author: KRENZLER, District Judge.

text:
    Andrea EATON, Plaintiff, v. CITY OF SOLON, Charles J. Smercina, Mayor, Arthur Korkowski, John Rachocki, Anthony J. Celebrezze, Jr., Defendants.
    No. C83-4668.
    United States District Court, N.D. Ohio, E.D.
    Dec. 13, 1984.

      Joseph W. Diemert, Jr. & Associates Co., L.P.A., Cleveland, Ohio, for plaintiff.
    Charles T. Riehl, Law Director, City of Solon, Victor Leo, Thomas G. Longo, Asst. Law Director, Cleveland, Ohio, for City of Solon, Charles J. Smercina, Mayor, Arthur Korkowski and John Rachocki.
    John T. Williams, Asst. Atty. Gen., Columbus, Ohio, for Anthony J. Celebrezze, Jr.
   MEMORANDUM OF OPINION AND ORDER

KRENZLER, District Judge.

In this case, the plaintiff is asking the court to order the city of Solon, Ohio, to issue a building permit for a single-family, “Geodesic Dome home.” The plaintiff is also seeking money damages, both compensatory and punitive, for the City’s failure to issue the permit, and an injunction mandating the issuance of the permit. The action has both federal claims and pendent state claims. The federal claims are alleged violations of Title 42 U.S.C. §§ 1983 and 1985. Although inartfully drawn, the Court concludes that plaintiffs claims for mandamus, declaratory judgment, and injunctive relief constitute pendent state claims under Ohio Rev.Code Ann. ehs. 2731, 2721, and 2727, respectively.

This case could be disposed of with a brief opinion, but because the proper scope of actions under § 1983 has become a troublesome and vexatious issue in the federal courts, it merits a more in depth analysis by this Court.

This Court is concerned that recent cases decided under § 1983 have indicated that § 1983 is, in effect, being amended and repealed, not by congressional action but by court decisions. Accordingly, this Court will consider § 1983 in some depth, both in general and as it applies to this case.

FACTS

The plaintiff, Andrea Eaton, filed a complaint captioned “Complaint for Mandamus, Declaratory Judgment, Damages, and Equitable Relief.” The defendants are the City of Solon; Charles J. Smercina, the Mayor; Arthur Korkowski, the Building Commissioner; John Rachocki, a former City Councilman; and Anthony J. Celebrezze, Jr., the Attorney General of the State of Ohio.

The plaintiff proposes to build a home on a parcel of property in the City of Solon, acting as the authorized agent and representative of the owner. She alleges that the defendants, individually and in concert with one another, and by intentional acts under color of municipal and/or state statutes, city ordinances, or regulations, have violated, and will violate in the future, certain of her constitutional rights.

Specifically, plaintiff claims that she is being deprived of her liberty and lawful use of her property without due process of law, that the actions of the defendants constitute a confiscation of her property without due process of law, and that she is being denied equal protection of laws. She alleges that the defendants have interfered with her private ownership of her property and imposed arbitrary, discriminatory, capricious, and unreasonable restrictions upon the use of her property by the refusal to act upon her application for a building permit.

She further avers that the defendants have acted under the guise of an ordinance which is unconstitutional, in that it imposes arbitrary, discriminatory, vague, and unreasonable standards.

Finally, plaintiff alleges that as a direct and proximate result of the above violations and conspiracy, she has suffered damages. She seeks monetary relief for her damages, attorney’s fees, and a permanent injunction against the defendants, jointly and severally, ordering them to grant the building permit.

The defendants, the City of Solon, Mayor Charles Smercina, Building Commissioner Arthur Korkowski, and former Councilman John Rachocki, filed a joint motion to dismiss the complaint.

First, they argue that the plaintiff has made conclusory allegations which are not sufficient to state a cause of action and afford the relief requested under § 1983.

Second, the defendants allege that the plaintiff has no standing to maintain this action because she is not the owner of the property upon which the house is to be built.

Next, the defendants contend that the plaintiff failed to use at least three available state procedures to challenge the action of the Solon building inspector. Specifically, the defendants allege that the plaintiff could have made use of any of the following procedures available under state law: (1) a mandamus action pursuant to Ohio Rev.Code Ann. ch. 2731; (2) administrative procedures provided for in the Solon Building Code, Ordinance 1305.07, together with the right of appeal in the Ohio courts under Ohio Rev.Code Ann. ch. 2506; and (3) a declaratory judgment action pursuant to Ohio Rev.Code Ann. § 2721.03.

The defendants cite Vicory v. Walton, 721 F.2d 1062 (6th Cir.1983), rehearing en banc denied, 730 F.2d 466 (6th Cir.1984), as authority for the proposition that the plaintiff cannot maintain this Fourteenth Amendment due process claim under § 1983, because she had an adequate state remedy which satisfied due process requirements. Defendants claim that since the plaintiff failed to plead or demonstrate the inadequacy of the state processes, she has not stated a claim for denial of due process pursuant to § 1983.

The defendants next contend that the plaintiff has not stated a cause of action under § 1985 because she has not alleged any “class based invidiously discriminatory animus” on the part of the defendants.

Finally, the defendants allege that the federal district court lacks jurisdiction over a suit seeking mandamus of a local public official.

In substance, the defendants argue that the plaintiff is asking the district court to order the issuance of a building permit, a remedy which is inappropriate since the state has adequate remedies which provide all the due process to which the plaintiff is entitled.

Attached to the motion to dismiss is the affidavit of Charles T. Riehl, the Law Director of the City of Solon. He states that the plaintiff has submitted to the Solon Building Department an application for a building permit to construct a “Geodesic Dome home” on a certain lot located within the City of Solon, Ohio. Her application was supplemented by architectural plans for the construction. Riehl states that the application remains incomplete and has not been formally acted upon by the Building Commissioner.

Riehl goes on to state that on or about September 26, 1983, the Building Commissioner of the City of Solon verbally advised the plaintiff that, upon completion of her application, her application would be denied. In considering the plaintiffs application for a permit, the City of Solon solicited and obtained opinions from an appraiser and an architect regarding the advisability of issuing the permit requested.

Finally, the affiant states that the plaintiff has not filed any action in mandamus pursuant to Ohio Rev.Code Ann. ch. 2731 in connection with this matter; has not initiated any declaratory judgment action under Ohio Rev.Code Ann. ch. 2721 in connection with this matter; and has not initiated any other procedure under state statute or local ordinance in connection with this matter.

Attached to the affidavit were the written opinions of the appraiser and the architect and §§ 1301.01-1301.05 of the Codified Ordinances of the City of Solon dealing with the appointment and duties of the Building Commissioner. Also attached was § 1305.07 of the Codified Ordinance of the City of Solon which provides the mechanism for administratively appealing decisions of the building inspector regarding the denial of building permits.

The plaintiff filed a brief and a supplemental brief in opposition to the defendants’ motion to dismiss but did not attach any evidentiary material other than the before-mentioned power of attorney.

Because the defendants filed an affidavit with their motion to dismiss and the plaintiff filed the power of attorney, the Court will consider the motion to dismiss as a motion for summary judgment. Fed.R.Civ.P. 12(b) and 56.

§ 1983 IN THE FEDERAL COURTS

The two important legislative and constitutional provisions with which we will deal are 42 U.S.C. § 1983 and the Fourteenth Amendment to the United States Constitution.

Section 1983 provides as follows:

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 Constitution and laws, shall be liable to the party injured in an action at law, suit in equity, or other proper proceedings for redress. For the purposes of this section, any Act of Congress applicable exclusively to the District of Columbia shall be considered to be a statute of the District of Columbia.

Section 1 of the Fourteenth Amendment to the United States Constitution is as follows:

All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside. No State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any State deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws.

Section 1983 was enacted in 1871 and from 1871 through 1961, there were very few cases brought under the statute. In 1961, Monroe v. Pape, 365 U.S. 167, 81 S.Ct. 473, 5 L.Ed.2d 492 (1961), was decided. Since Monroe, there have been thousands of reported and unreported § 1983 cases,- and the only thing that is consistent about them is their inconsistency. Law school professors have been having a field day analyzing the courts’ decisions as they relate to § 1983. There are almost as many law review articles discussing § 1983 decisions as there are reported cases.

The language and intent of § 1983 are clear and unambiguous. The statute provides, in substance, that any person who, acting under color of law, violates another person’s constitutional rights, shall be liable to the injured party in a court of law, equity, or other proceeding. Still, the statute’s simple wording provides no insight into a number of legal questions important to the interpretation and application of § 1983.

Section 1983 does not expressly provide for the type of mental state required by the tortfeasor, whether it be negligence, intentional, or strict liability. It does not provide for an exhaustion-of-remedy rule in state court as a condition precedent to maintaining a § 1983 action in federal court. It does not state that if there is an adequate remedy at state law and in state court for the act committed, one is precluded from maintaining a § 1983 action in federal court. It makes no reference to immunities. It does not establish a priority between various constitutional rights, such as liberty or property under the Due Process Clause. It does not distinguish between procedural and substantive due process.

Yet, despite its facial simplicity, § 1983 affords relief for the myriad of constitutional rights violations which for years went unabated and uncompensated. It has thus become the basis of untold numbers of claims in the federal courts, clogging the dockets and adding to an already frustrating backlog in many courts. Litigants are frequently using § 1983 in the federal courts for their principal relief rather than first going to state court with their lawsuits. While the state and federal courts have concurrent jurisdiction over claims brought under § 1983, the federal courts have received the vast majority of these cases. This substantial expansion of the federal docket with cases which are not infrequently frivolous has discouraged and concerned many federal courts.

The following comments illustrate the attitude of many courts with regard to § 1983 cases.

Justice Powell’s concurrence in Parratt v. Taylor, 451 U.S. 527, 554, n. 13, 101 S.Ct. 1908, 1922 n. 13, 68 L.Ed.2d 420 (1981) noted that:

The present case ... illustrates the extent to which constitutional law has been trivialized, and federal courts often have been converted into small-claims tribunals. There is little justification for making such a claim a federal case____

Judge Shadur, in another § 1983 case, Ragusa v. Streator Police Department, 530 F.Supp. 814, 816 (1981), commented:

Civil case filings in this District Court during 1981 have once again followed the familiar pattern of breaking all previous annual records by a wide margin. As a concomitant to that increase without any corresponding increase in the number of judges, calendars grow even larger and more unmanageable. To some extent the increased influx is due to expanded sources of federal jurisdiction. But all too much of this growth industry is traceable to frivolous actions (in the federal sense) like Ragusa’s negligence claim.

Justice Rehnquist, in Paul v. Davis, 424 U.S. 693, 96 S.Ct. 1155, 47 L.Ed.2d 405 (1976), stated that if all torts committed by state officials were to rise to the dignity of violations of the Due Process Clause, it would make the Fourteenth Amendment a font of tort law to be superimposed on the state systems.

Unfortunately, many courts have dealt with their frustrations by creating a range of burdensome limitations on actions brought under § 1983. Federal courts have been regularly and systematically disposing of § 1983 cases by means other than on the merits. Some have applied the doctrine of abstention. Some have required the exhaustion of administrative or judicial remedies in state court before allowing a federal § 1983 action to go forward. Some have held that if there is an adequate remedy under state law for the alleged constitutional violation, a party is precluded from maintaining a § 1983 action in federal court. Some have broadly expanded the scope of immunities, both absolute and qualified. Some have dramatically limited what actions will be characterized as violations of constitutional rights.

Obviously, many of these limitations are justified and reasonable. Still, the roadblocks which they can pose for meritorious cases under § 1983 are substantial. For example, if the adequate state remedy-preclusion theory were adopted on a uniform basis, it would, in effect, repeal § 1983 because there is some state remedy for just about every constitutional violation. Similarly, if the exhaustion of state administrative or judicial remedies was required as a condition precedent to maintaining a § 1983 action in federal court, problems of res judicata and collateral estoppel would be substantial. For a cogent and detailed discussion of this disturbing trend, see Judge Holschuh’s dissent in Wheeler v. Shearer, 732 F.2d 531 (6th Cir.1984).

The issues in this case are relevant to the developing preclusion of § 1983 cases from federal court when there is an adequate state remedy. The cases relevant to this trend are discussed and analyzed in the next section of this opinion.

ADEQUATE STATE REMEDY AND THE PRECLUSION OF FEDERAL COURT ACTIONS UNDER § 1983

In Patsy v. Florida, 457 U.S. 496, 102 S.Ct. 2557, 73 L.Ed.2d 172 (1982), the United States Supreme Court held that it is not necessary to exhaust administrative or judicial remedies as a condition precedent to maintaining a § 1983 action. This holding is consistent with the holding in Monroe v. Pape, 365 U.S. 167, 81 S.Ct. 473, 5 L.Ed.2d 492 (1961), which held that § 1983 is supplementary to and independent of any state action, and that it is not necessary to exhaust administrative or judicial remedies as a condition precedent to maintaining a § 1983 action.

Still, the Supreme Court in Parratt v. Taylor, 451 U.S. 527, 101 S.Ct. 1908, 68 L.Ed.2d 420 (1981), held that a random, negligent taking of property by a state actor contrary to an established state procedure did not constitute a deprivation of property under the Fourteenth Amendment Due Process Clause because the state provided a procedure for redress in the form of a post-deprivation hearing. The adequate state remedy provided all the process that was due under the Fourteenth Amendment and hence, no constitutional violation was stated. The Court held, moreover, that due process was satisfied even though the state relief would not be as complete as relief available under § 1983.

The Supreme Court subsequently extended Parratt to intentional deprivations of property, holding, in Hudson v. Palmer, — U.S. —, 104 S.Ct. 3194, 82 L.Ed.2d 393 (1984), that an unauthorized intentional deprivation of property by a state employee does not violate due process if a meaningful post-deprivation remedy for the loss is available. In Logan v. Zimmerman Brush Co., 455 U.S. 422, 102 S.Ct. 1148, 71 L.Ed.2d 265 (1982), however, the Supreme Court ruled that Parratt does not apply when an “established state procedure” itself destroys a property interest without according the proper procedural safeguards.

Some lower courts have read the Parratt holding broadly, expanding it to mean that in any property-due process case where relief can be given under state law, due process is satisfied and a § 1983 action cannot be maintained. In Vicory v. Walton, the Sixth Circuit, interpreting Parratt v. Taylor, held that for purposes of § 1983 damage suits, a claim for deprivation of a property interest without due process of law has not been stated unless the plaintiff has pleaded and proved that the state remedy for redressing the wrong is inadequate. “The plaintiff must attack the state’s corrective procedure as well as the substantive wrong.” Vicory v. Walton, 721 F.2d at 1066.

Since the Fourteenth Amendment makes no distinction between liberty and property and does not prioritize these rights, consistency would seem to require the same result in cases dealing with violation of liberty interests as in those dealing with property interests. This would mean that in cases in which deprivation of a liberty interest was alleged, the existence of an adequate state remedy such as a tort action would preclude the § 1983 claim. Nevertheless, some circuits, including the Sixth, have distinguished between liberty and property interests, holding that the existence of adequate state remedies precludes a § 1983 action based on a property right violation, but not a liberty right violation.

In Wilson v. Beebe, 743 F.2d 342 (6th Cir.1984), the Sixth Circuit declined to apply Parratt to deprivations of life or liberty interests where the allegation was that the state actor used excessive force against the plaintiff. The Court acknowledged, however, that other circuits are making their liberty-due process holdings consistent with their property-due process holdings. Indeed, the United States Supreme Court in Ingraham v. Wright, 430 U.S. 651, 97 S.Ct. 1401, 51 L.Ed.2d 711 (1977), while acknowledging that a liberty interest was at stake in the case, found that existing state laws were sufficient to provide all the process that was due.

The inconsistent treatment of liberty and property interests aside, the instant case involves a property interest which is subject to the adequate state remedies preclusion rule of Vicory. The Court’s inquiry must therefore focus on the question of what facts are necessary to demonstrate that state remedies are inadequate.

Unfortunately, some district courts have misinterpreted Vicory, and have understood it to mean that if the state has laws or other procedures that would provide an adequate remedy for a property-due process violation, then the party cannot maintain a § 1983 action.

Based on this interpretation, some district courts have reviewed the state law to determine if there was a form for due process. If there was, these cases were dismissed either on the defendant’s motion to dismiss or by summary dismissal by the courts.

However, the fact that statutes, rules, regulations, ordinances, or procedures provide the form of due process does not mean that due process was afforded in every case. It is necessary to look both at the substance of due process as well as the form of due process to determine the adequacy of state remedies.

To begin with, a plaintiff must present something more than mere conclusory allegations parroting the words of § 1983 and the Fourteenth Amendment. The plaintiff must allege facts, in some specific detail, upon which she relies in order for the court to determine whether she has properly alleged the manner in which the state has denied her due process. A showing of the adequacy or inadequacy of state remedies, moreover, depends upon the interaction of the parties involved and the part played by each in expediting the state processes provided.

The present action involves an attempt to obtain a building permit. This type of action, as well as similar property, land use, and zoning actions, involves three types of actors. First, there are the legislative bodies, whether state or local, which enact the law and provide the processes, the adequacy of which come under Court scrutiny in the Vicory analysis. Second, there are the individual state actors and agencies that implement the government processes. Third, there is the plaintiff who seeks to enforce his or her property right.

The adequacy of state processes can thus be approached from three aspects: the existence and facial validity of remedies enacted by the first group of actors, the timeliness and reasonableness of enforcement by the second group of actors, and the diligence of pursuit of his/her rights by the third actor.

Assuming that state processes which are facially adequate are shown to exist, the question becomes whether the state actors who enforce those processes have acted in a timely and expeditious manner, and have not caused unwarranted, unreasonable, or excessive delays. Such delays, in and of themselves, can violate a person’s constitutional rights whether the conduct was negligent or intentional. This is what is meant by the substance of a constitutional right versus the form. Having the form of due process by statute, ordinance, rule, or regulation, without its proper or timely implementation, is as much a constitutional violation as if the established form or procedures themselves violated constitutional rights.

Unreasonable delay, whether it be negligent or intentional, by governmental agencies or state actors, in and of itself, is a constitutional violation. There is no lawful reason for delays not related to a legitimate, governmental purpose or function. Hearings must be granted at a meaningful time and in a meaningful manner. Armstrong v. Manzo, 380 U.S. 545, 85 S.Ct. 1187, 14 L.Ed.2d 62 (1965); Loudermill v. Cleveland Bd. of Educ., 721 F.2d 550 (1983).

A plaintiff, however, cannot make an application to the city for some type of approval or permit and sit idly by. Self-help must be used if he wants to use a § 1983 case to protect his property rights. The mere filing of an application followed by inaction by the governmental agency, in and of itself, is not sufficient to maintain a § 1983 action. If the governmental agency does not act in a reasonable, timely, expeditious manner, the property owner must aggressively and affirmatively assert his rights. By doing so, he is in the best possible position to assert the inadequacy of the state procedures and, thus, a violation of his constitutional rights should the governmental agency remain intransigent.

At the administrative and judicial levels, there are many things that he can do. The more he does and the less the city does to consider his application and dispose of it, the stronger is his position in maintaining a § 1983 case.

At the administrative level, the person can demand a hearing and a decision. This can either be by letter or other written notice. If the governmental agency does not act and causes unreasonable, unwarranted, and untimely delays, the person can bring a mandamus action to force the governmental agency to act. This means that the governmental agency will be forced to either grant or deny any permit or approval or to approve or disapprove the application. It is well established that mandamus may only be used to force the action, and cannot be used to require a particular conclusion or result.

If ruled against at the administrative level, the property owner can take an appeal to a quasi-judicial local agency or to the courts, if so provided. He should take such appeals in a timely fashion. He should oppose any motions to continue the proceedings and he should not request any continuances. In other words, he should aggressively pursue any appeals.

The state court system is part of the state system, and any unreasonable or unwarranted delays in adjudicating the issues before the court may be part of the state system that denies property-due process. In matters before the courts, the property owner should be prepared for trial and file a motion to advance. This would be another indication that the property owner is doing all that he can to bring the matter at issue to a conclusion in a timely, expeditious manner. Failure of the courts- to act in a timely or reasonable manner would be more evidence of the inadequacy of the state system in affording due process.

If all three of the foregoing groups mentioned and discussed above seriously and timely meet their respective duties and responsibilities and respect the other person’s rights, privileges, and immunities under the Constitution, most, if not all, of these property, building permit, land use, zoning type cases would be resolved at the state level, thus eliminating the need for § 1983 actions of this variety.

Many municipalities have adopted, by charter or ordinance, regulations providing time limits in which various administrative and quasi-judicial bodies must act on an application. If these governmental agencies would adopt and apply such reasonable time requirements to all agency decisions, it would certainly go a long way toward eliminating § 1983 suits on the basis of a constitutional violation for unreasonable, unwarranted, and untimely delays. Failure to act in a timely and reasonable manner would increase the probabilities that § 1983 actions would be brought against such governmental agencies for such conduct.

Courts have also been known to condone long delays in processing applications or claims as acceptable hazards of our bureaucracy. It is neither fair nor reasonable for a court, with a flourish of the pen, to characterize a delay of many years as being too insignificant to constitute a violation of Fourteenth Amendment due process. One cannot help but wonder if those judges who have concluded that these delays are not constitutional violations would have the same point of view if they were the participant in the proceedings. There is no lawful, valid, constitutional reason why there should be long, unreasonable, and unwarranted delays in affording persons due process.

Having stated the foregoing, it is important to state that the normal time consumed in the state process, administratively and judicially, that is fair, reasonable, and necessary for the orderly and proper functioning of government does not constitute a violation of a person’s constitutional liberty- or property-due process rights under the Fourteenth Amendment. In other words, the normal amount of time and money consumed to administratively and judicially process a state claim is not a constitutional violation of due process.

In conclusion, § 1983 confers no added rights on plaintiff beyond providing a remedy for violation of her federal constitutional and statutory rights. Thus, § 1983 cannot be used as the principal source of relief in a property-due process case if the state remedies available to plaintiff provide due process, both in form and substance.

It is the courts’ responsibility in each § 1983 property-due process action to evaluate both the state process and remedies available to the plaintiff, as well as the actions taken by all the parties involved. In deciding whether a plaintiff has been denied property without due process of law, the court must balance the interests and actions of all the parties and determine (1) whether normal and adequate processes were available to the plaintiff, (2) whether there were unreasonable, unwarranted, or excessive delays, and (3) whether the plaintiff actively pursued the claim.

CONCLUSION

Having reviewed all of the operative facts in this case and a brief history and status of § 1983, especially as it relates to property-due process cases, the Court will now reach its conclusions.

This Court will rule on all of the issues raised in the complaint and the motion to dismiss-motion for summary judgment. All of the issues will be ruled on recognizing that the Court’s ruling on some of the issues normally would make it unnecessary to rule on other issues.

1. § 1985. Plaintiff seeks relief under 42 U.S.C. § 1985(3) for a conspiracy to deprive her of equal protection of the laws. In order to establish a violation of § 1985(3), the conspiracy must be motivated by “some racial or perhaps otherwise class-based, invidiously discriminatory animus behind the conspirators’ action.” Griffin v. Breckenridge, 403 U.S. 88, 102, 91 S.Ct. 1790, 1798, 29 L.Ed.2d 338 (1971). Plaintiff has failed to allege facts showing a conspiracy against her because of her membership in a class. Plaintiff therefore fails to state a claim upon which relief can be granted and the Court dismisses the § 1985(3) claim under Fed.R.Civ.P. 12(b)(6).

2. STANDING ISSUE. The plaintiff brings the action in her own name, although she does not allege that she owns the property but, instead, alleges in paragraph 3 of the complaint “that she is the authorized agent and representative of the owners of said parcel of property.” Plaintiff premises her standing to bring this action on a power of attorney attached to her brief in opposition to the motion to dismiss representing that she has authority to build the house. Plaintiff presents no other evidence to the Court that she has any interest in the property other than the power of attorney. A § 1983 cause of action is personal to the person who alleges that his or her constitutional rights are violated, and it cannot be delegated to another person. The plaintiff has no standing to maintain this § 1983 action.

While this case could be dismissed on the standing issue alone, it would not serve the best interests of the law and the courts. Through various procedural devices, Bernadine Osinski, who is the real party in interest and thus, a necessary and indispensable party, could enter this case or initiate a new case and these proceedings would begin anew. Therefore, this Court will not dismiss the case on the standing issue.

Assuming arguendo that the plaintiff has standing, she can not prevail as will be explained below.

3. FOURTEENTH AMENDMENT ISSUES. Plaintiff has raised several Fourteenth Amendment issues. These are the denial of equal protection and a deprivation of both a liberty and property interest without due process.

A. EQUAL PROTECTION. Plaintiff’s equal protection claim is based upon her allegation that the defendants used an unconstitutionally vague ordinance in denying her building permit. Yet, the plaintiff acknowledges that “[a] formal written denial was not granted____” Brief in Support of Motion for Preliminary Injunction, p. 2. Since plaintiff’s application for a building permit has neither been formally granted nor denied, she can not convincingly allege that certain ordinances, be they constitutional or not, were used in denying the permit. Since there is no evidence to prove that any formal decision has been made regarding plaintiff’s application, the plaintiff has failed to state a claim upon which relief can be granted stemming from the unequal application of unconstitutional ordinances.

B. DUE PROCESS

1. LIBERTY. Plaintiff has failed to allege facts sufficient to indicate that a liberty interest is at stake.

2. PROPERTY. This Court could dismiss the complaint because Vicory v. Walton requires that the plaintiff allege with sufficient detail that state law is inadequate. Plaintiff’s complaint is inadequate because it only makes conclusory allegations. However, the plaintiff or Bernadine Osinski could file for leave to amend the complaint or file a new action after dismissal and this, too, would not be in the best interests of the law or this Court. Further, the defendants filed the Riehl affidavit with all of the operative facts involving the adequacy of state remedies which the plaintiff has not disputed. The defendants have thus supplied the operative facts which the plaintiff neglected to plead. Because we have all of the undisputed facts, the case can now be decided on the merits which is preferable to a dismissal on standing or failure to state a cause of action. Therefore, this Court will act on the motion for summary judgment.

Assuming arguendo that the plaintiff has stated a cause of action under § 1983, she can not prevail for the reasons stated below.

Plaintiffs § 1983 property-due process claim fails because she has failed to allege or provide evidence to create a material issue of fact as to the inadequacy of the state remedies available to her. If plaintiff had provided evidence that she had been diligent in attempts to force the defendants to act by use of these state remedies but had failed in these attempts because either the form or substance of the remedies was inadequate, a material issue of fact as to the adequacy of these remedies would exist. However, the Court concludes from the evidence submitted that there is no material issue of fact as to the adequacy of the state remedies and that moving defendants are entitled to judgment as a matter of law on the § 1983 claim. Thus, the Court grants moving defendants City of Solon, Charles J. Smercina, Arthur Korkowski, and John Rachocki’s motion for summary judgment as to the § 1983 claim.

4. The Court declines to entertain plaintiffs pendent state claims for mandamus, declaratory judgment, or injunctive relief pursuant to the doctrine set forth in United Mine Workers v. Gibbs, 383 U.S. 715, 86 S.Ct. 1130, 16 L.Ed.2d 218 (1966). Thus, plaintiffs claims for mandamus under Ohio Rev.Code Ann. ch. 2731, for declaratory judgment under Ohio Rev.Code Ann. ch. 2721, and for injunctive relief under Ohio Rev.Code Ann. ch. 2727 are hereby dismissed.

The Court notes that, upon issuance of this order, unreasonable and unwarranted delays on defendants’ part in acting on a properly-filed application for a building permit, whether negligent or intentional, may lead to a § 1983 action against them. Furthermore, plaintiff must affirmatively assert her rights through available state remedies or she will not be allowed to maintain a § 1983 action.

5. DEFENDANT CELEBREZZE. Defendant Anthony J. Celebrezze, Jr. was brought into this action under Ohio Rev. Code Ann. § 2721.12, which requires the Attorney General to be served with a copy of the proceeding and heard whenever declaratory relief is sought attacking the constitutionality of a state or ordinance. Because the Court has declined to exercise jurisdiction on the pendent state claim for declaratory judgment under Ohio Rev.Code Ann. ch. 2721, and has dismissed that claim, the Court dismisses defendant Celebrezze as a party defendant.

6. COSTS. Because the plaintiff did not provide evidence to show that she had aggressively pursued her state remedies and because the defendants did not act on the application for more than a year, the costs of this case are to be divided between the plaintiff and defendants, with each to pay one-half of the costs.

IT IS SO ORDERED.

      . A power of attorney was executed by Ms. Bernadine Osinski on November 17, 1983, whereby Ms. Osinski authorized plaintiff to (1) enter into any agreements for the purchase of Sublot No. 80, Permanent Parcel No. 952-23-53, in the City of Solon; (2) enter into any agreements for the construction of a home on said parcel; and (3) bring any applications or legal proceedings in plaintiff's name on behalf of Ms. Osinski for the acquisition of said parcel and for the construction of a home on said parcel. Although executed on November 17, 1983, Ms. Osinski provided that the plaintiff's authority be retroactive, effective August 23, 1982.


source: Caselaw Access Project

author: BRIEANT, District Judge.

license: Public Domain

text:
    UNITED STATES of America, Plaintiff, v. AMERICAN CYANAMID COMPANY, Defendant.
    No. 60 Civ. 3857-CLB.
    United States District Court, S.D. New York.
    Dec. 13, 1984.

      Richard Martin and Gregory Hovendon, Dept, of Justice, Antitrust Division, Washington, D.C., for plaintiff.
    Kenneth Newman, Donovan, Leisure, Newton & Irvine, New York City, for defendant.
    Robert Brookhiser, Washington, D.C., for defendant-intervenor Melamine Chemicals Co., Inc.
   MEMORANDUM DECISION

BRIEANT, District Judge.

By a motion dated October 18, 1984, and heard November 13, 1984 and fully submitted on November 21, 1984, defendant American Cyanamid seeks, for the second time in less than two years, to terminate a Consent Judgment (sometimes hereinafter referred to as the “Decree” or “Consent Decree”), made August 4, 1964, by the late Hon. Richard H. Levet of this Court in the above antitrust action. The United States and intervenor, Melamine Chemicals Co., Inc. (“MCI”), have made submissions in connection with the application. The intervenor opposes the relief requested and also tenders to the Court for resolution issues presented by the unfulfilled 1984 purchase requirements pursuant to the Decree, discussed in greater detail below.

The prior unsuccessful effort of Cyanamid to terminate the Final Consent Judgment in this action, is reported in United States v. American Cyanamid Co., 556 F.Supp. 361 (S.D.N.Y.), aff'd in part, rev’d in part and remanded, 719 F.2d 558 (2d Cir.1983), cert. denied, — U.S. —, 104 S.Ct. 1596, 80 L.Ed.2d 127 (1984), and familiarity therewith is assumed. Since the prior attempt, Cyanamid has altered the factual predicate by entering into a contract to divest its Formica Division, discussed below, and now seeks to have the Court consider its request de novo, based on the current circumstances. The Government, as it did before, has consented to the relief sought here, providing that the Court adopt certain procedural safeguards to assure that the divesture of the Formica profit center by Cyanamid does take place substantially in compliance with the terms proposed.

Melamine is a fine white crystalline powder which is used in the manufacture of resins, which in turn are used for high pressure laminates, such as “Formica” a well-known trademarked product, manufactured by a division of Cyanamid, as well as artificial chinaware, plastic parts for the automobile industry, and coatings for textile and paper products. In this Court’s prior opinion in the last round of the litigation, dated January 10, 1983, and reported at 556 F.Supp. 361, the use of this intermediate plastic product is fully discussed, presented with statistics for industry usage in 1982. These facts found by the Court and essentially not disturbed by the Court of Appeals in its partial reversal and remand, are believed to be sufficiently current at this time and substantially unchanged since 1982.

As this Court observed before, shortly following the entry of the Consent Judgment, there were four domestic producers of melamine, including Cyanamid and Fisher Chemical Co., a predecessor of MCI. Since 1979, there have been only two domestic producers, MCI and Cyanamid. Of the total world production capacity of melamine, as estimated in 1982 by the United States Department of Commerce, only 12% existed in the United States. Melamine is essentially a fungible intermediate chemical. There is no distinctive difference in quality or chemical content according to plant or county of origin. Its production is capital intensive, increased put-through in an operating plant does not increase the fixed costs, and the chemical reaction by which melamine is made proceeds on a continuous flow process, much the same as that of an oil refinery. Urea derived from natural gas is the principal raw material.

It was represented to this Court, without contradiction, that MCI’s parent continues to enjoy a favorable, low-cost source of natural gas for its production capacity, while the fix-price contracts of Cyanamid have expired. Because of the nature of the product melamine, it should be expected to sell at a competitive price, having a long term relation to the marginal costs of the least efficient producer.

The complaint in this civil antitrust action was filed October 5, 1960, and alleged violations of Sections 1 and 2 of the Sherman Act, 15 U.S.C. §§ 1 and 2, and § 7 of the Clayton Act, 15 U.S.C. § 18. The complaint alleged that Cyanamid unlawfully allocated and monopolized the foreign and domestic melamine and melamine-contained markets through its leadership of an international cartel of melamine producers, its exclusive control and manipulation of melamine technology and the chemical pre-curser product known as “Dicy,” then, but no longer, used to produce melamine, and by its acquisition in 1956 of Formica, Inc., the principal domestic user of melamine crystals for the production of high-pressure laminates. As a result of these alleged violations the Government contended in 1960 that the price of melamine and melamine-contained products was unreasonably high, the available supply of melamine unreasonably low, and actual competition in the melamine and melamine-related industries lessened, also that the potential emergence of new competitors in those industries was effectively foreclosed. The litigation was settled by entry of the Consent Judgment, which, of course, did not admit any violation.

Various proceedings during the years in 1969, 1973 and 1974 resulted in modification of the Decree at the request of Cyan-amid and with the consent of the Government. In 1975 the Government initiated criminal contempt proceedings against Cyanamid, alleging that Cyanamid in 1972 had wilfully violated the Consent Judgment’s maximum melamine production level. This Court, after a trial, found Cyan-amid not guilty of criminal contempt. See United States v. American Cyanamid Co., 427 F.Supp. 859 (S.D.N.Y.1977); see also Stamicarbon N.V. v. American Cyanamid Co., 506 F.2d 532 (2d Cir.1974). In 1983, after a hearing, this Court terminated the Decree because of changed circumstances, but that determination was reversed and remanded for further proceedings, as will be described in greater detail below.

The purpose of the Consent Judgment was to dissolve Cyanamid’s monopoly of the United States melamine industry and encourage the entrance of new producers into the domestic melamine market. To the extent it is possible to do so, this has already been achieved. MCI has entered the market, and it and Cyanamid are the sole domestic producers.

Following the prior proceedings in this Court in 1983, and following modification thereof by the Court of Appeals, the only surviving provision of significance which is still in effect, and imposes legal burdens on Cyanamid in excess of those already existing under the statutes and case law, is found in provision XI of the Judgment. This provision, by its terms, appears to operate in perpetuity, subject only to defeasance after ten years, upon application to the Court as therein contemplated, and subject also to modification by the Court under its inherent powers as defined by the Court of Appeals in United States v. American Cyanamid Co., 719 F.2d 558 (2d Cir.1984) (hereinafter “Cyanamid I”).

The relevant portions of provision XI are quoted in full at page 365 of 556 F.Supp. In essence, they require Cyanamid to purchase annually from other producers of melamine, with the preference to United States producers, an amount of melamine equivalent to the requirements of its Formica Division. Neither this provision nor anything else in the Consent Judgment prevented Cyanamid from manufacturing and selling in a lawful fashion in the merchant market for melamine in its crystal or powdered form. This market consists of Formica’s competitors, as well as' other users of melamine for other purposes, and they are and have for some time been purchasing directly from either Cyanamid or MCI. Furthermore, Cyanamid uses melamine in its paper surfacecoating and textile treating activities, and for other purposes unrelated to its Formica Division.

The Court of Appeals, in Cyanamid I held:

“We therefore reverse the decision of the district court insofar as it holds that ‘the conditions which the decree was designed to remedy no longer exist [and] the decree should be terminated,’ and we remand for the district court to apply the factors for analyzing the legality of a vertical merger set forth by Brown Shoe [370 U.S. 294, 82 S.Ct. 1502, 8 L.Ed.2d 510 (1962)], Fruehauf [Corp. v. FTC, 603 F.2d 345 (2d Cir.1979)], and other applicable cases, and to make findings of fact as to the current state of the melamine market and the market for products that contain melamine.” 719 F.2d at 567.

In so holding, the Court of Appeals concluded that:

“While Brown Shoe and its progeny have been the subject of considerable criticism by academicians who believe these cases apply overly harsh standards in assessing the legality of vertical mergers, these cases nonetheless continue to constitute the current state of the law____” [Footnote omitted]; Id. at 567.

Following the denial of certiorari by the Supreme Court, no proceedings were conducted on remand by Cyanamid. The Court takes this as a concession that while Cyanamid continued to own the Formica Division it would not be able to demonstrate that an analysis of the current facts would show that a vertical merger at this time between itself and Formica would not violate § 7 of the Clayton Act when tested by the obsolete factors enumerated in Brown Shoe and Fruehauf, supra.

Instead, bearing out this Court’s prior findings to that effect, rejected by the Court of Appeals, but held by Professor Yale Brozen, Professor (now Judge) Richard A. Posner, Professor Paul A. Samuelson, Judge Robert Bork and other scholars, to the effect that vertical mergers produce no anti-competitive effects, and apparently having despaired of convincing the Court of Appeals or the Supreme Court that this particular Emperor (vertical integration as an anti-competitive effect) has no clothes, Cyanamid concluded, with the aid of an investment banking house, to sell its Formica profit center to a management group as part of a leveraged buyout.

On October 12, 1984 Cyanamid made a public statement, printed in the Wall Street Journal, which advised in relevant part as follows:

“American Cyanamid Co. said it signed a definitive agreement to sell most of its Formica plastic laminate business for about $200 million in a leveraged buyout. The Formica business will be bought by a new company formed by some Formica managers and Shearson Lehman/American Express Inc. About 10% of the purchase price will be paid in preferred stock of the new company, and the rest will be paid in cash.
* * * * * *
The part of the Formica business being sold is expected to have 1984 sales of $275 million to $280 million, a Cyanamid spokesman said. The sale will include all of Formica’s operations in the U.S. and abroad except Formica’s troubled Latin American business. Last year, sales of Formica products in Latin American [sic] dropped 40%, offsetting a resurgence of Formica business in the U.S. The Cyan-amid spokesman said the Latin American sales haven’t changed much since then. In a leveraged buyout, a company is taken private in a transaction that is largely financed by borrowing. Ultimately, the debt is paid with funds generated by the target company.
The planned purchase is subject to the buyers obtaining financing.
$ # 5k *
Last May, Cyanamid said it had hired an investment banker to find a buyer for most of the Formica business because of its cyclical nature tied to the building industry.
The Cyanamid spokesman said the sale is expected to be completed before year-end. If so, the sale is likely to produce a ‘nominal gain’ in Cyanamid’s fourth-quarter earnings, he said.”

The stock market, which is never wrong, reacted to this good news by pricing the common stock of Cyanamid up $1,875 over the price of the prior day, apparently confirming the conclusion of management that vertical integration adds little to corporate efficiency or profitability.

It is insufficient for purposes of this proceeding simply to inform the Court that there has been an agreement to effect a divestiture. The Court must ascertain whether the divestiture is real or merely formal, and whether, following divestiture, the company achieving the leveraged buyout of the Formica assets of Cyanamid (“New Formica”) will in fact be a freestanding, independent, economic enterprise, willing and able to purchase its melamine from the most advantageous source at the most competitive price and conditions of sale.

The divestiture agreement, together with exhibits annexed thereto, has been submitted to the Court for perusal as confidential material pursuant to a protective order, and has also been made available to counsel for the intervenor and the Government. There is no need for this Court to recite the details of the agreement, nor will the public interest be served by disclosure of confidential information. Under the agreement, Wayne Group, Inc. agrees to acquire by merger with its subsidiary, WGI Acquisition Corp., all of the capital stock of Formica Corporation presently owned by Cyan-amid. Immediately thereafter WGI Acquisition Corp. will merge with Formica Corporation and carry on the Formica business previously conducted by Cyanamid, everywhere, except in Latin America. The Latin American aspect of Cyanamid’s efforts have been less than successful and profitable, and so minimal as not to occupy the attention of the Court.

Under the agreement, Cyanamid shall receive $175,100,000 in cash, and preferred stock of New Formica having a stated value of $20,000,000. The common stock of the new entity will be shared as to ownership by five current members of the Formica management group, who will own one-third thereof and manage the new enterprise, and Shearson Lehman/American Express, Inc., which will provide the venture capital and own the remaining two-thirds.

The preferred stock issue by its relatively standard terms raises an immediate red flag. However, as promised in the course of the hearing, Cyanamid, by written in: strument dated November 16, 1984, has agreed with New Formica that notwithstanding provisions which grant the preferred shareholders the right to elect one director of New Formica, whenever six consecutive dividend payments are in arrears, “upon termination of the Melamine Consent Decree and for so long as we or any person, firm or corporation, controlling, controlled by or under common control with us are the record or beneficial owners of the cumulative preferred stock, or any portion thereof, we hereby irrevocably waive our right to elect a director as aforesaid.”

Upon assurance that no such voting power may ever arise in favor of Cyanamid, this Court finds and concludes that the ownership of the preferred stock issue is a sufficiently attenuated relationship with New Formica, so that it is unlikely to distort any management decisions on the part of New Formica, particularly the decisions as to how or where it purchases melamine. The existence of the preferred stock will not require that the consent judgment remain in effect.

Apart from the preferred stock, Cyanamid will have no future financial stake in Formica and no role in its management. Specifically, it receives no security interest in any of Formica’s assets, and has no right to reassume control over Formica in the future.

The Court concludes that the net effect of the agreement is such that it represents a complete divestiture, with the same force and effect as if divestiture had been required by the Court in 1956 or thereafter, or even now, as an alternative to the execution or continuation of the Consent Judgment. There is absolutely no evidence that the arrangements between Cyanamid and New Formica are anything but what they appear to be, a typical leveraged buyout, whereby management of a division or profit center takes over its operations in behalf of an independent company owned by themselves and the investment bankers. Ample opportunity has been granted to the parties to develop evidence to the contrary, and none is forthcoming.

The Court finds and concludes that defendant has proved that from and after the effective date of the divestiture, it will be out of the Formica business, except in Central and South America.

Since this Court finds that the divestiture of the Formica business of Cyanamid will be complete upon the closing presently scheduled for December 31, 1984 with Wayne Group, there is now no purpose in engaging in the detailéd analysis required by the Court of Appeals in Cyanamid 1. Divestiture is a substitute for all such analysis. Divestiture of Formica was the greatest possible relief which the Government could have obtained in this lawsuit at any time during its lengthy history. Having voluntarily undertaken to divest itself of the Formica business and having destroyed the presumed anticompetitive vertical merger which supposedly foreclosed the competitors of Cyanamid from a segment of the market otherwise open to them, i.e., the sale of melamine to the Formica business, creating thereby a “clog on competition” (quoted from Brown Shoe, 370 U.S. at 324, 82 S.Ct. at 1523), Cyanamid now demonstrates that as of such divestiture the Consent Judgment serves no purpose. Cyanamid is correct in contending that, even without regard to divestiture, the continued effect of the Judgment has long been “unjustified, anticompetitive and unfair” (Affidavit of Frank V. AtLee, docketed August 18, 1984). The Government, since 1982 has taken the position that the provisions of the Decree affecting MCI have become “anticompetitive under contemporary market conditions.” (Government Memorandum filed November 9, 1984, p. 11, fn. 15).

There is no necessity, nor is it appropriate, to defer action until divestiture by Cyanamid of its Formica business is complete. Implicit, although not expressed in the agreement with New Formica, is the concept that as a practical matter the divestiture and sale will not close unless the Consent Judgment is terminated. The only reference thereto in the agreement is as follows:

“9. INDEMNIFICATION AND APPORTIONMENT OF OBLIGATIONS.

9.1 Cyanamid Indemnity. Cyanamid shall indemnify and hold harmless [New Formica] from and against any and all loss, liability, cost and expense (including any tax payable by reason of the receipt of indemnification payments) arising out of:
* * * * * *
(c) Any liability or obligation with respect to the purchase of melamine which may be imposed upon [New Formica] under the Melamine Consent Decree, filed in the U.S. District Court for the Southern District of New York on July 1, 1964 in U.S. v. American Cyanamid Company.”

The practical significance of this clause is lost on the Court; the preference for domestic melamine found in the Judgment might conceivably lead to some loss, also it might be expensive to persuade the Court that a particular price quote is “oppressively high.” (See subparagraph (C) of Provision XI quoted at 556 F.Supp. 365). Other than that, this provision seems to be so much useless boilerplate.

The truth of the matter is that the agreement which Wayne Group, Inc. has with Cyanamid, like most similar leveraged buyout transactions, is probably not subject to specific performance, and if it were, the agreement of the non-party lender to provide the necessary funds likewise is probably not amenable to such specific enforcement. No reasonably prudent investor would knowingly acquire a manufacturing business which must buy its raw material from one source when its competitors need not, and where the price is fixed by the supplier only subject to obtaining judicial relief if it is found to be “oppressively high,” whatever that means. Faced with such an eventuality, there will be no closing because common sense dictates that the lender, and probably also the buyer, will just walk away.

Accordingly, it is appropriate that the issue be resolved in advance of the closing date in the agreement, now set for December 31, 1984. Conditioned on entry of a detailed order which will require that the divestiture be completed substantially in accordance with the agreement submitted to the Court, the Consent Judgment shall be vacated as of such completion.

Melamine Purchases

As of August 4,1984 all provisions of the Consent Judgment, other than those which this Court has already found obsolete and as to which no issue has ever been raised, expired, except for the purchase requirement. Divestiture frees MCI and all others to sell melamine to New Formica, so that no foreclosure of market is now possible.

It will be recalled that pursuant to terms of the Consent Judgment discussed fully in Cyanamid /, a provision, on its face perpetual, requires Cyanamid to purchase annually from other producers of melamine, with the preference to United States producers, an amount of melamine equivalent to the requirements of the Formica Division. In our prior termination of this Consent Judgment, which was reversed, this Court recognized that intervenor MCI is now, in practice, the only other producer of melamine in the United States, and now the sole beneficiary of this requirement. The Court found, assuming termination of the Decree, which this Court then thought appropriate, that:

“[T]he present nature of the domestic melamine industry mitigates against an abrupt termination of the Consent Decree.....A serious question is presented ... whether relief from provision XI should not be done on a gradual basis over time in order to do Equity and enable MCI to make the production and marketing adjustments necessary to compensate for its sudden loss of Cyan-amid’s Formica Division as a so-called ‘captive customer’.” (556 F.Supp. at 371).

This Court concluded, in the last round of this litigation, that there was a fundamental difficulty of impracticality, a prudent consideration of the sort which also regulates a court of equity in the exercise of its judicial powers, and that for reasons therein stated, the Court could find no valid basis to determine the appropriate length of a period of termination.

The Court of Appeals in Cyanamid I rejected this conclusion. It held that if the district court on remand should

“continue to believe that a phase-out would be appropriate, the court should exercise its equitable power to determine an appropriate duration for such a phaseout____ Difficulty in rendering judgment may only rarely be sufficient reason for a court of equity to refuse to exercise its equitable powers, and there is not a sufficient reason upon the facts of this case to justify a refusal herein. Indeed, ... abrupt termination of Part XI without a phase-out is in itself an exercise of equitable power.” (719 F.2d at 567).

We now consider what should be done with respect to Part XI, based on current facts.

To begin with, this Court agrees with the position of Cyanamid that “no proper purpose can be served by retaining the Purchase Requirement subsequent to the divestiture of Formica, since that divestiture frees MCI completely to sell melamine to Formica and no “foreclosure [of the market] is any longer possible.” (Brief of Cyanamid, docketed October 18, 1984, p. 5).

The equities have changed further since it is undisputed that Cyanamid no longer enjoys a favorable long term natural gas purchase contracts from which it was manufacturing melamine, while MCI continues to enjoy such an advantage.

In light of the complete divestiture, and because MCI has had notice at least since October of the intention by Cyanamid to divest itself of its Formica Division, the Court sees no purpose in imposing any greater or more gradual phase-out. The situation is materially altered from that presented in Cyanamid I; after Cyanamid I, Cyanamid remained in the laminate business. After divestiture, there is no longer any vertical combination and therefore no “foreclosure” of the market, and MCI will be at least on equal terms with Cyanamid in providing melamine to New Formica. Indeed, this Court believes that MCI will be in a better position than Cyan-amid or anyone else because of its continuing favorable natural gas supply contracts.

The Consent Judgment, neither by its terms, nor as administered by the parties had fixed the date as of which purchase orders had to be issued for annual requirements. It merely required Cyanamid to buy an amount equal to the annual needs of its Formica Division by giving a purchase order at some time during or immediately after the close of the year in which the requirements applied. There was no requirement that the melamine so purchased actually be used to make laminates; it could be and was commingled with Cyan-amid’s own product and used for whatever defendant wanted. It is uncontradicted that as of September 1, 1984 Cyanamid’s inventory was more than twice the normal inventory, and that monthly carrying charges for this inventory were approximately $67,000.

Beginning in mid-1982, when Cyanamid initiated the first round of this litigation to terminate the Consent Judgment, it purchased no melamine from MCI or any outside source, until the end of the year, when it placed an order with MCI for an amount equal to the balance of 1982 melamine requirements for the Formica Division. Due to the size of that order, production and delivery did not take place, apparently by mutual agreement, until some time later in 1983. In 1983 while Cyanamid I was pending appeal or awaiting action on a petition for certiorari, Cyanamid purchased no melamine from MCI. In 1984 it purchased and took delivery of the 1983 purchase obligations. This had an adverse effect on MCI, causing it to reduce its capacity and shut its plant down for longer than normal periods in 1983, and also to lose the use of funds which would have been received had the sales been made in 1983. However, it is apparently not disputed that Cyanamid was within its rights under the literal provisions of the Consent Judgment to withhold issuing a purchase order for the balance of its 1983 requirements until 1984.

In April 1984, according to the undisputed affidavit of Scotty B. Patrick, Vice President and General Manager of MCI, Cyan-amid declined to make a commitment for 1984 purchases, or to schedule the issuance of purchase orders. However, at no time until about October, 1984, did Cyanamid advise that it would not purchase its 1984 requirements under the Decree. On October 12, 1984 Cyanamid told MCI formally, what was already a matter of public knowledge, that it had agreed to sell its Formica Division and planned to seek relief from the Court. Cyanamid then declined to purchase any melamine from MCI for 1984.

It would seem relatively obvious that the Consent Judgment, which partakes of contractual elements, should not be vacated retrospectively. The Government takes the position that the Consent Judgment, by its terms, obligates Cyanamid to purchase a pro rata share of melamine from outside domestic sources (MCI), for the Formica operations for the period of time during any calendar year that the Judgment has been in effect, and this Court agrees. It is the law of the case, pursuant to Cyanamid I, that the Consent Judgment cannot be vacated until the criteria set forth by the Court of Appeals in Cyanamid I have been satisfied. Since they apparently cannot be satisfied without divestiture, Cyanamid has opted for divestiture. Only effective on divestiture will Cyanamid’s obligations cease.

This Court concludes that as a condition of the relief requested herein, and indeed, in all events, Cyanamid and/or New Formica must issue a purchase order to MCI immediately prior to the divestiture for an amount of melamine equal to the amount of melamine used by the Formica Division of Cyanamid during the calendar year 1984 in production of its laminates, and also for that amount of melamine, if any, used by the Formica Division of Cyanamid during any part of 1985 prior to actual closing and performance of the divestiture agreement. If the purchase order is issued by New Formica, Cyanamid must guaranty payment therefor. The delivery schedule for the purchase of the 1984 requirements shall provide for dates acceptable to both parties, provided that all melamine required to be purchased thereunder shall be taken prior to July 31, 1985, unless MCI shall consent to a later date.

The mechanics of divestiture may not be permitted to frustrate MCI expectations that it will continue to benefit from the Judgment with respect to all of the requirements of Cyanamid for melamine used by the Formica Division through the date of closing of the divestiture agreement. Accordingly, the opening inventory of melamine of New Formica and the amount, if any, ordered by but not delivered to New Formica from MCI at closing may not exceed the amount of melamine which Cyanamid was required by the Judgment to purchase from outside sources since January 1, 1982 through the day of divestiture, less the amount of melamine actually used by Cyanamid since January 1, 1982 through the date of divestiture, in the manufacture of laminates by its Formica Division. Essentially, the Court observes that equity deems done that which should have been done, and either New Formica or Cyanamid should perform the Judgment fully through the date of its termination. New Formica’s inventory of melamine owned or on order should not exceed the amount of melamine inventory which it would have possessed, if, since 1982, all of the division purchases had been made from non-Cyanamid sources and all such purchases had been used in or held for the manufacture of laminates. Following divestiture Cyanamid may not sell any melamine to New Formica from its inventory which existed on the day of divestiture, at less than cost, applying FIFO principles of accounting and lot identification. If the computation necessary to achieve this result, presents practical difficulty, counsel for the parties may take the matter up with the Court on the settlement of the order terminating the Consent Judgment.

We note in closing that the national economy is not served by MCI actually making a large quantity of useless melamine, which Cyanamid or New Formica will have to purchase, inventory and carry at great expense until it can be used, simply to satisfy a Consent Judgment. Nothing prevents the parties from negotiating a release of the unperformed purchase obligation, whereby MCI would receive its lost profits in lieu thereof. The Court, however, is not in a position to compel such rational conduct, unless the parties wish to do so.

The foregoing constitutes the findings of fact and conclusions of law of this Court after a hearing.

Submit a final order on five (5) days notice of settlement or waiver of notice, which will dispose of the issues presently tendered to the Court consistently with these findings and conclusions.

      . The Government took the position that "once Cyanamid files an affidavit stating that the divestiture of Formica has in fact been completed in accordance with the terms supplied in these proceedings, the Court should enter an Order terminating the Final Judgment” (Memorandum filed November 9, 1984, p. 2). Essentially, the Government also expresses its own independent conclusion in the same memorandum that "Cyanamid is accurate in representing to the Court that divestiture will transform Formica into ‘a fully independent company’.” Id. p. 4.

      . See Professor Brozen’s views, quoted at 556 F.Supp. 369, from Yale Brozen, Concentration Mergers and Public Policy at 402-03 (1982). Richard A. Posner, Economic Analysis of Law, at 3 (2d ed. 1977) ("consistent with the economic concept of man as a ‘rational maximizer of his self-interest’ an individual will alter the operation of his business in response to economic changes in his surroundings to do so.” Paul A. Samuelson, Economics, at 44 (10 ed. 1976) (“the method [or raw material] that is the cheapest at any one time because of both physical efficiency and cost efficiency, will displace a more costly method [or raw material]. The only way for producers to meet price competition and maximize profits is to keep costs at a minimum by adopting the most efficient methods”). P. Areeda and D. Turner, Antitrust Law, ¶¶ 1000-109 (1980); Robert Bork, The Antitrust Paradox, 225-45 (1978).

      . The cash financing necessary, $175.1 Million Dollars, will come from sources independent of Cyanamid. Each party has separate outside counsel in connection with the divestiture, and separate investment bankers.

      . Since 1982 the Government has taken a position that a phase-out period for the purchase requirement is “not warranted or appropriate.” (Government Memorandum filed November 9, 1984 at p. 11, fn. 15).

      . We do not suggest that this is the sole motive for selling the Formica Division; there are obviously economic benefits flowing from the divestiture apart from the elimination of the purchase obligations of the Judgment. Whatever the Judgment provides, it does not require Cyanamid to remain in the laminate business forever; probably any such provision would be unconstitutional, if not void for vagueness or impossibility.

      . Cyanamid’s hardship is largely' self-created since it was foreseeable that the Court of Appeals might reverse in Cyanamid I, as it did, and that certiorari might be denied by the Supreme Court, as it was.


author: WEINER, District Judge.

text:
    Feodor FEDORENKO v. UNITED STATES IMMIGRATION AND NATURALIZATION SERVICE.
    No. 84-6096.
    United States District Court, E.D. Pennsylvania.
    Dec. 13, 1984.
    See also, D.C., 598 F.Supp. 1527.

      Andrew Fylypovych, Harvey, Pennington, Herting & Renneisen Ltd., Philadelphia, Pa., for petitioner.
    Alexander Ewing, Deputy Chief, Civ. Div., U.S. Atty., Philadelphia, Pa., for respondent.
   MEMORANDUM OPINION AND ORDER

WEINER, District Judge.

The petitioner is a 77 year old native of the Ukraine in the U.S.S.R. He entered the United States as an immigrant in 1949, pursuant to the Displaced Persons Act of 1948 (“DPA”), 62 Stat. 1009, which was enacted by Congress to enable European refugees driven from their homelands by World War II to immigrate to the United States. In 1970, petitioner became a naturalized citizen of the United States.

In 1977 the Government brought a denaturalization action against the petitioner in the United States District Court for the Southern District of Florida, alleging that petitioner illegally procured his citizenship by failing to disclose that he had been a guard at the Nazi death camp, Treblinka, during World War II. United States v. Fedorenko, 455 F.Supp. 893 (S.D.Fla.1978). The District Court entered a judgment for the petitioner, which was reversed on appeal by the United States Court of Appeals for the Fifth Circuit, and a judgment of denaturalization was ordered. United States v. Fedorenko, 597 F.2d 946 (5th Cir.1979). The Supreme Court affirmed the judgment of the Court of Appeals. Fedorenko v. United States, 449 U.S. 490, 101 S.Ct. 737, 66 L.Ed.2d 686 (1981). On March 11, 1981, the District Court revoked the petitioner’s citizenship and cancelled his certificate of naturalization.

In March 1981, the Immigration and Naturalization Service (“INS”) commenced deportation proceedings against the petitioner. On February 23, 1983 the Immigration Judge rendered his decision ordering that the petitioner be deported to the U.S.S.R.

On March 7, 1983, the petitioner filed an appeal with the Board of Immigration Appeals (“BIA”). BIA rendered a decision dismissing petitioner’s appeal. On May 30, 1984 a Petition for Review from the BIA decision was filed by petitioner in the United States Court of-Appeals for the Third Circuit. In August 1984, the Petition for Review was withdrawn. Petitioner was arrested in Philadelphia on December 10, 1984 by INS agents pursuant to a warrant of deportation issued on May 17, 1984. Presently before the court is the Petition of Feodor Fedorenko for Writ of Habeas Corpus. For the reasons which follow, the petition is DENIED.

The petition for writ of habeas corpus alleges that the Petition for Review was withdrawn improperly by petitioner’s former lawyer, and that it was done without petitioner’s consent or knowledge. The petitioner has filed this petition for writ of habeas corpus to prevent his deportation because he no longer has the protection of the automatic stay from deportation afforded by the filing of Petition for Review in the Court of Appeals. 8 U.S.C. § 1105a(a)(3).

8 U.S.C. § 1105a(a)(2) provides that the sole and exclusive jurisdiction to review final orders of deportation against aliens rests with the various Courts of Appeals. Cheng Fan Kwok v. Immigration and Naturalization Service, 392 U.S. 206, 88 S.Ct. 1970, 20 L.Ed.2d 1037 (1968). We recognize that 8 U.S.C. § 1105a(a)(9) provides that an alien in custody pursuant to a deportation order may obtain judicial review by habeas corpus proceedings. However, the courts have interpreted that section to apply only to a review of the denial of discretionary relief where deportability itself is not an issue. Daneshvar v. Chauvin, 644 F.2d 1248, 1251 (8th Cir.1981); Acosta v. Gaffney, 558 F.2d 1153, 1155-1156 (3d Cir.1977); United States ex rel Parco v. Morris, 426 F.Supp. 976, 978, n. 4 (E.D.Pa.1977).

Exclusive jurisdiction for review of a BIA decision on deportation is with the Court of Appeals, 8 U.S.C. § 1105a(a)(2), not with the District Court. We therefore deny the petition for writ of habeas corpus.

      . The Government has informed this Court that the petitioner, at the deportation hearing, designated the U.S.S.R. when he was asked to name the country he desired to be deported to if that was the decision of the Immigration Judge.


text:
    Feodor FEDORENKO v. U.S. IMMIGRATION AND NATURALIZATION SERVICE.
    Civ. A. No. 84-6195.
    United States District Court, E.D. Pennsylvania.
    Dec. 18, 1984.
    Andrew Fylypovych, Harvey, Pennington, Herting & Renneisen Ltd., Philadelphia, Pa., for plaintiff.
    Alexander Ewing, Deputy Chief, Civ. Div., U.S. Atty., Philadelphia, Pa., for defendant.
   MEMORANDUM OPINION AND ORDER

WEINER, District Judge.

Presently before the Court is a petition for writ of habeas corpus. For the reasons which follow, the petition is dismissed.

We need not repeat the facts of this case since they are set forth in detail in our Memorandum Opinion and Order dated December 13, 1984 in Civil Action No. 84-6096, an action between the same parties. 598 F.Supp. 1525 (D.C.Pa.1984). In that habeas action, the petitioner sought review of a decision of the Board of Immigration Appeals, which we dismissed for lack of jurisdiction.

The petitioner initially sought a stay of deportation which was denied by the Acting District Director of the Immigration and Naturalization Service on December 14, 1984. [See Exhibit A of this Petition for Writ of Habeas Corpus.]

The petitioner then brought this action seeking stay of deportation in order for him to be examined for the last time by his family physician, and so that his medical records can be reviewed, summarized and translated into Russian. The petitioner contends that without a translated copy of his medical history and records, his life will be seriously threatened should he need immediate medical attention in the U.S.S.R. We do not agree.

We take judicial notice of the fact that there are countless numbers of Russians who speak and read English, and can interpret medical records written in English. Further, the Supreme Court of the United States affirmed the Court of Appeals for the Fifth Circuit in 1981 ordering denaturalization of the petitioner. See, 449 U.S. 490, 101 S.Ct. 737, 66 L.Ed.2d 686. The Immigration Judge, in 1983, after lengthy hearing, ordered the petitioner deported to the U.S.S.R. The petitioner has had sufficient time to have his medical records translated into Russian if he felt it was necessary. We do not find any merit in his reasons for a stay of deportation.