author: PLUNKETT, District Judge.

text:
    Alpha SIZEMORE, Plaintiff, v. Margaret HECKLER, Secretary of the Department of Health and Human Services, Defendant.
    No. 84 C 6757.
    United States District Court, N.D. Illinois, E.D.
    April 4, 1985.
    Helen Cropper, Uptown Office Legal Assistance Foundation of Chicago, Chicago, Ill., for plaintiff.

      Edward J. Moran, Asst. U.S. Atty., Chicago, Ill., for defendant.
   MEMORANDUM OPINION AND ORDER

PLUNKETT, District Judge.

With this case we address the controversial issue of whether or not a terminated social security disability claimant, whose suit in federal court seeks, as one of two alternative remedies, a remand order to the Secretary of Health and Human Services (the “Secretary”) for a redetermination of eligibility, and whose claim is in fact remanded by this court to the Secretary, is a “prevailing party” and entitled to attorneys’ fees under the Equal Access to Justice Act (the “EAJA”), 28 U.S.C. § 2412(d)(1)(A). For the reasons discussed below, we find that such an individual is a “prevailing party” within the meaning of the EAJA. We further find that this conclusion holds true where, as here, we remanded plaintiff’s claim for inclusion in the Secretary’s national moratorium, announced in April of 1984, which suspended disability review processes pending the passage of legislation clarifying the standard for terminating benefits. The Secretary does not contend, and therefore fails to meet its burden of making a strong showing, that the agency action giving rise to this lawsuit was substantially justified. See Natural Resources Defense Council v. U.S.E.P.A., 703 F.2d 700, 712 (3d Cir.1983). Hence, plaintiff has satisfied the requirements of the EAJA and is entitled to an award of attorneys’ fees.

Background

On August 7, 1984, plaintiff Alpha Size-more, invoking this court’s jurisdiction under 42 U.S.C. § 405(g), filed a complaint against the Secretary in which she alleged that the Secretary wrongfully terminated her eligibility for disability benefits after a hearing before an administrative law judge and a review by the Social Security Administration Appeals Council. Plaintiff alleged that the termination decision was contrary to law in that the Secretary showed neither medical improvement on plaintiff’s part nor clear error in the original disability determination, and was not supported by substantial evidence. Plaintiff requested that this court reverse the Secretary’s finding of ineligibility or, in the alternative, remand the matter for a rehearing. Plaintiff also moved this court to remand her case to the Secretary for inclusion in the Secretary’s national moratorium, restoring benefits and suspending hearings or review for terminated recipients involved in the administrative appeal process. (The Secretary did not expressly extend this moratorium to claimants such as plaintiff with pending civil cases.)

On September 7, 1984, we announced in open court that the Secretary had failed to apply the proper legal standard, as set forth by the Seventh Circuit, in determining that plaintiff was ineligible to continue receiving benefits, and remanded the case for rehearing. We also ordered the Secretary to include plaintiff’s claim within the moratorium. As a result, the Secretary restored plaintiff’s benefits and delayed holding a rehearing pending the passage of legislation prescribing the standard for terminating eligibility. On October 9, 1984, the Social Security Disability Benefits Reform Act of 1984, Pub.L. No. 98-460, 98 Stat. 1794-1813 (codified in scattered sections of 42 U.S.C.), became law, and set forth a “medical improvement” standard similar to that which plaintiff had alleged in this court that the Secretary should have applied to her claim. The Secretary has not yet held plaintiff’s rehearing.

Plaintiff has filed an application for attorneys’ fees pursuant to the EAJA. The Secretary opposes the application on the grounds that plaintiff is not yet at least a “prevailing party,” as required for recovery under the EAJA, because plaintiff has not been deemed by this court or the Secretary to be eligible for benefits.

Analysis

The EAJA provides, in relevant part, as follows:

[A] court shall award to a prevailing party other than the United States fees and other expenses ... incurred by that party in any civil action [other than cases sounding in tort] brought by or against the United States in any court having jurisdiction of that action, unless the court finds that the position of the United States was substantially justified or that special circumstances make an award unjust.

28 U.S.C. § 2412(d)(1)(A). Although the statute expired by its own terms on October 1, 1984, it remains applicable to cases such as this that were commenced before the date of repeal. Pub.L. No. 96-481 § 204(c); see Berman v. Schweiker, 713 F.2d 1290, 1294 n. 13 (7th Cir.1983). Furthermore, the statute is applicable to actions such as this one against an agency official acting in her official capacity as well as to those against the United States itself. See 28 U.S.C. § 2412(d)(2)(C).

The government does not claim that its position was substantially justified or that this case falls within the “special circumstances” provision of the EAJA. Therefore, the question that determines plaintiffs entitlement to fees under the EAJA is whether or not plaintiff is a “prevailing party.”

A claimant is clearly a prevailing party when a district court finds that the claimant is entitled to benefits, reverses the Secretary’s determination of non-eligibility and remands to the Secretary simply for calculation and payment of benefits. See McGill v. Secretary of HHS, 712 F.2d 28, 30 (2d Cir.1983), cert. denied, — U.S. -, 104 S.Ct. 1420, 79 L.Ed.2d 745 (1984); Berman v. Schweiker, 531 F.Supp. 1149, 1153 (N.D.Ill.1982), aff'd, 713 F.2d 1290 (7th Cir.1983); Ruiz-Rivera v. Heckler, No. 83C2987, slip op. at 1 (N.D.Ill. Mar. 14, 1985). The question on which courts divide is whether or not a plaintiff prevails when the Secretary is reversed and the claim is remanded, either for a rehearing because of error in the original hearing process or for the taking of more evidence because of insufficient factfinding, without a judicial finding of eligibility for benefits. Compare, e.g., Brown v. Secretary of HHS, 747 F.2d 878, 885 (3d Cir.1984) (remand after denial of original application); McGill v. Secretary of HHS, 712 F.2d at 31-32 (same); with Haney v. Heckler, No. 82 C 7714, slip op. at 5-11 (N.D.Ill. Sept. 10, 1984) (remand after termination); Gross v. Schweiker, 563 F.Supp. 260, 262 (N.D.Ind.1983) (remand after denial of original application); see also cases cited in Brown, 747 F.2d at 881.

A number of considerations lead us to favor plaintiff’s contention that she was a prevailing party in this civil action. The EAJA does not define the term “prevailing party,” but the plain meaning of the term seemingly extends to a plaintiff who obtains one of the two alternative forms of relief sought — a rehearing according to specific guidelines. The standard definition of “prevailing party” is “[t]he party to a suit who successfully prosecutes the action or successfully defends against it, prevailing on the main issue, even though not necessarily to the extent of his original contention. The one in whose favor the decision or verdict is rendered and judgment entered____” Black’s Law Dictionary 1069 (5th ed. 1979). In this case, plaintiff succeeded on the only claim in her complaint, that the Secretary’s decision was contrary to law or not supported by substantial evidence. As she requested as one alternative for relief, we reversed the decision of the Secretary and ordered that the legal standard advocated by plaintiff be applied to plaintiff’s claim on rehearing. Judgment was entered and we retained no jurisdiction over the matter on remand. Thus, under ordinary standards, plaintiff prevailed in her lawsuit.

Under this analysis, this case is comparable to Bagby v. Beal, 606 F.2d 411, 415 (3d Cir.1979), in which the Court of Appeals for the Third Circuit found that a plaintiff who had been terminated from employment was a prevailing party under the Civil Rights Attorneys’ Fees Awards Act when the court ordered a rehearing by the Civil Service Commission in accordance with the requirements of due process. In each case, the plaintiff, while not fulfilling her ultimate goal of reinstatement, successfully invoked the judicial process to require the defendant to follow more protective procedures than those that led to termination.

The Third Circuit in Brown, in rejecting the position advocated here by plaintiff, attempted to distinguish its holding in Bag-by, reasoning that:

[t]he Constitution does not guarantee anyone an absolute right to enjoy a protected interest, such as Mrs. Bagby’s employment, but rather, ensures that one will not be deprived of the interest without due process of law. In the procedural due process context, the relief sought in court is the vindication of the right to be afforded an opportunity to be heard. In contrast, claimants such as Brown allege simply that a denial of an entitlement to benefits was not based on substantial evidence. Although such a claimant may request, in the alternative, relief other than his or her ultimate goal (the receipt of benefits), it is the receipt of those benefits that renders a typical Social Security plaintiff a prevailing-party-

Brown, 747 F.2d at 883. We believe the court may have assumed its conclusion. But even if the Brown reasoning is correct with regard to remand after denial of an original, application for benefits, as was involved in that case, we do not think a true distinction exists between the Bagby plaintiff and ours. Like the state employee in Bagby, a recipient of disability benefits cannot be terminated from the program without the benefit of certain procedures and findings. While both plaintiffs may ultimately be found ineligible, they prevailed on the only claims they raised — that they had not been accorded their procedural entitlement. True, the plaintiff in our case requested more complete relief, in the alternative, than what this court granted upon finding her claim meritorious. We had the power to grant the more complete relief, reversal without remand, if we deemed it appropriate. See 42 U.S.C. § 405(g). But since this court could not have granted both forms of relief requested, and we did grant the relief which we believed to be the appropriate measure to remedy plaintiffs injury, we fail to see a reason why plaintiff did not prevail within the plain meaning of the term.

We turn to the legislative history of the EAJA to determine whether Congress intended something more restrictive than the plain meaning of the term. To the contrary, the House Report, after stating that the term should be interpreted consistently with the law that has developed under fee shifting statutes, a point discussed infra, emphasized the expansive reading the term was meant to be given:

Thus the phrase “prevailing party” should not be limited to a victor only after entry of judgment following a full trial on the merits. A party may be deemed prevailing if he obtains a favorable settlement of his case ... or even if he does not ultimately prevail on all issues, Bradley v. School Board of the City of Richmond, 416 U.S. 696 [94 S.Ct. 2006, 40 L.Ed.2d 476] (1974).
In cases that are litigated to conclusion, a party may be deemed “prevailing” for purposes of a fee award in a civil action prior to the losing party having exhausted its final appeal. A fee may thus be appropriate where the party has prevailed on an interim order which was central to the case, Parker v. Mathews, 411 F.Supp. 1059, 1064 (D.D.C.1976), or where an interlocutory appeal is “sufficiently significant and discrete to be treated as a separate unit”, Van Hoomissen v. Xerox Corp., 503 F.2d 1131, 1133 (9th Cir.1974).

H.R.Rep. No. 1418, 96th Cong., 2d Sess. 11, reprinted in 1980 U.S.Code Cong. & Ad. News 4953, 4984, 4990 [hereinafter cited as House Report].

We have difficulty delineating Congress’ precise meaning from this passage, because several of the cited cases do not pertain to the propositions for which they are cited. Moreover, Congress did not address the particular situation at issue here. It is clear, though, that Congress intended fees to be available at significant junctures of a case prior to the point at which either party has entirely achieved its ultimate goals. Thus, for instance, Congress cited with approval the ease of Van Hoomissen v. Xerox Corp., 503 F.2d 1131 (9th Cir.1974), where the Court of Appeals for the Ninth Circuit held that Xerox was entitled to attorneys’ fees under Title VII when the court dismissed the Equal Employment Opportunity Commission’s (“EEOC”) appeal of a district court decision limiting the EEOC’s intervention in a Title VII suit against Xerox to only one of two issues upon which the agency sought to intervene. The court awarded fees even though Xerox had not yet, of course, succeeded in defending against the Title VII claims that remained. The court gave the following analysis from which the House Report quoted:

Although Xerox “prevailed” on this interlocutory appeal, it might still lose the principal case and thus not “prevail.” We agree that litigation should not be dissected to the point that the losing party be permitted to recover attorney’s fees connected with every procedural motion on which it prevails. But this interlocutory appeal is sufficiently significant and discrete to be treated as a separate unit. Thus, the fact that Xerox prevailed on this appeal qualifies it as a “prevailing party” eligible for an award of attorney’s fees connected with this appeal.

Id. at 1133.

The case before us is an even stronger case than Xerox for granting fees. As discussed, plaintiff prevailed in full on the merits of her civil case and received a portion of the relief she requested, which, by its nature, left this court without jurisdiction to grant the remainder of the relief. Certainly plaintiff achieved as “significant and discrete” a victory as did Xerox, in that she succeeded in her claim that the Secretary’s decision was contrary to law and, as she requested, the Secretary was required to provide her with a new hearing according to more favorable standards. Whereas Xerox succeeded only on appeal and only on one procedural fragment of its defense, plaintiff here succeeded on the merits before the district court.

Admittedly, an argument can be made from the legislative history of the EAJA which undercuts our analysis. Looking to the law of fee shifting statutes which existed at the time of the enactment of the EAJA, and which Congress intended courts to follow in interpreting the EAJA, see House Report at 11, courts find that the case of Hanrahan v. Hampton, 446 U.S. 754, 100 S.Ct. 1987, 64 L.Ed.2d 670 (1980) (per curiam) suggests a contrary result to that which we are suggesting. See e.g. McGill v. Secretary of HHS, 712 F.2d 28, 31 (2d Cir.1983), cert. denied, — U.S. -, 104 S.Ct. 1420, 79 L.Ed.2d 745 (1984). In Hanrahan, the Supreme Court determined that plaintiffs were not prevailing parties under the Civil Rights Attorney’s Fees Awards Act when the court of appeals reversed the district court’s directed verdict for the defendants and remanded the matter for a new trial. The Court found that a party must establish liability and entitlement to some relief on the merits in order to prevail for purposes of attorneys’ fees. Id. at 757, 100 S.Ct. at 1989.

We are not certain that Congress meant for Hanrahan’s result to apply to the EAJA. The sentence of the House Report stating that the law that has developed under fee shifting statutes should guide courts in interpreting the EAJA is followed by examples, not of Hanrahan’s restrictive view, but rather of expansive interpretations of the term. (“Thus, the phrase ‘prevailing party’ should not be limited ...” House Report at 11, U.S.Code Cong. & Admin.News 1980, p. 4990). Among these examples, the House Report cited Xerox in which, as noted above, the “prevailing party” did not prevail in any respect on the merits. Therefore, Hanrahan may not govern EAJA cases.

Even if Hanrahan is relevant authority, it does not govern this case where plaintiff did not achieve simply a remand from one court to another with the merits of her civil action undetermined but rather an order on the merits remanding the matter from the court system to a non-adversarial agency procedure. The reasons that the Hanrahan situation is distinguishable from a case such as this one are thoroughly examined in Haney v. Heckler, No. 82C7714, slip op. at 8-10 (N.D.Ill. Sept. 10, 1984):

Here, the plaintiffs claims were originally presented to an executive agency, with an appeal to the district court for the filing of a new and separate civil action. The civil action starts in the district court and is not simply a continuation of the executive action. Indeed, the executive action is deemed to be non-adversarial under the EAJA, ... and the district courts are limited to granting fees only for representation in the district court, and not in the Secretary’s proceedings____ By the time the claimant files the district court action, the Secretary has made a final decision on her or his case, the executive action is completed, and a new, civil suit is started. Similarly, in remanding for further proceedings, instead of reversing outright, the district court still finally decides the issues in its action____
... The court has granted most of the relief requested by finding on the present record that the Secretary may not terminate plaintiff’s benefits, and by remanding the case. Hence, plaintiff has prevailed in this civil action in a way that the plaintiff[ ] in Hanrahan ..., whose civil complaint[] requested damages and equitable relief, did not.

For the foregoing reasons, we believe that the legislative history of the EAJA supports plaintiff’s claim that she is a prevailing party. The Third Circuit found support for the contrary position in a recent Senate Report accompanying a bill to reauthorize the EAJA prior to its repeal. See Brown v. Secretary of HHS, 747 F.2d 878, 885 n. 8 (3d Cir.1984). We believe this report has no persuasive effect. A House bill was passed in lieu of the Senate bill, CCH Congressional Index, 98th Cong., Senate (1983-84) at 20,506, and was vetoed by the President on November 9, 1984, id., House (1983-84) at 34,550. Moreover, the Senate Report did not purport to examine the meaning of the EAJA as enacted in 1981 but rather to clarify its future meaning as of 1984. Thus the Report described departures from the original EAJA, such as coverage of non-adversarial Social Security hearings, S.Rep. No. 586, 98th Cong., 2d Sess. 7-8 (1984), as well as intended interpretations of terms from the old act. Hence, the legislative report is unpersuasive subsequent history in that it not only represents the views of a different Congress than the one which enacted the EAJA applicable to plaintiff’s case, see Consumer Product Safety Commission v. GTE Sylvania Inc., 447 U.S. 102, 118 n. 13, 100 S.Ct. 2051, 2061 n. 13, 64 L.Ed.2d 766 (1980); Oscar Mayer & Co. v. Evans, 441 U.S. 750, 758, 99 S.Ct. 2066, 2072, 60 L.Ed.2d 609 (1979); Teamsters v. United States, 431 U.S. 324, 354 n. 39, 97 S.Ct. 1843, 1864 n. 39, 52 L.Ed.2d 396 (1977); but it also accompanies a bill which never acquired the force of law, see Consumer Product Safety Commission, 447 U.S. at 118 n. 13, 100 S.Ct. at 2061 n. 13.

Of course, the legislative history of the original EAJA did not specifically address the issue raised by this case, so that our extrapolation involves guesswork. Our guess is substantiated, though, by the fact that the legislative purposes of the EAJA are served by granting fees in suits such as this one. Those purposes were expressed in the House Report as follows:

While the influence of the bureaucracy over all aspects of life has increased, the ability of most citizens to contest any unreasonable exercise of authority has decreased. Thus, at the present time, the Government with its greater resources and expertise can in effect coerce compliance with its position----
The exception [to the “American rule” of attorney’s fees] created by [the bill] focuses primarily on those individuals for whom cost may be a deterrent to vindicating their rights. The bill rests on the premise that a party who chooses to litigate an issue against the Government is not only representing his or her own vested interest but is also refining and formulating public policy.

House Report at 10, U.S.Code Cong. & Admin.News 1980, p. 4988.

This case exemplifies the concerns underlying the EAJA. Plaintiff is an indigent woman without income, property, or savings, who has, since 1973, depended primarily on federal disability benefits for her support. In 1982, the Social Security Administration notified her that, upon review of her case, it found her ineligible and terminated her benefits. Plaintiff requested and received first a hearing by an administrative law judge and then a review by the Appeals Council. At no time during these proceedings was the “medical improvement” standard applied to determine whether plaintiffs benefits could be terminated. Plaintiff filed suit in this court in August of 1984, and in September 1984, nearly two years after plaintiff stopped receiving benefits, we remanded the matter to begin the hearing process again.

Regardless of whether or not plaintiff is ultimately deemed eligible, she has been subjected to a lengthy and wearying bureaucratic process. Only through her persistence in filing her claim in the district court is she able to have the agency apply the proper standard to her case to determine if indeed she is eligible. By bringing these claims to federal court, claimants like plaintiff have not only redressed their own situations, but helped prompt Congress to pass the Social Security Disability Benefits Act of 1984 which expressly mandates application of the standard which courts previously merely inferred. See H.R.Rep. No. 618, 98th Cong., 2d Sess. 11 (1984), U.S. Code Cong. & Admin.News 1984, p. 3038 (agency policies have come under severe criticism in federal courts which have ruled that the agency must meet “medical improvement” standard to terminate recipients.) For these reasons we believe that granting attorneys’ fees to plaintiff would serve the purposes of the EAJA.

The Third Circuit, in holding that a plaintiff does not prevail upon remand, admitted concern about the magnitude of agency error in these cases and the need for plaintiffs to invoke the aid of federal courts to oversee agency decisions. See Brown v. Secretary of HHS, 747 F.2d at 881-882. In our view, the court created a fiction to circumvent its undesirable conclusion that these plaintiffs are not prevailing parties. The court claimed that a district court retains jurisdiction over the remanded claim so that, if the plaintiff is ultimately deemed eligible, the court can then award fees. See id. at 883-885. The court found authority for retaining jurisdiction by deferring to the reading of 42 U.S.C. § 405(g) advocated by the Secretary in that case, according to which the Secretary would be required to return to the district court upon conclusion of any remand proceeding. Plainly, though, the language in question in § 405(g) pertains only to cases in which the basis for remand is the discovery of new and material evidence. See 42 U.S.C. § 405(g) (“The court may ... at any time order additional evidence to be taken before the Secretary, but only upon a showing that there is new evidence which is material ...; and the Secretary shall, after the case is remanded, ... modify or affirm his findings of fact or his decision, or both, and shall file with the court any such additional and modified findings of fact and decision____”) The section of the statute providing for reversal and remand for rehearing, under which we remanded this case, does not provide for such filing of the results of rehearing in the district court.

In fact, we believe that the statement of the Brown court that “[w]e assume that under this arrangement [of retaining jurisdiction for EAJA purposes] a district court may mark the case closed for statistical purposes, even though a final judgment has not been rendered,” Brown, 747 F.2d at 884 n. 6, belies the claim that the court retains jurisdiction. Our cases are closed for statistical purposes when judgment has been entered and the court has disposed of the case.

The Brown system is also illogical because the EAJA does not cover attorney time spent during Social Security Administration proceedings. See House Report at 12. The resulting paradox under Brown is that plaintiffs eligibility for fees depends on the result of the very portion of proceedings which is not part of the civil suit and for which she is ineligible to recover fees.

While we sympathize with Brown’s result of not denying fees altogether, we believe the fiction is unnecessary to the result. The civil action ends with entry of judgment. What remains to be done is an administrative, and not a judicial, function. As the Supreme Court said in F.P.C. v. Idaho Power Co., 344 U.S. 17, 20, 73 S.Ct. 85, 86, 97 L.Ed. 15 (1952), “the guiding principle ... is that the function of a reviewing court ends where an error of law is laid bare. At that point the matter once more goes to [the agency] for reconsideration ...” (citations omitted). The decision on remand of whether the plaintiffs “objective may be achieved” if the proper law is followed “is an administrative, not a judicial decision.” Id. at 21, 73 S.Ct. at 87 (footnote omitted). Accordingly, we believe that plaintiff prevailed in the judicial decision which terminated this civil suit.

Yet another indication leading to this result is that the Secretary could probably have immediately appealed our remand order, rather than having to wait to appeal the rehearing requirement until the agency rendered a decision upon rehearing. The Court of Appeals for the Fifth Circuit asserted appellate jurisdiction in an appeal from a district court order like ours and held that where a district court remands a case to an agency for a new hearing in accordance with specified guidelines, the order is final and appealable. Cohen v. Perales, 412 F.2d 44, 48 (5th Cir.1969), reversed on other grounds sub nom Richardson v. Perales, 402 U.S. 389, 91 S.Ct. 1420, 28 L.Ed.2d 842 (1971). The Supreme Court as well asserted jurisdiction over the case on certiorari to the Fifth Circuit. Id. While the issue is complex, virtually every circuit has agreed with the Fifth Circuit on facts such as these. See, e.g., Bender v. Clark, 744 F.2d 1424, 1426-1428 (10th Cir.1984); Souch v. Califano, 599 F.2d 577, 578 n. 1 (4th Cir.1979); Lopez Lopez v. Secretary of HEW, 512 F.2d 1155, 1156 (1st Cir.1975); Gueory v. Hampton, 510 F.2d 1222, 1225 (D.C.Cir.1974); Jamieson v. Folsom, 311 F.2d 506, 507 (7th Cir.), appeal dismissed and cert. denied, 374 U.S. 487, 83 S.Ct. 1868, 10 L.Ed.2d 1043 (1963). The likelihood that our order is final and appealable is all the more evidence that the judicial portion of this matter is completed, and that as between the parties, it is the plaintiff who prevailed in that judicial portion, albeit not to the fullest extent she originally desired.

Our conclusion that plaintiff is a prevailing party is not altered by the fact that we instructed the Secretary to include her case in the national moratorium. In so doing, we ensured that plaintiffs rehearing would be held according to the standards to be promulgated by Congress and that plaintiff would be treated as an eligible recipient in the meanwhile. Thus, she is now receiving procedural protections which she would not have received without bringing suit to protest the improper procedure employed by the Secretary in the termination determination.

Conclusion

For all of the foregoing reasons, plaintiff is entitled to an award of attorneys’ fees under the EAJA. Plaintiff’s attorney, Helen Cropper of the Legal Assistance Foundation of Chicago, has submitted an affidavit requesting $1,691.25 and detailing what she computes to be 21.55 hours of work at a requested rate of $75.00 per hour. While this request is reasonable, according to our mathematics the figures are incorrect. The hours billed total 23.35, rather than Cropper’s total of 21.55. Then again, multiplying her total of 21.55 by the hourly rate of $75.00, we arrive at a product of $1,616.25, rather than Cropper’s submission of $1,691.25. Because we cannot tell wherein the errors lie, Cropper should submit a corrected version of her requested bill upon which we will rule by mail.


source: Caselaw Access Project

author: ROBERT D. POTTER, Chief Judge.

license: Public Domain

text:
    Johnny L. MOORE, Plaintiff, v. INMONT CORPORATION, Defendant.
    No. C-C-83-471-P.
    United States District Court, W.D. North Carolina.
    April 4, 1985.

      Donnie Hoover, Charlotte, N.C., for plaintiff.
    John J. Doyle, Jr., Weinstein, Sturges, Odom, Groves, Bigger, Jonas & Campbell, Charlotte, N.C., for defendant.
   MEMORANDUM AND ORDER

ROBERT D. POTTER, Chief Judge.

THIS MATTER is before the Court on a Complaint filed by the Plaintiff Johnny L. Moore against Inmont Corporation (“Inmont” or “the Company”) alleging the Plaintiff was subjected to racially discriminatory practices in his employment and was discharged because of his race. The trial was heard before the undersigned on January 10 and 11, 1985 in Charlotte, North Carolina. The Plaintiff was represented by Donnie Hoover and the Defendant was represented by John J. Doyle, Jr. After a full trial of the matter, the Court, having carefully considered the testimony and exhibits enters the following findings of fact and conclusions of law:

FINDINGS OP PACT

(1) This action was brought pursuant to Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. § 2000e et seq. and pursuant to 42 U.S.C. § 1981, the Civil Rights Act of 1866.

(2) The Plaintiff, Johnny L. Moore, a black male, formerly was employed by the Defendant as a “chemical dumper” or “production helper” at the Defendant’s Charlotte, North Carolina manufacturing facility-

(3) The Defendant, Inmont Corporation, is a corporation licensed to do business in North Carolina.

The Defendant operates a manufacturing facility in Mecklenburg County, North Carolina, in which it engages in the production and sale of printing inks and textile colorings. The Defendant is subject to the jurisdiction of this Court and is an “employer” as defined by 42 U.S.C. § 2000e(b), being engaged in an industry affecting commerce and employing in excess of fifteen employees.

(4) This suit arises out of a charge of race discrimination filed by the Plaintiff with the Equal Employment Commission on November 2, 1982.

(5) The Complaint was filed more than 180 days after the filing of the aforesaid charge and within 90 days after the issuance of the right-to-sue letter by the EEOC.

(6) The Plaintiff was hired by the Defendant on November 3, 1980 and worked for the Defendant until August 28, 1982 at which time he was discharged on the stated ground of smoking in an unauthorized area.

(7) The manufacturing facility where the Plaintiff was employed consists of three central areas, the office area, the production area, and the warehouse/shipping area. The office area contains the administrative section of the Company. The production room is utilized for manufacturing inks. The warehouse/shipping area is utilized for storage of the completed product and for shipping or receiving goods and raw materials.

(8) The ingredients used to manufacture and package the inks include highly flammable, volatile substances. In addition, the inks are extremely flammable, hazardous materials.

(9) Due to the presence of the volatile substances in the facility, fire prevention is of the paramount concern and the plant is highly regulated to protect against fire. The National Electric Code (“NEC”) specifies exactly what precautions the Company must employ to protect against combustion. The production room and the warehouse area are “classified” (hazardous) locations under Article 500 of the NEC. The production area, in which there are present open flammable materials, is a National Fire Protection Association (“NFPA”) Class I, Division 1 location. The warehouse/storage areas is a NFPA Class 1, Division 2 location. Both areas are equipped with spark proof, explosive proof wiring, motors and other electrical equipment as required by the NEC for classified locations. For instance, an average house light switch would not be acceptable in the production area because of the arc. In addition, other equipment used in the production and warehouse areas of the facility is designed to conform with the requirements set forth in Article 500 of the NEC.

(10) Inmont has developed and implemented a safety program to curb fire hazards. The Company developed a safety committee to explain rules to the employees and the supervisors are responsible for giving a safety talk at the end of each week. In addition the Company has trained fire fighters.

(11) The Company promulgated a booklet containing the employee safety rules. The booklet is issued to all new employees who have to sign acknowledged receipt of the book. The Plaintiff received and signed for his booklet. Since smoking presents a possible source of ignition and consequently a potential fire and safety hazard particularly in the classified areas, the booklet contains numerous references to smoking prohibitions in unauthorized areas. See, e.g., Plaintiffs Exhibit 6, pp. 3, 5, 6, 13.

(12) After an employee was caught smoking in an unauthorized area, to stress the importance of plant safety and to ensure against the dangers of smoking in hazardous locations, the Company promulgated and posted a written policy on October 28, 1980 which unambiguously states that any employee observed smoking in a no smoking area would be immediately terminated. Specifically, the notice as posted provides:

Subject:
SMOKING
Every employee of the Charlotte operation is well aware of the danger of smoking at this location.
Irregardless of the past practice, starting immediately anyone observed smoking in a non-smoking area will be immediately discharged.

Since the inception of this policy, a copy of this notice has been posted on the employee bulletin board adjacent to the production room.

(13) All new employees, including the Plaintiff, who were hired after the rule was posted, were aware of the smoking prohibition and the consequences for violating the policy, through their initial training with the Company and through periodic reminders at the safety meetings. The Plaintiff does not deny knowledge of the immediate termination rule. Instead the Plaintiff denies that he was smoking, or if he was smoking he denies knowing he was in an unauthorized area, or if he was smoking in an unauthorized area he contends other employees smoked in that area without being discharged.

(14) The main employee entrance to the facility is located in the shipping area. There is a no smoking sign on the outside of the building on the wall behind the main employee entry door. To get to the production area the employees enter the door in the shipping area and walk to the employee cafeteria where they follow a walkway around the perimeter of the shipping area to the production area at the rear of the plant. This corridor is adjacent to the employees’ lockers, running from the production room to the employees’ cafeteria.

(15) The corridor is marked with a solid yellow line which serves to demarcate the boundary area where smoking is permitted. Although the Company periodically repaints the line, it naturally fades with time, especially with the presence of various solvents in the plant. Even though the line fades, it has remained in a substantially similar configuration for the past 18 years. Thus, by custom and usage the employees are aware of the smoking areas.

(16) On the day of the Plaintiff’s discharge the evidence shows that the yellow line was visible with respect to the straight line from the production area to the cafeteria. In close proximity to the cafeteria, the line makes a right angle to compensate for the corner of the cafeteria. The Defendant’s evidence shows that the line was painted at the end of the angle. The Plaintiff’s evidence shows that the end of the right angle was not painted.

(17) There are five no smoking signs along the corridor reiterating the policy of no smoking in the production area and no smoking across the yellow line separating the corridor from the shipping area. In addition, there is a no smoking sign next to the entry door, which indicates that smoking is not allowed when entering the building.

(18) Immediately inside the employee entry is a small self contained office, where warehouse personnel do their paperwork. On the outside wall of this office facing the entry side of the building is the telephone where the Plaintiff was discovered smoking.

(19) This office was constructed in 1981, after the Plaintiff was hired. It is specifically designed and equipped so that air constantly flows into the office, creating positive pressure ventilation. The ventilation allows individuals inside the office to smoke while at the same time presenting no danger of ignition of the hazardous materials which are stored in the vicinity of the warehouse office. The employees who use this office are permitted to smoke inside of the office.

(20) The area surrounding the office has remained a no-smoking area and was so designated in August, 1982. Hazardous, flammable materials in the form of finished ink products are routinely stored and shipped from this area. Within a few feet of the office highly flammable solvents are regularly used to clean the drums prior to stenciling the drums for shipment.

(21) On the evening of August 28, 1982 the Plaintiff was working the third shift (11:00 p.m. to 7:00 a.m.) in the production area. During the course of the evening his uniform split and he needed to put on another uniform. His supervisor, Willis McDaniels, authorized the Plaintiff to leave the production area to change uniforms and to make a telephone call. The only free telephone was the telephone on the outside of the warehouse office located at the employee entrance. After the Plaintiff left the production area and entered the yellow lined corridor he began smoking a “duct” from a cigarette partially smoked earlier in the evening.

(22) As the Plaintiff walked down the corridor with the cigarette in his hand he saw and talked to a foreman, Allen Hardy. Mr. Hardy did not tell the Plaintiff to extinguish his cigarette before he crossed the yellow line. The Plaintiff contends Mr. Hardy intentionally set him up for the discharge by not warning him about smoking. Mr. Hardy credibly testified he did not warn the Plaintiff about smoking because he thought since the Plaintiff was carrying a uniform he was going to the lockers instead of the telephone.

(23) Mr. Hardy proceeded to the laboratory, discussed an order and doubled back to the shipping area, near the office. The Plaintiff proceeded to the telephone.

(24) When Mr. Hardy returned to the office he observed the Plaintiff holding a lighted cigarette in his hand while he was talking on the telephone located immediately outside the warehouse office. Mr. Hardy approached the Plaintiff, confirmed that the cigarette in his hand was lit and informed the Plaintiff that he was terminated for violating the Company’s no smoking rule.

(25) The Plaintiff and Mr. Hardy located the Plaintiff’s supervisor, Mr. McDaniels, to advise him of the discharge. The Plaintiff asked to be given a break, that he simply made a mistake, having forgotten about the cigarette in his hand when he went to the telephone. Mr. McDaniels decided to notify the plant production manager, David Wilburn about the incident. After telephoning Mr. Wilburn, Mr. Hardy explained that the Plaintiff was observed smoking in a no smoking area. Mr. Wilburn ratified Mr. Hardy’s decision to terminate the Plaintiff for smoking.

(26) At no time during his conversation with either Mr. Hardy or Mr. McDaniels did the Plaintiff contend that he was not smoking, that he was not in an unauthorized area or that he did not know the area outside the warehouse office was a no smoking location. To the contrary, the Plaintiff acknowledged the violation but maintained that he should be given special consideration and not terminated since his actions were not intentional. The Plaintiff explained that he simply forgot that the cigarette was in his hand when he entered the no smoking area to use the telephone, and that this mistake was not a sufficient reason to terminate his employment with the Company.

(27) On the Monday after the Plaintiff was discharged he tried to speak with the plant manager, John Ganóte. His request was denied in accordance with Mr. Ganote’s policy not to have ex parte discussions with terminated collective bargaining unit employees in the absence of their union representative. Instead, Mr. Ganóte adheres to the bargaining grievance procedures before he becomes directly involved in reviewing any discharge decision.

(28) The Plaintiff asked the union shop steward, Melvin Broome, to prepare and submit a grievance on the Plaintiff’s discharge. The grievance does not state that the Plaintiff was not smoking. The grievance was denied and the denial was affirmed in the local hearing. Due to an unexplained mix-up between the Plaintiff and the union, the grievance was not timely submitted to arbitration. Accordingly, the request for arbitration was denied.

(29) At the trial and in the Plaintiff’s amended Complaint the Plaintiff contended that he was not smoking, but was merely holding a completely burned out filter in his hand while using the telephone and that prior to this time he did not know the area around the telephone was a no smoking area.

(30) The Court does not credit the Plaintiff’s testimony that he was not smoking or that he did not know he was in a no smoking area. The Court finds it significant that the Plaintiff’s recollection of the incident has changed. Mr. Hardy and Mr. McDaniels (a black supervisor) both testified that the Plaintiff admitted the offense but requested leniency in that it was unintentional. The union grievance does not say anything about only having an extinguished “duct” in his hand. Further, the Plaintiff swore under penalty of perjury in his EEOC charge that

“I admit to smoking in a non smoking area, however, I had just crossed over from an authorized smoking area and had not realized I had crossed the line that separates the two areas.
* * * * * *
When Allen Hardy, White, Foreman, caught me smoking in an a [sic] unauthorized area, he immediately discharged me.”

(31) In addition to the conflicting self-serving nature of the Plaintiff’s own testimony, the circumstantial evidence undermines the credibility of Plaintiff’s contentions. The plant policy was no smoking unless in an authorized area, and not, smoking allowed unless in an unauthorized area. The actual presence of flammable materials in the office area corroborates the fact that the Company would and did designate this area as a no smoking area. Further, there was a no smoking sign at the entry which sign clearly would put anyone on notice not to smoke when entering the building. In addition, even if the yellow line was discolored on the corridor, there was no evidence of any yellow line near the phone, which line would indicate that smoking is allowed. Finally, there was not any testimony from the Plaintiff that he had ever smoked in that area before. After an employee has been with a Company for a couple of years he knows through custom and practice what he can and cannot do. The Court, therefore, finds that at the time of his discharge the Plaintiff was smoking in an area which the Plaintiff knew to be a no smoking area.

(32) The Plaintiff contends that even if he was smoking in a no smoking area, other employees have engaged in the same or similar conduct without being discharged. In support of this contention the Plaintiff testified that Allen Hardy, a white foreman, and Bill Kelly, a black supervisor smoked in this area. The Defendant’s evidence was that although they smoked inside the office, they did not smoke outside the office. Even if it is assumed that the two men did smoke in the unauthorized area, the fact that Mr. Kelly is black and was not reprimanded negates the Plaintiff’s argument that the no smoking policy was only applied to him because he was black.

One of the Plaintiff’s witnesses, Eric Straite, testified that Frank Morris, a white production area employee smoked in the vicinity of the telephone. The Court does not find Mr. Straite’s testimony to be credible. Mr. Straite did not identify when or how often he observed Mr. Morris smoking. He did not state whether any supervisor was aware of Mr. Morris’ smoking. The other witnesses did not testify that Mr. Morris smoked and the union steward testified that he never observed anyone smoking in that area. Further, as Mr. Straite was fired by the Defendant for excessive absenteeism it is reasonable to believe his testimony is at least partially biased.

(33) The documentary evidence concerning discipline meted for the no smoking policy clearly shows that the immediate termination clause was uniformly enforced. The only employee caught smoking in this area who was not terminated was black, and it was his conduct which led to the promulgation of the current written no smoking/immediate termination rule. Pri- or to the October 1980 rule, Fred Williams, a black warehouseman, was observed lighting a cigarette at one of the warehouse loading docks. Immediately after Mr. Williams lit the cigarette he realized what he had done and extinguished his cigarette. A supervisor, however, observed the violation and reported-it to the plant management. Initially Mr. Williams was terminated for the offense, but ultimately after a two month suspension without pay, he was reinstated due to the mistaken nature of his conduct and the fact that the consequences for violating the policy had not been sufficiently defined or noticed to the employees. It was precisely because of the “extenuating circumstances” plea raised by the union in Mr. Williams’ case that the Company promulgated the no smoking/automatic termination rule which went into effect in October 1980. Automatic discharge was provided for in that rule to emphasize the seriousness of the hazard and to avoid the defense of extenuating circumstances raised in Mr. Williams’ case.

(34) After the policy was adopted and posted in October, 1980 all employees observed smoking in an unauthorized area have been terminated, including the Plaintiff. On January 27, 1981, David Wilburn, the production manager, observed two black employees, Robert Ballard and Rickey Cherry, smoking in an unauthorized area. They were immediately terminated for the offense. The employees filed a grievance protesting their terminations and the complaint was heard by an arbitrator. On June 3, 1981 the arbitrator issued an opinion and award denying the grievance and affirming the discharge, noting that

In this case, there is no doubt that the no smoking rule is reasonable and necessary. There is no doubt that these Grievants knew the rule and the safety reasons for adhering to the rule. Smoking in unpermitted areas creates substantial risks of harm to persons and property. The violation of this rule clearly warrants the discharge of an employee. Any other result would undermine the Company’s ability to maintain a preventive safety program.

There were no other employees observed violating the rule, until the Plaintiff was discharged.

(35) In light of the above, the Court finds that the no smoking/automatic termination policy was applied uniformly to all employees, including the Plaintiff, regardless of race.

(36) The Plaintiff also asserts that a white employee, Frank Morris, committed a comparable dischargeable offense, however, he was not discharged. Mr. Morris was a forklift operator. The end of the forklift consists of exposed metal which metal is a potential fire hazard if, through careless operation, the forklift collides with other metal objects in the production and warehouse area causing sparks. A spark in an unauthorized area would be as dangerous as smoking in an unauthorized area. The uncontested evidence is that Mr. Morris was intoxicated several times while on the job and operating his forklift. He, however, was sent home and suspended instead of fired. Although the supervisors thought Mr. Morris was intoxicated they never observed him consuming any alcohol. Mr. Morris was eventually fired for hitting a trailer door. The Company could not report that they were terminating him because he was intoxicated.

(37) Although the toleration of Mr. Morris’ intoxication on the job might initially be suspect, any inference of racial discrimination was credibly refuted by the fact that black employees also were not discharged if intoxicated and by recognizing the constraints placed on the employer under the collective bargaining contract.

The policy of the Company is to terminate employees drinking if the employee is observed consuming alcohol at work. If the supervisor does not observe the' consumption but merely observes the apparently intoxicating conduct the employee is sent home. This discrepancy in enforcement is due to the difficulty of proof required under the collective bargaining contract. The employees are protected by a collective bargaining contract which requires the employer to prove beyond a reasonable doubt that an employee actually committed the offense. With controlled substances there is great difficulty in proving beyond a reasonable doubt that an employee is intoxicated unless the supervisor actually observes the consumption. Thus, such proof being necessary in order to make the termination of a bargaining unit employee withstand the scrutiny of arbitration, employees reporting to work who appear to be intoxicated are merely sent home, instead of discharged. Conversely, if an employee is observed consuming alcohol he is immediately discharged.

The Plaintiff’s evidence further showed, through the testimony of Carl Smith, a black employee, Eric Straite, a black terminated employee, and Melvin Broome, a white shop steward, that the Company did not discharge, but instead sent home Donald Davis and other black employees intoxicated on the job.

(38) In light of the above, the Court finds that to compare the enforcement of the smoking policy with the enforcement of the drinking policy is to compare apples with oranges. Although there is a difference in the consequences between the smoking and drinking policies the difference is not attributable to race. The Company applied the smoking policy uniformly to all employees and applied the drinking policy uniformly to all employees.

(39) Accordingly, the Court finds that the Plaintiff was discharged on August 28, 1982 for smoking in a no smoking area and his discharge for smoking was not a pretext for racial discrimination.

(40) The Plaintiff also testified about various forms of harassment against him such as verbal criticism, incorrect discipline reports, being assigned menial tasks, or alternatively not being assigned menial work. The cause of much of this “harassment” according to the Plaintiff’s testimony was not because of race — the Plaintiff being “singled out among blacks and whites”. For example, the Plaintiff complained that he was denied light duty work by Mr. McDaniels. There was not any credible evidence that Mr. McDaniels was racially motivated in denying the Plaintiff light duty work. Mr. McDaniels explained that the work was denied because the Plaintiff did not have an on-the-job injury which is required to lessen an employee’s job responsibilities. Further, Mr. McDaniels is black.

(41) Similarly, the Plaintiff said he was racially harassed by Bill Kelly and David Woods. Both men are black production supervisors. David Woods credibly testified that he did not harass the Plaintiff or single him out to sweep the floor. Mr. Kelly denied harassing the Plaintiff, but agreed that he did have to talk to the Plaintiff about his excessive absentee/tardy record. To be assigned work and receive constructive criticism from a supervisor is a normal part of any employee’s job. There is not any evidence linking the employment discussions and reports with race.

(42) The Plaintiff, in addition, placed racial significance on an incident in which Mr. Morris verbally threatened the Plaintiff. Although Mr. Morris did exchange threats with the Plaintiff, the evidence also showed that the Plaintiff “let the word out at the plant that I know how to box” and that I have a “right to defend myself.” Faced with Mr. Moore’s and Mr. Morris’ dispute, Mr. Ganóte warned both employees against their disruptive conduct and informed them that any altercation on or off the premises would result in immediate termination. Mr. McDaniels also told the employees to stay out of trouble and if they encountered further problems with each other they should work out the problems through Mr. McDaniels. The Court finds the Company’s actions in dealing with this problem to be prudent, sensible, and intelligent and without any racial bias.

(43) The Court accordingly finds that the Defendant did not harass or encourage, condone, or permit other employees to harass the Plaintiff.

CONCLUSIONS OF LAW

(1) The Court has jurisdiction over this litigation pursuant to 28 U.S.C. § 1343.

(2) Both Title VII and Section 1981 prohibit discrimination in employment because of an employee’s race. The well-known order and allocation of proof set forth in the seminal cases of McDonnell Douglas Corp. v. Green, 411 U.S. 792, 93 S.Ct. 1817, 36 L.Ed.2d 668 (1973) and Texas Department of Community Affairs v. Burdine, 450 U.S. 248, 101 S.Ct. 1089, 67 L.Ed.2d 207 (1981) are applicable to the Plaintiff’s claims under Title VII. Bur-dine, the more recent case, summarized the three stages in the proof of such claims: the claimant must prove by a preponderance of the evidence a prima facie case of discrimination; if the claimant proves a prima facie case, the employer has the burden to articulate a legitimate nondiscriminatory reason for the employment decision; once the employer articulates the reason, the claimant then has the burden to prove by a preponderance of the evidence that the legitimate reasons offered by the employer were but a pretext for discrimination. Burdine, supra, at 253, 101 S.Ct. at 1093. At all times the plaintiff retains the ultimate burden of persuading the court that he has been the victim of intentional discrimination. Burdine, supra, at 256, 101 S.Ct. at 1095.

(3) In Title VII cases, such as the instant action, in which disparate treatment is the basis of the Plaintiff’s claim, the Plaintiff must prove intentional discrimination. The trier of fact may rely on inferences rather than direct evidence of intentional discrimination, but discriminatory intent must be proved by a preponderance of the evidence, whether direct, circumstantial or otherwise. Texas Department of Community Affairs v. Burdine, supra; Board of Trustees of Keene State College v. Sweeney, 439 U.S. 24, 99 S.Ct. 295, 58 L.Ed.2d 216 (1978).

(4) To establish a prima facie case of discriminatory discharge the Plaintiff must show that: (1) he is a member of a protected class; (2) he was qualified for the position he held; (3) despite his qualifications he was discharged; and (4) after his discharge, the employer continued to seek applicants from persons of complainant’s qualifications. Smith v. University of North Carolina, 632 F.2d 316 (4th Cir.1980). Alternatively, a plaintiff may establish a prima facie case by showing that he was discharged and that a non-black person whose conduct was similar to his was retained. McDonald v. Santa Fe Trail Transportation Co., 427 U.S. 273, 96 S.Ct. 2574, 49 L.Ed.2d 493 (1976); Anderson v. Savage Laboratories, Inc., 675 F.2d 1221, 1225 (11th Cir.1982); Aquamina v. Eastern Airlines, Inc., 644 F.2d 506, 508 (5th Cir.1981).

(5) In the instant situation, although the Plaintiff failed to present any evidence as to his replacement the undisputed evidence is that the Defendant found the Plaintiff’s qualifications and performance to be satisfactory. The Plaintiff was not discharged for insufficient work performance, but for violating an important Company policy. The Plaintiff’s evidence further was to the effect that Frank Morris, a white male, was not discharged for conduct similar to the Plaintiff’s conduct. Accordingly, the Court finds that the evidence supports a prima facie case of discrimination.

(6) Even though the Plaintiff established a prima facie case, it is manifest that the Plaintiff’s breach of the fully published no smoking/automatic termination policy was a legitimate non-discriminatory reason for the employment decision in contest. Similarly, the valid difference between enforcement of the drinking policy and enforcement of the smoking policy and the fact that the Company did not discharge black employees observed intoxicated at work were legitimate non-discriminatory reasons for retaining Mr. Morris while discharging the Plaintiff. Thus, as the evidence shows that the Plaintiff violated the smoking policy, that the smoking policy was uniformly applied to all employees and that there exists a legitimate difference in policing the two violations the Plaintiff did not prove that the Defendant’s reason for his discharge was pretextual.

(7) With respect to the Plaintiff’s claim under Section 1981, it is established that in order to prevail the Plaintiff must offer evidence showing discriminatory animus by the Defendant in terminating the employment. Washington v. Davis, 426 U.S. 229, 96 S.Ct. 2040, 48 L.Ed.2d 597 (1976). As discussed previously, the evidence does not establish any discriminatory intent in terminating the Plaintiff and any claim under Section 1981 similarly fails.

(8) Any finding of fact which is determined also to be a conclusion of law is so deemed, and any conclusion of law which is determined also to be a finding of fact is so deemed.

Based on the foregoing Findings of Fact and Conclusions of Law, IT IS, HEREBY, ORDERED, ADJUDGED, AND DECREED:

(1) That this action is DISMISSED WITH PREJUDICE;
(2) That each party shall pay his and its own costs, including attorney’s fees; and
(3) The Clerk is directed to enter judgment pursuant to Fed.R.Civ.P. 58.


author: DAN M. RUSSELL, Jr., District Judge.

text:
    CITY OF BILOXI, MISSISSIPPI, Plaintiff, v. Honorable Louis O. GIUFFRIDA, et al., Defendants.
    Civ. A. No. S84-0121(R).
    United States District Court, S.D. Mississippi, S.D.
    April 9, 1985.

      Keith Pisarich, Biloxi, Miss., for plaintiff.
    Peter H. Barrett, Asst. U.S. Atty., Biloxi, Miss., C. Max Vassanelli, Dennis G. Linder, Dept. of Justice, Civ. Div., Washington, D.C., for defendants.
   MEMORANDUM OPINION

DAN M. RUSSELL, Jr., District Judge.

This cause is presently before the Court on the defendant’s motion to dismiss, or in the alternative for summary judgment. After careful review of the submitted briefs and pleadings, the following undisputed facts are revealed:

1. The City of Biloxi voluntarily entered the National Flood Insurance Program (NFIP) on September 11, 1970. On August 12, 1981, the City was informed by the' Federal Emergency Management Agency (FEMA) that a flood insurance study was being completed for the community and that the data developed would be used as a basis for participation in the NFIP. The City was informed that FEMA had selected the firm of GEE and Jensen, Inc. to conduct the study for the community. The City was also informed that a ninety-day appeal period would be provided to the City prior to finalizing the flood elevations. There was also communication between the City and the private consulting firm on the study being prepared. On June 8, 1982, a draft of the study for the City prepared by the independent contractor was forwarded to FEMA. On November 30, 1982, FEMA notified the City that a final community coordination meeting would be held on December 15, 1982, to review the Flood Insurance Study. The meeting was held on December 15, 1982, and the Study for the Community was reviewed.

2. On January 19, 1983, FEMA notified the City of Biloxi that the City’s base flood elevations would be revised as a result of a flood insurance study previously compiled. The City was also advised that public notification of the study would be made and that the City could appeal the proposed flood determination during a ninety-day period following publication. The City was advised that the sole basis for such appeals was the possession of knowledge or information indicating that the proposed base flood determination were scientifically incorrect. FEMA also told the City that if the community could not submit technical data before the end of the ninety-day appeal period, it could nevertheless submit such data at any time.

3. On February 7, 1983, the City sought from FEMA an extension of the ninety-day appeal period.

4. On March 18,1983, FEMA responded that the ninety-day appeal period was statutory and therefore could not be extended. However, the City could appeal a final study at any time by submitting additional scientific and technical data.

5. On May 17, 1983, prior to the expiration of the ninety-day appeal period, the City filed a purported “appeal” of the base flood elevations.

6. On June 23, 1983, FEMA informed the City that the appeal was deficient in that it did not contain technical or scientific data to refute FEMA’s flood insurance study. The City was informed specifically that a published study may be revised at any time by submitting supporting scientific or technical data. Once received, FEMA would revise the study and Flood Insurance Rate Map (FIRM).

7. On September 15, 1983, the City was advised that since FEMA did not receive an appropriate appeal, the determination of the base flood elevations for the City was considered final and the FIRM would become effective on March 15, 1984.

8. On February 8, 1984, the City filed its complaint in this action seeking a declaratory judgment that the statutory ninety-day appeal is unconstitutional because it violates the City’s rights under the equal protection and the due process clauses of the Constitution.

Plaintiff alleges that the statutory period of ninety days within which to gather and assemble scientific or technical data is unreasonable, arbitrary and capricious in that it does not allow enough time for the City to adequately research and develop its appeal.

I. THE NINETY-DAY STATUTORY APPEAL PERIOD IS CONSTITUTIONAL.

The plaintiff bears a heavy burden of proof in demonstrating that the statute is unconstitutional. It must be proven that the statute is without any rational basis and is “clearly arbitrary and unreasonable, having no substantial relation to the public health, safety, morals or general welfare.” Western Mineral Council v. Watt, 643 F.2d 618, 628 (9th Cir.1981). Legislative acts which adjust the burdens and benefits of economic life enjoy a presumption of constitutionality. Hodel v. Indiana, 452 U.S. 314, 323 (1981).

The plaintiff bases its constitutional challenge on the sole fact that FEMA had at least eighteen months to conduct its study of the Biloxi area, whereas the City was only allowed ninety days to research and develop a scientific and technical appeal.

The appeal process received close scrutiny by Congress as is reflected in the legislative history of 42 U.S.C. § 4104. As stated in S.Rep. No. 93-583, 15-16, U.S.Code Cong. & Admin.News 1973, p. 3217, it was the subject of considerable discussion and debate to assure an equitable balancing of all interests involved.

The ninety-day appeal period was not chosen randomly, but determined by Congress to be capable of “carefully protecting the interests of those affected [while] avoidpng] the pitfall of permitting those unnecessary delays and self interested procrastinations which would make the flood insurance program unworkable.” Cong. Rec. 11-42885, December 20, 1973. See also Texas Landowners Rights Assoc. v. Harris, 453 F.Supp. 1025 (D.C.1978).

It is also noted that although Congress has limited the appeal period to ninety days, FEMA will accept an appeal of its flood elevations at any time, even beyond the ninety-day period. FEMA made this fact known to the City on a number of occasions beginning on November 30, 1982.

After considering the basis of the plaintiffs argument, and viewing the facts in a light most favorable to it, it is the opinion of this Court that the plaintiff cannot meet its burden in proving that the appeal period is violative of due process or without rational basis.

II. THIS COURT LACKS SUBJECT MATTER JURISDICTION TO REVIEW THE CITY OF BILOXI’S ATTEMPTED APPEAL OF FEMA’S DECISION.

The National Flood Insurance Program has two principal functions: (1) to offer flood insurance at affordable rates to persons living within flood-prone areas throughout the United States and (2) to mitigate flood hazards in those areas with respect to future construction. The firm of GEE and Jensen, Inc. established the areas of special flood hazards within the Biloxi community for which the City must enact flood plain management ordinances in accordance with the Federal Insurance Administration’s regulations to participate in the National Flood Insurance Program.

Under 42 U.S.C. § 4104(b), a community, after having been notified of the proposed flood elevation determination, has a limited right to appeal:

“... The sole basis for such appeal shall be the possession of knowledge or information indicating that the elevations being proposed by the Director with respect to an identified area having special flood hazards are scientifically or technically incorrect, and the sole relief which shall be granted under the authority of this section in the event that such appeal is sustained in accordance with subsection (e) or (f) of this section is a modification of the Director’s proposed determination accordingly.”

Id. 42 U.S.C. § 4104(e) states the appropriate administrative review of such an appeal by a community as well as the methodology for the resolution of conflicting data:

“Upon appeal by any community, as provided by this section, the Director shall review and take fully into account any technical or scientific data submitted by the community that tend to negate or contradict the information upon which his proposed determination is based. The Director shall resolve such appeal by consultation with officials of the local government involved, by administrative hearing, or by submission of the conflicting data to an independent scientific body or appropriate Federal agency for advice____”

Id.

A careful reading of statute reveals a two-step process. (1) The community submits contradictory scientific or technical data, and (2) The Director resolves the conflict by one of three procedures.

The City contends that on February 18, 1983, it was notified by the Federal Emergency Management Agency that Biloxi’s base flood elevation would be revised as a result of a flood insurance study. On May 18, 1983, the City of Biloxi delivered its initial appeal papers citing what it contends to be several technical errors or deficiencies with the new flood elevations. In particular, the appeal alleged the following errors:

1. The computed wave heights and crescent elevations for transits 9 and 10 which did not properly account for the effects of Deer Island;
2. The use of wave statistics which are inappropriate for waves in the very shallow water depths encountered along transets 1 through 8;
3. Neglecting the effect of the unique characteristics of the bottom sediments in Mississippi Sound; and
4. Errors in the NAS methodology concerning wave generation on the leeside of obstructions which were not corrected for the flood insurance study.

These four allegations on which an appeal was based went unsubstantiated without any scientific or technical evidence being submitted to question the study’s accuracy. As such, this Court finds that the City of Biloxi failed to take an administrative appeal as required by 42 U.S.C. § 4104(b) and (e). Having failed to meet the prerequisite of step one (the submission of scientific or technical data) the City is not entitled to the administrative resolution of the conflict provided by step two.

As cited in Reardon v. Krimm, 541 F.Supp. 187, 189 (D.Kans.1982):

“The City is attempting just the sort of unlimited appeal which the language of the Act forecloses. The Act limits appeals to issues of technical and scientific accuracy of the base flood level determinations. 42 U.S.C. § 4104. The limitation on appeals was the product of more debate and testimony than any other portion of the Act when it was being considered in Congress. 1973 U.S.Code and Adm.News, p. 3217. The decision by Congress to adopt such a limited scope of appeal was, therefore, not a hasty one, nor is it one which may be overlooked by the Court...
In light of the fact that the City did not challenge the flood elevations on the basis of their scientific and technical accuracy at the administrative level, the Court concludes there was no appeal at the administrative level, as that term is defined by subsections (c), (d) and (e) of 42 U.S.C. § 4104. Inasmuch as an administrative appeal is a prerequisite to this Court’s jurisdiction [42 U.S.C. § 4104(F)], the City’s appeal must be dismissed for lack of jurisdiction.”

It should be noted that even had the City perfected an appropriate appeal, this Court would still lack subject matter jurisdiction over the case for the City failed to comply with 42 U.S.C. § 4104(g):

“Any appellant aggrieved by any final determination of the Director upon administrative appeal, as provided by this section, may appeal such determination to the United States district court for the district within which the community is located not more than sixty days after receipt of notice of such determination____” (emphasis added).

The City states in its response brief that it received a letter from FEMA dated June 28, 1983 in which the City of Biloxi was notified that its initial appeal papers were not adequate. On September 15, 1983, the City was again advised that since FEMA did not receive an appropriate appeal, the determination of the base flood elevations for the City was considered final.

In a light most favorable to the plaintiff, the sixty-day appeal period would have expired November 16, 1983. Plaintiff did not file its complaint until February 8, 1984. “Where a party fails to meet the statutory prerequisites for judicial review of administrative action, the Court lacks subject matter jurisdiction to hear the case.” City of Trenton v. Federal Emergency Management, 545 F.Supp. 13, 17 (E.D.Mich.1981). Accordingly, this Court is of the opinion that it lacks subject matter jurisdiction over this action.

Therefore, for this reason and for those previously stated, the plaintiff’s cause of action is hereby dismissed.

An Order in accordance with this Opinion shall be provided as set forth in the Local Rules.