author: HUYETT, District Judge.

text:
    UNITED STATES of America v. Russell STRONG.
    Crim. A. No. 85-3.
    United States District Court, E.D. Pennsylvania.
    March 5, 1985.

      Linda Dale Hoffa, Asst. U.S. Atty., Philadelphia, Pa., for the U.S.
    Walter Philips, Philadelphia, Pa., for defendant.
   FINDINGS OF FACT, DISCUSSION, AND CONCLUSIONS OF LAW

HUYETT, District Judge.

Presently pending before me are the government’s applications to request the assistance of the judiciaries of Hong Kong and Singapore and for the exclusion of time under the Speedy Trial Act, 18 U.S.C. § 3161 et seq. These motions present several novel issues of law. In order to set them in the proper framework, I will very briefly describe the nature of the charges against the defendant.

Defendant Strong is charged with five counts of violating 18 U.S.C. § 287 (filing false claims). It is alleged that Strong filed false amended tax returns in the names of several Americans who resided in Indonesia. Each of these amended returns would have resulted in large refunds to the taxpayers. It is alleged that Strong directed that the refund checks be sent to two addresses in Hong Kong. One of these was a post office box registered to the name of Puta Caliente Ltd., a Hong Kong Corporation. The other address was the location of Golden Trinity Ltd., another Hong Kong corporation. It is further alleged that Strong was personally involved in both of these businesses.

The Internal Revenue Service (“IRS”) at one point sent a refund check to the Hong Kong address and it is alleged that the proceeds from that check found their way from Hong Kong to a bank account in California, and from there at least some part of the funds were transferred to the defendant’s account in Beckenridge, Texas.

On February 22, 1985, I held oral argument on the government’s motions. I have decided to grant the government’s applications and to exclude the time necessary under the Speedy Trial Act. In support of that decision, I make the following findings of fact.

FINDINGS OF FACT

1. On January 3, 1985 a federal grand jury in the Eastern District of Pennsylvania returned a five-count indictment charging the defendant Russell Strong with violations of 18 U.S.C. § 287 (filing false claims against the United States).

2. On January 17, 1985, the defendant was arraigned and entered a plea of not guilty on all counts before United States Magistrate Peter B. Scuderi.

3. On January 28,1985, the government filed separate applications to this court to request the assistance of the judiciary of Hong Kong and the judiciary of Singapore in the preparation of this case for trial.

4. Simultaneous with the filing of the requests for judicial assistance, the government filed a motion, pursuant to 18 U.S.C. §§ 3161(h)(3)(A), 3161(h)(8), and 3161(h)(1)(F), requesting that excludable time in this matter be computed and entered on the record from the date of the filing of the requests for judicial assistance until such time as the requests are either granted or denied by the respective foreign judiciaries or other prompt disposition is made.

5. During the investigation of this case, in January and February, 1983, the government learned through an interview with Max Brown, an American citizen residing in Hong Kong, that Shirley Chan, a citizen of Hong Kong, had important information. Specifically, Brown advised the IRS investigator of the following:

a. Shirley Chan, a director of Golden Trinity Limited, had received a series of written instructions from Russell Strong using the alias of Pedro. In one letter, Chan was directed to open Post Office Box 20343 for Strong’s company, Puta Caliente. This post office box, according to the government, is the same address which was used on the amended tax returns for Harvey and Siti Z. Goldstein as charged in Counts 3 and 4 of the indictment.

b. In another letter, Chan was instructed by Strong, under the alias of Pedro, to mail two letters to the IRS with Hong Kong stamps and not a franking machine.

c. Another letter from Strong, using the alias of Pedro, questioned whether any checks had come in for clients of Pedro.

d. Chan also received instructions from Strong concerning the handling of a United States treasury check made payable to Leon Moore. The submission of fraudulent amended tax returns in the name of Leon and Dorothy D. Moore are charged in Counts 1 and 2 of the indictment.

6. Max Brown stated to the IRS investigator that he had received this information from Chan and also from examining documents in the files of Golden Trinity Limited and Puta Caliente in Hong Kong.

7. Brown declined to allow the IRS investigator to examine the corporate files and Chan declined to be interviewed or deposed with regard to these matters. Both Chan and Brown took the position that without an order from a Hong Kong court they would expose themselves to civil liability.

8. At the hearing on these motions, the government introduced into evidence, as government exhibits G-l and G-2 respectively, the transcripts for the separate interviews of Shirley Chan and Max Brown conducted by the IRS investigator in Hong Kong in January and February, 1983.

9. In June 1983, former Assistant U.S. Attorney Louis Ruch prepared a draft request for the assistance of the judiciary of Hong Kong to obtain access to the corporate files of Golden Trinity Limited and Puta Caliente, and to obtain the testimony of Chan. Ruch sought authorization from the Office of International Affairs in the criminal division of the Justice Department to apply for a court order requesting the issuance of the judicial request.

10. On August 15, 1983, in a written letter attached as Exhibit A to the government’s reply memorandum of law filed on February 19, 1985, the Office of International Affairs advised that the Hong Kong court would most likely not cooperate with the request based on the needs of the grand jury, but would cooperate with the request after indictment.

11. For this reason, the government waited until after indictment to file the requests for assistance of the judiciary of Hong Kong.

12. In November of 1983, a grand jury subpoena was issued to Citibank in New York requesting the production of bank records for Russell and Catherine Strong at Citibank in Singapore.

13. In January of 1984, Citibank declined to produce the subpoenaed documents, citing the financial privacy laws of Singapore which prescribe criminal sanctions for disclosure of customer information contrary of the laws provisions.

14. In its January, 1984 letter, Citibank advised the government that it might wish to proceed by way of letters rogatory.

15. The government thereafter determined that a request for judicial assistance seeking these Citibank documents before indictment would not be successful and that it would be necessary to wait until after indictment to file the government’s request for judicial assistance.

DISCUSSION

The government’s proposal to conduct foreign “discovery” through requests for judicial assistance creates several difficult issues of law concerning the power of the court to grant the government’s requests and the Speedy Trial Act questions involved.

The government is asking this court to seek the assistance of the judiciaries of Hong Kong and Singapore in the production of certain evidence located in those nations. Specifically, the government desires me to ask the judiciary of Hong Kong to compel the deposition of Shirley Chan and the production of certain records she maintains on behalf of Golden Trinity Ltd. and Puta Caliente Ltd., both of which are Hong Kong corporations. It also asks me to request the judiciary of Singapore to compel the disclosure of certain banking records maintained at Citibank’s Singapore offices.

The defendant argues that this court is without the power to grant the government requests, and that, in any case, the time necessary to comply with these requests should not be excluded under the Speedy Trial Act. I will address these arguments in turn.

The government has stated that there are two grounds for the court’s power to issue requests for judicial assistance or letters rogatory to a foreign judiciary in a criminal case. First, it asserts that such power is inherent in a federal court. Second, it asserts that such power can be grounded more explicitly in Rule 57(b) of the Federal Rules of Criminal Procedure. I believe that both of these arguments have merit.

Rule 57(b) states:

If no procedure is specifically prescribed by rule, the court may proceed in any lawful manner not inconsistent with these rules or with any applicable statute.

Defendant has argued that there is a rule of criminal procedure that governs at least part of the government’s request: Rule 15. That Rule allows the court to order that a witness be deposed “[wjhenever due to exceptional circumstances of the case it is in the interest of justice that the testimony be taken and preserved for use at trial.” Defendant argues that this Rule should be read as providing the only means by which a deposition can be ordered in a criminal case. He further asserts that the government has not met its burden under this rule.

Without deciding whether the government has met the specific requirements of Rule 15(a), I think that the defendant’s argument must fail. Rule 15 allows the court to order that a deposition be taken. Obviously, a United States court cannot order that a deposition of a foreign national be taken. Defendant’s argument to the effect that I can order that the deposition take place but that I lack the power to order Ms. Chan to attend or testify and that this result was the desire of the framers of the Rules is more than somewhat disingenous. The only realistic way of deposing a person who, like Ms. Chan, has previously refused to testify voluntarily is to enlist the aid of her national judiciary in order to compel the prospective witness to testify at the deposition consistent with any privilege she may viably assert at that time under the local law.

Defendant also makes a somewhat similar, more complicated argument based on the Federal Rules of Civil Procedure. Defendant argues that the framers of the Civil Rules have provided explicit means of conducting a foreign deposition. This fact, coupled with Rule 15’s failure to provide a means to take foreign depositions, leads defendant to conclude that Congress made the affirmative decision to remove the power to order or seek foreign depositions in a criminal case. I believe that this argument misinterprets the relevant Rule of Civil Procedure and misreads Congressional intent.

In Federal Rule of Civil Procedure 28(b), a series of procedures is set out for the taking of a deposition in a foreign nation. That rule, however, does not purport to be the basis of an American court’s power to issue a letter rogatory or a commission. Rather, it is clearly designed to set up a limited number of requirements for the taking of such depositions. It is not the basis of the court’s substantive power, but rather sets out a certain means by which that power can be utilized.

The power of a court to transmit a letter rogatory is governed, at least in part, by 28 U.S.C. § 1781 which states:

(a) The Department of State has power, directly, or through suitable channels
(2) to receive a letter rogatory issued, or request made, by a tribunal in the United States, to transmit it to the foreign or international tribunal, officer, or agency to whom it is addressed, and to receive and return it after execution.
(b) This section does not preclude
(2) the transmittal of a letter rogatory or request directly from a tribunal in the United States to the foreign or international tribunal, officer, or agency to whom it is addressed and its return in the same manner.

This section, although not explicitly stating that a court has the power to issue a letter rogatory, recognizes the power of the Department of State to transmit such a request from a court of the United States to a foreign court and to receive and transmit back that response from the destination court. It also states explicitly that the power of a court to transmit or receive such letters remains intact. 28 U.S.C. § 1781(b)(2).

Defendant argues that Civil Rule 28 and Criminal Rule 15 should be read together as evidence of the affirmative Congressional desire to prevent a court from exercising the power to enlist the aid of a foreign judiciary in compelling a foreign deposition. I think that the simple answer to this contention is that it reads too much into the silence of Congress. I cannot conclude, based on the available rules and statutes, that Congress intended to allow for the taking of evidence abroad in civil cases, but not in criminal cases. If this were the Congressional intent, it would have been a simple matter to make it explicit in either Rule 15 or 28 U.S.C. § 1781.

Defendant argues vigorously that 28 U.S.C. § 1781 applies only to civil cases. In support of that assertion, he points to the Hague Convention for the Taking of Evidence Abroad in Civil or Commercial matters, 23 U.S.T. 2555, T.I.A.S. No. 7444. That Convention was entered into by the United States in 1972 and governs the taking of evidence from abroad among its signatory nations. The United States, Singapore, and Great Britain, including its colonies, are signatories. The defendant would read the Convention as repealing or modifying the powers set forth in 28 U.S.C. § 1781 because it provides certain specific procedures for the taking of evidence abroad. I cannot accept this interpretation of the effect of the Convention. First, the Convention is procedural and not substantive. It does not purport to provide the courts of any nation with more power than they already have, nor to limit their existing power with regard to their ability to take evidence abroad. Second, the fact that the Convention applies on its face only to civil or commercial matters should not lead to the conclusion that there exists no means to gather evidence abroad in a criminal ease through the use of letters rogatory. There has been an explosion of civil litigation involving foreign entities in recent years, and the Convention was designed to provide some uniformity to the means by which evidence in those cases could be gathered. Finally, if I were to accept the defendant’s arguments in this regard, I would, in effect, be concluding that a court cannot proceed through letters rogatory or other means to obtain evidence from abroad unless the Convention and its procedures applies. This conclusion is untenable because the Convention as it presently stands has been signed by relatively few countries. I cannot view the Convention as limiting the powers conveyed by statute in such a manner.

Moreover, it has been held that federal courts have the inherent power to issue requests for judicial assistance through letters rogatory. In United States v. Reagan, 453 F.2d 165, 172-73 (6th Cir.1971), the court stated:

The opinion of the Court of Appeals in In Re Pacific Ry. Comm’n., 32 F. 241 (Cir.Ct.N.D.Cal., 1887), is suggestive though not squarely in point. There the Court held that the Pacific Railway Commission created by Act of Congress did not have the power to issue letters rogatory. Speaking of this instrument, the Court stated:
There are certain powers inherent in all courts. The power to preserve order in their proceedings, and to punish for contempt of their authority, are instances of this kind. And by jurists and text writers the power of the courts of record of one country, as a matter of comity, to furnish assistance, so far as is consistent with their own jurisdiction, to the courts of another country, by taking the testimony of witnesses to be used in the foreign country, or by ordering it to be taken before a magistrate or commissioner, has also been classed among their inherent powers. “For by the law of nations,” says Greenleaf, “courts of justice of different countries are bound mutually to aid and assist each other, for the furtherance of justice; and hence, when the testimony of a foreign witness is necessary, the court before which the action is pending may send to the court within whose jurisdiction the witness resides a writ, either patent or close, usually termed a letter rogatory, or a commission sub mutuae vicissitudinis obtentu ac in juris subsidiunz, from those words contained in it. By this instrument the court abroad is informed of the pendency of the cause, and the names of the foreign witnesses, and is requested to cause their deposition to be taken in due course of law, for the furtherance of justice, with an offer on the part of the tribunal making the request to do the like for the other in a similar case.” Treatise on Evidence, vol. 1, § 320. The comity in behalf of which this power is exercised cannot, of course, be invoked by any mere investigating commission, 32 F. at 256, 257. (Emphasis added.)

(quoting In Re Pacific Ry. Comm’n., 32 F. 241, 256-57 (Cir.Ct.N.D.Cal.1887).

The Reagan court approved the issuance of a request for judicial assistance in a criminal case before the indictment had been returned based upon an ex parte proceeding. The facts of the instant case are different, but make for a stronger argument that the requests as proposed are proper. The defendant in the present case has had a full opportunity to argue his case regarding the power of the court to issue such requests and the propriety of the requests framed. Moreover, the defendant has already been indicted; the government cannot be said to be on a “fishing expedition” here. I have reviewed the reasoning of the Reagan court and find it compelling. Reagan relies, in turn, on well established precedents stretching back to the words of Chief Justice Marshall in Osborn v. Bank of the United States, 22 U.S. (9 Wheat.) 738, 819, 6 L.Ed. 204 (1824). I find it to be a correct statement of the law regarding the power of a federal court to issue a request for judicial assistance in criminal cases. See also United States v. Staples, 256 F.2d 290, 292 (9th Cir.1958).

My decision that this court does have the power to issue the requests for assistance does not dispose of the present controversy. Obtaining the information the government seeks from Hong Kong and Singapore might conceivably take more time than is allowed to bring a defendant to trial under the Speedy Trial Act, 18 U.S.C. § 3161 et seq. (“Act”). Defendant has been indicted and is awaiting trial. In order for the requests to proceed and for the requested information to be received, some exclusion of time must be made under the Act. The government has proposed that time may be excluded under three separate provisions of the Act: § 3161(h)(1)(F) (dealing with the exclusion of time for pretrial motions); § 3161(h)(3)(A) (dealing with the unavailability of an essential witness), and § 3161(h)(8)(A) (exclusion in the interests of justice). The defendant argues that none of these provisions allows for the exclusion of time for the processing of these requests.

At argument on this matter, the government admitted that the pretrial motions exception would allow for the exclusion of time from the time of the “filing of the motion through the conclusion of the hearing on, or other prompt disposition” of the motion and that this exception could not be used to exclude time from the granting of the instant requests until the time in which the requests are received back from Hong Kong or Singapore.

The second exception urged by the government would apply to only one part of one of the instant requests: that dealing with the deposition of Shirley Chan. The government claims that she is an essential witness within the meaning of the Act and that she has made herself unavailable. There can be little dispute that Chan is “unavailable” as that term is defined in § 3161(h)(3)(B). The defendant argues, however, that Chan is not essential to the government’s case and that her testimony and the material of which she is custodian would be mere “icing on the cake.”

An essential witness is one that is “extremely important to the proceeding, perhaps providing proof that was not otherwise attainable.” United States v. Marrero, 705 F.2d 652, 656 (2d Cir.1983) (citing S.Rep. No. 1021, 93rd Cong. 2d Sess. 37 (1974)). Chan was a business associate of the defendant in Hong Kong. In her position with Golden Trinity Ltd., she had the occasion to maintain the corporate records of Puta Caliente Ltd., a corporation which was allegedly formed by the defendant. Moreover, Puta Caliente was the registered owner of a post office box in Hong Kong to which certain of the tax refund checks involved in this case were directed. Certain of the tax refund checks were also directed to 1402 Tung Wah Mansions, Hong Kong. That is the address of Golden Trinity Ltd. Although the government has obtained some of the information Chan holds, it claims that much of the information it has is in the form of hearsay statements from Max Brown, another business associate of defendant. The government also asserts that Chan was directed to open the post office in question by someone who was identified as “Pedro.” Pedro is an alleged alias of defendant Strong. The government claims that Chan alone can provide admissible testimony regarding this post office box and how it came to be opened.

Clearly, Chan is an important witness to the government’s case. It is true that the government’s case would be substantially impeded if Chan’s testimony were unavailable. I also believe that the information in the hands of Chan may be the only admissible form of certain information. At this stage of the proceedings, I cannot speculate as to whether a jury would fail to convict Strong if Chan did not testify. I do not have a crystal ball, nor do I have a complete picture of the evidence in the government’s possession. I believe, however, that Chan is “extremely important” to this proceeding and that a jury would not be fully able to evaluate the entire case against Strong without her testimony. I therefore conclude that at least as to part of the government’s requests, the time needed to depose Chan is excludable under § 3161(h)(3)(A).

The government argues that the remainder of the time needed to process the requests for assistance is excludable under § 3161(h)(8)(A) which states:

(h) The following periods of delay shall be excluded ... in computing the time within which the trial of any such offense must commence:
(8)(A) Any period of delay resulting from a continuance granted by any judge on his own motion or at the request of the defendant or his counsel or at the request of the attorney for the Government, if the judge granted such continuance on the basis of his findings that the ends of justice served by taking such action outweigh the best interest of the public and the defendant in a speedy trial. No such period of delay resulting from a continuance granted by the court in accordance with this paragraph shall be excludable under this subsection unless the court sets forth, in the record of the case, either orally or in writing, its reasons for finding that the ends of justice serve by the granting of such continuance outweigh the best interests of the public and the defendant in a speedy trial.

Under this section, I must evaluate a number of factors to determine whether, on balance, the interests of justice served by the continuance would outweigh the best interests of the public and the defendant in a speedy trial. These factors “among others” are:

(i) Whether the failure to grant such a continuance in the proceeding would be likely to make a continuation of such proceeding impossible, or result in a miscarriage of justice.
(ii) Whether the case is so unusual or so complex; due to the number of defendants, the nature of the prosecution, or the existence of novel questions of fact or law, that it is unreasonable to expect adequate preparation for pretrial proceedings or for the trial itself within the time limits established by this section.
(iii) Whether, in a case in which arrest precedes indictment, delay in the filing of the indictment is caused because the arrest occurs at a time such that it is unreasonable to expect return and filing of the indictment within the period specified in section 3161(b), or because the facts upon which the grand jury must base its determination are unusual or complex.
(iv) Whether the failure to grant such a continuance in a ease which, taken as a whole, is not so unusual or so complex as to fall within clause (ii), would deny the defendant reasonable time to obtain counsel, would unreasonably deny the defendant or the Government continuity of counsel, or would deny counsel for the defendant or the attorney for the Government the reasonable time necessary for effective preparation, taking into account the exercise of due diligence.

No continuance under this section can be granted because of the lack of diligent preparation on the part of the government’s attorney. 18 U.S.C. § 3161(h)(8)(C).

I cannot say at this juncture whether a failure to grant the continuance would result in a miscarriage of justice. I can say, however, that it would result in the government being forced to try this case without being fully prepared and without being able to produce certain highly probative evidence. It would also force the government to rely on testimony which at this early stage would appear to be inadmissible hearsay. As I will discuss more fully below, I believe that the government has been forced into this position by forces beyond its control and not because of a lack of due diligence.

This case is certainly complex, it involves allegations of an elaborate scheme to defraud the United States government and involves American citizens presently living in at least three far eastern nations, as well as a number of foreign nationals. Moreover, the charges involve records and information that are difficult to discover without an existing criminal indictment. Although there is only one defendant involved in this case and the indictment sets out only five counts, the factual theory behind those counts involves the flow of money from the United States to Hong Kong, then to California, then to Texas, and finally to Singapore. Obviously, the investigation of this alleged scheme was not simple. Indeed, the very motions presently before me demonstrate that the issues in this case are complex and novel.

Defendant argues that the government should have proceeded to extract the information it now seeks before the indictment was returned. Obviously, had it done so, the present Speedy Trial Act problems would not have arisen. The government responds to this argument by asserting that it proceeded with all possible diligence but that the exigencies of international law forced it to wait until after the indictment to seek the requests for assistance.

During the early stages of the investigation in this matter, the government became aware of the importance of Chan and the records she controlled. It attempted to obtain Chan’s voluntary cooperation. She refused based in part on her reading of Hong Kong corporate privacy laws. The government drafted a request for judicial assistance and submitted that request to the Office of International Affairs in the Criminal Division of the Justice Department for review. In August, 1983, the Office of International Affairs advised the government’s counsel in this matter that it would be unlikely that the government of Hong Kong would grant the requests before an indictment had been returned. This assessment was based on caselaw from Great Britain and Hong Kong.

The power of the government of Hong Kong to act on letters rogatory is based on Chapter 8 of that nation’s Evidence Ordinance which in turn is derived from Great Britain’s Evidence (Proceedings in Other Jurisdictions) Act of 1975. That statute allows for the issuance of letters rogatory after “proceedings have been instituted.” The House of Lords has interpreted that language to require the return of an indictment or information before the letters can issue. See Rio Tinto Zinc Corp., et al. v. Westinghouse Electric Corp., [1978] 1 All. E.R. 434. The Supreme Court of Hong Kong has interpreted its Evidence Ordinance in conformity with the English courts’ interpretation of the Evidence (Proceedings in other Jurisdictions) Act. See In the Matter of Grand Jury Proceedings in the United States District Court, Southern District of California No. 82/141, M.P. No. 168, slip op. (Hong Kong, April 28, 1983).

Similarly, the government attempted to obtain the information from the Singapore branch of Citibank early in the investigation by way of a grand jury subpoena. Citibank’s New York legal counsel refused to produce the records so subpoenaed. The basis for this refusal were the Singapore Bank Privacy laws which in Citibank’s opinion prevented the release of the information. Citibank suggested that the government proceed by way of letters rogatory.

I conclude that under the constraints in which the government operated before the indictment, its investigation was conducted with due diligence.

The defendant obviously has an interest in seeing the earliest possible resolution of this case as do all criminal defendants. The public shares that interest. I think that under all the circumstances of this case, however, the interests of the public and the defendant in a speedy trial are outweighed by the countervailing factors militating in favor of a continuance. If I were to refuse to grant such a continuance, it would be tantamount to concluding that the government could never proceed by way of letters rogatory in countries like Great Britain and Hong Kong which require an indictment before their courts will heed a foreign request for assistance. I do not consider this result to be desirable from the standpoint of the administration of justice. I will therefore grant the government’s motion and allow it to proceed to issue letters rogatory to the judiciaries of Hong Kong and Singapore. I will also exclude the time required to receive this information under 28 U.S.C. § 3161(h)(8)(A).

CONCLUSIONS OF LAW

1. This court has the power to seek the assistance of the judiciary of Hong Kong and Singapore in the production of evidence in this case.

2. The government’s applications to this court requesting the court to seek the assistance of the judiciaries of Hong Kong and Singapore are proper.

3. The evidence sought in those requests is important to the government’s case. The deposition of Shirley Chan is necessary and proper to the government’s case.

4. Based on the available evidence of record, I conclude that Shirley Chan is an essential witness within the meaning of 18 U.S.C. § 3161(h)(3)(A).

5. The government has proceeded with due diligence in its investigation of this case.

6. The ends of justice served by granting the government’s request for a continuance outweigh the best interests of the public and the defendant in a speedy trial because the failure to grant a delay would deny the government the reasonable time necessary under the circumstances of this case for effective preparation, because this is a complex case, and because the failure to grant such a delay would deny the government the evidence needed to prove Strong’s involvement in the crimes charged.

      . At oral argument, counsel for defendant agreed that the facts as set out in the government’s motions were accurate for purposes of considering the government’s motions.

      . Defendant relies on United States v. Johnpoll, 739 F.2d 702 (2d Cir.1984) in his argument that Rule 15 provides the sole mechanism for the taking of a deposition in a criminal case either in this country or abroad. In Johnpoll, the district court allowed the government to depose a number of witnesses who were citizens and residents of Switzerland. The Second Circuit affirmed the trial court's decision to allow the taking of these depositions under Rule 15. Id. at 708-709. Johnpoll is distinguishable from the instant case, however, because it appears that the witnesses deposed therein willingly came forward to be deposed. In the instant case, Chan has refused to voluntarily give to the government the information it now seeks. Moreover, the Johnpoll court noted that the witnesses had to be deposed because they were not amenable to process and could not be compelled to testify at trial. Id. at 709.

      . See infra at p. 196-197.

      . The defendant has argued that the government has not shown that the procedures it intends to follow are likely to produce the desired results. He has asserted that the privacy laws of Singapore would prevent the disclosure of the information sought from Citibank. Legal counsel for Citibank, however, apparently felt otherwise when they advised the government to proceed by way of letters rogatory. Moreover, defendant’s reliance on Singapore’s reservations under the Hague Convention is misplaced. In its acceptance of the Convention, Singapore states that it will interpret the "reference to civil or commercial actions in the Convention” to not include tax matters for the Republic of Singapore. 28 U.S.C.A. § 1781 note (Supp.1985) at 101. At best, this statement is ambiguous. I have already concluded, however, that the Hague Convention only applies to civil or commercial matters. Indeed, this conclusion is a lynchpin of one of defendant’s arguments. I do not consider Singapore’s reservations in the Hague Convention to be dispositive of the issue whether Singapore will respond to the requests with the information the government seeks. The government has represented that it believes that the requests will be successful based on the Office of International Affairs’ experience in this area. The defendant has not referred me to any authority which would lead me to a contrary conclusion. I therefore conclude that the government has a reasonable chance to obtain this information through the means it wishes to employ.


source: Caselaw Access Project

author: HADEN, Chief Judge.

license: Public Domain

text:
    Helen L. FURY, et al., Plaintiffs, v. COUNTY COURT OF WOOD COUNTY and its Commissioners, William C. Parrish; Dexter L. Buckley, Jr.; and Holmes R. Shaver, Defendants. and Helen L. FURY, et al., Plaintiffs, v. L.W. BECHTOLD, Sheriff of Wood County; Juanita Coe, Clerk of the Circuit Court of Wood County and H.K. Smith, County Clerk of Wood County, Defendants.
    Civ. A. Nos. 83-A150, 84-A022.
    United States District Court, S.D. West Virginia, Parkersburg Division.
    March 12, 1985.

      Fred J. Holroyd, Holroyd & Hamrick, Charleston, W.Va., for plaintiffs.
    Elizabeth A. Pyles, Asst. Pros. Atty., Parkersburg, W.Va., for defendants.
    George J. Cosenza, Cosenza & Underwood, Parkersburg, W.Va., for Coe and Smith in No. 84-A022.
   MEMORANDUM OPINION AND ORDER

HADEN, Chief Judge.

Both of these civil actions are brought by the same 22 Plaintiffs, who all work in county offices in Wood County, West Virginia, alleging violation of the Fair Labor Standards Act, 29 U.S.C. § 201, et seq. The cases are brought against two separate sets of Defendants. In Civil Action No. 83-A150, the County Commission of Wood County and its three Commissioners, William C. Parish, Dexter L. Buckley, Jr. and Holmes R. Shaver, are the Defendants. In Civil Action No. 84-A022, the individual elected county officials for whom Plaintiffs work are named as Defendants: L.W. Bechtold, Sheriff of Wood County, Juanita Coe, Clerk of the Circuit Court and H.K. Smith, County Clerk. The gravamen of both actions is stated in Paragraph VII of both complaints wherein Plaintiffs allege the “Defendants have paid and are paying plaintiffs’ wages and rates of pay lower than other employees of the opposite sex ... because of plaintiffs’ sex.” The Defendants in both actions have filed motions to dismiss the complaints for Plaintiffs’ failure to join the real parties in interest. See Rule 17(a) of the Federal Rules of Civil Procedure.

The resolution of Defendants’ motions to dismiss turns upon the issue of whether the County Commission is the Plaintiffs’ employer or whether Plaintiffs are employed by the elected county officials in whose offices they work. The statute controlling this issue, W.Va.Code, § 7-7-7, makes it clear that as a general proposition the County Commission and the individual elected county officials are joint employers of those employees in the various county offices. The statute provides, in pertinent part, as follows:

“The county clerk, circuit clerk ... sheriff ... by and with the advice and consent of the county commission may appoint and employ, to assist them in the discharge of their official duties for and during their respective terms of office, assistants, deputies and employees.
The county clerk, circuit clerk ... sheriff ... shall ... file with the county commission a detailed request for appropriations for anticipated or expected expenditures for their respective offices, including the compensation for their assistants, deputies and employees, for the ensuing fiscal year.
“The county commission shall ... by order fix the total amount of money to be expended by the county for the ensuing fiscal year, which amount shall include the compensation of county assistants, deputies and employees.
The county clerk, circuit clerk ... sheriff shall then fix the compensation of their assistants, deputies and employees based on the total amount of money designated for expenditure by their respective offices by the county commission and the amount so expended shall not exceed the total expenditure designated by the county commission for each office.
The county officials, in fixing the individual compensation of their assistants, deputies and employees and the county commission in fixing the total amount of money to be expended by the county, shall give due consideration to the duties, responsibilities and work required of the assistants, deputies and employees and their compensation shall be reasonable and proper.
After the county commission has fixed the total amount of money to be expended by the county for the ensuing fiscal year and after each county official has fixed the compensation of each of his assistants, deputies and employees ... each county official shall file ... a budget statement for the ensuing fiscal year, setting forth the name, or the position designation if then vacant of each of his assistants, deputies and employees, the period of time for which each is employed, or to be employed if the position is then vacant, and his monthly or semimonthly compensation.
Sfc * * * *
Each county official named in this section shall have the authority to discharge any of his assistants, deputies or employees by filing with the clerk of the county commission a discharge statement specifying the discharge action____”

The above underscored language of the statute repeatedly defines the respective budgetary roles of the County Commission and the individual County officials — the County Commission sets the total budget for a given office, i.e., that of the County Clerk, Sheriff and Circuit Clerk; the County Clerk, Sheriff and Circuit Clerk then set the compensation for individual employees in their offices within the confines of the overall budget established by the County Commission. Because these civil actions allege disparate compensation between male and female employees, the budgetary/compensation decisions complained of are made by and are the responsibility of the individual elected county officials. For purposes of this litigation, therefore, the County Clerk, Sheriff and Circuit Clerk are Plaintiffs’ employers and would be liable for any gender-based wage discrimination found to have occurred. It follows then that the Circuit Clerk, Sheriff and County Clerk are the real parties Defendant in these actions. This conclusion is directly supported by an opinion of the Attorney General summarized in the annotations following Section 7-7-7 in the Code:

“[The] county commission has no authority to fix the compensation of a deputy, assistant or employee of a named county official stated in this section, but the named county official may, in fact, compensate any deputy, assistant or employee in the absence of any civil service requirement to the contrary, in an amount which he, the county official, deems appropriate, to the extent that the overall compensation of such deputies, assistants or employees does not exceed the total budget sum previously approved by the county commission.”

Op. Attorney General, February 17, 1976.

While the individual elected county officials have the primary responsibility for the hiring, firing and compensation of their employees, the County Commission is also a necessary party inasmuch as that body exercises “general control of the fiscal affairs of the county.” Amoroso v. Marion County Commission, 305 S.E.2d 299, 303 (W.Va.1983). The County Commission must remain a Defendant so that, if Plaintiffs prevail, the Commission can be required to appropriate sufficient funds to pay any award of damages. See State ex rel Cabell County v. Dunfee, 163 W.Va. 539, 258 S.E.2d 117 (1979) (salary to be paid deputy sheriffs cannot be raised by Sheriff if the increased expenditure would exceed the budget for the Sheriffs office set by the County Commission). Recognizing that the individual county officials named as Defendants in Civil Action No. 84-A022 are the parties responsible for the alleged discrimination in compensation, but also recognizing that the County Commission is a necessary party Defendant if the Court is to accord the parties “complete relief” if Plaintiffs prevail on the merits, the Court hereby ORDERS as follows:

1. The Defendants’ motion to dismiss Civil Action No. 83-A150 is granted;

2. The Defendants’ motion to dismiss Civil Action No. 84-A022 is denied; and

3. The Court will favorably entertain a motion by Plaintiffs requesting leave of Court to amend the complaint in Civil Action No. 84-A022 to include as Defendants the County Commission of Wood County and its Commissioners for the sole purpose of requiring the Commission to appropriate the necessary funds to pay any damage award Plaintiffs may recover.

        See Rule 19(a) of the Federal Rules of Civil Procedure.


author: DONALD J. PORTER, District Judge.

text:
    The UNITED STEEL WORKERS OF AMERICA, AFL-CIO-CLC, and United Steelworkers of America, Local Union No. 7044, Plaintiffs, v. Judith MEIERHENRY, In her capacity as Secretary of the South Dakota Department of Labor, Defendant.
    Civ. No. 83-3085.
    United States District Court, D. South Dakota, C.D.
    March 15, 1985.

      John G. Engberg, Peterson, Engberg & Peterson, Minneapolis, Minn., Dennis W. Finch, Finch & Viken, Rapid City, S.D., for plaintiffs.
    Ronald W. Banks, Banks & Johnson, Rapid City, S.D., for defendant.
   MEMORANDUM OPINION

DONALD J. PORTER, District Judge.

FACTUAL BACKGROUND

Plaintiff (union) is the representative of the production and maintenance employees of the Homestake Mining Company (Home-stake) in Lead, South Dakota. On May 31, 1982, Homestake had 1,345 employees involved in production and maintenance. Of these, 1,141 belonged to the Union, while 204 did not.

A contract between Homestake and the union expired on May 31, 1982, and, upon a majority vote of its members, the union commenced a strike against Homestake on June 1,1982. At least some of the employees, both union and non-union, attempted to go to work that day, but all were turned back by Homestake. Homestake essentially shut down its operations until the signing of a new contract on September 26, 1982.

During the strike, many of the idled employees applied to the South Dakota Department of Labor for unemployment compensation benefits. Initially, all applicants, whether union or non-union, were denied benefits. In August, 1982, the Department of Labor reversed its decision, and granted benefits to the non-union applicants. This was based on an interpretation of SDCL 61-6-19, which prohibits the payment of unemployment benefits to claimants unemployed because of a labor dispute unless the claimant is not participating in, financing, or directly interested in the dispute and does not belong to the class of workers involved in the dispute, or unless the claimant is locked out by the employer. The decision granting benefits to Homestake’s non-union employees states:

The claimants do not belong to the union that is involved in the labor dispute. In addition, the claimants are not participating in or financing the labor dispute, but would be directly interested in the labor dispute in that any changes in wages, hours or working conditions, which resulted from the labor dispute, will apply to the claimants ... However, the claimants have been available for work since the labor dispute commenced, but the employer has' declined to allow them to commence work. In view of this circumstance, the claimants would, in effect, be locked out from their employment by the employer. Since the claimants are locked out from their employment by the employer, they would be eligible for the receipt of unemployment insurance benefits.

On the other hand, union employees continued to be held ineligible for benefits. The State Department of Labor decision observed that most union applicants were engaged in picketing, that they had financed the strike in their payment of union dues from which strike benefits were paid, and that they were directly interested in the outcome of the strike. It made no difference that some seemed to oppose the strike; the decision found

Some claimants might be willing to cross a picket line to resume work for the employer and feel that since the mine is shut down they are locked out from employment from the employer. However, the claimants do belong to Local 7044 of the United Steelworkers of American union whose membership did vote to go on strike against the employer. As members of the union which went on strike against the employer, the claimants would have initiated the labor dispute prior to any employment being withheld by the employer. Consequently, it cannot be said that the claimants are locked out by the employer. In view of all the above factors, the Referee must' hold that the claimants are ineligible for the receipt of unemployment insurance benefits.

Defendant, in her capacity as the Secretary of the state Department of Labor, affirmed these decisions. In her deposition, defendant stated that “we were not necessarily making a determination on eligibility based on union membership. The thing that made the determination is whether they were out of work through no fault of their own.”

Following this decision, non-union employees received unemployment benefits in the approximate amount of $129 per week. Union employees received, during the course of the strike, union strike benefits which began at $40 per week, gradually rising to $67 per week by the last week of the strike. For several weeks, the union operated a cooperative food store for union members, and also established a strike kitchen that served lunches to union members and their families during the strike.

At least several members of the union attempted to resign their union membership during the strike to establish eligibility for unemployment benefits. These attempts were not successful, as union rules allowed resignations only during the month of November, and in any event, the state would apparently not have paid any unemployment benefits to claimants who had been union members at the commencement of the strike. After the strike had ended, however, approximately 124 individuals did resign from the union. While it is plain that dissatisfaction with union leadership was a factor in many of these resignations, it is also clear that the availability of unemployment benefits was a factor in at least some of these resignations. Plaintiff was able to produce the testimony of seven employees who either resigned or attempted to resign from the union who identified the unemployment benefits issue as the principal or a leading factor in their decisions to resign. The record also indicates that an undetermined number of other union members resigned because of the unemployment compensation issue.

DISCUSSION

I.

Initially, defendant claims this case must be controlled by the court’s decision in United Steelworkers of America v. Block, 578 F.Supp. 1417 (D.S.D.1982). United Steelworkers certainly considered many of the same issues as the present case, involving, as it did, the same “locked out” distinction between the Homestake’s union and non-union employees in their eligibility for food stamps during the same 1982 strike. The principle point on which the United Steelworkers case turned, however, was the finding that plaintiff had no standing to bring the action. While United Steelworkers recognized that “an organization, such as a union, has standing to assert the ... rights of its members,” 578 F.Supp. at 1419, the court found that “the union failed to establish that it lost a single member, present or prospective, on account of [the grant of food stamps to non-union employees.]” 578 F.Supp. at 1421. Here, the union has, as indicated by the factual summary, established the loss of at least several members because of defendant’s unemployment benefits policy, and a resultant reduction in dues paid to it by those lost members. Assuming the correctness of the standing decision in United Steelworkers, the court is satisfied that plaintiff here has shown an injury to it as a result of defendant’s policy and may assert the claims in the complaint.

II.

Mindful of its obligation to avoid, wherever possible, deciding cases on constitutional grounds when other grounds for decision exist, the court turns first to plaintiff’s argument that defendant’s interpretation of South Dakota unemployment compensation guidelines is preempted by 29 U.S.C. § 157, generally referenced as Section 7 of the National Labor Relations Act (NLRA):

Employees shall have the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection.

A violation of these rights constitutes an unfair labor practice under 29 U.S.C. § 158(a)(1) (Section 8(a)(1) of the NLRA).

Cases dealing with NLRA preemption are innumerable, and frequently confusing. One of the Supreme Court’s most recent decisions in the area, Brown v. Hotel and Restaurant Employees, — U.S. -, 104 S.Ct. 3179, 82 L.Ed.2d 373 (1984), makes this much clear:

If the state law regulates conduct that is actually protected by federal law, however, pre-emption follows ... as a matter of substantive right. Where, as here, the issue is one of an asserted substantive conflict with a federal enactment, then “[t]he relative importance to the state of its own law is not material ... for the Framers of our Constitution provided that the federal law must prevail.”

— U.S. at —, 104 S.Ct. at 3187, 82 L.Ed.2d at 384. As the court in the leading case of San Diego Bldg. Trades Council v. Garmon, 359 U.S. 236, 244, 79 S.Ct. 773, 779, 3 L.Ed.2d 775 (1959), states, “[w]hen it is clear or may fairly be assumed that the activities which a State purports to regulate are protected by § 8 [29 U.S.C. § 158], due regard for the federal enactment requires that state jurisdiction must yield.” The question plaintiff puts to the court, therefore, is whether the South Dakota unemployment compensation law conflicts with the rights contained in 29 U.S.C. § 157.

Curiously, the precise issue presented here does not appear to have previously arisen. The case that comes closest, and upon which defendant relies most heavily, is New York Telephone Co. v. New York State Department of Labor, 440 U.S. 519, 99 S.Ct. 1328, 59 L.Ed.2d 553 (1979). Initially, it might be noted that a majority of the court in New York Telephone Co. was unable to agree upon an opinion, and joined only in the judgment that the NLRA did not preempt a state from paying unemployment compensation to strikers. To the extent that this meant that all persons idled by a strike, whether union or non-union members, were eligible under New York law for unemployment benefits, it certainly can be argued that the New York unemployment policy had no real impact on the rights protected by the 29 U.S.C. § 157, and, in fact, no claim of any violation of § 157 was advanced in the case. 440 U.S. at 529, 99 S.Ct. at 1335. As the plurality opinion recognized, the New York policy implemented “a broad state policy that does not primarily concern labor-management relations, but is implicated whenever members of the labor force become unemployed.” 440 U.S. at 534, 99 S.Ct. at 1337. Although, as the plurality opinion noted, the general applicability of a state law is not sufficient to exempt the law from NLRA preemption, see Farmer v. Carpenters, 430 U.S. 290, 300, 97 S.Ct. 1056, 1063, 51 L.Ed.2d 338 (1977), the South Dakota law at issue here, in its specialized application to union versus non-union workers unemployed by a strike, can hardly be considered to be of general applicability. It might also be noted that the plurality opinion in New York Telephone Co. emphasized its view that the New York statute must be treated with “the same deference ... afforded analogous state laws of general applicability that protect interests ‘deeply rooted in local feeling and responsibility.’ ” 440 U.S. at 540, 99 S.Ct. at 1341. Given the later language in Brown, supra, — U.S. at -, 104 S.Ct. at 3187, 82 L.Ed.2d at 384, that the importance of state law is of no materiality when there is an asserted substantive conflict with federal law, the continued vitality of at least portions of the plurality opinion seems questionable. Finally, this court does not find that the legislative history cited in New York Telephone Co. supra, 440 U.S. at 540-545, 99 S.Ct. at 1341-1344, that indicated a Congressional intent to leave to the states the decision of whether to pay unemployment benefits to strikers is relevant here. While a neutral unemployment benefit policy which does not conflict with any specific provision of the NLRA, see New York Telephone Co., 440 U.S. at 529-530, 99 S.Ct. at 1335-1336, may not be preempted, it can hardly be argued that Congress intended to allow states power to administer their unemployment programs in such a manner as to directly interfere with express rights guaranteed under either 29 U.S.C. § 157 or 29 U.S.C. § 158. For these reasons, the court does not consider its decision here controlled by New York Telephone Co.

III.

Turning to the question of whether the South Dakota unemployment compensation policy at SDCL 61-6-19, violates 29 U.S.C. § 157, the court is mindful of the proposition, which defendant does not dispute, that “coercive actions which the [NLRA] forbids employers and unions to take ... are likewise prohibited from being taken by the States.” Nash v. Florida Industrial Com., 389 U.S. 235, 239, 88 S.Ct. 362, 366, 19 L.Ed.2d 438 (1967). Under 29 U.S.C. § 158(a)(1), which makes violations of § 157 an unfair labor practice, it is clear that “not only intrusive threats and promises but also conduct immediately favorable to employees which is undertaken with the express purpose of impinging upon their freedom of choice for or against unionization and is reasonably calculated to have that effect” is a violation of § 157. NLRB v. Exchange Parts Co., 375 U.S. 405, 409, 84 S.Ct. 457, 460, 11 L.Ed.2d 435 (1964). Or, as this circuit has put it, “ ‘[interference is no less interference because it is accomplished through allurements rather than coercion.’ ” NLRB v. Crown Can Co., 138 F.2d 263, 267 (8th Cir.1943). See also NLRB v. Gilmore Industries, Inc., 341 F.2d 240 (6th Cir.1965); NLRB v. Douglas and Lomason Co., 333 F.2d 510 (8th Cir.1964). Plaintiff concedes that it cannot show that the South Dakota policy was undertaken with the specific intent to impinge on employees’ freedom of choice for unionization. This does not, however, end the court’s inquiry.

Under NLRB v. Great Dane Trailers, Inc., 388 U.S. 26, 34, 87 S.Ct. 1792, 1798, 18 L.Ed.2d 1027 (1967), “if it can reasonably be concluded that the ... conduct was ‘inherently destructive’ of important employee rights, no proof of an anti-union motivation is needed.” Inherently destructive is, as observed by the case of Inter-Collegiate Press, Graphic Arts Div. v. NLRB, 486 F.2d 837, 845 (8th Cir.1973), a term “not easily susceptible of precise definition ... We should not attempt to complete a catalog of actions that might be regarded as ‘inherently destructive,’ but rather must determine whether the conduct in [any particular] case should be so viewed. One commentator suggests that ‘inherently destructive’ conduct is that which creates visible and continuing obstacles to the future exercise of employee rights.” Put another way, “cases finding ... conduct inherently destructive ... are cases involving conduct with far reaching effects which would hinder future bargaining, or conduct which discriminates solely upon the basis of participation in strikes or union activity.” Portland Willamette Co. v. NLRB, 534 F.2d 1331, 1334 (9th Cir.1976). See also NLRB v. Sherwin-Williams Co., 714 F.2d 1095 (11th Cir.1983); Vesuvius Crucible Co. v. NLRB, 668 F.2d 162 (3rd Cir.1981).

The case involving inherently destructive conduct coming closest to the factual situation here is NLRB v. Erie Resistor Corp., 373 U.S. 221, 83 S.Ct. 1139, 10 L.Ed.2d 308 (1963). In Erie Resistor, the employer response to a strike was to announce that strike replacements and strikers leaving the strike would receive a 20-year super-seniority as credit against any future lay-offs by the employer. Within three weeks, a large number of strikers returned to their jobs, and the union was forced to capitulate. Following the strike, many union members resigned their memberships. The Erie Resistor court essentially adopted the NLRB’s assessment of the impact of the super-seniority, and found (a) the plan affected all strikers; (b) the plan necessarily operated to the detriment of strikers as opposed to nonstrikers; (c) the plan offered individual benefits to strikers as an inducement to abandon the strike; (d) the plan undermined the strikers’ mutual interest and dealt a crippling blow to the strike effort; (e) the plan created a permanent reminder of the negative consequences of a strike, rendering future bargaining difficult. Given this analysis, the court held that “super-seniority by its very terms operates to discriminate between strikers and nonstrikers, both during and after a strike, and its destructive impact upon the strike and union activity cannot be doubted.” 373 U.S. at 232, 83 S.Ct. at 1147.

While the impact of the South Dakota unemployment compensation scheme is more subtle than the Erie Resistor “super-seniority,” the state statute has a very similar effect. The discrimination between union and non-union members cannot be denied, and all union members, to the extent they did not find other work, had to survive the strike with substantially less income than did their non-union counterparts. Also undeniable is the fact that the South Dakota statute stands as a permanent, tangible inducement for employees to either abandon their union or to decline to join in the first place. The union must act as representative for all members of the class of worker the union represents, whether union or not, see 29 U.S.C. § 159(a), and as defendant recognizes, all non-union members receive the same benefits as union members under any contract negotiated. The most potent and well-known union weapon in contract negotiations is a strike, but this, of course, necessarily brings severe monetary hardship on those left unemployed by a strike. What the state unemployment statute says, in effect, is that if an employee stays out of the union, he can be sure that he will receive an income if there is a strike, and will also receive the benefit of any changes brought about by the strike. This lesson was not lost on plaintiffs members during the 1982 strike. As one individual who resigned his membership testified:

Well, I couldn’t understand why we should pay the Union dues all the time that we’re belonging to the Union and they’re nonunion and they’re not paying any dues, they’re getting the same benefits we are plus the only thing they didn’t get from the Union was the forty dollars a week. They got one hundred twenty or one hundred thirty from the State of South Dakota, and I didn’t think that was very fair because they’re going to benefit from the strike just as much as a Union member is.

Unlike Erie Resistor, the state statute does not offer an inducement to abandon a particular strike, since unemployment compensation will not be paid to anyone who was a union member at the commencement of the strike. Viewed from another perspective, however, the state statute is even more insidious than the Erie Resistor “super-seniority,” in that the inducement is not just to abandon one strike, but to abandon the union itself and all future strikes. An offer of income in the event of strikes in return for refraining from union membership seems no less an inducement to reject union membership than an offer to raise wages or to build an employee swimming pool if a union is defeated in its organizing election. See NLRB v. Douglas and Lomason Co., supra.

Further, the parties stipulated that two or more union members tried to resign during the strike so they could get unemployment benefits. No resignation was effective unless made in November; if the strike had continued until that month, it is reasonable to infer that a number of members would have tendered effective resignation to attempt to receive unemployment benefits. Whether they would have in fact received the benefits is less important than the fact their resignations would have inevitably weakened the strike effort.

Finally, the state statute tended to create a cleavage in the work force between those who remained committed to the union after the strike and those who, because of financial pressures, found unemployment benefits during a strike more attractive than union membership. The administration of the statute left a permanent reminder to Homestake’s employees of the ramifications of union membership as opposed to non-union membership during a strike. As another resignee testified:

Q. Now, what were the reasons for resigning from the Local in November of 1982?
A. Well, the unemployment, I really didn’t like the unemployment deal where the nonunion members got unemployment and I’m sitting here on forty dollars a week and they’re getting the full benefits that you get out of a strike. Well, this didn’t seem right, that they should get unemployment and us not because we were shut out, too.
Q. But by this time the strike is over, right, November 1982?
A. Yeah.
Q. Well, was it a financial reason or was it just shall we say a quarrel with the way the system was working that caused you to resign?
A. No, I just thought there might be another one, and if there is another strike, I want to be on the paying end of it.
Q. There might be another strike you say?
A. Might be.
Q. Any other reasons for your resignation from the Union?
A. Well, I didn’t like the way it was held, the meetings that was held, some of them, but that was — the main reason was that I am drawing forty dollars a week and everybody else is running around town getting one hundred and some.
(Emphasis supplied.)

Defendant complains that plaintiff was able to produce no more than the seven who testified their resignation was in whole or in part caused by the state statute, and the names of two others who apparently resigned for the same reasons. Yet the court must be cognizant that the relations between a union and its former members cannot be considered to be particularly favorable, and from the fact plaintiff was able to obtain the testimony of these seven, it is reasonable to infer that a substantial number of the rest of the 124 resignations in November, 1982 were due, in whole or in part, to defendant’s policy. Even more significantly, in the court’s view, these resignations came more than a month after defendant’s policy had ceased to have any direct impact on anyone working at Homestake. In other words, those who resigned from the union were now back at work, and ineligible for unemployment benefits in any event. Under the terms of the new contract between the union and Homestake, there could not be another strike until 1986. The fact some members still resigned because of the unemployment benefits issue is a strong indication that, as the time for contract negotiations nears again, and the chance of a new strike reappears, many more union members will take defendant’s policy into account in their decision of whether to remain in the union. The 1982 resignations allow this court a reasonable inference that many union members will choose to resign, simply so that if there is a strike, they will be able to receive benefits. This will have the direct effect of weakening plaintiff as it enters into bargaining and making that bargaining much more difficult.

Based on the foregoing analysis, the court has no hesitation in finding that the “allurements” or “inducements” offered by defendant in the state unemployment compensation law create a visible and continuing obstacle to the future exercise of the employee right, guaranteed under 29 U.S.C. § 157, to decide whether to belong to a union, Inter-Collegiate Press, supra, 486 F.1d at 845, and have far reaching effects that would hinder future union bargaining and discriminate solely upon the basis of participation in strikes or union activity, Portland Willamette Co., supra 534 F.2d at 1334. Thus, the South Dakota statute is “inherently destructive” of, and in direct conflict with, the right to unionize under 29 U.S.C. § 157; to allow the state unemployment compensation policy to stand would frustrate the purposes of the NLRA. Accordingly, the court must hold that the South Dakota statute is preempted by 29 U.S.C. § 157.

IV.

Since the court has found for plaintiff on this ground, in accordance with the basic principle that courts should avoid, wherever possible, constitutional questions, the court will not consider plaintiffs claims under the First and Fourteenth Amendments to the United States Constitution. The court therefore turns to the question of the remedy. Plaintiff asks either that defendant be ordered to pay benefits to the union member who applied for unemployment compensation in 1982, or that defendant be ordered to recover the unemployment benefits paid to nonunion members in 1982. The court finds no basis for either order. As to the first alternative, the court must read New York Telephone Co., supra, as holding that the states have the power to decide whether or not to pay unemployment benefits to strikers, so long as that payment does not otherwise interfere with the NLRA. South Dakota’s unemployment policy, or at least the portions left intact by this ruling, clearly demonstrates a choice to not pay strikers. The court does not find it has the power to order a different decision, even as a remedial measure. The second alternative, that of recovering the benefits paid out, the court considers highly inequitable. After the lapse of more than two years, it would be grossly unfair to force the repayment of money received by innocent parties to redress the wrongfulness of defendant’s actions.

The court concludes that the injury to plaintiff is fully remedied by a permanent injunction enjoining defendant from ever construing SDCL 61-6-19 in such a way as to allow the payment of unemployment compensation benefits to non-union employees idled by a strike while the same grade or class of employees who are members of a union are denied unemployment benefits based upon their membership in a union.

This opinion shall constitute this court’s findings of fact and conclusions of law.

Judgment will be entered accordingly.

      . Jurisdiction for this action is based on 28 U.S.C. § 1343 and 42 U.S.C. § 1983, involving the question of whether defendant, acting under color of state law, deprived plaintiff of rights under 29 U.S.C. § 157.

      . United Steelworkers also, of course, proceeded to reject plaintiff’s substantive claims, devoting most of the opinion to a discussion of the asserted violations of union members’ rights to freedom of association and equal protection. This court does not reach the similar claims raised here for the reason given infra. United Steelworkers also rejected plaintiffs claims under 29 U.S.C. § 157, but did so without extensive analysis and without citation of authority. This court is accordingly free to consider the § 157 contentions here.

      . The plurality in New York Telephone Co. also suggested some sort of policy on the part of lower courts to avoid implying pre-emption in the area of welfare programs. 440 U.S. at 534 n. 23, 99 S.Ct. at 1337 n. 23. Yet, the main case cited for this proposition, Super Tire Engineering Co. v. McCorkle, 550 F.2d 903 (3rd Cir.1977), announced no such policy, but based its decision on its interpretation of the meaning of Kimbell, Inc. v. Employment Security Commission, 429 U.S. 804, 97 S.Ct. 36, 50 L.Ed.2d 64 (1976). Kimbell summarily dismissed, for want of a substantial federal question, an appeal of a case dealing with welfare payments to strikers. The case most severely criticizing the analysis of Super Tire is New York Telephone Co. v. New York State Department of Labor, 566 F.2d 388 (2d Cir.1977) which, paradoxically, is the very case affirmed by the Supreme Court in New York Telephone Co.

      . It might be observed that the cases dealing with inducement as an unfair labor practice require a showing of an intent to interfere since a wage increase could be "part of a general wage plan and one which was granted independently of union activity.” Douglas and Lomason Co., 333 F.2d at 514. Here, it can hardly be argued that the statutory grant of benefits is unrelated to union activity, since all union members are denied benefits while all non-union employees are made eligible.

      . The record in the case distinguishes it from Inter-Collegiate Press, where there had been no showing that the union's position had been jeopardized or that it had suffered any diminution in its capacity to represent the employees; no union member resigned his membership.

      . Defendant testified in her deposition that union membership was not considered, only whether an individual was out of work through no fault of his own. However, no union member was allowed benefits, whether he had voted against the strike, see Lawrence Heinbaugh deposition at 7, or whether he would have been willing to cross the picket line to return to work, while all non-union members were granted benefits, so long as they met all other relevant statutory criteria, such as sufficient base period earnings.

      . While Brown v. Hotel and Restaurant Employees, supra, makes it clear that when a state law conflicts with 29 U.S.C. 157, the importance of the state law is immaterial, the court in any event finds no validity in defendant’s argument that the grant of unemployment benefits to nonunion employees was necessary since they were not receiving the union strike benefits. The state statute does not mention the presence or absence of "strike benefits” as a factor to be considered in granting unemployment benefits, and in fact the decision of the Department of Labor granting benefits, quoted at length supra, made no reference to the fact the non-union Homestake employees were not receiving strike benefits. It seems clear that even in a situation where a union did not, for some reason, have a strike fund, or the strike fund had become depleted, so that no strike benefits were being paid to union members, non-union members would still qualify for unemployment benefits. Further, it should also be noted that Homestake employees who did not join the union were exempt from a monthly deduction, approximately $21 in 1982, from their paycheck for union dues, a savings that at least partially mitigates their ineligibility for union benefits in the event of a strike.


author: BELEW, District Judge.

text:
    Augusta CLARK, Vicki Hammond and Brenda Buckner v. TARRANT COUNTY, TEXAS and Tarrant County Adult Probation Department.
    Civ. A. No. 4-82-260 K.
    United States District Court, N.D. Texas, Fort Worth Division.
    March 20, 1985.

      Art Brender, Fort Worth, Tex., for plaintiff.
    Donald K. Buckman, Robert S. Travis, Cantey Hanger Gooch Munn & Collins, Tim Curry, Crim. Dist. Atty., Matthew A. King, Asst. Dist. Atty., Fort Worth, Tex., for defendants.
   MEMORANDUM OPINION

BELEW, District Judge.

There is pending before the Court Defendant Tarrant County’s Motion to Dismiss pursuant to Rule 12(b)(7) and Rule 12(b)(6) as well as the Motion of Defendant Tarrant County Adult Probation Department (“TCAPD”) for Summary Judgment and Dismissal pursuant to Rule 12(b)(1).

Plaintiffs brought this action alleging that the TCAPD and the County discriminate against female probation officers with regard to salary and promotions within the TCAPD in violation of 42 U.S.C. §§ 1983, 1985, 2000e et seq., and the due process clauses of the Fifth and Fourteenth Amendments to the United States Constitution. Plaintiffs are seeking declaratory and injunctive relief, back pay, costs, and attorneys’ fees.

The County argues, in essence, that no claim upon which relief could be granted has been stated against it because it is an entity wholly distinct from the TCAPD and Plaintiffs’ grievances concern the TCAPD only. The TCAPD argues that we lack jurisdiction on the Section 2000e claim because, based on Texas statutes and customs which define the nature of Plaintiffs’ positions, they are not “employees” within the meaning of 2000e(f). It argues that we lack jurisdiction on all other claims because the TCAPD is an arm of the state and, hence, immune under the Eleventh Amendment. After an oral hearing in which testimony and written documents were received into evidence and after careful consideration of the motions, responses, briefs and affidavits, the Court has determined that there is no genuine issue of material fact and renders judgment in favor of both Defendants for the reasons set forth in the following findings of fact and conclusions of law.

Findings of Fact

1. Plaintiffs Augusta Clark, Vicki Hammond, and Brenda Buckner are, or were in the time period relevant to this lawsuit, female probation officers for the TCAPD.

2. The TCAPD and the other adult probation departments around the state were created by Art. 42.12 of the Texas Code of Criminal Procedure. Under Art. 42.12, the adult probation offices which exist in Texas are under the direct supervision of the state judiciary.

3. Art. 42.12, § 1, Tex.Code Crim.Proc. states:

It is the purpose of this Article to place wholly within the State courts of appropriate jurisdiction the responsibility for determining when the imposition of sentence in certain cases shall be suspended, the conditions of probation, and the supervision of probationers, in consonance with the powers assigned to the judicial branch of this government by the Constitution of Texas.

4. Art. 42.12, § 10(a), Tex.Code Crim. Proc. states that the state district judges trying criminal cases shall establish a probation office and employ the necessary district personnel. Subsection (b) provides that when more than one probation officer is required, the state judges shall appoint a Chief Probation Officer who, with the judge’s approval, shall appoint assistants and other employees.

5. State district judges are responsible for running the TCAPD and the salaries of the probation officers are paid from the funds of the state judicial district.

6. Chief probation officers are appointed by district judges. The chief probation officers then, pending the approval of their district judge, appoint the other probation officers.

7. The principal source of income for general operating expenses of the TCAPD is an appropriation made by the Texas legislature every two years. Fees paid by probationers supply the remainder.

8. The County does not hire, fire, supervise, or pay the salaries of adult probation officers.

9. The only official involvement that the County has with the TCAPD is that it is required by statute to provide physical facilities, equipment, and utilities as well as enter into a contract with the district judges allowing probation officers to participate in that county’s group insurance or self insurance programs and in the retirement plan.

10. Any judgment that Plaintiffs might obtain in this case could be satisfied only from state funds.

Conclusions of Law

A. The County Defendant

Plaintiffs’ sole rationale for suing the County is their initial belief that Tar-rant County was their employer while they were at the TCAPD. See First Amended Complaint, ¶ III. Based on our finding of fact with respect to the lack of a significant relationship between the TCAPD and the County, we dismiss the cause of action against the County pursuant to Rule 12(b)(6). See Tex.Code Crim.P. art. 42.12; see generally Shore v. Howard, 414 F.Supp. 379, 384-85 (N.D.Tex.1976) (Mahon, J.) (official acts of TCAPD held to be done as agent for judges); Op.Atty.Gen. 1983, No. MW-542 (each judicial district is required to establish and maintain its own district probation office).

B. The TCAPD

The TCAPD is a creation of the State of Texas and is an extension of the state judiciary. See supra Findings of Fact 2-10; Shore 414 F.Supp. at 384-85. Therefore, a lawsuit against the TCAPD is a lawsuit against the state. See Johnson v. Texas Department of Corrections, 373 F.Supp. 1108 (S.D.Tex.1974) (lawsuit against Department of Corrections is lawsuit against the state); Hughes v. Turnpike Authority of Kentucky, 353 F.Supp. 1105 (E.D.Ky.1973) (lawsuit against the Authority which had no meaningful existence apart from Kentucky Highway Department is lawsuit against state); Lowe v. Texas Tech University, 540 S.W.2d 297 (Tex.1976) (lawsuit against Texas Tech is lawsuit against state). By virtue of the Eleventh Amendment and judicial interpretation thereof, a state enjoys immunity from lawsuits brought against it by its own citizens. Hans v. Louisiana, 134 U.S. 1, 10 S.Ct. 504, 33 L.Ed. 842 (1898). A state’s judicial system shares sovereign immunity and since the TCAPD is part of that system, it, too, is generally immune from suit. See NAACP v. State of California, 511 F.Supp. 1244, 1257-58 (E.D.Cal.1981); Louis v. Supreme Court of Nevada, 490 F.Supp. 1174, 1180 (D.Nev.1980); see also Lokey v. Richardson, 534 F.Supp. 1015, 1019 (N.D.Cal.1982) (“the California Adult Authority is ... absolutely immune from liability”) rev’d on other grounds, 527 F.2d 949 (9th Cir.1975) reversal vacated, 540 F.2d 1022 (9th Cir.1976), rev’d on other grounds, 600 F.2d 1265 (9th Cir.1979).

A State’s sovereign immunity, and thus, the TCAPD’s immunity, is not absolute, however; it can be sued if it expressly consents, see, e.g., Florida Department of Health v. Florida Nursing Home Association, 450 U.S. 147, 101 S.Ct. 1032, 67 L.Ed.2d 132 (1981) or it can be sued if Congress has expressly abrogated its immunity by federal statute. The Supreme Court has held that both Title VII and, to a far lesser extent, Section 1983 limits a state’s sovereign immunity. See Fitzpatrick v. Bitzer, 427 U.S. 445, 96 S.Ct. 2666, 49 L.Ed.2d 614 (1976); Edelman v. Jordan, 415 U.S. 651, 675-678, 94 S.Ct. 1347, 1361-1363, 39 L.Ed.2d 662 (1974). Hence, our inquiry focuses on whether Plaintiffs have stated a claim under either of these two federal provisions such that the TCAPD’s immunity is abrogated. We shall examine the Title VII claim first.

In general, Title VII affords relief to an employee who claims discrimination from an “employer” as both of those terms are defined in the statute. The definition of “employee” is found at 42 U.S.C. § 2000e(f) and provides:

(f) The term “employee” means an individual employed by an employer, except that the term “employee” shall not include any person elected to public office in any State or political subdivision of any State by the qualified voters thereof, or any person chosen by such officer to be on such officer’s personal staff, or an appointee on the policy making level or an immediate adviser with respect to the exercise of the constitutional or legal powers of the office. The exemption set forth in the preceding sentence shall not include employees subject to the civil service laws of a State government, governmental agency or political subdivision.

In deciding whether an individual who is in one sense an “employee” of the state within the everyday meaning of the word, is also not an “employee” of the state within the meaning of Title VII, this Court must look to federal rather than state law. Calderon v. Martin County, 639 F.2d 271 (5th Cir.1981). State law is relevant only in so far as it defines the responsibilities and powers of a position and is thereby probative of whether one who holds that position is within the “personal staff” exception to Title VII found in 42 U.S.C. § 2000e(f).

The pertinent case law on the “personal staff” exception focuses on the relationship between the elected officials and assistants. In Owens v. Rush, 654 F.2d 1370 (10th Cir.1981), the Court held that an “undersheriff” was not covered by Title VII where the “undersheriff” served at the pleasure of his superior who had plenary powers of appointment and removal. The “undersheriff” was personally accountable to only the sheriff who was “both politically and civilly liable for any default or misconduct of the undersheriff in the performance of his official duties.” Id. at 1376.

The Plaintiffs argue, correctly, that the legislative history of this Title VII exception shows that it was intended to be construed “narrowly.” They insist that although Rush may apply to the head or chief probation officer, the Plaintiffs in this case do not have the same relationship with the district judge that the “undersheriff” had with the “sheriff” in Rush. That is, the Plaintiffs are not on the elected official’s personal advisory staff.

In Ramirez v. San Mateo County District Attorney’s Office, 639 F.2d 509 (9th Cir.1981), the Ninth Circuit ruled that a Mexican-American who was not hired as a deputy district attorney for the county, had no claim under Title VII against the district attorney or the county because the position of deputy district attorney was that of a member of the “personal staff” of an elected official and was not covered by state civil service laws. The position, therefore, came within the “personal staff” exception. The Court reasoned that:

Unlike most other county workers, deputy district attorneys serve at the pleasure of their superior, the district attorney, who has plenary power of appointment and removal.

Ramirez at 513. Cf. Adams v. McDougal, 695 F.2d 104, 108 (5th Cir.1983).

Other cases that support this position are Wall v. Coleman, 393 F.Supp. 826 (S.D.Ga.1975) and Kyles v. Calcasieu Parish Sheriff's Dept., 395 F.Supp. 1307 (W.D.La.1975). In Kyles, the Court held that a deputy sheriff was within the “personal staff” exception. In Wall, the Court held that the position of assistant district attorney was within the “personal staff” exception.

At the evidentiary hearing conducted which elucidated the state law and custom on this issue, Judge Tom Cave of the 213th Judicial District testified that he considers probation officers in his court part of his personal staff, that he asks probation officers for recommendations which he sometimes follows and sometimes rejects, and that he instructs probation officers on how he wants particular cases handled. He testified that he is the immediate supervisor of his probation officers with absolute authority to hire, fire, and promote. Judge Gray of Tarrant County Criminal District Court No. 4 also testified that he has absolute authority to hire and fire probation officers and that he considers probation officers immediate advisors in his exercise of judicial powers.

Plaintiff Clark testified that she reports to Judge Cave daily, has no civil service protection, and has free access to the Judge’s chambers. Ms. Clark further testified that she is an extension of the Court, that she offers the Judge advice and recommendations on whether to revoke or retain probation, that she is the Judge’s immediate advisor on probation matters, and that she would follow the Judge’s instructions on handling a probationer even if it conflicted with those of Don Smith — the chief probation officer.

Ms. Clark testified that a probation officer’s duties include filing pre-sentence investigation reports, checking up on their probationers once a month and taking information on delinquent probationers to their judge or the district attorney, depending on the court. The district attorney will then file a petition for revocation and the judge will order the arrest of the probationer. The probation officer prepares a report on the probationer's compliance with the terms of probation and a hearing is held. The decision whether to revoke is then solely within the discretion of the judge.

In short, there is nothing in Ms. Clark’s testimony, or otherwise in the record, that contradicted the testimony of either Judge Cave or Judge Gray or which indicated that she did not come within the “personal staff” exception to Title VII.

The Court holds the position of probation officer within TCAPD is that of a member of the “personal staff” of an elected official, that such position is not a civil service position, and thus as a matter of law Plaintiffs have no claim under the provisions of Title VII.

Plaintiffs also fail to establish a cause of action pursuant to 42 U.S.C. Section 1983. That statute permits suits against a person and provides:

Every person who, under color of any statute, ordinance, regulation, custom, or usage, of any State or Territory or the District of Columbia, subjects, or causes to be subjected, any citizen of the United States or other person within the jurisdiction thereof to the deprivation of any rights, privileges, or immunities secured by the Constitute and laws, shall be liable to the party injured in an action at law, suit in equity, or other proper proceeding for redress____[emphasis added]

For many years, Section 1983 suits against cities were not permitted because it had been held that they were not persons. Monroe v. Pape, 365 U.S. 167, 81 S.Ct. 473, 5 L.Ed.2d 492 (1961). That doctrine was overruled as to cities and local governments in Monell v. Department of Social Services of the City of New York, 436 U.S. 658, 98 S.Ct. 2018, 56 L.Ed.2d 611 (1978). However, states, especially when, as here, they have not been sued through their officers, are not “persons” within the meaning of Section 1983. See Quern v. Jordan, 440 U.S. 332, 341-345, 99 S.Ct. 1139, 1145-1147, 59 L.Ed.2d 358 (1979); Surmeli v. State of New York, 412 F.Supp. 394 (S.D.N.Y.), aff'd 556 F.2d 560 (2nd Cir.1976) cert. denied, Nyquist v. Surmeli, 436 U.S. 903, 98 S.Ct. 2230, 56 L.Ed.2d 400 (1978).

Because Plaintiffs have failed to establish both a Title VII and a Section 1983 claim, they have failed to pierce the TCAPD’s immunity. As the Supreme Court has recently stated, a state’s Eleventh Amendment immunity operates as a jurisdictional bar to a lawsuit regardless of the relief sought. Pennhurst State School & Hospital v. Halderman, 465 U.S. 89, -, 104 S.Ct. 900, 907, 79 L.Ed. 67, 78 (1984). For this reason, we must grant summary judgment in favor of the TCAPD.

Any conclusion of law that should be made a finding of fact is hereby made a finding of fact. Any finding of fact that should be made a conclusion of law is hereby made a conclusion of law.

Judgment will be entered in accordance with this Memorandum Opinion.

      . Since the Court will consider matters outside of the pleadings, Tarrant County’s Rule 12(b)(6) motion will be treated as one for summary judgment pursuant to Rule 56.

      . See supra Findings of Fact 2-9.

      . We are troubled by the fact that Plaintiffs have not named the state as a defendant. As Chief Justice Burger has recently stated: "It does not make a fetish out of ordinary procedure to say that if a claimant seeks damages from a municipality, this should be done by making it a named party defendant; that will assure the municipality has notice and an opportunity to respond." Brandon v. Holt, — U.S. -, 105 S.Ct. 873, 83 L.Ed.2d 878 (1985). (Burger, C.J. concurring in Judgment) However, due to the policy of liberal construction behind Rule 15(b), we will proceed to decide the legal issues without first insisting that formal amendment be filed. See Id. p. - & n. 19, 105 S.Ct. p. 877 & n. 19 (Opinion of the Court, Stevens, J.)

      . The Eleventh Amendment provides:
      The judicial power of the United States shall not be construed to extend to any suit in law or equity, commenced or prosecuted against one of the United States by citizens or subjects of any foreign state.

      . No argument is made here that the TCAPD has consented to be sued.

      . Plaintiffs also have alleged causes of action pursuant to 42 U.S.C. § 1985 and the due process clauses of the 5th and 14th Amendments. We have found no case that has interpreted Section 1985 to limit a state’s sovereign immunity. In any event, we agree with Defendants that Plaintiffs have failed to demonstrate the existence of a conspiratorial relationship between the County and TCAPD. See supra Findings of Fact 2-9. As to the due process claims, the Supreme Court has dispelled the view that states surrendered all sovereignty by the mere passage of these amendments. See Edelman, 415 U.S. 664-667, 94 S.Ct. 1356-1358 (distinguishing Ex Parte Young, 209 U.S. 123, 28 S.Ct. 441, 52 L.Ed. 714 (1908)). Express congressional intent to abrogate the immunity conferred by the Eleventh Amendment is required. Fitzpatrick, 427 U.S. at 451-52, 96 S.Ct. at 2669-70.

      . Crucial to the Supreme Court’s reasoning in Monell was the notion that when people whose acts represent the official policy of a city commit torts, the city can then be sued as a “person" within the meaning of Section 1983. Monell, 436 U.S. at 694-95, 98 S.Ct. at 2037-38. In the instant case, Plaintiffs have sued only the TCAPD and none of its officers. It is hard to see how the entity itself is capable of committing torts.