author: COHEN, Senior District Judge:

text:
    John GRAEBER, individually and trading as Graeber Service Station, Plaintiff, v. MOBIL OIL CORPORATION, Defendant.
    Civ. A. No. 85-1616.
    United States District Court, D. New Jersey.
    July 18, 1985.

      Thomas H. Ward, P.C. by Thomas H. Ward, Woodbury, N.J., for plaintiff.
    Crummy, Del Deo, Dolan, Griffinger & Vecchiore, P.C. by Michael D. Loprete, Ann M. Schmidt (on brief), Newark, N.J., for defendant.
   OPINION

COHEN, Senior District Judge:

This wrongful franchise termination action is presently before the Court on motions for summary judgment and counsel fees made on behalf of the defendant, Mobil Oil Corporation (Mobil).

The plaintiff, John Graeber, individually and trading as Graeber Service Station, brought this action in state court to enjoin Mobil from terminating their franchise agreement or, in the alternative, to recover damages for its wrongful termination. On March 29, 1985, plaintiff obtained a temporary restraining order (TRO), in an, ex parte státe' court proceeding, prohibiting Mobil’s termination for twenty days. See New Jersey Court Rule 4:52-l(a). Thereafter, Mobil agreed to continue the restraints of the TRO on a voluntary basis and did so for at least five additional weeks. During that time, on April 2, 1985, Mobil removed the action to this Court based on our federal question and diversity-jurisdiction. See 28 U.S.C. §§ 1331 and 1332(a)(1).

On the present motion, Mobil initially sought a declaration dissolving the state court’s restraints in addition to an order granting it summary judgment and counsel fees. Plaintiff then filed a cross-motion, seeking a preliminary injunction, 'effectively, to continue the restraints of the TRO. For reasons which shall soon become apparent, both parties’ motions for preliminary, equitable relief have become moot. Thus, we write only in regard to defendant’s motion for summary judgment and fees.

Finding that plaintiff’s wrongful termination claim, about which there are no genuine issues of material fact, is governed exclusively by the Petroleum Marketing Practices Act (PMPA or the Act), 15 U.S.C. § 2801 et seq., and that it cannot succeed thereunder, we shall grant defendant’s summary judgment motion. See Fed.R. Civ.P. 56(c). See also In Re Japanese Electronic Products, 723 F.2d 238, 257-59 (3d Cir.1983). Finding further that plaintiff’s action was not frivolous, we shall deny defendant’s request for an award of counsel fees. See 15 U.S.C. § 2805(d)(3).

I. FACTUAL HISTORY

In varying capacities, the plaintiff had been affiliated with Mobil for approximately fifteen years when the parties executed a three year franchise agreement on July 7, 1982. Plaintiff was not represented by counsel at the time. By letter, also dated July 7, 1982 and apparently received shortly thereafter, Mobil advised plaintiff that the franchise, which was to commence on March 1, 1983, would be subject to an underlying lease of the gas station premises between Mobil and one Marie Gonserkevis. The franchise agreement, just executed by the parties, did not include any mention of Ms. Gonserkevis or the actual existence of an underlying lease. Instead, it provided, in abstract terms, that the expiration of a grounds lease would necessitate franchise termination.

Because the underlying premises lease was first executed in 1945 and renewed at five year intervals thereafter and because Mobil’s letter of July 7, 1982 referred to the possibility of Mobil “los[ing] its right” to grant possession, see Exhibit F attached to the McClintock Affidavit, plaintiff perceived that his franchise would not be terminated unless Mobil was unable to renew the underlying lease. Thus, he was unpleasantly surprised when informed, by letter dated November 28, 1984, that Mobil had elected not to renew the underlying lease and that, as a result, his purportedly profitable franchise would be terminated, effective March 31, 1985 (approximately one year before scheduled expiration). Subsequently, plaintiff obtained a lease from Ms. Gonserkevis directly and the ability to trade as a Texaco station. At oral argument, plaintiff conceded that these steps have rendered his preliminary injunction motion moot and, of course, Mobil has withdrawn its motion to dissolve the TRO issued in state court.

II. DISCUSSION

A. Preemption

We must first decide what substantive law governs defendant’s motion for summary judgment. Plaintiff’s central thesis is that Mobil violated an implied contractual covenant to use its best efforts to ensure that their franchise agreement would not be prematurely terminated. He relies principally on the case of Shell Oil Co. v. Marinello, 63 N.J. 402, 307 A.2d 598 (1973). Mobil contends that the PMPA, which was enacted after the Marinello decision, preempts all other wrongful termination authority with which it is inconsistent. We must agree with the defendant.

In pertinent part, 15 U.S.C. § 2806(a) provides:

To the extent that any provision of this subchapter applies to the termination (or the furnishing of notification with respect thereto) of any franchise, ... no State or any political subdivision thereof may adopt, enforce, or continue in effect any provision of any law or regulation ... with respect to termination ... unless such provision of such law or regulation is the same as the applicable provision of this subchapter.

Consistently, courts have construed this section as preempting both statutory and common law in the wrongful franchise termination area. See, e.g., DiNapoli v. Exxon Corp., 549 F.Supp. 449, 455 (D.N.J.1982) (New Jersey Franchise Practices Act preempted); Meyer v. Amerada Hess Corp., 541 F.Supp. 321, 332 (D.N.J.1982) (common law preempted). Thus, to the extent that they are dependent on either state common law or the New Jersey Franchises Practices Act, the counts in plaintiffs complaint, which allege that Mobil wrongfully terminated the subject franchise, must be dismissed.

B. The Petroleum Marketing Practices Act

We are left to consider plaintiffs claims in the context of those provisions of the PMPA which “establish minimum federal standards governing the termination and nonrenewal of franchise relationships” by franchisors. See Brungardt v. Amoco Oil Co., 530 F.Supp. 744, 745 (D.Kan.1982). The circumstances under which a franchisor may permissibly terminate a franchise are set forth in 15 U.S.C. § 2802(b)(2). Those permitting nonrenewal can be found in 15 U.S.C. § 2802(b)(3).

Congress explicitly provided a good faith requirement in most of the grounds for termination or nonrenewal which necessarily involve the exercise of business judgment by a franchisor. Thus, if a franchisor determines to withdraw from the marketing of motor fuel in a particular geographic area, thereby necessitating the termination of a franchise the term of which is three years or longer, it must, inter alia, make such a determination “in good faith and in the normal course of business.” 15 U.S.C. § 2802(b)(2)(E). Similarly, a determination not to renew a franchise agreement because of the failure of the franchisor and franchisee to agree upon changes in their relationship is only permissible if the changes sought by the franchisor are demanded “in good faith and in the normal course of business” and “not for the purpose of preventing the renewal of the franchise relationship.” 15 U.S.C. § 2802(b)(3)(A). Conversely, there are no explicit good faith requirements imposed on franchisors who terminate a franchise for any of the four reasons, described below, provided in § 2802(b)(2)(A) to (D). Instead, Congress attempted to protect franchisees, who typically lack any significant bargaining power, from arbitrary terminations by attaching requirements of recency and adequate notice to the § 2802(b)(2) grounds for termination.

In general terms, § 2802(b)(2) permits a franchisor to terminate a franchise by giving adequate notice, prescribed in § 2802(b)(1), of any of the following: (A) a recent failure of the franchisee to comply with a material and reasonable provision of the franchise agreement; (B) a recent and continuing failure of the franchisee to exert good faith efforts to carry out the provisions of the franchise agreement; (C) the recent occurrence of an event, included or similar to those enumerated in § 2802(c), which renders termination reasonable; or (D) a recent written agreement with the franchisee to terminate (or not renew).

In this case, Mobil seeks to terminate, pursuant to § 2802(b)(2)(C), citing, as the predicate event, its decision not to renew the underlying lease of the service station premises. The text of the relevant paragraphs of § 2802(b) & (c) follows:

(b) (2) grounds for termination of a franchise [include:]
(C) The occurrence of an event which is relevant to the franchise relationship and as a result of which termination of the franchise or nonrenewal of the franchise relationship is reasonable, if such event occurs during the period the franchise is in effect and the franchisor first acquired actual or constructive knowledge of such occurrence—
(i) not more than 120 days prior to the date on which notification of termination or nonrenewal is given, if notification is given pursuant to section 2804(a) of this title,
(c) As used in subsection (b)(2)(C) of this section, the term “an event which is relevant to the franchise relationship and as a result of which termination of the franchise or nonrenewal of the franchise relationship is reasonable” includes events such as—
(4) loss of the franchisor’s right to grant possession of the leased marketing premises through expiration of an underlying lease, if the franchisee was notified in writing, prior to the commencement of the term of the then existing franchise—
(A) of the duration of the underlying lease, and
(B) of the fact that such underlying lease might expire and not be renewed during the term of such franchise (in the case of termination) or at the end of such term (in the case of nonrenewal);

When compared with the other enumerated events which make franchise termination permissible, it is obvious that only subsection (4), quoted above, contains its own notice requirements. For the reasons provided below, it is similarly clear that the notice requirement contained in § 2802(c)(4)(A) obviates the need for the recency requirement found in § 2802(b)(2)(C)(i). See Veracka v. Shell Oil Co., 655 F.2d 445, 449 (1st Cir.1981) (deeming the § 2802(b)(2)(C)(i) requirement to be an unnecessary notice requirement); Gaspar v. Chevron Oil Co., 490 F.Supp. 971, 975 (D.N.J.1980) (same).

Elaborating upon the four permissible grounds for termination found in § 2802(b)(2)(A) through (D), the Senate Report described the rationale of the § 2802(b)(2) time limitations (recency requirements) as follows:

Specific conditions are attached to each of these grounds, including time limitations which are imposed to preclude a franchisor from basing termination or non-renewal upon old and long forgotten events. The time limitations are designed to provide adequate opportunity for a franchisor to evaluate a potential grounds [sic] for franchise termination whether to terminate the franchise or not to renew the franchise relationship.

S.Rep. No. 731, 95th Cong. 2d Sess. 33 (1978), reprinted in 1978 U.S.Code Cong. & Ad.News 873, 892 [hereinafter cited as 5. Rep. No. 95-731]. Thus, the recency requirements protect franchisees, by preventing franchisors from “reaching into the distant past for [a termination] excuse that the statute allows” Veracka, 655 F.2d at 449, as well as franchisors, by affording them an adequate opportunity for deliberation. Conversely, the notice requirements of § 2804 are more singularly intended for the benefit of franchisees. See S.Rep. No. 95-731 at 40.

Undoubtedly, Congress intended that franchisors would ordinarily have to fulfill both the recency and notice requirements. See 15 U.S.C. § 2802(b)(1). Typically, the two requirements work well together. For example, if a franchisee willfully adulterates gasoline, the franchisor must decide within 120 days of the time it first acquired knowledge of the adulteration whether to terminate the franchise relationship. See 15 U.S.C. §§ 2802(b)(2)(C)(i) and (c)(10). If it so decides, a franchisee must receive at least ninety days notice of the termination decision. 15 U.S.C. § 2804(a).

This case demonstrates that the recency requirement merely becomes a redundant notice requirement when termination is justified by reference to the expiration of an underlying lease. Section 2802(c)(4) requires a franchisor to notify a franchisee of the existence of an underlying lease and § 2804(a)(1) requires notification of termination due to the expiration of the same. Obviously, a franchisor does not “learn” of its own decision not to renew an underlying lease in the manner that it might acquire knowledge of the other events enumerated in § 2802(c). Although” the recency requirement could be applied in this context, the result would be to require a franchisor to inform a franchisee of its decision not to renew an underlying lease within 120 days after it made that decision. This would be inconsistent with § 2804(a) in which Congress has explicitly prescribed a minimum termination notification period of ninety days. In order to apply the more specifically applicable provision and because the underlying rationale of § 2802(b)(2)(C)(i), to prevent termination by reference to otherwise forgotten events, would not be advanced by its application here, we hold that, in order to satisfy the PMPA, Mobil need have notified the plaintiff, in timely fashion, only of the existence of an underlying lease and of the effect of its decision not to renew the same (i.e., franchise termination). Thus, we shall

only require strict compliance, see, e.g., Escobar v. Mobil Oil Corp., 678 F.2d 398, 400 (2d Cir.1982), with the criteria of §§ 2802(c)(4) and 2804(a).

C. The Adequacy of Mobil’s Notification of an Underlying Lease

Section 2802(c)(4) requires a franchisor to notify a franchisee “[1] in writing, [2] prior to the commencement of the term of the then existing franchise — [3] of the duration of the underlying lease, and [4] of the fact that such underlying lease might expire and not be renewed during the term of such franchise____” On July 7, 1982, Mobil sent a two paragraph letter to the plaintiff. Because the franchise agreement was executed on the same day and the term of the franchise did not commence until March 1,1983, this letter was received “prior to the commencement of the term of the then existing franchise.” It read as follows:

Please be advised that the premises which Mobil Oil Corporation proposes to lease to you is subject to an underlying lease to Mobil dated November 6, 1945. The term of the underlying lease commenced April 1, 1980 and is scheduled to expire on March 31, 1985.
The above described underlying lease will expire and may not be renewed during the term of your franchise agreement. In such event, Mobil would lose its right to grant possession of the lease premises to you and accordingly, be required to terminate its agreement and its relationship with you.

See Exhibit F of the McClintock Affidavit. Although the letter’s second paragraph succintly advises plaintiff of the possibility of termination, its first paragraph is no model of clarity. Our inquiry, however, is a limited one. At this point, we need only determine whether the first paragraph advises plaintiff of the duration of the underlying lease. Notwithstanding its needless mention of the 1945 commencement date, we find that it did so advise. Thus, defendant gave plaintiff adequate notice, pursuant to § 2802(c)(4), of the existence and potential impact of an underlying grounds lease.

D. Good Faith and Best Efforts

Before considering whether Mobil gave adequate notice of its decision to terminate, plaintiff maintains that we must decide whether Mobil acted in bad faith by leading the plaintiff to believe that it would use its best efforts to renew the underlying lease.

Mobil first leased the service station premises, for a period of five years, from Ms. Gonserkevis in 1945. The lease was subsequently renewed seven times, each for periods of five additional years. Plaintiff was aware of these renewals but has not presented any specific facts to support his contention that he was led to believe Mobil would renew the lease for an eighth time. Additionally, plaintiff has not suggested that any retaliatory motive led to Mobil’s decision not to renew the underlying lease. Essentially, plaintiff’s contention, which we must accept as true, is that he reasonably inferred that Mobil would use its best efforts to avoid franchise termination, due to the expiration of an underlying lease, for three reasons: Mobil had repeatedly renewed the lease before, Mobil advised him only of the possibility that it might lose possession, and Mobil agreed to permit him to operate his service station until one year after the lease was scheduled to expire. We hold that this claim cannot succeed under the PMPA. Plaintiff’s reasonable expectation has not engendered a legally enforceable right. Specifically, we hold that thd PMPA does not obligate a franchisor to advise a franchisee that it can permissibly terminate their franchise agreement by electing not to renew an underlying lease or to use its best efforts to renew an underlying lease, even if, at the time of its execution, the term of the franchise agreement exceeds the remaining term of the applicable underlying lease. Our reasons follow.

At least four courts have suggested, in dicta, that a franchisor may not fail to renew an underlying lease in bad faith. See Rogue Valley Stations, Inc. v. Birk Oil Co., 568 F.Supp. 337, 347-48 n. 6 (D.Or.1983) (collecting cases). None, however, has been obligated to delineate the contours of this pronouncement because none has actually been confronted with improper franchisor motive. Other courts have found that § 2802(c)(4) simply does not contain a good faith requirement. See, e.g., Ohandjanian v. Mobil Oil Corp., 1984 Bus. Franchise Rep. (CCH) 118249 (C.D.Cal.1984) . Our holding does not extend to the question of bad faith because none has been alleged. Nevertheless, we have been asked to decide whether a franchisor is obligated to be candid about the likelihood of franchise termination vis-a-vis its intention to renew an underlying lease. Thus, we begin our inquiry by considering the circumstances under which the PMPA requires a franchisor to act reasonably or in good faith.

The Act contains an explicit requirement of good faith in a number of its franchise termination or nonrenewal justifications. See 15 U.S.C. §§ 2802(b)(2)(E) and (b)(3)(A) & (D). We cannot ignore its exclusion of the same in § 2802(c)(4). Although § 2802(b)(2)(C) requires predicate events to render franchise termination “reasonable,” § 2802(c)(4) defines the expiration of an underlying lease as one of the events which makes the termination of a franchise “reasonable.” Moreover, the legislative history of § 2802(c)(4) makes it clear that a franchisor’s election not to renew an underlying lease may permissibly result in its expiration. See S.Rep. 95-731 at 38. In fact, the Act’s legislative history only cautions that franchise termination should:

not be permitted based upon the expiration of a[n underlying] lease which does not evidence the existence of an arms length relationship between the parties [to the lease] and as a result of the expiration of which no substantive change in control of the premises results.

Id. Thus, Congress’ concern, in this regard, seems only to extend to a confirmation that a franchisor, which seeks to terminate because of an underlying lease, is a bona fide lessee and not someone who creates a fictitious leasehold in order to be able to exploit § 2802(c)(4). One exception, regarding a franchisor’s attempt to frustrate a franchisee’s state created right to assign the franchise is noted but is also, of course, irrelevant to our present decision. See id. at 43.

The Act does not explicate nor imply any other restraints on a franchisor’s ability to terminate pursuant to § 2802(c)(4).

There is no question, in this case, about Mobil’s bona fide lessee status. Clearly, a substantive change in the control of the premises would have resulted had not the plaintiff arranged to rent from Ms. Gonserkevis directly. Thus, the PMPA presents no equitable or fairness obstacles to the defendant’s motion for summary judgment.

E. The Adequacy of Mobil’s Termination Notice

Plaintiff’s final and most strenuously asserted argument is that Mobil’s notice of termination was defective. It is uncontested that the notice was written, posted by certified mail, and received more than ninety days before it became effective. See § 2804(a)(2), (c)(1) & (c)(2). Plaintiff has, however, been able to argue colorably that the notice did not fulfill the informational criteria set out in § 2804(c)(3). These require that every termination notice must contain:

(A) a statement of intention to terminate the franchise or not to renew the franchise relationship, together- with the reasons therefor;
(B) the date on which such termination or nonrenewal takes effect; and
(C) the summary statement prepared under subsection (d) of this section [by the Secretary of Energy].

In relevant part, Mobil’s letter reads:

The expriation [sic] of Mobil’s underlying lease also provide [sic] grounds for the nonrenewal [sic] of our franchise relationship under the Petroleum Marketing Practices Act. Pursuant to 15 U.S.C. Sec. 2802(b)(3) [sic], Mobil elects to and hereby terminates said franchise relationship with you effective March 31, 1985.

See Exhibit G of the McClintock Affidavit. Clearly, Mobil’s clumsy expression fulfilled the second and third criteria of § 2804(c)(3). Its subparagraph (A) compliance is not, however, self-evident.

Mobil advised of nonrenewal when it meant to advise of termination. Accordingly, Mobil cited § 2802(b)(3) when it should have cited § 2802(b)(2)(C) and (c)(4). Mobil’s expression was similarly confused in the paragraph which preceded the one quoted above. There, Mobil reminded the plaintiff that loss of its underlying lease provided grounds for termination, see paragraph 14(B)(h) of the Retail Dealer Contract (RDC) attached as Exhibit E to the McClintock Affidavit, but concluded: “Accordingly, Mobil elects to and hereby nonrenews its Retail Dealer Contract and Service Station Lease with you effective March 31, 1985.” Exhibit G of the McClintock Affidavit (emphasis supplied). The PMPA distinguishes clearly between the termination and the nonrenewal of a franchise agreement. See 15 U.S.C. § 2802(b)(2) & (b)(3). Paragraph 14 of the RDC between Mobil and the plaintiff does so as well. Mobil’s notice of termination does not.

In enacting the PMPA, Congress set out to provide franchisees with “meaningful protections from arbitrary or discriminatory terminations.” S.Rep. 95-731 at 18. Nevertheless, “Congress chose to allow a franchisor to terminate a franchise when an underlying lease expires without making a further showing that the decision was made in good faith or in the exercise of reasonable business judgment.” Ohandjanian v. Mobil Oil Corp., 1984 Bus. Franchise Rep. (CCH) If 8249 at 14,799 (C.D.Cal.1984). Section 2802(c)(4) and its legislative history effectively define termination, due to an election not to renew an underlying lease, to be reasonable. The rule that unambiguous statutory language is ordinarily conclusive is an important corollary to the establishment of Congress as the law making body and the judiciary as the law interpreting body. Thus, we may not ask Mobil to justify its decision not to renew its underlying lease or to provide notification not required by statute. We can only determine whether it adequately noticed the plaintiff of the existence of an underlying lease and of the expiration of the same.

Mobil’s termination notice confused the termination and nonrenewal decisions as well as the associated statutory citations. Thus, plaintiff did not complain frivolously of deficient notice. Nevertheless, the termination notice contained all of the necessary information and its import was certainly not lost on the plaintiff, as his subsequent actions demonstrate. Cf. Davy v. Murphy Oil Corp., 488 F.Supp. 1013, 1016 (W.D.Mich.1980) (franchisor’s intention to terminate was not clearly expressed). Plaintiff knew when and why his franchise agreement would terminate. We shall not construe § 2802(c) in an unreasonably rigid fashion in order to compensate for our inability to append subparagraphs (b)(2)(C) and (c)(4) of § 2802.

III. CONCLUSION

Congress has required a showing of a franchisor’s good faith when unfavorable business conditions result in the termination or nonrenewal of a franchise. 15 U.S.C. §§ 2802(b)(2)(E) & (b)(3). Congress has instructed courts to “carefully scrutinize” termination justifications proffered as reasonable, pursuant to § 2802(b)(2)(C), but not enumerated in § 2802(c). S.Rep. 95-731 at 38. Yet, Congress has determined that a franchisor may prematurely terminate a franchise agreement, without liability, by electing not to renew an underlying premises lease if it merely provides timely notice of the existence and expiration date of the same. In this case, Mobil’s notices were adequate.

Accordingly, we hold that Mobil permissibly terminated the subject franchise and shall issue an order granting Mobil’s motion for summary judgment. We shall deny Mobil’s request for counsel fees because plaintiff’s challenge to the adequacy of its termination notice was not frivolous.

      . Docket No. C2340-85, Chancery Division of the Superior Court of New Jersey in Gloucester County.

      . On June 6, 1985, Mobil made its last gasoline delivery and on June 10, Mobil removed all of its identification signs.

      . Plaintiff's motion for a preliminary injunction was also supported by allegations that the defendant was.obligated to alleviate environmental concerns caused by an unsound gas tank. Before oral argument, however, Mobil removed the tank, as well as related environmental concerns, at its own expense.

      . Mobil has not argued that it is entitled to give notice pursuant to § 2804(b)(1), which permits less than the 90 days notice required by § 2804(a).

      . The other enumerated events contained in § 2802(c), which make termination reasonable are:
      (1) fraud or criminal misconduct by the franchisee relevant to the operation of the marketing premises;
      (2) declaration of bankruptcy or judicial determination of insolvency of the franchisee;
      (3) continuing severe physical or mental disability of the franchisee of at least 3 months duration which renders the franchisee unable to provide for the continued proper operation of the marketing premises;
      (5) condemnation or other taking, in whole or in part, of the marketing premises pursuant to the power of eminent domain;
      (6) loss of the franchisor's right to grant the right to use the trademark which is the subject of the franchise, unless such loss was due to trademark abuse, violation of Federal or State law, or other fault or negligence of the franchisor, which such abuse, violation, or other fault or negligence is related to action taken in bad faith by the franchisor;
      (7) destruction (other than by the franchisor) of all or a substantial part of the marketing premises;
      (8) failure by the franchisee to pay to the franchisor in a timely manner when due all sums to which the franchisor is legally entitled;
      (9) failure by the franchisee to operate the marketing premises for—
      (A) 7 consecutive days, or
      (B) such lesser period which under the facts and circumstances constitutes an unreasonable period of time;
      (10) willful adulteration, mislabeling or misbranding of motor fuels or other trademark violations by the franchisee;
      (11) knowing failure of the franchisee to comply with Federal, State, or local laws or regulations relevant to the operation of the marketing premises; and
      (12) conviction of the franchisee of any felony involving moral turpitude.

        . Moreover, if all three statutory provisions were enforced, a franchisor would be required to reveal each of the following at the indicated time: (1) the existence and potential effect of an underlying lease, before the commencement of the franchise term (pursuant to § 2802(c)(4)); (2) its decision not to renew the underlying lease, within 120 days after it was made (pursuant to § 2802(b)(2)(C)(i); and (3) the result of its decision (i.e., franchise termination), at least ninety days before the termination became effective (pursuant to § 2804(a)). Clearly, it would be pointless to require notification pursuant to both § 2804(a) and § 2802(b)(2)(C)(i).

      . Notwithstanding the protestations of plaintiff, it is clear that Congress intended to include "a decision by the franchisor not to exercise an option to renew the underlying lease” within the ambit of § 2802(c)(4). See, e.g., Veracka, 655 F.2d at 448 (quoting S.Rep. at 38). Moreover, Congress has not indicated that a franchisee should be specifically informed that a franchisor may lose the right to grant possession by electing not to renew an underlying lease. While this proposition comports with principles of property law, it likely surprises a great many service station operators. As we read 15 U.S.C. §§ 2802(c)(4) and 2804(a), however, their surprise, even if reasonable, is irrelevant to the question of whether a termination was wrongful.

      . It is clear that Mobil's letter of July 7 adequately fulfills the other § 2802(c)(4) criteria.

      . Mobil’s letter noted the effective date of termination and, pursuant to § 2804(c)(3)(C), the required PMPA summary statement was enclosed.

      . In the context of this case, Mobil’s counsel states the proposition succintly: "Mobil was not required to exercise good faith in its termination of plaintiff’s franchise, any possible fact question regarding good faith is irrelevant____” Defendant’s Reply Brief at 11.


source: Caselaw Access Project

author: BILLINGS, District Judge.

license: Public Domain

text:
    David JONES v. Margaret HECKLER, Secretary of Health & Human Services.
    Civ. A. No. 84-104.
    United States District Court, D. Vermont.
    July 18, 1985.
    As Amended Sept. 11, 1985.

      Elliot M. Burg, South Royalton Legal Clinic, South Royalton, Vt., for plaintiff.
    Christopher Baril, Asst. U.S. Atty., Rut-land, Vt., for defendant.
   MEMORANDUM OF DECISION

BILLINGS, District Judge.

Plaintiff, David Jones, has objected to the Magistrate’s Report and Recommendation (Report) filed May 7, 1985, pursuant to 28 U.S.C. § 636(b)(1)(C). In his Report, the Magistrate concluded that the decision of the Secretary of Health and Human Services (Secretary) denying plaintiff’s application for Disability Insurance Benefits (DIB) was supported by substantial evidence and, further, that the Secretary’s failure to call a vocational expert to testify at the administrative hearing was not legal error. The plaintiff’s objections to the Magistrate’s Report were submitted on written and oral argument.

The Court has considered the record presented for review, together with the arguments advanced by counsel at the hearing and in their respective memoranda. For the reasons that follow, the Court adopts Magistrate’s Report in its entirety, and we further hold that the Secretary’s decision denying plaintiff’s application for DIB benefits is both supported by substantial evidence and devoid of legal error.

PROCEDURAL HISTORY

On June 30, 1982, plaintiff filed applications for Social Security Income (SSI) and DIB, claiming disability to work since November, 1981, due to mental illness. On July 30, 1982, after being informed by the Social Security Administration that his insured status for DIB expired on December 31, 1975, plaintiff amended his application to claim onset of disability in 1974.

Plaintiff’s applications were denied initially and again upon reconsideration. Plaintiff filed a request for a hearing before an Administrative Law Judge (AD). A de novo hearing was held before AD Henry Milne on May 5, 1983. The AD ruled that plaintiff was disabled since June 30, 1982 (the date of his application) and, therefore, was entitled to SSI. However, the ALJ denied plaintiff DIB since his insured status had expired on December 31, 1975. In other words, the AU concluded plaintiff failed to demonstrate that he was disabled during the period of his insured status.

The Appeals Council affirmed the ALJ’s ruling on January 30, 1984, thus rendering the AU’s ruling the final decision of the Secretary. Plaintiff then filed a timely appeal to this Court, pursuant to 42 U.S.C. § 405(g).

FACTUAL BACKGROUND

The facts presented in the record are correctly reported by the Magistrate and are accepted without recitation except to the extent that the Magistrate failed to report any non-medical evidence contained in the administrative record below. To that extent, the Court has considered all the lay evidence presented by plaintiff, see, infra at 281, but nevertheless holds that such evidence does not affect the outcome of their case.

DISCUSSION

The issue before the Magistrate was whether the Secretary’s decision that plaintiff was not disabled on or before December 31, 1975, is supported by substantial evidence and whether the Secretary committed error by failing to call a vocational expert. As mentioned above, the Magistrate found that the Secretary’s decision was supported by ample evidence and, further, that the Secretary was not legally bound to call a vocational expert to testify at the administrative hearing.

Plaintiff has raised three specific objections to the Magistrate’s Report. The first is that the Magistrate did not give proper weight to the opinions offered by plaintiff's treating physicians. The second objection is that the Magistrate erroneously concluded that there was no lay testimony or evidence on which to bottom a conclusion that the post-1976 medical evidence may be retrospectively applied to plaintiff’s condition in 1975. The third and final objection to the Report is that the Magistrate failed to consider the argument that the Secretary did not meet her burden to produce expert evidence that there are a sufficient number of jobs in the national economy that persons with plaintiff’s functional limitations could do.

A person is “disabled” within the meaning of the Social Security Act, entitling him to benefits, if he is unable “to engage in any substantial gainful activity by reason of a medically determinable physical or mental impairment which can be expected to last for a continuous period of not less than 12 months.” See 42 U.S.C. § 1382(c). Disability claims are to be evaluated by a five-part analysis:

First, the Secretary considers whether the claimant is currently engaged in substantial gainful activity. If he is not, the Secretary next considers whether the claimant has a- “severe impairment” which significantly limits his physical or mental ability to do basic work activities. If the claimant suffers such an impairment, the third inquiry is whether, based solely on medical evidence, the claimant has an impairment which is listed in Appendix 1 of the regulations ... Assuming the claimant does not have a listed impairment, the fourth inquiry is whether, despite the claimant’s severe impairment, he has the residual functional capacity to perform his past work. Finally, if the claimant is unable to perform his past work, the Secretary then determines whether there is work which the claimant could perform.

Berry v. Schweiker, 675 F.2d 464, 467 (2d Cir.1982).

In determining whether a claimant is disabled the Secretary must consider (1) objective medical facts and clinical findings, (2) diagnoses and medical opinions of examining physicians, (3) the claimant’s subjective evidence of pain and physical incapacity as testified to by himself and others who observed him, and (4) the claimant’s age, educational background, and work history. Carroll v. Secretary of HHS, 705 F.2d 638, 642 (2d Cir.1983); Parker v. Harris, 626 F.2d 225, 231 (2d Cir.1980); Marcus v. Califano, 615 F.2d 23, 26 n. 2 (2d Cir.1972).

In this case, plaintiff concedes that there is little or no medical evidence concerning the claimed period of disability, from 1974 up to and including December 31, 1975. However, he claims medical evidence from plaintiffs treating physicians who examined him in December of 1976, in 1977 and during the 1982-83 year, may be relied upon to draw conclusions about plaintiffs medical condition on or prior to December 31, 1975. In this regard, plaintiff relies primarily on reports submitted by Drs. Metoyer and Rasmussen, neither of whom treated plaintiff prior to 1977.

A treating physician’s opinion may be applied retroactively to draw conclusions about a claimant’s medical condition prior to treatment. Dousewicz v. Harris, 646 F.2d 771 (2d Cir.1981). That opinion, however, is not entitled to the same weight as otherwise would be given if the examination was contemporaneous with the claimed period of disability. Id. at 774. See also McCarthy v. Schweiker, 529 F.Supp. 473, 476 (S.D.N.Y.1982). Rather, a treating physician’s retroactive opinion “must be evaluated in terms of whether ‘it is predicated upon “medically accepted clinical diagnostic technique” ’ and ‘whether considered in light of the entire record, it establishes the existence of a “physical impairment” ’ ” during the alleged period of disability. Dousewicz, supra, at 774, quoting Stark v. Weinberger, 497 F.2d 1092, 1097 (7th Cir.1974).

To be sure, the AU’s decision is not a paragon of clarity, and it is unclear whether he gave proper weight to the retroactive opinions.of plaintiff’s treating physicians. Nonetheless, the absence of an express rationale does not prevent this Court from upholding the AU’s ruling, since portions of the AU’s ruling and the evidence before him indicate that his ruling was supported by substantial evidence.

In this case, however, the plaintiff has failed to show, as is required by Dousewicz, that the opinions of Drs. Metoyer and Rasmussen as to plaintiff’s medical condition on or before December 31, 1975, were based on a “medically accepted clinical diagnostic technique” rather than simple conjecture by an expert. Second, even if the treating physicians’ opinions were predicated on accepted clinical evidence, we cannot say those opinions are sufficiently probative of plaintiff’s medical condition in 1975, because those opinions are, in fact, internally inconsistent and are contradicted by other medical evidence of record.

For example, although Dr. Metoyer’s 1983 report indicates that plaintiff is not capable of working a 40 hour week, and that “historically” plaintiff must have been disabled in 1975, her 1977 report states that plaintiff had appropriate affect, no significant memory problems, no obvious thought process defect and no impairment of judgment or insight. (Tr. 153, 201) True, Dr. Metoyer saw plaintiff in 1977 after he tried to commit suicide by overdose and, in her report of that incident, she stated that plaintiff had a “longstanding inadequate adjustment to life”. However, in that same report she also concluded that plaintiff was not a latent schizophrenic, but, at worst, plaintiff suffered from a borderline personality and could be vulnerable to a schizophrenic episode. (Tr. at 202) Thus, apart from her reference to plaintiff’s “longstanding” adjustment problems, there is inadequate evidence in Dr. Metoyer’s 1977 reports to conclude that plaintiff was disabled in 1975.

Likewise, Dr. Rasmussen’s reports are self-contradictory. Although he stated plaintiff’s pathological symptoms had remained the same for many years, he also noted that plaintiff’s symptoms had gradually deteriored over time. Additionally, although he concluded that plaintiff was likely disabled in 1975, he stated in a 1983 questionnaire that plaintiff had been afunctional with respect to his occupational and social functioning only for the last four years.

Dr. Rasmussen’s conclusions regarding plaintiff’s medical condition in 1975 are also contradicted by Dr. Metoyer’s 1977 conclusions that plaintiff had appropriate affect and unimpaired judgment. Additionally, both Dr. Rasmussen’s and Dr. Metoyer’s opinions regarding plaintiff’s medical condition in 1975 are weakened by Dr. Wright’s conclusion in 1972 that plaintiff had no mental disorder. Clearly, then, the opinions of Drs. Metoyer and Rasmussen as to plaintiff’s medical condition in 1975 are contradicted by significant medical evidence in the record, including their own findings.

The next question is whether the non-medical evidence of record sufficiently supports the treating physicians retroactive opinions to warrant a conclusion that plaintiff was disabled in 1975. In support of his claim that he was disabled in 1975, plaintiff points to the following “lay” evidence:

Plaintiff was involved in substance abuse at age 13 (1966), Tr. 243, and was homosexually raped that same year. Tr. 147. At 16, he attempted suicide, Tr. 324, and dropped out of school because of bad feelings about his physical appearance. Tr. 165. In August, 1971, plaintiff was evaluated as “withdrawn” and the product of an “unsettled home life,” and the next year (after Dr. Wright’s evaluation) he was considered by his psychologist to have a passive-aggressive personality and “schizi tendencies”. Tr. 144. His brief enlistment in the Army in 1973 was characterized by substance abuse, Tr. 192, 264, a “nervous breakdown” with withdrawal and depression, Tr. 269, disturbed dreams, some degree of paranoia and, in the end, a discharge following four months of out-patient psychiatric counseling. Tr. 150. He has been self-conscious about his “shakiness” since “early in life”, Tr. 195, 266, and test results suggest “profound isolation” in his early years. Tr. 281. His work history is “extremely poor.”

However, like the medical evidence in the record this “lay” evidence leaves a gap in the testimony during a critical period, namely from 1973 when plaintiff was discharged until December, 1976, when plaintiff was admitted to Northeast Kingdom Mental Health Services. This gap is fatal to plaintiff’s case, for we hold there must be some evidence, either medical or lay, during the claimed period of disability to corroborate medical testimony which a claimant seeks to apply retroactively. See, e.g., Dousewicz v. Harris, supra, at 774 (plaintiff submitted “considerable” evidence, including operations during relevant period, to corroborate doctors’ opinion, derived through later examinations, that plaintiff was disabled during claimed period); Basinger v. Heckler, 725 F.2d 1166 (8th Cir.1984) (gap in medical testimony during plaintiff’s insured status was supplemented by lay testimony from relatives and friends regarding plaintiff’s condition during relevant period); Boyd v. Heckler, 704 F.2d 1207 (11th Cir.1983) (testimony from plaintiff and her family regarding pain and inability to work during period in question was sufficient to offset gap in the medical testimony). Thus, even when viewed in light of all the other evidence in the record, we cannot say that the post-1976 medical evidence in the record combined with the pre-1974 lay evidence is sufficient to establish a disability on or before December 31, 1975. This is especially so when post-1975 lay evidence — not mentioned by plaintiff — is taken into account; in the early 1980’s plaintiff regularly participated in a band.

Finally, plaintiff contends that the Secretary was bound to call a vocational expert to testify at the administrative hearing. This argument presupposes that the burden of proof had shifted to the Secretary to establish there were other jobs in the national economy that plaintiff could do despite his functional limitations.

As mentioned above, supra, at 279, the determination of a disability involves a five-step test. If at any stage-of the inquiry the AU determines that a claimant is or is not disabled, the inquiry ends there. Berry v. Schweiker, 675 F.2d 464, 467 (2d Cir.1982). The burden is on the claimant to satisfy the first four elements of the test. However, assuming the claimant satisfies his burden, the burden then shifts to the Secretary to establish the fifth step of the test. At that point the Secretary must establish that the claimant, despite his disability, can do other work. See, 20 C.F.R. § 404.1520(f)(1). To meet this burden, the Secretary must ordinarily call a vocational expert to testify about the availability of jobs in the national economy.

In this case, however, the plaintiff failed to satisfy the second of the first four elements of the disability test and, therefore, the burden never shifted to the Secretary. Although his decision does not specifically so state, it is clear the AU found that plaintiff failed to establish he had a severe impairment on or before December 31, 1975. See 20 C.F.R. § 404.520(c). This determination does not require consideration of age, education or prior work experience. Id.

The Magistrate’s conclusions that the Secretary’s findings are supported by substantial evidence is well founded in the record. Likewise, the Magistrate’s conclusion that the Secretary was not required to call a vocational expert is supported by law. Accordingly, the Magistrate’s recommended decision is accepted. Plaintiff’s motion for summary judgment is DENIED and the Secretary’s motion for an order affirming her decision is GRANTED.

It is SO ORDERED.

      . In his Memorandum In Support of Plaintiff's Objection to the Magistrate’s Report and Recommendation, at 2, plaintiff states: “[i]ndeed there are no medical reports available between May 1972, the date of an opinion by Psychiatrist Alice Wright at Northeast Kingdom Mental Health Services (NKMHS), and December 1976, when plaintiff resumed treatment at NKMHS."

        . The opinions of a treating physician whose diagnosis is contemporaneous with the claimed period of disability are binding on the Secretary unless contradicted by substantial evidence. Bluvband v. Heckler, 730 F.2d 886, 893 (2d Cir.1984), quoting Bastien v. Califano, 572 F.2d 908, 912 (2d Cir.1978).


author: WALINSKI, District Judge.

text:
    William P. ALLINDER, et al., Plaintiffs, v. STATE OF OHIO, et al., Defendants.
    No. C 84-7395.
    United States District Court, N.D. Ohio, W.D.
    July 19, 1985.

      Gregory Arnold, Toledo, Ohio, for plaintiffs.
    John K. Maguire, Asst. Atty. Gen., Columbus, Ohio, for defendants.
   MEMORANDUM and ORDER

WALINSKI, District Judge.

This matter is before the Court on a motion for partial summary judgment filed by plaintiffs, William P. Allinder and Caroline I. Allinder. Defendants have filed a memorandum in opposition to the motion for summary judgment. Also before the Court is plaintiffs’ reply to defendants’ memorandum in opposition. Plaintiffs’ motion for partial summary judgment seeks a declaration of this Court that the Ohio Department of Agriculture’s apiary inspection program is an unconstitutional exercise of state power in that plaintiffs’ apiaries are being inspected by the state without a search warrant, without their prior knowledge and outside their presence; and thus constitute an unreasonable and unlawful search of their property. Plaintiffs further seek a declaration that Ohio Rev. Code § 909.05 is unconstitutional to the extent that it provides legislative authority for the Ohio Department of Agriculture to conduct administrative inspections of plaintiffs’ apiaries without securing a search warrant.

On May 9, and 10, 1984, the parties presented testimony and documentary evidence on this issue at a hearing before the Court on plaintiffs’ motion for preliminary injunction. In Findings of Fact and Conclusions of Law (“Findings”), filed on July 30, 1984, this Court concluded that the plaintiffs failed to establish irreparable harm and, therefore, denied the motion for preliminary injunction. The July 30th opinion, however, considered at length the warrant requirements relating to administrative searches and found that plaintiff established a substantial likelihood of success on the merits of their claim. The opinion further questioned the existence of material issues of fact concerning the constitutionality of the warrantless search provision of the Ohio Apiary Inspection Law. O.R.C. § 909.05. Plaintiffs then filed the motion sub judice.

Rule 56, Fed.R.Civ.P. directs the disposition of a motion for summary judgment. In relevant part Rule 56(c) states:

The judgment sought shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law ...

In ruling on a motion for summary judgment, the Court’s function is to determine if any genuine issue exists, not to resolve any factual issues, and to deny summary judgment if such an issue exists. United States v. Diebold, Inc., 369 U.S. 654, 82 S.Ct. 993, 8 L.Ed.2d 176 (1962); Tee-Pak, Inc. v. St. Regis Paper Co., 491 F.2d 1193 (6th Cir.1974). Further, “[i]n ruling on a motion for summary judgment, the Court must construe the evidence in its most favorable light for the party opposing the motion and against the movant.” Bohn Aluminum & Brass Corp. v. Storm King Corp., 303 F.2d 425, 427 (6th Cir.1962). To summarize, if the movant demonstrates that he is entitled to a judgment as a matter of law, then the Court must next weigh the evidence in a light most favorable for the party opposing the motion; if reasonable minds could differ as to a material fact in issue, then a genuine factual dispute exists and the motion for summary judgment must be denied.

Rule 56(e) places a responsibility on the party against whom summary judgment is sought to demonstrate that summary judgment is improper, either by showing the existence of a material question of fact or that the underlying substantive law does not permit such a decision. In relevant part the provisions states:

When a motion for summary judgment is made and supported as provided in this rule, an adverse party may not rest upon the mere allegations or denials of his pleading, but his response, by affidavits or .as otherwise provided in this rule, must set forth specific facts showing there is a genuine issue for trial. If he does not so respond, summary judgment, if appropriate, shall be entered against him.

Rule 56(e), Fed.R.Civ.P.

Plaintiffs’ complaint argues that the Ohio Apiary Inspection Law, O.R.C. § 909.-01 et seq., violates their constitutional rights to be free from (1) unlawful search and seizure and (2) taking property without due process of law. The singular issue upon which plaintiffs seek relief in their motion for partial summary judgment is whether the warrantless search of their apiaries, pursuant to the Ohio Apiary Inspection Law, violates the Fourth Amendment’s prohibition against unreasonable searches. The Court’s present consideration is therefore limited to that issue.

The United States Supreme Court recently reaffirmed the longstanding view that administrative, nonconsensual entry and search of property is governed by the warrant requirement of the Fourth and Fourteenth Amendments. Michigan v. Clifford, 464 U.S. 287, 104 S.Ct. 641, 646, 78 L.Ed.2d 477 (1984). See also Marshall v. Barlow’s Inc., 436 U.S. 307, 311-13, 98 S.Ct. 1816, 1819-20, 56 L.Ed.2d 305 (1978); Camara v. Municipal Court, 387 U.S. 523, 528-33, 87 S.Ct. 1727, 18 L.Ed.2d 930 (1967). The Fourth Amendment’s prohibitions against unreasonable searches was extended to administrative inspections of private commercial property nearly a decade and a half ago. Camara, 387 U.S. at 523, 87 S.Ct. at 1727; See v. City of Seattle, 387 U.S. 541, 87 S.Ct. 1737, 18 L.Ed.2d 943 (1967). The reason for this extension was found in the basic purpose of the amendment, which is “to safeguard the privacy and security of individuals against arbitrary invasions by government officials.” Camara, 387 U.S. at 528, 87 S.Ct. at 1730.

The Fourth Amendment warrant requirement, however, is not without exception. Donovan v. Dewey, 452 U.S. 594, 101 S.Ct. 2534, 69 L.Ed.2d 262 (1982); United States v. Biswell, 406 U.S. 311, 92 S.Ct. 1593, 32 L.Ed.2d 87 (1972); Colonnade Catering Corp. v. United States, 397 U.S. 72, 90 S.Ct. 774, 25 L.Ed.2d 60 (1970). The United States Supreme Court recently stated:

[Ujnlike searches of private homes, which generally must be conducted pursuant to a warrant in order to be reasonable under the Fourth Amendment, legislative schemes authorizing warrantless administrative searches of commercial property do not necessarily violate the Fourth Amendment. See, e.g., United States v. Biswell, 406 U.S. 311 [92 S.Ct. 1593, 32 L.Ed.2d 87] (1972); Colonnade Catering Corp. v. United States, 397 U.S. 72 [90 S.Ct. 774, 25 L.Ed.2d 60] (1970). The greater latitude to conduct warrantless inspections of commercial property reflects the fact that the expectation of privacy that the owner of commercial property enjoys in such property differs significantly from the sanctity accorded an individual’s home, and that his privacy interest may, in certain circumstances, be adequately protected by regulatory schemes authorizing warrantless inspections. United States v. Biswell, supra, at 316 [92 S.Ct. at 1596].

Donovan, 452 U.S. at 598-99, 101 S.Ct. at 2538 (footnote omitted). Courts have been unable to articulate a “ready test” for determining reasonableness other than by balancing the need for the warrantless search against the businessman’s privacy interest. Camera, 387 U.S. at 536-37, 87 S.Ct. at 1734-35. The determinative factors to be considered are, whether the state has shown a substantial need for warrantless searches, whether the industry affected is so closely regulated as to provide notice of the prospect of governmental intrusion and whether the statutory scheme enacted “provides an adequate substitute for a warrant in terms of the certainty and regularity of its application.” Donovan, 452 U.S. at 603, 101 S.Ct. at 2540.

First, the Court has some doubt as to the state’s need for a warrantless search. The defendants argue that warrantless searches are essential to the apiary inspection system to preserve the advantage of surprise. They assert that “[i]t would be a very simple matter for a beekeeper to remove a diseased hive from the inspector’s eyes only to return it to its original position following the inspection.” This argument is unpersuasive in light of the testimony at the injunction hearing of the state apiarist, who stated that a vast majority of the beekeepers in Ohio are hobbyists. These hobbyists are unfamiliar with the symptoms of the infectious bee diseases, and consider the state inspection for disease to be a worthwhile service. Moreover, testimony indicated that notice to beekeepers is left to the discretion of the individual inspector. In the instant case, the deputy state inspector called the plaintiffs giving them three days notice of an inspection. The Court, therefore, questions the viability of this “surprise” argument and, in turn, questions the state’s showing of need for a warrantless search.

Defendants further submit that obtaining a search warrant for individual apiary inspections would effectively eliminate the apiary inspection program. The state expresses concern as to the administrative burden, as well as the effect the time lapse would have on the program with its unique seasonal nature. This Court is unconvinced, however, that requiring warrants to inspect would impose serious burdens on the inspection system or the courts, would prevent inspections necessary to enforce the statute, or would make the program less effective. As discussed above, it is clear that a great majority of the apiarists can be expected to consent to inspection without a warrant. In those few cases where owners do insist on a warrant, the delay and increased administrative burden will not be so serious as to endanger the inspection program.

Second, the Court must consider whether the beekeeping industry has been “long subject to close supervision and inspection.” Colonnade Catering Corp. v. United States, 397 U.S. 72, 76-77, 90 S.Ct. 774, 776-77, 25 L.Ed.2d 60 (1970). In Marshall v. Barlow’s, Inc., 436 U.S. 307, 313, 98 S.Ct. 1816, 1820, 56 L.Ed.2d 305 (1978), the Supreme Court observed that certain industries have had such a history of close governmental supervision that no reasonable proprietor entering into such a business could have a justifiable expectation of privacy. Balelo v. Baldrige, 724 F.2d 753, 764 (9th Cir.1984). Liquor, firearms and mines are industries found to be “closely regulated.” Colonnade Catering Corp. v. United States, 397 U.S. 72, 90 S.Ct. 774, 25 L.Ed.2d 60 (1970); United States v. Biswell, 406 U.S. 311, 92 S.Ct. 1593, 32 L.Ed.2d 87 (1972); Donovan v. Dewey, 452 U.S. 594, 596, 101 S.Ct. 2534, 2536, 69 L.Ed.2d 262 (1982).

At the injunction hearing and in post-hearing briefs, the defendants argued that “the beekeeping industry in Ohio has been and continues to be closely regulated by the Ohio Department of Agriculture,” and that “the individual beekeepers are aware of the requirements for periodic inspection.” (D. Post-hearing Memo, in Opp. to Prel.Inj., at 13). Testimony presented at the evidentiary hearing, however, did not support these assertions. The state apiarist testified that less than 100% of the beekeepers in Ohio are registered and that only about 85% of those registered are inspected every year. (Inj.Tr. at 33). He testified further that the typical reason for failure to register colonies is beekeepers who are unaware of the registration and inspection requirements. Although the State of Ohio has been registering and inspecting bee colonies since the 1930’s, the state’s evidence fails to prove that such regulation had the pervasiveness and regularity necessary to affect the individual proprietor’s legitimate expectation of privacy. Unlike the federal government’s control over the alcohol, firearms, and mining industries, the beekeeping industry is not “pervasively regulated” by the Department of Agriculture under the Ohio Apiary Inspection Law. See Dow Chemical Co. v. U.S., 536 F.Supp. 1355 (E.D.Mich.1982).

Third, the Court must examine the statutory scheme to determine whether it provides “an adequate substitute for a warrant in terms of certainty and regularity of its application.” Donovan, 452 U.S. at 603, 101 S.Ct. at 2540. The record indicates that unlike the Coal Mine Safety and Health Act examined in Donovan and found to provide a predictable, defined regulatory presence, the Ohio Apiary Inspection Law leaves the frequency of inspections to the unchecked discretion of the local inspectors. Upon review of the evidence presented at the preliminary injunction hearing, this Court concluded, in its Findings of July 30, 1984, that the apiary statute gives the field inspector unbridled discretion as to when to search and whom to search. (Findings, at 10). The defendants contend that this preliminary conclusion was erroneous.

Defendants argue that apiary inspections are unique in that they are seasonal and can only occur during favorable (warm, dry) weather conditions. (D.Memo. in Opp. S.J. at 10). Moreover, defendants contend that apiary inspectors are not exercising “unbridled” discretion since the department has an annual training program for all apiary inspectors at which each inspector receives the program guidelines and procedures set forth in a training manual. A new inspector will be subjected to extensive field training with a state inspector in his region before conducting inspections on his own. (Inj.Tr. at 142-43).

With reference to plaintiffs’ evidence that the inspection program is conducted in an irregular and erratic fashion, defendant counters stating that plaintiffs’ apiaries have not been inspected in recent years due to litigation by the Allinders in the state courts. The defendants urge that testimony at the hearing established that the goal of the apiary inspection program is to inspect each beekeeper once a year. The record indicates that approximately eighty-five percent of the registered beekeepers are inspected each year. (Inj.Tr. at 33). It is the defendants’ contention that this is a statistically high rate of inspection considering the unique enforcement problems encountered in an apiary inspection program. Thus, the defendants argue that considering the unique nature of the apiary inspection program and utilizing the criteria set forth in both Marshall and Donovan, this Court should find the certainty, regularity and fairness necessary to render the warrantless searches of apiaries reasonable.

After thorough review of the Ohio Apiary Inspection Law, the transcript of the injunction hearing, the filed affidavits and the memoranda of the parties, the Court concludes that the statute, sub judice, does not provide an adequate substitute for a warrant in terms of certainty, regularity and fairness of its application. The authority to make warrantless searches devolves almost unbridled discretion upon the field inspectors as to when to search and whom to search. Marshall v. Barlow’s, Inc., 436 U.S. 307, 323, 98 S.Ct. 1816, 1825, 56 L.Ed.2d 305 (1978). The existence of this discretion was conceded by defense witnesses several times during the injunction hearing. The state apiarist testified that the inspectors are part-time workers who plan their work as they see fit and that there is no minimum requirements for hours of inspection per week. (Inj.Tr. at 43-45). The inspectors decide when to inspect and whom to inspect. (Inj.Tr. at 44). The state apiarist further testified that the inspectors have to make subjective judgments regarding the presence of disease and that they have the authority to decide whether or not to send a smear sample for verification of the disease in the individual case. (Inj.Tr. at 63). Even the manner of the inspection is left to the discretion of the individual inspector. (Inj.Tr. at 89).

The Ohio Apiary Inspection Law is, therefore, not sufficiently comprehensive and predictable that “the assurance of regularity provided by a warrant is rendered unnecessary.” Donovan v. Dewey, 452 U.S. 594, 599-02, 101 S.Ct. 2534, 2538. The State of Ohio has failed to limit in any meaningful way the unbridled discretion granted the field inspector by the apiary inspection statute. “Where [the State] has authorized inspection but made no rules governing the procedures that inspectors must follow, the Fourth Amendment and its various restrictive rules apply.” Colonnade Corp. v. United States, 397 U.S. 72, 77, 90 S.Ct. 774, 777, 25 L.Ed.2d 60 (1970). Accordingly, I must conclude that a warrant is constitutionally required to assure an unconsenting apiary owner, who may have little real expectation that his business will be subject to inspection, that the contemplated search is “authorized by statute, and ... pursuant to an administrative plan containing specific neutral criteria.” Marshall v. Barlow’s, Inc., 436 U.S. at 323, 98 S.Ct. at 1826.

In a typical commercial setting, the businessman’s expectation of privacy is rarely at issue in an administrative inspection case. In the instant case, however, the plaintiffs’ commercial setting consists of bee colonies placed on separate parcels of land, located in four Ohio counties. Given the atypical nature of this case, the Court must consider whether the plaintiffs have a reasonable expectation of privacy in light of the open fields doctrine of Hester v. United States, 265 U.S. 57, 44 S.Ct. 445, 68 L.Ed. 898 (1924) and its progeny.

Recently, in Oliver v. United States, 466 U.S. 170, 184, 104 S.Ct. 1735, 80 L.Ed.2d 214 (1984), the United States Supreme Court reaffirmed the vitality of the open fields doctrine. In that case, police discovered marijuana planted on a secluded section of the petitioner’s farm, in a fenced area with no trespassing signs posted around the property. Granting a motion to suppress evidence, the district court concluded that this was not an “open” field because the petitioner “had done all that could be expected of him to assert his privacy in the area of the farm that was searched.” Id. 104 S.Ct. at 1738. The Court of Appeals for the Sixth Circuit reversed the district court. The Court of Appeals reasoned that the “human relations that create the need for privacy do not ordinarily take place” in open fields. Id. at 1739. The United States Supreme Court affirmed this finding concluding that the petitioner’s asserted expectation of privacy in the open field “is not an expectation that ‘society recognizes as reasonable.’ ” Id. at 1741. The Supreme Court stated:

[O]pen fields do not provide the setting for those intimate activities that the Amendment is intended to shelter from government interference or surveillance. There is no societal interest in protecting the privacy of those activities, such as the cultivation of crops, that occur in open fields. Moreover, as a practical matter these lands usually are accessible to the public and the police in ways that a home, an office or commercial structure would not be. It is not generally true that fences or no trespassing signs effectively bar the public from viewing open fields in rural areas.

Id. at 1741. The Oliver case focuses on the legitimate expectation of privacy of the person whose open field was being searched. The Supreme Court examined the petitioner’s legitimate privacy interest and concluded that none existed.

It is true, of course, that petitioner Oliver and respondent Thornton, in order to conceal their criminal activities, planted the marijuana upon secluded land and erected fences and no trespassing signs around the property. And it may be that because of such precautions, few members of the public stumbled upon the marijuana crops seized by the police. Neither of these suppositions demonstrates, however, that the expectation of privacy was legitimate in the sense required by the Fourth Amendment. The test of legitimacy is not whether the individual chooses to conceal assertedly “private” activity. Rather, the correct inquiry is whether the government’s intrusion infringes upon the personal and societal values protected by the Fourth Amendment. As we have explained, we find no basis for concluding that a police inspection of open fields accomplishes such an infringement.

Id. at 1743 (emphasis added). Footnote 13 of the opinion appears to be particularly illustrative of the Supreme Court’s rationale, where it states: “Certainly the Framers did not intend that the Fourth Amendment should shelter criminal activity wherever persons with criminal intent choose to erect barriers and post no trespassing signs.” Id. at 1743 n. 13.

It is clear to the Court that the open fields doctrine as enunciated in Oliver is not applicable to the instant case. Unlike the criminal activity discovered in Oliver, the commercial activity of the plaintiffs is both legal and valuable to society. Beekeeping, by its very nature, must be performed outside and in a natural setting. Legitimate commercial activities which cannot be completely confined or enclosed (i.e. lumber yards, sand mines and rock quarries) remain within the protection of the Fourth Amendment. The opinion in Oliver does not conclude that every activity carried on in an open field is outside constitutional protection. Rather, the Supreme Court stated that “the correct inquiry [to determine the legitimacy of the expectation of privacy] is whether the government’s intrusion infringes upon the personal and societal values protected by the Fourth Amendment.” Oliver, 104 S.Ct. at 1743. This Court concludes that beekeeping is among those commercial activities performed in an open field with a legitimate expectation of privacy which society recognizes as reasonable.

Other considerations take the instant case outside the open fields exception as well. First, the statute authorizing the warrantless search of apiaries does not limit that search to bee colonies found in open fields. The statute in relevant part states the following:

§ 909.05 Power to enter upon premises.
To enforce sections 909.01 to 909.18, inclusive, of the Revised Code, the director of agriculture or his authorized representatives shall have access to and egress from any apiary or to any premises, buildings, or any other place, public or private, in which he has reason to believe that bees, honey, wax, used hives, or used appliances are kept. No person shall resist or hinder the director or his authorized representative in the discharge of their duties under such sections. No occupied dwelling may be entered without a search warrant.

Thus, the express language of the apiary law authorizes the search of any premises, building, or any other place which may store bees, honey, wax, used hives or used appliances. The warrantless search of an apiary or building located on the curtilage around a home, effected by means of a physical intrusion into the curtilage, clearly violates the Fourth Amendment absent exigent circumstances. See Dow Chemical Co. v. United States, 749 F.2d 307 (6th Cir.1984); Robertson v. United States, 165 F.2d 752 (6th Cir.1948). Second, unlike the EPA’s photographic flyover considered by this Circuit in Dow Chemical Co. v. United States, 749 F.2d 307 (6th Cir.1984), the governmental inspection in the instant suit is without question sufficiently intrusive to constitute a “search” triggering the warrant clause of the Fourth Amendment. State apiary inspectors cannot do “walk by” inspection of bee colonies to detect disease. The state approved inspection technique requires opening of the colony, manipulation of the frames, location of the queen and examination of the brood. Clearly, this type of intrusion goes far beyond the public observation non-search involved in the open fields exception to the Fourth Amendment.

For these reasons, the Court concludes that the open fields exception does not take this case out of the purview of the Fourth Amendment. The Court finds that there is no genuine issue as to any material fact related to this claim. The Allinders have proved an actual expectation of privacy in their apiaries, and that expectation is one the society is prepared to recognize as reasonable. The Court further finds that warrantless, nonconsensual inspections of apiaries to be unreasonable' under the Fourth Amendment.

I hold that the Ohio Apiary Inspection Law is unconstitutional insofar as it purports to authorize nonconsensual apiary inspections without a warrant or its equivalent.

For the foregoing reason, it is

ORDERED that the Allinders’ motion for partial summary judgment is hereby granted.

FURTHER ORDERED that the Ohio Department of Agriculture is permanently enjoined and restrained from conducting warrantless, nonconsensual inspections of apiaries pursuant to the Ohio Apiary Inspection Law, O.R.C. § 909.05.


author: BATTISTI, Chief Judge.

text:
    Rory BROWN, et al., Plaintiffs, v. CONSOLIDATED RAIL CORPORATION, Defendant.
    No. C79-1230.
    United States District Court, N.D. Ohio, E.D.
    July 19, 1985.

      Marcia W. Johnson, Asst. U.S. Atty., Cleveland, Ohio, Mary Anne Garvey, Solicitor’s Office, Dept, of Labor, Washington, D.C., for plaintiffs.
    Thomas R. Skulina, Riemer, Oberdank & Skulina, Cleveland, Ohio, for defendant.
   MEMORANDUM OPINION AND ORDER

BATTISTI, Chief Judge.

On January 16, 1985, this Court granted plaintiffs’ motions for summary judgment as to liability and found that plaintiffs were entitled to recover monthly displacement allowances (MDA’s) from defendant. On January 16, 1985, the Court ordered plaintiff to set forth their damages within 30 days. On May 8, 1985, with the Court’s leave for extensions of time, plaintiffs filed their Memorandum on Measure of Damages [hereinafter “Plaintiffs’ Memorandum”]. Defendant was given 14 days to respond but has elected not to do so.

The Court has reviewed plaintiffs’ demand for damages and finds them properly calculated and reasonable. In order to effectuate the statutory purpose of 38 U.S.C. § 2022, to return the veteran to the position he would have been in had he not lost wages or benefits due to the absence caused by military service, see 38 U.S.C. § 2021(b)(2), plaintiffs have calculated their damages by reference to the earnings of a similarly situated employee. Plaintiff uses the amount of $20,129.13 awarded in displacement allowances to a track foreman (who was junior to him) as the figure to which he is entitled. This Court agrees. Hence, plaintiff Brown, since he received no MDAs, is entitled to $20,129.13 in damages.

Plaintiffs Douglas and Oswald received some MDAs but less than they were entitled to. Therefore, these plaintiffs calculated their damages as the difference between the MDAs received by a similarly situated employee and the amount they received. Once again, plaintiffs have shown that a journeyman electrician who had less seniority than plaintiffs Douglas and Oswald received MDAs totalling $5,827.80. Since Douglas has already received $4,710.43, he is entitled to $5,827.80 minus $4,710.43 or $1,117.37. Since Oswald has received $5,080.62, he is entitled to the difference between $5,827.80 and $5,080.62 or $747.18.

Plaintiffs also state that they are entitled to prejudgment interest. The only statutory guidance on the issue of interest, 28 U.S.C. § 1961, permits interest to be recovered on a judgment but does not specifically address the question of whether prejudgment interest should be permitted. Louisiana & Arkansas Ry. Co. v. Export Drum Co., 359 F.2d 311, 317 (5th Cir.1966). Although writing in the context of a patent infringement case wherein a particular provision of the patent law permitting interest was interpreted, the Supreme Court has held that since “prejudgment interest should ordinarily be awarded absent some justification for withholding such an award, a decision to award prejudgment interest will only be set aside if it constitutes an abuse of discretion.” General Motors Corp. v. Devex Corp., 461 U.S. 648, 657, 103 S.Ct. 2058, 2062, 76 L.Ed.2d 211 (1983). The Sixth Circuit has also applied the abuse of discretion standard in reviewing the award of prejudgment interest. See, e.g., In re Higbee Co., 161 F.2d 597, 600-01 (6th Cir.1947). The purpose of awarding prejudgment interest is to insure that an injured party is fully and fairly compensated for his loss. Sea-Land, Service, Inc. v. Eagle Terminal Tankers, 443 F.Supp. 532, 534 (W.D.Wash.1977). In other words, prejudgment interest is a means by which a party who is entitled to an award can collect the proceeds from funds he presumably would have had the use of had it not been for defendant’s conduct. Thus, this Court finds in the instant case that plaintiffs are entitled to prejudgment interest in order to effectuate the purposes of 38 U.S.C. § 2021 et seq., which is to restore plaintiffs to the position they would have been in if they had received all the MDAs to which they were entitled. Furthermore, this Court finds no extraordinary circumstances or justification for withholding prejudgment interest. Defendants’ good faith or justification for its position is immaterial to the decision to award such interest.

Having found that plaintiffs are entitled to prejudgment interest, the Court must next address what rate of interest is to be applied and at what date the interest begins to apply. Pursuant to 28 U.S.C. § 1961, interest on judgments recovered in the district court shall be at the rate allowed by law on judgments recovered in the courts of the state in which the federal court is sitting. See also Briggs v. Penn. R. Co., 164 F.2d 21 (2d Cir.1947), aff'd, 334 U.S. 304, 68 S.Ct. 1039, 92 L.Ed. 1403 (1948).

The date at which interest became payable on the judgment is critical to determining the applicable rate; it is therefore appropriate at this point to determine that date. Plaintiffs contend that October 1, 1981 is the relevant date since “the sub-chapter of the Regional Rail Reorganization Act of 1973 which governs the payment of MDA’s was repealed in 1981.” Plaintiffs’ Memorandum at 3. Therefore, plaintiff argues “that all MDAs to which the plaintiffs are entitled should have been paid prior to October 1, 1981.” Id. at 4. The courts have varied in the dates which they have used. The Second Circuit has rejected the date of commencement of the action as the starting point for prejudgment interest; it instead allowed interest “from the first day of the first month after each plaintiff received the last installment of [his payment] ... to the date of judgment.” Accardi v. Penn R. Co., 369 F.2d 805 (2nd Cir.1966). In Schaller v. Board of Education of Elmwood Local School, 449 F.Supp. 30 (N.D.Ohio 1978), District Judge Don Young assessed interest from the median date of the period in which the violations occurred. This Court believes that prejudgment interest should become applicable at the first date on which damages may be clearly determined as a sum certain or “liquidated sum.” See Lodge 743, Intern. Ass’n. of Machinsts, A.F.L.-CIO v. United Aircraft Corp., 336 F.Supp. 811, 815 (D.Conn.1971). This date comports with traditional notions of interest running on money from the time an undisputed amount becomes due and payable. See 45 Am.Jur.2d Interest and Usury §§ 87-88 (1969). “When a definite sum of money is determined to have been due and payable at a date certain prior to judgment, the legal rate of interest is allowed thereon from such date to the date of judgment.” Phillips Petroleum Co. v. Stahl Petroleum Co., 569 S.W.2d 480 (Tex.1978).

In the instant case, the total sum due plaintiffs became judicially ascertainable and definite on October 1, 1981 since that was the last date on which plaintiffs were entitled to benefits. Thus, interest became payable from October 1, 1981. Since the state law rate governs, state law should also control the question of whether a judgment entered before the date of a statutory rate increase should earn interest at the new rate from the effective date of the statute. Capra, Inc. v. Ward Foods, Inc., 567 F.2d 1316 (5th Cir.1978). In Ohio, interest on damages is viewed in the nature of statutory damages and hence a statutory change in the rate of interest has been held applicable to damages entered before the effective date of the statutory revision. 31 Ohio Jur.2d Interest §§ 20-21 (1975). The Ohio Legislature changed the statutory interest rate in Ohio Revised Code § 1343.03 from 8% to 10%, effective July 5, 1982. Therefore, plaintiffs are entitled to interest at a rate of eight percent per annum from October 1, 1981 until July 5, 1982 and at a rate of ten percent per annum from July 5, 1982 until January 16, 1985, the date of judgment. Since in Ohio principal and interest became merged following judgment, Hosford v. Automatic Control Systems, 14 Ohio App.3d 118, 470 N.E.2d 263 (1984) and the 1982 revision of 28 U.S.C. § 1961 explicitly allows compound interest, the damages plus prejudgment interest may be compounded in the instant case.

Using the compound interest formula, S = P X (1 + i)n, where S is the value or yield, P is the principal, i is the annual interest rate and n is the number of years, plaintiff Brown is awarded $27,062.91 in damages and interest; plaintiff Douglas is awarded $1,502.26 in damages and interest; and plaintiff Oswald is awarded $997.85 in damages and interest. (See attachment for calculations)

Accordingly, the Clerk of Court shall enter judgment for plaintiffs and assess damages in the amount stated above.

IT IS SO ORDERED.

JUDGMENT ENTRY

In Accordance with the Memorandum Opinion and Order filed on January 16, 1985, the Court has received plaintiffs memorandum setting forth the correct measure of damages. The defendant was given fourteen (14) days to file a response but has elected not to do so.

Pursuant to the Memorandum Opinion and order filed on July 19, 1985, IT IS ORDERED that damages will be dispersed as follows: Rory Brown $27,062.91; Thomas Douglas, $1,502.26 and Michael Oswald, $997.85. (See attached Prejudgment Interest Calculations.)

      . 38 U.S.C. § 2021(b)(2) reads in pertinent part: "any person ... should be so restored or reemployed in such manner as to give such person such status in the person’s employment as the person would have enjoyed if such person had continued in such employment continuously from the time of such person's entering the Armed Forces until the time of such person’s restoration to such employment, or reemployment”.

      . 28 U.S.C. § 1961 was amended in 1982, deleting the provision that interest is to be calculated at the rate allowed by state law. The statute now provides that interest is to be calculated at the coupon rate of 52 week United States Treasury Bills. Interest shall also be compounded annually. The statute is still silent on whether it is applicable to prejudgment interest. Because of the complexities of determining the coupon yield rates in the period from 1981 to the present, the Court believes application of the state rates discussed in the statute prior to 1982 is both fair and simple enough in application that it should be applied here.

      . 45 U.S.C.A. §§ 771-780 were repealed on August 13, 1981 but "notwithstanding the repeal ... benefits accrued ... as a result of events that occurred wholely prior to October 1, 1981 shall be disbursed.”

      . Ohio law permits an interest rate of 10% per annum "upon all judgments, decrees, and orders of a judicial tribunal for the payment of money arising out of tortuous conduct or a contract or other transaction.” O.R.C. § 1343.03.

      . In submitting their pr.ejudgment interest demand, plaintiffs have not shown, explained or attached their calculations. Therefore, this Court is unclear how plaintiffs arrived at values of $28,399.38 for plaintiff Brown, $1,576.45 for plaintiff Douglas and $1,054.16 for plaintiff Oswald. Since plaintiffs may have relied on compound interest tables and interpolated, the Court believes that use of the formula and its own calculations will result in more accurate values.