattern of racketeering activity.

A “pattern of racketeering activity” as defined by RICO, 18 U.S.C. § 1961(5), consists of the commission of two acts of racketeering activity as set forth in 18 U.S.C. § 1961(1), within ten years of one another. Paragraph 37 of the complaint alleges thirteen acts of robbery were committed by the defendants on August 10, 1985. One of the “predicate acts” comprising “racketeering activity” under RICO is “any act or threat involving ... robbery ... which is chargeable under state law and punishable by imprisonment for more than one year”. 18 U.S.C. § 1961(1)(A). Further, the complaint alleges a conspiracy to destroy a business engaged in interstate commerce, by means of robbery, theft, physical violence and threats of physical violence. This alleged conspiracy constitutes a violation of 18 U.S.C. § 1951; such a violation in turn constitutes a predicate act under RICO. 18 U.S.C. § 1961(1)(B). Thus, the plaintiff’s RICO count cannot be dismissed for failure to allege the predicate acts required by the statute.

The defendants aver that “the assertions of racketeering are so plainly insubstantial as to be devoid of any merit.” However, the recent case of Sedima, S.P. R. L. v. Imrex Co., Inc., 473 U.S. -, 105 S. Ct. 3275, 87 L.Ed.2d 346 (1985) clarifies that if the plaintiff alleges that the defendants engaged in a pattern of racketeering activity in a manner forbidden by section 1962 and that the racketeering activities injured the plaintiff in his business or property, the plaintiff has stated a claim. Stating a claim pursuant to § 1962(c) requires alleging (1) conduct, (2) of an enterprise (3) through a pattern (4) of racketeering activity. Sedima, 105 S.Ct. at 3285. “But the statute requires no more than this. Where the plaintiff alleges each element of the violation, the comparable injury necessarily is the harm caused by the predicate acts sufficiently related to constitute a pattern, for the essence of the violation is the commission of those acts in connection with the conduct of an enterprise.” Id. at 3286. Here, the plaintiff’s have alleged all four elements and have described the defendant’s enterprise as a “group of individuals who have entered into a conspiracy which has as its goal the destruction of plaintiff’s business and property.” (Complaint at 1).

The defendants are incorrect in contending that the RICO count must fail because the plaintiffs do not allege that the defendants invested in the enterprise. Sections 1962(b), (e) and (d) do not require investment by the defendants: the statute encompasses conduct related to the unlawful enterprise other than direct financial investment.

In summary, it cannot be said that no set of facts proven in relation to the plaintiff’s complaint could result in liability for the defendants under RICO, thus, the plaintiff’s RICO count will not be dismissed.

ANTITRUST COUNT

The complaint asserts that in acting to destroy the plaintiff’s business, the defendants have violated “the Sherman Act,” 15 U.S.C. § 1, which provides that “[ejvery ... combination ... or conspiracy, in restraint of trade or commerce among the several States ... is declared to be illegal ..." For activities to constitute a Section 1 violation, the following five elements must be present: 1) the activities must be in or affect interstate commerce or foreign commerce; 2) the activities must be performed by two or more persons; 3) the activities must be the result of concerted action; 4) the concerted action must constitute a restraint on trade or commerce; and 5) the restraint must be unreasonable.” II E.D. Kintner, Federal Antitrust Law § 9.1, 5 (1980). All five elements have been alleged in the plaintiffs pleading.

(1) “The test of jurisdiction is not that the acts complained of affect a business engaged in interstate commerce but that the conduct complained of affects the interstate commerce of such business.” Page v. Work, 290 F.2d 323, 330 (9th Cir.) cert. denied, 368 U.S. 875, 82 S.Ct. 121, 7 L.Ed.2d 76 (1961). The plaintiff states that it engages in interstate commerce (Complaint ¶ 4) and that the defendants have conspired to destroy the plaintiffs business (Complaint ¶ 21), inferring that destruction of the business would necessarily affect the interstate commerce of the business.

The Supreme Court has declared that “[i]f it is interstate commerce that feels the pinch, it does not matter how local the operation which applies the squeeze.” United States v. Women’s Sportswear Mfrs. Ass’n, 336 U.S. 460, 464, 69 S.Ct. 714, 716, 93 L.Ed. 805 (1949). Discovery may reveal that the effect on interstate commerce of the alleged antitrust violation is not direct or substantial, but rather, is inconsequential and remote. The court may choose to refrain from sustaining federal antitrust jurisdiction upon such a finding. See Page v. Work, 290 F.2d at 332. However, presently, on the fact of the pleadings, the plaintiffs have alleged an affect on interstate commerce.

(2) The plaintiff has alleged the activities have been performed by thirteen persons. (Complaint 11 6-18).

(3) The plaintiff has alleged that the activities are the result of joint, concerted action by the individual defendants. (Complaint If 1, 20, 21, 22). An express agreement or other direct evidence of the conspiracy need not be presented, as the necessary concerted action may be inferred from indirect evidence such as the “course of dealings or other circumstances.” American Tobacco Co. v. United States, 328 U.S. 781, 809-10, 66 S.Ct. 1125, 1138-39, 90 L.Ed. 1575 (1946).

(4) and (5) Contracts, combinations and conspiracies which directly hinder or obstruct interstate commerce, and thus operate to the prejudice of the publie interest by restricting competition or obstructing trade, are restraints on trade or commerce prohibited by the Sherman Act. United States v. American Tobacco, 221 U.S. 106, 179, 31 S.Ct. 632, 648, 55 L.Ed. 663 (1911). “The legality of an agreement or regulation cannot be determined by so simple a test, as whether it restrains competition ... the true test of legality is whether the restraint imposed is such as merely regulates ... competition or whether it is such as may suppress or even destroy competition.” Board of Trade v. United States, 246 U.S. 231, 238, 38 S.Ct. 242, 243, 62 L.Ed. 683 (1918). The plaintiff has defined the defendants’ alleged restraint of trade as actions intended to further the goal of destroying the plaintiff’s business, largely through illegal practices. Thus, while discovery or trial may prove otherwise, as the pleadings now stand the plaintiff has alleged activities which may be found to be an unreasonable restraint.

The defendants argue the antitrust count should be dismissed, based on claims that the defendants are not in competition with the plaintiffs, and thus, that an “antitrust injury” has not been alleged; that the defendants’ action are analogous to political campaigns or boycotts which fall outside of the scope of the Sherman Act; and that the defendants’ motives and purposes are noncommercial in nature. Given the directive that factual allegations and inferences are to be read from the plaintiff’s perspective when evaluating a Rule 12 motion to dismiss, none of these claims will support dismissal of the antitrust claim at this state of action.

The legislative history of the Sherman Act “provides an indication” that the bill’s sponsors were concerned with competitors in commerce. State of Mo. v. Nat. Organization for Women, 620 F.2d 1301, 1309 (8th Cir.1980). However, certain courts have held that actions may be found to be within the scope of the Sherman Act even where the defendant is not an economic rival of the plaintiff and did not have an anti-competitive motive, if the effect of the actions complained of was to destroy a business. See United States v. Realty Multi-List, Inc., (“Realty Multi-List ”) 629 F.2d 1351, 1363-66 (5th Cir.1980); e.g., Klor’s Inc. v. Broadway-Hale Stores, 359 U.S. 207, 79 S.Ct. 705, 3 L.Ed.2d 741 (1959). The nature of the competition protected by the Sherman Act is revealed by the Supreme Court’s statements of the Act’s goals. For example, the Court has stated:

The Sherman Act reflects a legislative judgment that ultimately competition will produce not only lower prices, but also better goods and services ... all elements of a bargain are favorably affected by the free opportunity to select among alternative offers.

Nat’l Society of Prof. Engineers v. United States, 435 U.S. 679, 98 S.Ct. 1355, 55 L.Ed.2d 637 (1978). Thus, the essence of the competition covered by the Act is that choices be preserved, which does not necessarily entail that the parties to an action be business rivals. As the Fifth Circuit has stated, the nature of the competition protected by the Sherman Act cannot be simply equated with business rivalry. Realty Multi-List, 629 F.2d at 1363. “A practice is ‘plainly anticompetitive’ ... under the Sherman Act ... when it operates to deny to consumers the opportunity to choose among alternative offers without offering the possibility of any joint, efficiency-producing economic activities.” Id. at 1364.

Here, the plaintiffs allege that the defendants’ purpose is to destroy the plaintiffs’ business; and the defendants state that a “moral, religious, political and philosophical animus exists between this plaintiff and these defendants.” The plaintiff argues that the defendants’ actions are focused on destroying the plaintiff’s business in order to deny consumers the opportunity to choose the plaintiff’s abortion services. The alleged injury which flows from these actions reflects the anticompetitive effect of the alleged violation, which under Clayton Act analysis, may qualify it as an “antitrust injury” — “the type the antitrust laws were intended to prevent”. Brunswick Corp. v. Pueblo Bowl-O-Matic, Inc., 429 U.S. 477, 489, 97 S.Ct. 690, 697, 50 L.Ed.2d 701 (1977) (to recover treble damages on account of § 7 violations of the Clayton Antitrust Act, plaintiffs must prove “antitrust injury”). Thus, it is not dispositive for the defendants to argue that an antitrust injury has not occurred because the alleged violators are not doctors in direct competition for the plaintiffs clients. Additionally, Sherman Act violations cannot be tolerated “merely because the victim is just one merchant whose business is so small that his destruction makes little difference to the economy.” Klor’s Inc., 359 U.S. at 213, 79 S.Ct. at 710.

The defendants also argue that their alleged violative actions are analogous to political campaigns or boycotts which fall outside the scope of the Sherman Act. Political boycotts and attempts to influence legislation, standing alone, do not violate the antitrust laws. See, e.g., Eastern Railroad Presidents Conference v. Noerr Motor Freight, Inc., 365 U.S. 127, 136, 81 S.Ct. 523, 528, 5 L.Ed.2d 464 (1961) (attempts to enact legislation); State of Missouri v. Nat. Organization of Women, Inc., 620 F.2d 1301 (8th Cir.1980) (political boycott designed to assist the passage of desired legislation did not violate the antitrust laws). However, not all actions with political overtones are protected from Sherman Act applicability. The State of Missouri holding specifically distinguishes situations where the intention of the alleged violators is to destroy a business enterprise and where there is no issue of the right to petition for legislation. Id. at 1304, n. 4. The decision in State of Missouri cited Council of Defense of the State of New Mexico v. International Magazine, 267 Fed. 390 (8th Cir.1920), where a state-created council of defense’s actions in boycotting a publishing company because of the pro-German sympathies of a stockholder were found to violate the Sherman Act. In Council of Defense, “the declared and obvious purpose was to destroy complainant’s business in New Mexico”, Id. at 411, and no issue of the right to petition was involved. Thus, the Sherman Act was held to apply. State of Missouri, 620 F.2d at 1304, n. 4.

Here, the complaint alleges that the defendants’ primary purpose is to destroy the plaintiff’s business. In contrast, in State of Missouri, the court established that the defendants’ ultimate objective was to assist the passage of desired legislation, and that the economic harm resulting from the defendants’ action was an intermediate goal in achieving that objective. Id. at 1314. It follows that on the basis of the plaintiff’s pleadings, the instant case is not directly analogous to the political boycott in State of Missouri, or the publicity campaign in Noerr Motor Freight, and dismissal is not compelled at this stage by the reasoning presented in those decisions.

Finally, the defendants infer that the antitrust count should be dismissed because the defendants’ purposes are noneconomic and noncommercial. While the Sherman Act is aimed primarily at combinations having commercial objectives, it has also been applied, albeit to a more limited extent, to organizations which normally have other objectives, Apex Hosiery Co. v. Leader, 310 U.S. 469, 506-07, 60 S.Ct. 982, 999-1000, 84 L.Ed. 1311 (1940), such as labor unions, Allen Bradley Co. v. Local 3, International Brotherhood of Electrical Workers, 325 U.S. 797, 65 S.Ct. 1533, 89 L.Ed. 1939 (1945), or state appointed commissions, Council of Defense of State of New Mexico, 267 Fed. at 390.

Therefore, it would be improper to dismiss the plaintiff’s count pursuant to the defendant’s motion on the basis of the defendants’ inference that its objectives are noncommercial and noneconomic. Moreover, in a Rule 12 motion, the court is compelled to interpret the pleadings from the plaintiff’s perspective, and here the plaintiff has characterized the defendants’ objective as the destruction of a commercial business.

The court is aware that the Sherman Act does not purport to afford remedies for all torts committed by or against persons engaged in interstate commerce, Hunt v. Crumboch, 325 U.S. 821, 826, 65 S.Ct. 1545, 1547, 89 L.Ed. 1954 (1945). The court also acknowledges that the pleadings do not portray a “typical” antitrust violation; the dissimilarity of the alleged combination to combinations normally held to violate the Sherman Act is disturbing. However, neither does the alleged combination fall very clearly into a category of political activity or of simple tortious action.

Facts have been alleged by the plaintiff from which it could be determined as a matter of law that, by reason of the defendants’ intent or by the inherent nature of their acts, their alleged conspiracy was calculated to prejudice public interest by restricting commerce.

Thus, it cannot be said that no set of facts proven in relation to the plaintiff’s complaint could result in liability for the defendants under the federal antitrust laws. At this stage, the plaintiff’s antitrust count will not be dismissed for failure to state a claim or for want of federal jurisdiction.

STATE LAW CLAIMS

The complaint alleges RICO and antitrust causes of action, therefore, the defendants’ request to dismiss the plaintiff’s state law claims for want of a surviving federal claim, pursuant to United Mine Workers of America v. Gibbs, 383 U.S. 715, 86 S.Ct. 1130, 16 L.Ed.2d 218 (1966), will be denied.

      . For purposes of RICO, each act of criminal activity is counted as an act of racketeering activity even if numerous acts arise out of the same episode. See United States v. Weatherspoon, 581 F.2d 595, 601-02 (7th Cir.1978).


author: ASPEN, District Judge:

text:
    Haim ELRAD, Plaintiff, v. UNITED LIFE AND ACCIDENT INSURANCE COMPANY, Defendant.
    No. 85 C 6953.
    United States District Court, N.D. Illinois, E.D.
    Oct. 29, 1985.
    Cheri A. Novak, Chicago, 111., for plaintiff.
    James T. Nyeste, Wildman, Harrold, Allen & Dixon, Chicago, 111., for defendant.
   MEMORANDUM OPINION AND ORDER

ASPEN, District Judge:

Dr. Haim Elrad (“Elrad”) sued United Life and Accident Insurance Co. (“United”), alleging misrepresentation in connection with United’s sale to him of a life insurance policy. The case was originally filed in Illinois state court, but United removed to this Court under 28 U.S.C. § 1441(b), basing jurisdiction on diversity of citizenship. Once here, United promptly moved to dismiss the case, while Elrad moved to remand the case to state court. For the following reasons, United’s motion is granted and Elrad’s is denied.

Facts

The allegations of the complaint, viewed in the light most favorable to Elrad and assumed to be true, state the following. On October 12, 1981, Robert Smith, acting as United’s agent, sold a life insurance policy to Elrad. Smith allegedly induced Elrad to buy the policy by falsely representing that the policy was a “whole-life” rather than “term” policy, and that he could deduct from his federal income tax interest he would incur to finance a loan to pay for the policy. Relying on those misrepresentations, Elrad borrowed money from Professional Funding Corp. to pay for the premiums.

Elrad claims that the interest is not lawfully tax deductible, and that the policy is a term rather than whole-life one. He seeks recovery under three state law theories. Count I alleges a violation of Ill.Rev.Stat. ch. 73, § 761, a provision of the Illinois Insurance Code prohibiting misrepresentations as to the terms or benefits of a policy. Count II rests on §§ 1-203 and 2-302 of the Uniform Commercial Code (“UCC”), Ill.Rev.Stat. ch. 26, §§ 1-203, 2-302 (1983), which respectively prescribe good faith in performing contracts subject to the UCC and proscribe unconscionable clauses in contracts governed by the UCC. Count III alleges violations of the Illinois Consumer Fraud and Deceptive Business Practices Act, Ill.Rev.Stat. ch. 12U/2, 11262 (1983), and the Uniform Deceptive Trade Practices Act, Ill.Rev.Stat. ch. I2D/2, 11312 (1983). None of these theories can defeat United’s motion to dismiss.

The Petition for Removal

As a threshold matter, we must rule on Elrad’s opposition to United’s petition to remove this case from state court. Elrad does not dispute that diversity jurisdiction is proper from the face of his complaint: he is a citizen of Illinois while United is incorporated in and has its principal place of business in New Hampshire. Moreover, the amount in controversy exceeds $10,000, and United has complied with the non-jurisdictional requirements for removal set forth in 28 U.S.C. § 1446.

Elrad’s argument is that the case was not “providently” removed under 28 U.S.C. § 1447(c). He points out there were related state court cases involving the same subject matter, and that judicial economy compels that the cases be tried together. In one state case, Professional Funding Corp. sued Elrad for not paying on the insurance funding agreement. Elrad counterclaimed and also brought in United and its alleged agent Smith as third-party defendants. But the state court dismissed the third-party claim against United, suggesting that Elrad refile the complaint and move to consolidate it with the first suit. Elrad refiled, but United removed the case here before Elrad could file his motion to consolidate.

At the outset, we observe that the term “provident” in § 1447(c) is not a broad invitation to this Court to decline jurisdiction simply for reasons of economy. It simply refers to basic non-jurisdictional requirements such as the posting of a bond. It is now well established that a district court cannot remand an otherwise properly removed case for discretionary or policy reasons. See Thermitron Products, Inc. v. Hermansdorfer, 423 U.S. 336, 343-44, 96 S.Ct. 584, 589-90, 46 L.Ed.2d 542 (1976); Ryan v. State Bd. of Elections of State of Ill., 661 F.2d 1130, 1133 (7th Cir.1981). Since this case satisfies the jurisdictional and non-jurisdictional requirements of §§ 1441 and 1446, respectively, there is no basis for remanding this case. Thus, the motion to remand is denied. Having so ruled, we may now turn our attention to United’s attack on the complaint.

Count I: No Private Right of Action

United is correct that no private right of action exists for a violation of Ill.Rev.Stat. ch. 73, § 761. Section 761(5) provides that any company who violates that section “shall be guilty of a business offense and shall be required to pay a penalty of [between $100 and $1,000], to be recovered in the name of the People of the State of Illinois by the State’s Attorney of the county in which the violation occurs____” At least one Illinois court has held that in enacting this section the Illinois legislature pre-empted the remedies for violations of § 761, foreclosing a private right of action. See Glazewski v. Allstate Ins. Co., 126 Ill.App.3d 401, 410-11, 81 Ill.Dec. 349, 466 N.E.2d 1151, 1157-58 (1st Dist.1984), aff'd in part, rev’d in part on other grounds, 108 Ill.2d 243, 91 Ill. Dec. 628, 483 N.E.2d 1263 (1985). Elrad has not attempted to distinguish Glazewski or otherwise address this challenge to Count I. Accordingly, we follow Glazewski and grant United’s motion to dismiss Count I.

Count II: UCC Does Not Apply

We must also reject Elrad’s claim that United’s alleged misrepresentations are subject to the UCC. He has cited no authority to support his novel assertion. He claims that United’s conduct was unconscionable under Section 2-302 of the Code, but Article II applies only to the sale of goods. See Ill.Rev.Stat. ch. 26, 112-102 (1983). We disagree with Elrad’s strained argument that a sale of life insurance is somehow the sale of a “good.” See ¶ 2-105 (defining “good”). He also claims that United’s conduct violated the “obligation of good faith” imposed by ¶ 1-203 of the UCC. But of course 111-203 applies only to a “contract or duty within” the UCC, and Elrad has not shown how his insurance contract is within the Code. While an insurance contract is a “commercial transaction,” not all commercial transactions fall within the Code. Indeed,

[t]he ... Code does not apply to the sale of realty (except fixtures), yet these are undeniably commercial matters. The Code does not apply to the formation, performance, and enforcement of insurance contracts____

White & Summers, Uniform Commercial Code (2d Ed. 1980) at 6. Finding no basis for holding that the UCC can apply to Elrad’s claim, we dismiss Count II.

Count III: Statute of Limitations

Actions under the Consumer Fraud and Deceptive Business Practices Act contain a three-year limitation period. Ill.Rev. Stat. ch. 121V2, If 270a, § 10a(e) 1983). This limitation provision applies as well to Elrad’s related claim under the Uniform Deceptive Trade Practices Act, Ill.Rev.Stat. ch. 12172, § 311 et seq. (1983). See Chgo. Bd. Options Exchange v. Connecticut Gen’l Life Ins. Co., 553 F.Supp. 125, 129 (N.D.Ill.1982), rev’d on other grounds, 713 F.2d 254 (7th Cir.1983). Elrad bought the policy in dispute in October 1981 and filed his suit in state court well over three years later, in July 1985. United claims that the suit is therefore time-barred.

Elrad’s brief response is that the limitations clock did not begin running until October 3, 1984, which is when he allegedly learned that the interest on his separate funding agreement is not tax deductible. He also claims that the finance charge was not to begin until October 12, 1984. Thus, Elrad essentially argues (1) that the so-called “discovery rule” applies to his suit under the two trade regulation acts, and (2) that he discovered the misrepresentation in October 1984. Even if the discovery rule-does apply to this case, Elrad’s claim was untimely.

The Seventh Circuit has applied the discovery rule to a suit under the Uniform Deceptive Trade Practices Act, although it did so without discussing or citing Illinois law. See Chicago Bd. Options Exchange, 713 F.2d at 261 (“CBOE”). One Illinois case did not expressly hold that the discovery rule applies to suits under the Act, but held that the plaintiff there had not sufficiently pled facts to withstand a motion to dismiss even under application of the discovery rule. See Sommer v. United Savings Life Ins. Co., 128 Ill.App.3d 808, 819, 84 Ill.Dec. 77, 471 N.E.2d 606, 615 (1984). We will assume that Illinois courts would apply a “discovery rule” to suits under the Act. Under such a rule, the limitations clock does not begin to tick until the plaintiff learns or in the exercise of due diligence should have learned of all of the elements of injury stemming from the allegedly deceptive acts. See CBOE, 713 F.2d at 261; also, e.g., Knox College v. Celotex Corp., 88 Ill.2d 407, 414-17, 58 Ill.Dec. 725, 430 N.E.2d 976, 979-80 (1981). In Knox College, the Illinois Supreme Court explained what the phrase, “knows or should have known of the injury,” means:

This court has recently considered the discovery rule in depth in two cases, and has adopted a construction of the rule which can be termed neither narrow nor expansive. That is, we have held that the event which triggers the running of the statutory period is not the first knowledge the injured person has of his injury, and, at the other extreme, we have also held that it is not the acquisition of knowledge that one has a cause of action against another for an injury he has suffered. Rather, we have held in Witherell v. Weimer (1981), 85 Ill.2d 146, 156, 52 Ill.Dec. 6, 421 N.E.2d 869 and Nolan v. Johns-Manville Asbestos (1981), 85 Ill.2d 161, 171, 52 Ill.Dec. 1, 421 N.E.2d 864, that the statute starts to run when a person knows or reasonably should know of his injury and also knows or reasonably should know that it was wrongfully caused. In those cases it was made clear that the term “wrongfully caused” does not mean that the plaintiff must have knowledge of the defendant’s negligent conduct before the statute is triggered.
4s 4c 4c >{< <i H< 4c
The term “wrongfully caused,” as we have used that term in stating the rule must be viewed as a general or generic term, and not a term of art. This is apparent from the holdings of Nolan and Witherell that the use of the term does not connote knowledge of negligent conduct or knowledge of the existence of a cause of action.
At some point, the injured person becomes possessed of sufficient information concerning his injury and its cause to put a reasonable person on inquiry to determine whether actionable conduct is involved. At that point under the discovery rule, the running of the limitations period commences. As we held in Witherell and Nolan, this is usually a question of fact, and as we view the facts before us, it is a question of fact in this case.

88 Ill.2d at 414-17, 58 Ill.Dec. 725, 430 N.E.2d at 979-81. Regardless of when Elrad actually knew of the alleged misrepresentation, we think there is no genuine issue of fact that more than three years have passed since Elrad reasonably should have known of his injury and should have known that it was wrongfully caused.

In reaching this conclusion we must clear up some superficial factual confusions. First, the complaint alleges that Smith sold Elrad the policy in October 1983. But United has tendered an affidavit of an employee, as well as copies of the relevant insurance forms, which show that the policy was issued in October 1981. Elrad has not rebutted this evidence, by affidavit or otherwise. Under Rule 56(e), then, we hold that no genuine issue of fact exists that Elrad’s policy was first issued in October 1981. Second, Elrad contends in his “Reply to Defendant’s Motion to Dismiss” at 3 that the finance charge, according to a separate funding agreement, was to begin on October 12, 1984, and that he learned on October 3, 1984, that the interest was not tax deductible. Neither assertion is supported by document or affidavit. In contrast, United counters with two notes signed by Elrad, one dated October 12, 1981, and another dated October 12, 1982, which show that regardless of when Elrad first learned or believed that the interest was not deductible, he actually began accruing interest at an 8% annual rate as early as October 12, 1981. Elrad has not rebutted this documentary evidence. Accordingly, we hold that no genuine issue exists that interest began accruing on his funding of United's policy on October 12, 1981. Indeed, his unsubstantiated assertion to the contrary in his response flirted with the sanctions of Fed.R.Civ.P. 11.

Having established this factual framework, we hold that Elrad should have learned that his interest payments were not deductible at least by April 15, 1982, the next “tax day” following his financing agreement. He gives no reason whatsoever why he failed to discover the problem by then or could not have done so in the exercise of due diligence. Accordingly, we dismiss Count III as time-barred to the extent it is based on Smith’s alleged misrepresentation concerning the deductibility of interest payments. Count III is also based on an alleged misrepresentation that the policy was “whole-life” rather than “term.” Elrad has made no argument or showing at all as to when he discovered this misrepresentation or why he should not have discovered it within three years before filing the suit. Thus, we also dismiss Count III as time-barred to the extent it is based on this second alleged misrepresentation.

Conclusion

For the foregoing reasons, we deny Elrad’s motion to remand to state court and grant United’s motion to dismiss the complaint in its entirety. In light of this ruling, we do not reach United’s other challenges to the complaint, and we express no opinion on their merit. It is so ordered.

      . The complaint actually alleges that the policy was issued in October 1983. However, as we discuss below at 7, it is clear that 1981 is the correct date.

      . That provision states in relevant part:
      (1) No company doing business in this State, and no officer, director, agent, clerk or employee thereof, broker, or any other person, shall make, issue or' circulate or cause or knowingly permit to be made, issued or circulated any estimate, illustration, circular, or verbal or written statement of any sort misrepresenting the terms of any policy issued or to be issued by it or any other company or the benefits or advantages promised thereby or any misleading estimate of the dividends or share of the surplus to be received thereon, or shall by the use of any name or title of any policy or class of policies misrepresent the nature thereof.

      . Nor is there a basis for abstaining under any of the variations of the so-called “abstention doctrine." Elrad does not contend otherwise.

      . Our ruling is narrow. All we hold is that no private right of action exists under § 761 for violations of that section. This holding does not implicate the dispute between courts in this district, as well as between appellate courts in Illinois, as to whether § 767 of the Act preempts other remedies for an insurer’s failure to pay on a claim. See, e.g. Barr Co. v. Safeco Ins. Co. of America, 583 F.Supp. 248, 255-56 (N.D.Ill. 1984) (Moran, J.) (detailing the dispute).

      . That section says:
      (e) Any action for damages under this Section shall be forever barred unless commenced within 3 years after the cause of action accrued;
      The substantive provision of the Act reads:
      Unfair methods of competition and unfair or deceptive acts or practices, including but not limited to the use or employment of any deception, fraud, false pretense, false promise, misrepresentation or the concealment, suppression or omission of any material fact, with intent that others rely upon the concealment, suppression or omission of such material fact, or the use or employment of any practice described in Section 2 of the “Uniform Deceptive Trade Practices Act”, approved August 5, 1965, in the conduct of any trade or commerce are hereby declared unlawful whether any person has in fact been misled, deceived or damaged thereby. In construing this section consideration shall be given to the interpretations of the Federal Trade Commission and the federal courts relating to Section 5(a) of the Federal Trade Commission Act.
      Ill.Rev.Stat. ch. ¶262 (1983).

      . This is probably true, as Illinois courts apply a discovery rule under the related doctrine of fraud. See, e.g., Knox v. Celotex Corp., 88 Ill.2d 407, 58 Ill.Dec. 725, 430 N.E.2d 976 (1981).

      . Even though United’s motion was filed under Rule 12, the standards of Rule 56 apply since we are considering matters outside of the pleadings. See Fed.R.Civ.P. 12(b). Rule 56(c) empowers the Court to grant summary judgment if United, the moving party, shows that no genuine issue of material fact exists. See Cebula v. General Elec. Co., 614 F.Supp. 260, 263 (N.D.Ill. 1985) (Aspen, J.). We must view the evidence, as well as reasonable inferences it creates, in the light most favorable to Elrad. Id. If United fails to carry its burden of proof, the motion will be denied, regardless of whether Elrad utters a word in response; but if United succeeds in showing that no genuine issue exists, the burden shifts to Elrad to create a genuine issue. He cannot rest on bare pleadings or unsubstantiated assertions in so doing. Id. at 263-64; Fed.R.Civ.P. 56(e). In summary judgment motions raising a statute of limitations defense, the defendant must establish specifically that (1) the limitation period has run, and (2) that no genuine issues of material fact exist as to the time plaintiffs claim accrued and as to the application of the statute to plaintiffs claim. See, e.g., Green v. United States, 765 F.2d 105, 107 (7th Cir.1985).

      . For example, we do not address United’s argument that there were no misrepresentations because the interest was actually deductible and because the policy was actually whole-life. We do not in this opinion interpret the Internal Revenue Code or construe the insurance policy.


text:
    CALEB & CO. and Unit & Co., partnerships, on behalf of themselves and all others similarly situated, Plaintiffs, v. E.I. DuPONT DE NEMOURS & COMPANY, First Jersey National Bank, and Conoco, Inc., Defendants.
    No. 84 Civ. 4075(RWS).
    United States District Court, S.D. New York.
    Oct. 31, 1985.
    Breed, Abbott & Morgan, New York City (Thomas A. Shaw, Jr., Thomas W. Kelly, Howard Wolfson, of counsel), for plaintiffs.
    Cravath, Swaine & Moore, New York City (Ronald S. Rolfe, Alan R. Glickman, Marc J. Apfelbaum, of counsel), for E.I. DuPont and Conoco.
    Olwine, Connelly, Chase, O’Donnell & Weyher, New York City (Job Taylor, III, William K. Dodds, Maura Fecher, of counsel). for First Jersey Nat. Bank.
   OPINION

SWEET, District Judge.

Plaintiffs Caleb & Company and Unit & Co. (“Caleb”) have brought a motion for an order pursuant to Rule 3(j) of the Civil Rules for the Southern District of New York granting reargument of that portion of the court’s July 26, 1985 opinion which dismissed Caleb’s second cause of action “to the extent that it is premised on an obligation to pay promptly prior to August 17.”

The standard for granting a motion for reargument is strict in order to dissuade repetitive arguments on issues that have already been considered fully by the court. Such motions, therefore, may be granted only where the court has overlooked matters or controlling decisions which might have materially influenced the earlier decision. New York Guardian Mortgagee Corp. v. Cleveland, 473 F.Supp. 409, 420 (S.D.N.Y.1979). In its memorandum in support of the motion for reargument, Caleb cites no controlling authority which would controvert the court’s earlier opinion but instead asserts that the court may have overlooked the terms of the prospectus on which Count Two of the complaint was premised.

In view of Caleb’s motion for reargument, the relevant paragraph of the prospectus has been reexamined to determine whether any relevant matters had been overlooked in rendering the July 26 opinion. Since the July 26 opinion does not, either explicitly or implicitly, address the significance of the different language used in the summary of the prospectus, the body thereof, and the press releases, the motion for reargument is granted.

All of the evidence on the record including each of the memoranda submitted in support of the original motion have been reconsidered and upon such reconsideration the conclusion in the July 26, 615 F.Supp. 96, opinion which dismissed a portion of Count Two of Caleb’s complaint is withdrawn and the motion to dismiss denied. It is assumed that all authorities and argument have been presented, and thus no reargument as such is required. However, should DuPont wish to be heard further, such reargument can be heard upon notice on November 8 or such other date as is agreeable to counsel and upon such notice this decision will be stayed until reargument.

The DuPont prospectus included an obligation to pay promptly in accordance with the following terms:

Upon the terms and subject to the conditions of the Offer, the exchange of DuPont Shares or cash for Conoco Shares validly tendered and not withdrawn will be made as promptly as practicable after the latest of
(i) the tender of such Conoco Shares,
(ii) 12:00 Midnight, New York time, on August 4, 1981,
(iii) approval of the DuPont stockholders of the proposal to amend the certificate of Incorporation of DuPont to increase the authorized number of DuPont Shares and to approve the issuance of DuPont Shares in connection with the acquisition of Conoco, at a meeting called for August 17, 1981,
(iv) the expiration of the waiting period applicable to the Offer under the HSR Act in connection with the Purchaser’s acquisition of the Conoco Shares or
(v) with respect to any Conoco Shares not theretofore accepted for exchange, the expiration of any withdrawal period resulting from the commencement of a tender offer for Conoco Shares by another bidder.

Notwithstanding clause (iii) above, the Purchaser reserves the right (but shall not be obligated) to accept Conoco Shares in exchange for cash prior to DuPont stockholder approval.

Prospectus at 17-18 (emphasis added). The July 26 opinion analyzed each of these two sentences and found what appeared to be an unambiguous obligation followed by an additional reserved right. Thus, the opinion concluded that an obligation to pay cash promptly did not arise until all five events had occurred. The second sentence, as explained in the July 26 opinion, did not create an additional obligation to pay cash in exchange for Conoco shares before the shareholder meeting, since the phrase “in exchange for cash” modifies the shares which may be accepted rather than the timing of the payment of cash exchanged for those shares.

While each of these sentences appear clear, an examination of the relationship between the two sentences reveals significant ambiguity regarding DuPont’s contractual obligation to pay promptly. By linking the two sentences with the phrase “[notwithstanding clause (iii) above,” the prospectus is open to the interpretation that DuPont’s exercise of its right to accept stock prior to the stockholders’ meeting on August 17, also made the date of the stockholders’ meeting irrelevant for purposes of triggering its prompt payment obligation.

Two supportable interpretations may be drawn from the “notwithstanding” phrase. While the phrase may be interpreted to refer only to the statement within clause (iii) regarding the requirement of stockholder approval for the proposed merger, the “notwithstanding” phrase may also refer to the function of clause (iii) regarding the requirement of stockholder approval as a prerequisite to DuPont’s prompt payment obligation. Of course, there are better ways to express each of the above interpretations than through the cryptic use of the word “notwithstanding.” The prospectus could have stated that even if DuPont exercised its right to accept shares in exchange for cash prior to the August 17 meeting that clause (iii) was still valid with regard to its prompt payment obligation. On the other hand, the prospectus could have stated that clause (iii) should be disregarded for prompt payment purposes if DuPont exercised its right to accept shares in exchange for cash. Each interpretation may fairly be drawn from this section as it was written in the body of the prospectus.

Having concluded that the body of the prospectus does not unambiguously set forth the contractual obligations of DuPont, it becomes necessary to examine any possible evidence that would clarify the prompt payment requirement. Some additional evidence may be gathered from the fact that a different version of the “notwithstanding” clause appears in the summary of the prospectus. As stated in the summary, DuPont reserved the right “to accept and pay for Conoco shares tendered for cash prior to DuPont stockholder approval” (emphasis added). Caleb urges that the additional words underlined above establish DuPont’s absolute duty to pay prior to the stockholder meeting for any Conoco shares accepted in exchange for cash. This interpretation fails for two reasons. First, such an interpretation would mean that this brief phrase establishes a more stringent duty to pay than is set forth at length in the immediately preceding sentence which states DuPont’s prompt payment obligation. More importantly, the absolute payment deadline urged by Caleb does not clarify the ambiguity found in the body of the prospectus but instead represents an independent obligation not supported by the body of the prospectus.

Nevertheless, the language in the summary tends to support Caleb's position. The words “and pay for” suggest that the “notwithstanding” clause and sentence which it introduces refer to and modify the prompt payment obligation in the immediately preceding sentence. Therefore, while the words do not create an absolute payment deadline, they do support the argument that the “notwithstanding” clause should be interpreted to make the stockholders’ meeting on August 17 irrelevant for the purpose of triggering DuPont’s prompt payment obligation.

The most significant evidence for interpreting DuPont’s prompt payment obligation as requested by Caleb may be found in the press releases issued by DuPont on August 5, 1981. Since the prospectus itself does not clearly determine the obligations of DuPont, “[t]he practical interpretation of the contract by [the] party, evidenced by his words or acts, can be used against him on behalf of the other party____” 3 Cor-bin on Contracts § 558, at 256 (1960). See also Ocean Transport Line, Inc. v. American Philippine Fiber Industries, Inc., 743 F.2d 85, 88, 90-91 (2d Cir.1984); Viacom International, Inc. v. Lorimar Productions, Inc., 486 F.Supp. 95, 98 n. 3 (S.D.N. Y.1980).

At 9:12 a.m. on August 5, DuPont issued a press release which included the following statement:

DuPont has accepted all shares tendered for cash at the close of the withdrawal period last night and began paying $98 for each share at 3:45 a.m. today, in accordance with the terms and conditions of the offer.
Shares tendered for stock and all shares tendered without election for cash or stock will be exchanged for DuPont shares ____ The exchange will take place promptly after August 17, subject to DuPont shareholders’ approval of the issuance of DuPont shares.

Very soon thereafter, at 9:55 a.m., the company issued an additional statement:

Clarifying DuPont’s earlier release, all Conoco shares tendered for cash on or prior to midnight Monday, August 3, have been purchased and payment therefor will be made as promptly as practicable.

Together, these statements provide a contemporaneous interpretation by DuPont of its obligations under the prospectus. The first statement depicts DuPont’s actions following its acceptance of shares in exchange for cash when it began paying $98 per share immediately on the morning of August 5. The second statement qualified these actions and was termed a clarification. It cautioned that payment would only be made as “promptly as practicable,” thereby tracking the language in the body of the prospectus. Moreover, the press releases clearly distinguish between the company’s prompt payment obligations for the two types of acceptances. Only with regard to those transactions in which Conoco shares were to be exchanged for DuPont shares did the company state that the exchange would take place promptly after August 17, 1981, the date of the stockholders’ meeting.

The evidence and the practicalities of the tender offer indicate that clause (iii), the August 17 stockholders’ meeting, was irrelevant for the purpose of triggering DuPont’s prompt payment obligations for Conoco shares accepted in exchange for cash. It is, of course, axiomatic that the language of a contract is to be construed against the draftsman. 67 Wall Street Co. v. Franklin National Bank, 37 N.Y.2d 245, 371 N.Y.S.2d 915, 918, 333 N.E.2d 184, 186-87 (N.Y.1975). This principle, together with the evidence considered above, compel the conclusion that the July 26 opinion erroneously dismissed Count Two of Caleb’s complaint to the extent it was premised on a contractual obligation to pay promptly prior to August 17, 1981.

The conclusion reached today is merely that the August 17 shareholders’ meeting was not one of requirements for DuPont’s prompt payment obligation towards Caleb. Having rejected the argument that DuPont was absolutely required to pay prior to the shareholders’ meeting, no determination has been made regarding the date on which DuPont’s payment of cash in exchange for Conoco shares was required under the prospectus.

The prospectus merely requires that DuPont pay “as promptly as practicable” after each of the four conditions, other than the stockholder meeting, had occurred. At this stage in the proceedings, it is not possible to translate the phrase “as promptly as practicable” into a specific number of days after which DuPont had breached its obligation to pay cash. Caleb’s suggested rule of thumb of five days for prompt payment cannot be accepted on the facts now presented. As DuPont correctly notes, the prospectus and letter of. transmittal provide that delivery of cash or DuPont shares in exchange for Conoco shares would only be made after Conoco stock certificates had been received by the Exchange Agent; the prospectus permitted tendering shareholders up to eight New York Stock Exchange trading days (after tender to deposit their certificates. Thus, the actual date of delivery of the tendered Conoco shares is relevant to determining when payment was required by the prospectus. The time periods specified for other procedures in the tender offer may also be relevant to determining the date on which payment was required under the prospectus. For example, the prospectus cautioned that it would take nine New York Stock Exchange trading days to announce the final results of the first proration.

For the reasons stated above, the July 26 opinion is amended to state that Count Two of Caleb’s complaint properly states a claim based on DuPont’s contractual obligation to pay “as promptly as practicable” after August 5, 1981. On this date, each of the four required preconditions had been satisfied and DuPont had notified the Exchange Agent of its acceptance.

IT IS SO ORDERED.

      . This evidence only becomes relevant upon the finding that the body of the contract is ambiguous. Had the body of the prospectus been clear, the different language used in the summary would be irrelevant for the purpose of determining DuPont’s contractual obligations since the summary section provides that ”[t]he information below is qualified in its entirety by the more detailed information ... appearing elsehere in this Prospectus."

        . It should be noted that DuPont's acceptance of the tendered shares is not listed as one of the preconditions to prompt payment. This can only be regarded as an inadvertant omission since no exchange could possibly have been contemplated without DuPont’s acceptance which would complete the contractual transaction. The prospectus indicates at another paragraph on page 18 that DuPont shall have been deemed to accept validly tendered shares when it gave oral or written notice to the Exchange Agent.