author: MacMAHON, District Judge.

text:
    The ROYAL SOCIETY OF MEDICINE, Plaintiff, v. INTERNATIONAL SOCIETY FOR PREVENTIVE ONCOLOGY, INC. a/k/a International Symposium For Detection and Prevention of Cancer, Inc., and Herbert E. Nieburgs, Defendants.
    No. 82 Civ. 6903 (LFM).
    United States District Court, S.D. New York.
    Feb. 19, 1985.

      Lynch, Rowin, Burnbaum & Crystal, by Howard C. Crystal, New York City, for plaintiff.
    Stephen Latzman, New York City, for defendants.
   OPINION

MacMAHON, District Judge.

Plaintiff, The Royal Society of Medicine (“RSM”), moves for summary judgment against defendant, International Society for Preventive Oncology, Inc. (“ISPO”), on its second, third and fifth causes of action. Plaintiff also moves to dismiss defendants’ counterclaims. Defendants oppose plaintiff’s motion for summary judgment and cross-move for summary judgment dismissing plaintiff’s complaint against defendant Herbert E. Nieburgs (“Nieburgs”) and plaintiff’s fifth cause of action.

FACTS

This action is based on a contract signed by the parties in March 1979. In the fall of 1977, plaintiff entered into an agreement to sponsor the Fourth Symposium on the Detection and Prevention of Cancer (“symposium”), to be held in London in July 1980, with the International Study Group for the Detection and Prevention of Cancer (“DepCa”), a non-profit medical society organized under the laws of Belgium. Defendant Nieburgs served as president of DepCa in 1977.

Plaintiff agreed to organize the symposium and to guarantee a loan for £20,000 as seed money. The agreement also provided that the loan was without risk and would be repaid at periodic intervals. Due to lack of sponsorship by other organizations, however, plans for the symposium were put on hold at the November 1978 meeting of the Symposium Organizing Committee, which Nieburgs attended.

In March 1979, plaintiff entered into a new agreement regarding the organizing of the symposium, which substituted the International Symposium for Detection and Prevention of Cancer, Inc. (“ISDPC”) for DepCa. ISDPC, a separate corporation formed to organize symposia, later changed its name to ISPO. In pertinent part, the March 1979 agreement provided that ISPO:

3. Agrees that repayment of the money already lent by the RSM (plaintiff) beyond £20,000 (as shown at Appendix A), plus interest, will be a first call on registration fees as received and that the said £20,000 shall be repaid to the RSM within four weeks of the termination of the Symposium.
4. Agrees that any profits from the Symposium will ■ be shared with the RSM on the basis of 75% to ISDPC (ISPO) and 25% to RSM.

Defendants have paid plaintiff for amounts due over £20,000 but have not repaid the original loan. Plaintiff alleges that, in further violation of the March 1979 agreement, defendants have failed to provide plaintiff with an accounting and percentage of the profits. In addition, in July 1980, plaintiff arranged a symposium dinner at a cost of £1,500, which plaintiff alleges defendants agreed but have failed to pay.

DISCUSSION

Plaintiffs Second Cause of Action

Plaintiff moves for summary judgment on its second cause of action which alleges that, under the March 1979 agreement, defendants were required, but have failed, to repay plaintiff £20,000 within four weeks of the symposium.

Defendants contend that they were assured of and expected to receive invoices for plaintiff’s expenditures before reimbursement and would not have signed the agreement if they had known that invoices were unavailable. They also assert that the term “provisional” in Appendix A signifies that the amount to be paid was subject to verification which plaintiff has failed to provide. Finally, defendants contend that the agreement was executed in reliance on a chart distributed at the November 1978 meeting, which falsely aggrandized the number of expected attendants. They claim that the chart showed that the total number of persons interested in the symposium was 1,255.

Defendants do not dispute that money is owed, but rather claim that the amount should be verified before it is paid. The document, however, is unambiguous and subject to only one interpretation. Security Options Corp. v. Devilliers Nuclear Corp., 472 F.2d 844, 846 (2d Cir.1972). The agreement clearly provides that defendants were to repay plaintiff the £20,000 loan within four weeks after the symposium. The agreement is silent as to providing invoices. Any assurance in various letters by plaintiff to supply invoices was merely to accommodate defendants’ accounting procedures, not because such documentation was required by the March agreement. The term “provisional” relates to the expenditures over the original £20,000, not to the £20,000 itself.

Finally, a proper reading of the chart shows that plaintiff did not misrepresent the number of persons expected to attend the symposium. The chart establishes that the total number of inquiries made equalled 1,255, while the expected number of attendants was 399.

We find that the agreement unequivocally required defendants to repay the £20,000 loan within four weeks of the symposium. Defendants’ affirmative defenses and counterclaims, all derived from the same factual basis, are insufficient to alter this result and are dismissed based on the following discussion.

Defendants claim that they signed the March 1979 agreement under coercion or duress and that plaintiff unlawfully or maliciously interfered with the symposium. They also counterclaim that they were induced to enter into the March 1979 agreement by plaintiff’s misrepresentations and that plaintiff breached the agreement by failing to comply with its terms and conditions. These allegations rest on the same alleged factual basis, i.e., that plaintiff withdrew from organizing the symposium in November 1979, attempted to organize its own symposium, and solicited support for it from potential participants.

To establish the defense of economic duress, defendants must demonstrate that the agreement was obtained: (1) by means of a wrongful threat precluding the exercise of free will; (2) under the press of financial circumstances; (3) where circumstances permitted no other alternative. Union State Bank v. Weaver, 526 F.Supp. 29, 33 (S.D.N.Y.1981). The prima facie tort of malicious interference is established by proof of intentional infliction of harm, resulting in damages, without excuse or justification, by an act or series of acts that would otherwise be lawful. Ann-Margret v. High Society Magazine, 498 F.Supp. 401, 408 (S.D.N.Y.1980); Sommer v. Kaufman, 59 A.D.2d 843, 399 N.Y.S.2d 7 (1st Dept.1977).

Defendants have not shown facts to establish these defenses. They may not rest on mere conclusory allegations to obtain a trial. Quinn v. Syracuse Model Neighborhood Corp., 613 F.2d 438, 445 (2d Cir.1980).

Contrary to defendants’ allegations, the uncontroverted facts show that plaintiff did not withdraw from organizing the symposium in November 1978. It was agreed by all present at the meetings, including Nieburgs, that it was impractical to proceed with plans without the support of other medical societies and that the organizing of the symposium should be temporarily halted. It was also agreed that members of the symposium committees not present would be advised of the situation. When the planning resumed, plaintiff did support and assist with the organization of the symposium. Defendants have not shown that plaintiff made false representations to defendants of its intentions with regard to the agreement.

Defendants’ second counterclaim alleges that, by withdrawing from the symposium, plaintiff breached the fall 1977 agreement. Plaintiff correctly points out that the fall 1977 agreement was executed between itself and DepCa and not with the instant defendants. This counterclaim is dismissed for a lack of standing.

Since there are no factual issues in dispute, we grant plaintiff’s motion for summary judgment on its second cause of action. Adickes v. S.H. Kress & Co., 398 U.S. 144, 90 S.Ct. 1598, 26 L.Ed.2d 142 (1970); Heyman v. Commerce And Industry Ins. Co., 524 F.2d 1317 (2d Cir.1975). Plaintiffs Third Cause of Action

Plaintiff’s third cause of action alleges that plaintiff advanced £1,500 for a symposium dinner in July 1980 with the understanding that defendants would reimburse it. Defendants have failed to respond to plaintiff’s claim, conceding liability. Rule 56(e), Fed.R.Civ.P. “Plaintiff’s assertions cannot be attenuated by defendants’ lack of opposition. Defendants must actively parry plaintiff’s thrust.” Warner-Lambert Pharmaceutical Co. v. Sylk, 53 F.R.D. 206, 208 (E.D.Pa.1971). Since there is no showing as to the existence of a material fact in dispute, plaintiff’s motion for summary judgment on the third cause of action is granted.

Plaintiffs Fifth Cause of Action

Plaintiff's fifth cause of action seeks an accounting of the profits earned at the symposium based on the March 1979 agreement which provided that plaintiff would receive 25% of the profits. Defendants claim, however, that the symposium did not earn a profit and that plaintiff has been provided with a full accounting of the financial aspects of the symposium. Defendants seek dismissal of this cause of action. Insofar as defendants seek to attack plaintiff’s claim by proving matters outside the face of the pleading, the motion becomes one for summary judgment under Rules 12(b)(6) and 56, Fed.R.Civ.P.

Despite defendants’ submission of a summary statement of disbursements and receipts from the symposium, material issues are raised as to the accuracy and completeness of this statement. Since neither party has properly démonstrated the absence of a genuine issue of fact in dispute, summary judgment is denied to both parties on this claim. Adickes, supra; Heyman, supra. Dismissal of Complaint Against Nieburgs

Defendants argue that the entire complaint should be dismissed as to Nieburgs because he was acting in his official corporate capacity, first as president of DepCa in making the fall 1977 agreement, and then as president of ISPO in making the March 1979 agreement. Plaintiff counters, however, that summary judgment should not be granted on this issue and Nieburgs should be held liable individually because he acted without authority in contracting with plaintiff. Plaintiff contends that Nieburgs signed the March 1979 agreement without informing or receiving authorization from the ISPO board and failed to request confirmation for the fall 1977 agreement from the DepCa board as required by the two corporations’ by-laws.

Sufficient issues of fact are raised here to deny defendants’ motion for dismissal of plaintiff’s claim as to defendant Nieburgs.

Defendants also move to dismiss the first cause of action for fraud against Nieburgs, claiming that plaintiff has failed to show sufficient facts to establish a misrepresentation of a material fact and an intent to deceive. An inquiry into allegations of fraud “necessarily involves a dispute concerning state of mind and conflicting interpretations of perceived events.” Schmidt v. McKay, 555 F.2d 30, 37 (2d Cir.1977). Summary judgment, therefore, is not a proper vehicle for resolution of this factual dispute.

Accordingly, plaintiff’s motion for summary judgment on its second and third causes of action is granted. Plaintiff’s motion to dismiss all four of defendants’ counterclaims is also granted. All other motions made by either party are denied.

Settle judgment within ten (10) days.


source: Caselaw Access Project

author: BUA, District Judge.

license: Public Domain

text:
    KANTER & EISENBERG, a partnership, Plaintiff, v. MADISON ASSOCIATES, a general partnership, and Hines Chicago Associates, Ltd., a limited partnership, Defendants.
    No. 84 C 8703.
    United States District Court, N.D. Illinois, E.D.
    Feb. 19, 1985.

      Richard W. Hillsberg, Bruce L. Wald, Tishler & Wald, Ltd., Chicago, 111., for plaintiff.
    David M. Stahl, Donald C. Clark, Jr., Irene B. Cramer, Isham, Lincoln & Beale, Chicago, 111., for defendants.
   ORDER

BUA, District Judge.

The plaintiff, Kanter & Eisenberg, a partnership, (“Kanter”) filed this suit against defendants, Madison Associates, a general partnership, and Hines Chicago Associates, Limited, a limited partnership in the Circuit Court of Cook County, Illinois, alleging breach of contract, common law fraud, misrepresentation, and violation of the Illinois Consumer Fraud and Deceptive Business Practices Act. Ill.Rev.Stat., ch. 121 ¥2, § 261 et seq. Defendants removed the case to this Court pursuant to 28 U.S.C. §§ 1441 and 1446. Before the Court is plaintiff’s motion to remand to the state court. For the reasons stated below, plaintiff’s motion to remand is granted.

I. FACTS

On May 23, 1984, Kanter filed a complaint against defendants alleging breach of contract, common law fraud, misrepresentation, and violation of the Illinois Consumer Fraud and Deceptive Business Practices Act, Ill.Rev.Stat., ch. 12U/2, § 261 et seq. Although the state court complaint did not allege the citizenship of the parties (as a matter of general practice state courts do not require allegations of the citizenship of the parties in their complaints), Kanter identified itself in its complaint as “a law partnership leasing the 22nd floor of Three First National Plaza, Chicago, Illinois 60602.” Complaint U 1. The complaint identified defendant Madison Associates as “the landlord of the premises” and defendant Chicago Associates, Ltd. as “the managing partner of the landlord.” Complaint Us 2-3.

In the defendants’ removal petition, however, Madison alleges that it is a Texas general partnership with one of its partners a Delaware corporation with its principal place of business in New York. Verified Petition for Removal U 4. Hines Chicago Associates, Ltd. alleges to be a Texas limited partnership with its partners citizens of Texas and Louisiana. Verified Petition for Removal ¶ 5. For purposes of diversity jurisdiction, therefore, the defendants are citizens of Delaware, New York, Texas, and Louisiana.

This action by Kanter is based upon breach of contract, fraud, and misrepresentation brought by Kanter, as tenants of Three First National Plaza, against the defendants. The dispute involves computation of the “initial basic cost” clause and other representations made by the defendants which were allegedly not contained in Kanter’s lease. Two additional suits have been brought in the state court against defendants by other tenants of Three First National Plaza. The first action was filed on. March 23, 1984 by Hayes/Joyce and Company. The second was filed by Bell, Boyd & Lloyd on April 27, 1984, after it was granted leave to intervene in the Hayes/Joyce lawsuit. On May 7, 1984, Kanter filed a petition for leave to intervene in the Hayes/Joyce action. Circuit Court Judge David J. Shields granted Kanter leave to intervene for purposes of discovery and other pre-trial proceedings on May 23, 1984.

The defendants filed their answer to Kanter’s complaint on July 5, 1984. The defendants then proceeded with discovery and other pre-trial proceedings involving all three suits. The defendants have also been involved for several months in proceedings conducted in the state court regarding Bell, Boyd & Lloyd’s motion for a preliminary injunction.

On October 9, 1984, the defendants filed a petition for removal of this case pursuant to 28 U.S.C. § 1441 et seq. The petition relies on diversity of citizenship of the parties as grounds for removal and contains allegations of Kanter’s citizenship allegedly first learned by defendants on October 1, 1984 at a deposition of one of Kanter’s partners, Marshall E. Eisenberg.

On November 8, 1984, Kanter filed a motion for remand stating that defendants’ petition for removal is untimely under 28 U.S.C. § 1446(b) which provides, in part, that a removal petition must be “filed within thirty days after the receipt by the defendant, through service or otherwise, of a copy of the initial pleading setting forth the claim for relief upon which such action or proceeding is based____” Id. Defendants, however, argue that it is the second paragraph of § 1446(b) that determines when the thirty days for removal begins to run in this case. That section provides:

If the case stated by the initial pleading is not removable, a petition for removal may be filed within thirty days after receipt by the defendant, through service or otherwise, of a copy of an amended complaint, pleading, motion, order or other paper from which it may first be ascertained that the case is one which is or has become removable.

28 U.S.C. § 1446(b)(2).

II. DISCUSSION

The procedure for removal is set out in 28 U.S.C. § 1446(a), and requires defendants seeking removal to file “a verified petition containing a short and plain statement of the facts which entitle him ... to removal...” Id. Subsection (b) sets out the time period in which the defendants’ petition to remove a case from state court must be filed. Kanter cites the first paragraph of § 1446(b), arguing that the case was removable on the initial pleading and therefore defendants’ petition for removal was untimely since the petition for removal was not filed until October 9, 1984, more than five months after Madison received a copy of Kanter’s complaint. Defendants admit that their petition was not filed within thirty days of service. Defendants, however, invoke the second paragraph of § 1446(b) and argue that the deposition of Marshall E. Eisenberg on October 1, 1984 was the first time they could have known of Kanter’s citizenship and thus the diversity of citizenship upon which federal jurisdiction is based. Defendants therefore argue that their petition was timely since it was filed only eight days after learning of the diversity jurisdiction.

This case falls between the two clear cut situations addressed by § 1446(b). The first paragraph covers cases that are initially removable based upon the allegations in the complaint. The second paragraph covers cases that are not initially removable. A third situation, however, exists which involves cases that are indeterminate, i.e., they do not supply on the face of the complaint sufficient information to determine whether or not federal jurisdiction exists. The question presented is which paragraph of § 1446(b) applies to this third category of cases in which the initial pleading does not, on its face, provide the necessary information for removal.

In Kaneshiro v. North Am. Co. for Life & Health, 496 F.Supp. 452 (Hawaii, 1980), the plaintiff brought suit against the defendant insurer in Hawaii state court for breach of an insurance contract. The defendant removed the case to the U.S. District Court for the District of Hawaii. The plaintiff then filed a motion for remand stating that defendant’s motion was untimely. The court held that since the plaintiff’s allegation of his Hawaiian residency was “a clue” to his citizenship, the defendant’s petition for removal was untimely because it was not filed within 30 days of its receipt of the initial pleading. The court held that the defendant’s petition was untimely, notwithstanding the fact that the plaintiff’s state court complaint did not indicate on its face all of the elements necessary for federal diversity jurisdiction. Under Kaneshiro, a duty is placed on the defendant desiring removal to scrutinize the plaintiff’s initial pleading unless the complaint provides “no clue” from which plaintiff’s citizenship can be ascertained.

In the present case, Ranter’s complaint clearly provided “a clue” to Ranter’s citizenship by alleging its address in the first paragraph of the complaint. Defendants obviously knew their own citizenship is other than Illinois. The defendant also knew that Ranter is a law partnership practicing in Chicago, Illinois. Complaint, 111. Additionally, it would have been a simple matter for defendant’s counsel to call Ranter’s counsel and ask whether all of the plaintiff’s partners were citizens of Illinois. The plaintiff’s address provided by the complaint plus a phone call would have resolved all doubts concerning whether diversity jurisdiction existed at the time the complaint was filed. Since the case was removable on its facts, even though not upon the face of the complaint, the first paragraph of § 1446(b) should apply to defendants’ petition for removal. Under § 1446(b)(1) the defendants’ petition for removal was untimely because it was not filed within thirty days of their receipt of the initial pleading. Therefore, Ranter’s petition for remand must be granted.

III.. CONCLUSION

For the foregoing reasons, this Court grants plaintiff’s motion for remand to the Circuit Court of Cook County. Costs under 28 U.S.C. § 1446(d) shall be determined by the State Court.

IT IS SO ORDERED.


author: GONZALEZ, District Judge.

text:
    Ellen Judith FINN, Plaintiff, v. Thomas I. DAVIS, Jr. and PrudentialBache Securities, Inc., Defendants.
    No. 84-8414-Civ.-GONZALEZ.
    United States District Court, S.D. Florida.
    Feb. 19, 1985.

      John P. Stetson, West Palm Beach, Fla., for plaintiff.
    David M. Goldstein, North Miami, Fla., for Davis.
    Kathy M. Klock, Miami, Fla., for Prud-Bache.
   ORDER

GONZALEZ, District Judge.

THIS CAUSE has come before the Court upon the Motion to Dismiss Non-Federal Claims, Alternative Motion to Compel Arbitration and Motion to Dismiss, Motion to Strike filed on behalf of the defendants. For reasons set forth below, the Motion to Dismiss Non-Federal Claims shall be granted. The Motion to Dismiss shall be granted in part and denied.in part.

FACTS

In January of 1983, the plaintiff opened an open account with the defendants. She recently had received a $100,800.00 property settlement and desired income producing investments. As the plaintiff had little experience in the stock market, her former spouse informed the defendant DAVIS that such investments should be, inter alia, in stocks focused on dividend return and that there should be minimum trading with no margin trading or speculative purchases such as warrants, options, futures or puts and calls. Exhibit A, Complaint.

In August of 1983, the plaintiff discovered that her account had decreased substantially in value. Thereafter, she commenced litigation in an attempt to recoup her losses.

The plaintiff, however, did not turn initially to the federal forum. On May 15, 1984, she filed a nine-count complaint in the Circuit Court of the Fifteenth Judicial Circuit In and For Palm Beach County, Florida. Finn v. Davis, 602 F.Supp. 801 (1985). The plaintiff alleged various state security law and RICO violations and civil theft as well as common law claims for breach of contract, negligence, fiduciary duty and fraud. In response to the complaint, on June 20, 1984, the defendants filed Motions to Dismiss, Motions to Strike and Motions to Compel Arbitration.

Prior to the state court hearing on the above motions, the plaintiff filed her 13 count complaint with this Court. This complaint alleges various violations of the Securities and Exchange Act of 1934, 15 U.S.C.A. §§ 78a et seq. and violations of the federal RICO act, 18 U.S.C., §§ 1961 et seq. The plaintiff also asserts state statutory and common law claims that are identical to those now pending in the state forum.

On September 6, 1984, the state court granted the defendants’ Motion to Compel Arbitration.

MOTION TO DISMISS NON-FEDERAL CLAIMS

The Court again notes that the plaintiff now has pending two lawsuits that seek to recoup her monetary losses: the suit filed initially with the state court and this subsequent litigation. Both actions involve identical parties and similar facts. In fact, seven of the thirteen counts now before this Court are taken verbatim from the state-court complaint:

1. Count I alleging breach of contract (Count I, state complaint);
2. Count VII alleging fraudulent transactions in violation of Fla.Stat. § 517.-301 (Count II, state complaint);
3. Count VII alleging common law breach of fiduciary duty (Count IV, state complaint);
4. Count VII alleging negligence by the defendant BACHE (Count IV [sic], state complaint);
5. Count IX seeking punitive damages for common law fraud (Count VI, state complaint);
6. Count X alleging civil theft in violation of Fla.Stat. § 812.014, .035 (Count VIII, state complaint);
7. Count XII asserting violations of Florida’s RICO statute, Fla.Stat. § 895.01 (Count IX, state complaint).

Further, although not presented to the state court, Count XIII merely asserts a cause of action for the common law tort of intentional infliction of emotional distress.

The defendants maintain that this Court should refuse to exercise its pendent jurisdiction over the above non-federal claims. They therefore urge the dismissal of Counts I, VI, VII, VIII, IX, X, XII and XIII.

This Court agrees.

It has consistently been recognized that pendent jurisdiction is a doctrine of discretion, not of plaintiff’s right. Its justification lies in considerations of judicial economy, convenience and fairness to litigants; if these are not present, the federal courts should hesitate to exercise jurisdiction over state claims, even though bound to apply state law to them____ Needless decisions of state law should be avoided both as a matter of comity and to promote justice between the parties by procuring for them a surefooted reading of applicable law____ [I]f it appears that the state issues substantially predominate, whether in terms of proof, of the scope of the issues raised, or of the comprehensiveness of the remedies sought, the state claims may be dismissed without prejudice and left for resolution to state tribunals---- Finally, there may be reasons independent of jurisdictional considerations, such as the likelihood of jury confusion in treating divergent legal theories of relief, that would justify separating state and federal claims for trial____ If so, jurisdiction should ordinarily be refused.

United Mine Workers of America v. Gibbs, 383 U.S. 715, 726-727, 86 S.Ct. 1130, 1139, 16 L.Ed.2d 218 (1966). See, Weissinger v. White, 733 F.2d 802 (11th Cir.1984); Williams v. Bennett, 689 F.2d 1370 (11th Cir.1982), cert. denied, _ U.S. _, 104 S.Ct. 335, 78 L.Ed.2d 305 (1983). Thus, while this Court may have the power to exercise its pendent jurisdiction, this power is discretionary.

The plaintiff filed two lawsuits, one with the state court and one with this Court. She initially selected the state forum as her avenue for remedying the alleged wrongs caused by these defendants. Further, the state claims, both statutory and common law, dominate the instant complaint. Continued litigation of these claims in the federal forum would be duplicative and would do nothing to promote comity, judicial economy, justice between these parties, or fairness to others involved therein. Additionally, in Stowell v. Ted S. Finkel Investment Service, Inc., 489 F.Supp. 1209 (S.D.Fla.1980), aff'd., 641 F.2d 323 (11th Cir.1981), the court found that joining federal security law claims with common law fraud created the likelihood of jury confusion. Such jury confusion also is inherent in this case. Also, such claims seek to “maximize the possible recovery for the plaintiffs”, id at 1215, and specifically to recoup punitive damages that are unavailable under applicable state law. For those reasons, the court refused to exercise its pendent jurisdiction. Accord, Summer v. Land and Leisure, Inc., 571 F.Supp. 380 (S.D.Fla.1983).

Finally, the Court marks the fact that the plaintiff will not be prejudiced by this Court’s refusal to exercise jurisdiction over the pendent state claims. These pendent claims are now pending before the state tribunal. Thus, neither the statute of limitations nor the doctrines of collateral estoppel and res judicata are applicable bars to the plaintiff’s potential remedies.

Accordingly, the pendent state claims shall be dismissed.

MOTION TO DISMISS

The remaining counts assert violations of the Securities and Exchange Act of 1934 (the Act), supra, and the federal RICO statute, supra. Specifically, the plaintiff maintains that the defendants’ misrepresentations and omissions of material facts, purchases of unsuitable stocks, churning activities and unauthorized trades violated section 10(b) and Rule 10b(5) of the Act. Further, BACHE’s failure to supervise violated sections 20(a) and (b) of the Act. Owing to the alleged violations of the Act, the defendants assertedly violated federal RICO law.

The defendants argue that the above claims are not pled with the requisite specificity to satisfy Rule 9(b) of the Federal Rules of Civil Procedure.

This Court agrees that the churning claim fails to satisfy Rule 9(b); the remaining claims, however, are stated with the requisite specificity.

Rule 9(b) provides that “[i]n all averments of fraud or mistake, the circumstances constituting fraud or mistakes shall be stated with particularity.” The purpose of this Rule is to discourage frivolous litigations without resulting in substantial unfairness to either party. Summer v. Land and Leisure, Inc., supra.

To promote the purpose of Rule 9(b), this Court looks to the background of the parties and their access to information. The plaintiff is unsophisticated in financial matters and had no prior experience in the stockmarket. The defendant, BACHE, is a nationally known registered broker-dealer and a member of the National Association of Securities Dealers, Inc. and the New York Stock Exchange. The defendant, DAVIS, is a registered representative of BACHE and registered with the National Association of Securities Dealers, Inc. and the Florida Division of Securities.

A review of the facts presented reveal that although the plaintiff did not allege precise dates and times, the allegedly fraudulent acts occurred within an eight-month period. She has alleged that the defendants knew that material statements were false and that omissions were intended to induce and did induce here reliance thereon. Further, such acts were done intentionally and with scienter. The plaintiff also alleges that BACHE is the employer of DAVIS who acted, at all times, within the scope of his authority or with apparent authority. Complaint, ¶¶ 7-9. Additionally, the complaint sets forth specific allegations of fraudulent statements, misrepresentations and omissions. Complaint, ¶¶ 20(a)-(f), 22(a)-(f), as well as specific unauthorized transactions. Complaint, ¶ 19. See, Eaton v. Coal Par of West Virginia, Inc., 580 F.Supp. 572 (S.D.Fla.1984); Summer v. Land and Leisure, Inc., supra.

The Court finds that the allegations contained within the complaint’s statement of facts, considering the plaintiff’s limited access to information, satisfy Rule 9(b). Thus, Counts II, IV and V alleging respectively fraud, misrepresentation and omissions, unauthorized trades and failure to supervise are pled with the requisite specificity, state causes of action for violations of the Act and are sufficient to withstand this Motion to Dismiss.

Count III, however, is woefully inadequate to state a cause of action for churning violations under section 10(b) and Rule 10b(5). The plaintiff incorporates all preceeding paragraphs of the complaint and then states merely that the defendants controlled her account and “traded excessively in the account in disregard of Plaintiff’s needs and to generate commissions and interest for themselves.” Complaint, 1135. She “neither sets forth the specific securities and transactions involved in [her] case (including the nature and amount of the purchases and sales), nor states the amount of commissions generated by these transactions.” Viscomi v. Paine, Webber, Jackson and Curtis, Inc., 596 F.Supp. 1537, 1539 (S.D.Fla.1984). See, Vetter v. Shearson Hayden Stone, Inc., 481 F.Supp. 64 (S.D.N.Y.1979). Compare, In re Catanella and E.F. Hutton and Co., Inc., 583 F.Supp. 1388 (E.D.Pa.1984).

Thus, Count III shall be dismissed.

Finally, the defendants argue that the federal RICO count must be dismissed and the plaintiff fails to allege a link with organized crime, racketeering activity or a distinct racketeering enterprise injury.

This Court, however, is not persuaded by decisions maintaining that the intent of RICO was to reach only those activities tied to organized crime. See, Sedima v. Imrex Co., 741 F.2d 482 (2nd Cir.1984), petition for cert. filed, _ U.S. _, 105 S.Ct. 901, 83 L.Ed.2d 917 (1985); Bankers Trust v. Rhoades, 741 F.2d 511 (2nd Cir.1984); Divco Construction and Realty Corp. v. Merrill Lynch Pierce Fenner and Smith, Inc., 575 F.Supp. 712 (S.D.Fla.1983). Further, the Eleventh Circuit consistently has rejected such requirements. United States v. Gottesman, 724 F.2d 1517 (11th Cir.1984); United States v. Uni Oil, Inc., 646 F.2d 946 (5th Cir.1981), cert. denied sub nom, Crude Co. v. United States, 455 U.S. 908, 102 S.Ct. 1254, 71 L.Ed.2d 446 (1982); United States v. Martino, 648 F.2d 367 (5th Cir.1981), cert. denied, 456 U.S. 949, 102 S.Ct. 2020, 72 L.Ed.2d 474 (1982).

Additionally, the Court finds that the complaint sets forth the requisite inferences of racketeering activity involving fraud in the sale of securities. Further, the complaint's asserted RICO injury is sufficient. See, Morosani v. First National Bank of Atlanta, 703 F.2d 1220 (11th Cir.1983).

CONCLUSION

The Court has reviewed carefully the matters presented and the applicable law. Accordingly, it is hereby

ORDERED AND ADJUDGED as follows:

■ 1. The Motion to Dismiss Non-federal Claims be and the same is GRANTED. Counts I, VI, VII, VIII, IX, X, XI and XIII are DISMISSED without prejudice to pursue available state remedies;

2. The Motion to Dismiss the remaining Counts is DENIED as to Counts II, IV, V and XII and GRANTED as to Count III. Count III is DISMISSED without prejudice to file an amended claims within 20 days of - the date of this Order;

3. The Motion to Strike is DENIED as moot.

      . The Court notes that the plaintiff attached to the complaint various account statements. It is not the function of this Court, however, to cull through these financial statements in order to determine whether they reveal sufficient facts to support a claim of churning activity.

      . In Bonner v. City of Prichard, 661 F.2d 1206 (11th Cir.1982) (en banc), the Eleventh Circuit adopted as precedent the decisions of the Fifth Circuit rendered prior to October 1, 1981.


author: GARRITY, District Judge.

text:
    Tallulah MORGAN et al., Plaintiffs, v. John A. NUCCI et al., Defendants.
    Civ. A. No. 72-911-G.
    United States District Court, D. Massachusetts.
    Feb. 20, 1985.

      Larry Johnson, Robert Pressman, Center for Law and Educ. Gutman Library, Cambridge, Mass., Laurence S. Fordham, Foley, Hoag & Eliot, Boston, Mass., for plaintiffs.
    Caroline Playter, Kehoe, Doyle, Playter, Novick & Strimaitis, Boston, Mass., Kenneth Kimmerling, Puerto Rican Legal Defense & Educ. Fund, Inc., New York City, for El Comite.
    Robert Blumenthal, State Bd. of Educ., Quincy, Mass., Robert H. Bohn, Jr., Sp. Asst. Atty. Gen., Gitlin, Emmer, Kaplan & Bohn, Boston, Mass., for State Bd. of Educ.
    Steven P. Perlmutter, Asst. Corp. Counsel, Boston, Mass., for Mayor, City of Boston.
    James T. Grady, Grady, Dumont & Dwyer, Boston, Mass., for Boston Teachers Union.
    Richard W. Coleman, Segal, Roitman & Coleman, Boston, Mass., for BASAS-Boston Association of School Administrators and Supervisors.
    Martin A. Walsh, Community Relations Service, Boston, Mass., for Community Relations Service.
    Lucille Koch, Evalena Higginbottom, Acting Co. Executive Directors, City Wide Parents Council, Boston, Mass., for Transition Committee.
    Marshall Simonds, Henry C. Dinger, Goodwin, Procter & Hoar, Michael Betcher, Boston, Mass., for Boston School Committee, Maura McGroarty, Boston School Committee, Dept, of Implementation, Boston, Mass., for Boston School Committee and Boston School Dept.
    Nancy Gertner, Silvergate, Gertner, Baker & Fine, Boston, Mass., Herbert Henderson, N.A.A.C.P. Spec. Contribution Fund, Brooklyn, N.Y., for Concerned Black Educators of Boston.
    Henry C. Dinger, Goodwin, Procter & Hoar, Boston, Mass., and Thomas I. Atkins, Brooklyn, N.Y., for School defendants.
   MEMORANDUM AND ORDERS ON PROPOSED MODIFICATIONS OF STUDENT ASSIGNMENT PLAN

GARRITY, District Judge.

These orders represent the conclusion of a process which began on December 20, 1984 with the filing by the school defendants of two motions for modification of the student assignment plan. The first motion contained ten separate proposed modifications and the second requested leave to create a neighborhood school assignment pattern in districts 3 and 4 with desegregation accomplished only through voluntary transfers. The other parties filed objections and comments on the proposed modifications, and hearings were held on January 14, 15 and 17 and February 5 and 11, 1985.

In prior orders in open court, the court granted subdivisions 1, 2, 3, 5 and 10 of the first motion, with certain modifications and conditions. In most cases the court’s order approving the modification was issued after agreement on the meaning, intent and impact of the proposals was reached by the parties. Subdivision 7 of the proposed modifications, which concerned the conversion of the Umana High School from a citywide District 9 magnet to a District 8 middle school, was rejected by the court.

The subjects of these orders are (a) subdivision 7, the school defendants’ motion to reconsider the Umana proposal, (b) subdivision 6, which proposes to add grade six to the examination schools, (c) subdivision 9, which seeks leave to create a program of recruiting students for a small number of reserved seats in certain schools, and (d) the separate motion to create a new assignment plan for Districts 3 and 4.

That it was necessary for the court to hold days of hearings extending almost two months from the original filing deadline for these motions and for the parties to file numerous documents and expend substantial amounts of time merely trying to understand the proposals and their impact on desegregation in the Boston public schools, underscores the hastiness and carelessness with which the proposals were brought before the court and parties for consideration. It appears that the school defendants completely ignored their obligations under the law of this case, as set forth in detail in the Orders of Disengagement issued by the court on December 23, 1982. These orders require that proposed modifications of existing orders “have been previously presented to all other parties ... and made the subject of negotiations under the auspices of the State Board.” It was obvious from the objections and comments filed by the parties that few, if any, of these proposals had ever been seen by, much less negotiated among, the other parties. It is clear that such negotiations would not have been a useless formality, first, because agreements were worked out in open court after the proposals and their impact on desegregation were clarified and, in several instances, after the school defendants modified their motions in response to objections by other parties. Secondly, the negotiation process succeeded last year in producing a major modification of the court’s February 24,1976 order governing rating and screening of administrative personnel.

More significant in the context of the present orders is the school defendants’ failure to comply with the court’s order included in the Orders of Disengagement that proposed modifications be “detailed, complete, and include an analysis of their impact on the educational rights of minority students under the Fourteenth Amendment.” As the court noted on several occasions during the hearings on these matters, the proposals are lacking in detail and contain only the most conclusory analysis of their desegregative impact.

Through subsequent filings and testimony at the hearings and in the interest of expediency, those proposals which were relatively less complex and less controversial in their impact on plaintiffs’ rights were brought to a resolution despite their initial shortcomings. The proposals concerning the Umana and the exam schools continue to suffer from lack of detail and analysis to such an extent that the court is unable to find that the plaintiffs’ rights have been sufficiently addressed and protected.

Umana School

The school defendants have requested that the court reconsider its earlier denial of subdivision 7, the proposed conversion of the Umana School from a citywide magnet school to a community district 8 middle school. The court rejected the original proposal because it sought to dismantle the most important and successful opportunity for students to attend a desegregated school located in district 8 without proposing any alternative plan for preserving desegregation there. Despite the school defendants’ assertion in the original proposal that “a comparable level of desegregation” would be maintained in district 8, there was not the slightest suggestion of how this would be accomplished except for a passing and cryptic reference in testimony on January 14 to desegregative “assignment potential ... in one form or another”.

The school defendants now seek reconsideration because the court’s prior decision was based on the assertedly mistaken view that the school defendants had no plan to maintain the desegregation of the Umana. We are now informed in the motion to reconsider that “a magnet component is an integral aspect of this proposal.” Yet the court and the parties are not given a clue as to what this “integral aspect” of the proposal would actually achieve. Approximately 400 seats at the Umana would be unoccupied by East Boston middle school students and would be reserved for a magnet program. The only other information regarding the proposed magnet is that it may be composed in a manner similar to the business magnet at East Boston High School.

The court does not doubt that the creation of a viable middle school magnet program at the Umana may be possible under some circumstances. However, the court has a responsibility to base approval of a modification on more than a possibility, especially when a certain result of the proposal is the immediate, irretrievable loss of a successfully desegregated school in an area which has proved difficult to desegregate. The court’s obligation, “as it always has been, ... [is] to assess the effectiveness of a proposed plan in achieving desegregation.” Green v. School Board of New Kent County, 1968, 391 U.S. 430, 439, 88 S.Ct. 1689, 1695, 20 L.Ed.2d 716. An assessment of the effectiveness of a middle school magnet at the Umana is impossible on the current record.

Fundamental questions such as the nature of the proposed magnet program, applicable racial/ethnic guidelines, procedures governing admissions, the prospects for funding the expected changes in the facility and equipment necessary to make the magnet viable, the amount of shared curricula between regular and magnet students, and the readiness of Technical High to accommodate and educate students transferred from Umana in the fall of 1985, are all left unanswered.

General assurances of the school defendants that they will develop a functioning magnet program which is capable of attracting minority students to East Boston are inadequate. Before a program which has proven effective is dismantled, it is the plaintiffs’ constitutional right to demand, and the court’s responsibility to ensure, that the proposed magnet has a substantial likelihood of succeeding in achieving its objectives. Not every magnet is successful. The experience with the East Boston High business magnet is an example of the careful planning and community involvement which is necessary to realize the desegregative potential of a magnet in a community which is geographically isolated and has a neglible number of black residents. Extensive discussions and specific planning for a magnet component at East Boston High began, pursuant to the court’s order of May 3,1976, a full year and a half prior to its implementation in September of 1977. It is this sort of negotiation and planning that the December 23, 1982 Orders of Disengagement require.

On the other hand, the school defendants have identified several advantageous aspects of their proposal were it to succeed: it would eliminate a racially identifiable middle school, the Barnes; it would remove the occasion for expending substantial funds to renovate the Barnes; and it would enable resources and energy to be concentrated on improving the science education at Technical High. These .aspects of the proposal may be sufficient justification for adoption of the Umana modification at some future date.

Examination Schools

Subdivision 6 of the school defendants’ motion is a proposal to add grade six to the Boston Latin School and Latin Academy and grades six through eight to Boston Technical. This proposal, though significantly less sweeping than the Umana School proposal, still lacks crucial information on the extent of the impact of this change in grade structure on the overall desegregation of the Latin schools and on the ability of the school defendants to maintain desegregation at the sixth grade at the non-exam schools in the system. Despite repeated requests and opportunities to lay such questions to rest, including a request by the court for proposed findings of fact, the school defendants have failed to do so. With respect to the Boston Technical School, the proposal fails to articulate any desegregative or educational justification for adding a middle school component to that school.

The court has never questioned the prerogative of the school defendants to make changes in the grade structure at the Latin schools, “for educational reasons ... so long as they assure and do not impede desegregation at all grade levels. Morgan v. Kerrigan, D.Mass.1975, 401 F.Supp. 216, 244-45, aff'd, 1 Cir.1976, 530 F.2d 401, cert. denied, 1976, 426 U.S. 935, 96 S.Ct. 2648, 49 L.Ed.2d 386. However, no showing has been made that this change will not impede desegregation at all grade levels. Although the school defendants have not sought to change the current 35% minimum of black and hispanic representation required in the entrance grades (currently grades seven and nine) at the exam schools, the plaintiffs, plaintiff-intervenors and State Board all raise the objection that the disproportionately low rate of retention of black and hispanic students would be exacerbated by expanding the Latin schools to the sixth grade. This low retention rate and the inadequacies of the school defendants' response is well documented in all four monitoring reports filed by the State Board. The proposed findings of facts submitted by the school defendants do not address this concern and therefore the school defendants’ requested ruling of law that the proposal “will have no adverse impact on desegregation at the examination schools” continues to lack an adequate factual foundation.

More importantly, the record is insufficiently developed to enable the court to make any findings regarding the impact of the proposal on desegregation of sixth grades throughout the rest of the system. The primary objective of the proposal is to remove an obstacle to admission to the Latins by Boston public school students, that is, the necessity of their competing for admission with private school students while in the midst of adjusting as sixth graders to a new middle school. If this objective is achieved, more public school students will be admitted to the Latins and, assuming current racial percentages of those entering the Latins remain unchanged, a disproportionately greater number of white students will be drawn from public middle schools. A substantial decrease in the number of white sixth graders at non-exam middle schools could impede meaningful desegregation at those schools. In addition, plaintiff’s counsel has pointed out that the school defendants proposal may accelerate the current trend toward concentration of white students in the Latin schools, stating that if the proportion of white students making up the Latin schools’ population remains constant, 43% of all white seventh through twelfth graders in the public schools will be attending these two schools by 1988.

However, since the necessary factual analysis of the desegregative impact of this proposal can be readily accomplished by the school defendants, the court will defer decision on this matter. Although the impact of the proposal cannot be ascertained with a final degree of certainty, it can surely be addressed to an extent that will allow the court and parties, including the school defendants themselves, to gauge whether affirmative action in the form of expanded and intensified efforts to improve retention rates or to better prepare black and hispanic students to compete for admissions is necessary to protect plaintiffs’ and plaintiff-intervenors’ rights. Such a factual analysis may also show that the negative desegregative impact of the proposal outweighs its educational benefits.

In connection with the evaluation of the educational benefits of the proposal, the school committee may wish to consider further the extensive list of criticisms of the proposal which have been filed with the court by the citywide and school parent councils, individual parents, the Latin Schools’ associations, the headmaster of the Latin School and other concerned members of the community. These criticisms address the inadequacies of the Latin schools’ facilities and staff to accommodate sixth grade students and the educational and pedagogical drawbacks of the proposal. Whatever the merits of these criticisms, and they seem to have merit, they are essentially educational quality issues and, as such, are beyond the proper limits of the court’s involvement in the affairs of the school system. Morgan v. McKeigue, 1 Cir.1984, 726 F.2d 33, 34. The obligation to make decisions which affect only the quality of education for all students rests solely with the superintendent and school committee.

The school defendants’ motion as far as it seeks to add grades six through eight to Boston Technical High School is denied. Unlike the addition of grade six at the Latin schools, absolutely no desegregative nor educational justification for this aspect of the proposal has been advanced. In fact, any mention of Tech in connection with the pending motion was conspicuous in its absence, both at the hearing on January 14, 1985 and in the proposed findings of fact and conclusions of law submitted by the parties. The only reason suggested by the school defendants, or any other party, for transforming the grade structures at the examination schools was the burden placed on Boston public school students by having to enter into competition for admission at grade seven in the midst of adjusting to a new middle school at grade six. Boston Tech students currently enter at grade nine, and thus are not subject to this asserted burden. The grade nine through twelve structure of Tech is consistent with most of the high schools in the system. Any need for accommodating middle school students transferring from Umana has been obviated by the court’s denial of that proposal.

Balanced against this total lack of justification for including a middle school component at Tech is the detrimental impact of adding 800 middle schools seats to a system which continues to be handicapped by a substantial number of excess seats at the middle school level despite the recent closing of two middle schools. Should the school defendants revive and the court approve their motion to add a sixth grade at the Latin schools, the problem would be even more serious. Currently, the Lewis, Shaw and Gavin middle schools operate at less than 60 percent of their capacities as established by the Department of Implementation in May 1984. The adverse impact of half-empty schools on desegregation and the authority of the court to eliminate them are part of the law of this case. Morgan v. McDonough, 1 Cir.1982, 689 F.2d 265, 278, n. 22. See generally, United States v. DeJesus, 752 F.2d 640 (1 Cir.1985).

Recruitment for Reserved Seats

Subdivision 9 of the school defendants’ motion, modified in a supplemental memorandum filed January 29, 1985, seeks to fill a small number of reserved seats in 27 named schools by recruiting students whose presence would enhance the desegregation of the receiving school without impeding the desegregation of the sending school. Such students would be recruited without regard to their district or geocode. In many ways this proposal represents an adaptation of the policy of encouraging transfers for desegregation first introduced by the court in its student assignment plan issued May 10, 1975. Subdivision 9, as modified, was adopted in principle during the hearing of February 11, 1985, with the assent of the parties. At that hearing, the school defendants sought to add 31 more schools to the list of 27 schools submitted to the parties and the court. This last-minute modification is rejected because of the lack of opportunity for the court and the other parties to consider their inclusion and also because of the comparative success this last-minute group of schools has had in complying with the racial ethnic guidelines relative to those on the original list of 27. Indeed, the court commends the original proposal for its focus upon schools which are in need of special desegregation measures.

The proposal regarding 27 schools as clarified in the school defendants’ January 25 filing, is adopted by the court subject to the following conditions: (a) unless some of the schools are closed, the list of schools and the number of reserved seats in them shall remain the same for a period of at least two years from implementation, and (b) during that period the State Board shall monitor and evaluate the operation and effect of the program, including (i) the actual and perceived fairness of assignment procedures whereby some students are assigned voluntarily and some mandatorily to the same school, (ii) the impact of the program on the school defendants’ efforts to desegregate other community district and citywide schools, and (iii) the value of the program compared to the time and resources it may divert from other tasks of the Department of Implementation.

Test of New Assignment Plan in Districts 3 and k

The motion filed on December 20, 1984 by the school defendants concerning districts 3 and 4 was significantly modified during the hearing held on February 11, 1985. Originally the motion requested that students in those districts be assigned under the terms of the new proposal beginning in the fall of 1985. The proposal has been modified, largely during the hearing on February 11, so its implementation is now conditioned upon the degree of desegregation which would be achieved under it, as measured by parental responses on application forms to be sent out by March 25, 1985. The current assignment process is to proceed as usual in the event that the proposed plan does not live up to the school defendants’ expectations. As originally presented, the plan placed heavy emphasis on guaranteeing students a seat in their home assignment area. Apparently because of the resegregative impact of such an emphasis, attention has shifted to the open-enrollment aspect of the proposed plan which, it is hoped, will lead to voluntary desegregation.

Essentially, the school defendants’ plan must convert districts 3 and 4 into a consolidated, districtwide “magnet” system if it is to succeed, yet no magnet features currently exist at these schools and no means are provided to develop them. The success of the plan apparently relies entirely on the “marketing” of each school by its faculty and staff with “cooperation” from school officials. In most instances, in order to desegregate a school such marketing must convince parents to send their students to a school by bus rather than to a school within walking distance. How marketing of schools that do not offer distinctive merits can create incentives that will lead to voluntary busing is not clear.

Schools within districts 3 and 4 are certainly less distinctive than those in district 9, the citywide magnet district. Although district 9 is largely successful in achieving its objective of voluntary desegregation, it is not generally over-subscribed, indicating that, even with careful planning of magnet programs and the years of cooperation of paired universities, colleges, and businesses, magnet schools are limited in their appeal.

The evidence offered at the hearing on this matter does not support a more positive conclusion. The survey commissioned by the Citywide Education Coalition shows only that, all else being equal, some parents would prefer a “distant” school which offered an educational program superior to that offered at a nearby school. This hypothetical preference is irrelevant in a situation in which programatic offerings and pedalogical approaches at the schools are relatively similar and other factors such as the racial/ethnie make-up and general condition of a school’s neighborhood, the quality of a school’s facilities, traffic congestion, and the actual distance of the school from the student’s home, to name but a few, are inherently unequal. Furthermore, the survey does not address the issue of a parent’s choice in a completely “magnetic” district, that is, between a nearby school with one magnet program and a distant school with a different magnet program. Finally, the testimony concerning the results of an analysis of 1983 applications leads only to the narrow conclusion that some parents wish that they could get their students into a “better” school. Whether those “better” schools were community district schools located in districts 3 and 4 or whether the student’s attendance at such schools would enhance desegregation was not addressed.

At the hearings, counsel for plaintiffs and plaintiff-intervenors expressed serious misgivings about the workability of the school defendants’ proposal and the additional costs it might entail, but reserved objections until after new style, as well as current style, applications for student assignments in district 3 and 4 have been returned and analyzed. Accordingly they assented to allowance of the school defendants’ motion as modified. In the same spirit, i.e., of preferring voluntary to mandatory desegregation, and in reliance on school defendants' representation that the plan will be implemented only if “consistent with the existing degree of desegregation”, the court approves the school defendants’ proceeding to obtain two sets of assignment applications for students in districts 3 and 4, in conformity with the timetable set forth in Attorney Dinger’s letter dated February 15, 1985, attached hereto as Appendix A.

Summary of Orders

1. The school defendants’ motion to reconsider the court’s decision the Umana School is denied.

2. Decision is deferred on the proposed addition of a sixth grade to the Latin schools pending further submissions by the school defendants.

3. The proposed addition of grades 6-8 to Boston Technical High School is denied.

4. Recruitment of students to fill reserved seats is conditionally approved.

5. The school defendants’ motion to test a new assignment process in districts 3 and 4, in conformity with Attorney Dinger’s letter dated February 15, 1985, is allowed.

APPENDIX A

February 15, 1985

The Honorable W. Arthur Garrity, Jr.

United States District Court for District of Massachusetts

U.S. Post Office & Court House Boston, MA 02109

Re: Morgan, et al. v. Nucci, et al.

Civil Action No. 72-911-G

Dear Judge Garrity:

I understand that the Court has indicated a desire that the procedural mechanism for the implementation of the consolidated district proposal be elaborated in greater detail than was contained in the School Defendants’ filing of February 14. This letter will supply this information.

As Mr. Coakley indicated in his testimony, the Department of Implementation (“DI”) anticipates preparing applications for districts three and four which will permit assignments either under the procedures outlined in the December 20, 1984 filing or under the existing procedures. We have agreed to give plaintiffs’ counsel an opportunity for input on an informal basis in the development of the application form. The DI expects to send these applications out no later than March 25, and to get them back by the week of April 8, in time to permit analysis over the spring school vacation.

The DI will make an initial determination whether the preferences expressed by parents in the consolidated district will permit a set of .assignments consistent with those preferences which does not substantially diminish the degree of desegregation which currently exists in districts 3 and 4. If this is not possible, the staff will so advise the School Committee and the School Defendants will so advise the Court and the parties. Assignments would then be made in the usual fashion.

If a set of assignments pursuant to the experimental procedures is possible consistent with the existing degree of desegregation, the staff has been directed to share their analysis with the School Committee so that the Committee can satisfy itself that the proposed assignments do not in fact resegregate Districts 3 and 4. Unless the Committee otherwise directs, the School Defendants will file the results of their analysis on or about May 3, 1985. We would expect the filing of responses and the scheduling of a hearing, if necessary, within ten days after this submission.

This schedule is modestly more optimistic than that initially suggested by Mr. Coakley in court. Mr. Coakley believes that timely assignments would still be possible if this schedule contained in this letter slipped by a few days.

Respectfully,

/s/Henry C. Dinger

Henry C. Dinger

HCD:cel

cc: Counsel of Record

      . Decision on subdivision 8 pertaining to Hernandez-model schools awaits further filings due February 22, 1985, and subdivision 4 regarding computation of racial/ethnic guidelines is under advisement.

      . Deferment of decision on this matter will not affect the filing of the Unified Facilities Plan which is due on March 15, 1985.

      . It is not only the law of this case, Morgan v. Hennigan, D.Mass.1974, 379 F.Supp. 410, 482, but of numerous Supreme Court decisions, e.g., Green v. School Board of New Kent County,

        supra, that the school defendants must take affirmative action to desegregate, i.e., steps beyond mere compliance with court orders. Several of the subdivisions of the defendants’ motion filed December 20, 1984 reflect such affirmative action, and support the court’s belief that the instant proceedings are approaching a successful termination.

      . The lack of "distinctiveness" of these schools is not a criticism of the education they offer. The emphasis at community district schools has always rightly been on providing high-quality, standardized education, not on the development of a specialized curriculum or pedalogical approach.

      . This has been the approach of the court and all parties since the inception of these proceedings, as indicated by the extensive use of then-novel magnet schools and programs in the court’s desegregation plan.


author: POLOZOLA, District Judge.

text:
    Paul William HARMS v. MAERSK DUTCH SWEEDEN, LTD. Steamship Company, et al.
    Civ. A. No. 83-28-B.
    United States District Court, M.D. Louisiana.
    Feb. 20, 1985.
    Edward O. Taulbee, IV, Lafayette, La., for plaintiff.
    Charles J. Foret, Jeansonne, Briney & Goudelocke, Lafayette, La., for intervenor.

      William E. Wright, New Orleans, La., F.W. Middleton, Jr., Baton Rouge, La., for defendants.
   POLOZOLA, District Judge.

This matter is before the Court on plaintiffs motion to amend the judgment to add pre-judgment interest. No oral argument is required on this motion.

Plaintiff, Paul William Harms (“Harms”) brought this suit against Maersk Dutch Sweeden, Ltd. Steamship Company and the M/Y Niels Maersk (“Maersk”) seeking damages for personal injuries sustained while disembarking from the defendant vessel. Federal court jurisdiction was based upon diversity of citizenship and, alternatively, upon a maritime claim under § 905(b) of the Longshoremen’s and Harbor Workers’ Compensation Act.

On November 27, 1984, a jury returned a verdict in favor of the plaintiff in the sum of $150,000. Plaintiff’s award was reduced to $90,000 due to a finding by the jury that Harms was 40% contributorily negligent. This award was in globo and included past, present and future damages. Judgment was entered in accordance with the jury’s verdict on December 4,1984. No pre-judgment interest was included in the judgment.

Harms now seeks to amend the judgment to add pre-judgment interest from the date of judicial demand to the date the verdict was rendered. In support of his motion, Harms cites the general law that prejudgment interest should be allowed in cases in admiralty unless the court, in its discretion, finds “peculiar circumstances” warranting denial of such interest. Noritake Co. v. M/V Hellenic Champion, 627 F.2d 724, 728 (5th Cir.1980); Masters v. Transworld Drilling Co., 688 F.2d 1013 (5th Cir.1982). Maersk has filed an opposition to plaintiff’s motion and relies on many recent decisions rendered by the Fifth Circuit Court of Appeals which refused to allow pre-judgment interest in Jones Act cases tried to juries. Maersk states that these cases are “precisely analogous” to the case at bar, and thus, no pre-judgment interest should be awarded in a § 905(b) case tried to a jury. This Court agrees.

The law is well settled that there is no recovery of pre-judgment interest in a Jones Act case tried on the law side of federal court, i.e., before a jury. Williams v. Reading & Bates Drilling Co., 750 F.2d 487, 491 (5th Cir.1985); Theriot v. J. Ray McDermott & Co., 742 F.2d 877, 883 (5th Cir.1984); Wyatt v. Penrod Drilling Co., 735 F.2d 951, 955 (5th Cir.1984); Sanford Bros. Boats v. Vidrine, 412 F.2d 958, 972-73 (5th Cir.1969). Several reasons have been set forth by the courts for this rule. Some courts rely on 28 U.S.C. § 1961, which mandates payment of interest only from the date of entry of judgment in cases based on federal law. Duvernay v. Alcoa Steamship Co., 217 F.Supp. 698, 700 (E.D.La.1963). Other courts have noted that in personal injury cases, unlike collision or wrongful death cases, a substantial portion of the award is for future losses, upon which pre-judgment interest is never recoverable. Wyatt v. Penrod Drilling Co., 735 F.2d at 955 n. 3; Barrios v. Louisiana Construction Materials Co., 465 F.2d 1157, 1168 (5th Cir.1972). In Wyatt, the court stated:

A primary reason for this rule, especially in personal injury cases, is that a large component of the damage award generally is attributable to future lost wages and future medical expenses. Prejudgment interest is not necessary to compensate the plaintiff for losses which have not accrued at the time judgment is entered.

Finally, some courts have set forth a practical reason for denying prejudgment interest. Courts have recognized that the jury is aware of the delays the plaintiff has encountered in bringing his case to trial, and consequently some allowance is made by the jury for such losses when it determines the amount of the award. Sanford Bros. Boats v. Vidrine, 412 F.2d 958, 973 n. 13 (5th Cir.1969), quoting Moore-McCormack Lines v. Richardson, 295 F.2d 583, 593-94 (2d Cir.1961).

Each of the above reasons for denying pre-judgment interest in a Jones Act case tried to a jury is equally applicable to a § 905(b) action tried to a jury. The § 905(b) claim is based upon federal law, and future losses constitute a substantial portion of the damages claimed by the plaintiff. Even if the amount of pre-judgment interest was discretionary with the court in a § 905(b) action tried to a jury, the court would not award prejudgment interest under the facts of this case. There was a genuine dispute regarding the ultimate liability of the defendant. Plaintiff received an award which was substantially less than he originally claimed. Indeed, the jury in this case found that plaintiffs own negligent acts caused the accident.

Furthermore, even in a non-jury trial, pre-judgment interest may not be awarded with respect to future damages. Williams v. Reading & Bates Drilling Co., supra, 750 F.2d at 491; Wyatt v. Penrod Drilling, supra, 735 F.2d at 956 n. 4. The jury’s damage award in this case was not itemized. It is important to note that plaintiff did not request a special jury instruction or special interrogatory to the jury dividing the jüry award into past, present and future damages. Based on these considerations, the court finds that even if it had the authority to award pre-judgment interest herein, the court would not do so under the peculiar facts of this case.

Therefore:

IT IS ORDERED that the motion of Paul Harms to amend the judgment to add prejudgment interest be, and it is hereby DENIED.

      . The amended pretrial order filed by the parties provides: “1. JURISDICTION. Jurisdiction was founded by counsel for all parties and by the Court to be present under the provisions of 28 U.S.C.A. § 1332, 33 U.S.C.A. § 901, et seq., more specifically Section 905(B) and the General Maritime Law.”

      . 28 U.S.C. § 1332.

      . 28 U.S.C. § 1333.

      . 33 U.S.C. § 901, et seq.

      . The case was submitted to the jury on the following interrogatories:
      1. Was the Defendant negligent?
      2. If your answer to Question 1 is yes, was the Defendant's negligence a proximate cause of the accident?
      If your answers to Questions 1 and 2 were yes, please answer the following questions:
      3. Was the Plaintiff, Paul William Harms, negligent?
      4. If your answer to Question 3 is yes, was the Plaintiffs negligence a proximate cause of the accident?
      5. If your answer to Questions 3 and 4 are yes, what part, if any, stated as a percentage, did Plaintiffs own negligence play in causing his injury?
      6. What amount of damages, if any, is the Plaintiff entitled to recover without any reduction for any negligence which you may find on the Plaintiffs part?

      . There is dicta in some cases which indicates that if the plaintiff raises a Jones Act claim and a maritime claim (e.g., unseaworthiness) arising from the same facts, pre-judgment interest may be awarded only on the damages related to the maritime claim, and then only if the jury specifies which damages are attributable to the maritime claim. Domangue v. Penrod Drilling Co., 748 F.2d 999 (5th Cir.1984), Wyatt v. Penrod Drilling Co., 735 F.2d 951 (5th Cir.1984); Barton v. Zapata Offshore Co., 397 F.Supp. 778 (E.D.La.1975). Harms abandoned his unseaworthiness claim prior to trial; unseaworthiness was neither included in the contested facts in the pretrial order, nor was it argued to the jury. Plaintiff’s case, based solely on § 905(b) and tried before a jury, clearly was “at law" and not “in admiralty.”

      . In Williams, the court made a clear distinction between Jones Act cases tried under the admiralty side of the court without a jury and cases tried to a jury:
      We hold, therefore, that when a Jones Act claim is brought under the court’s admiralty jurisdiction, and hence the case is tried to the court and not to the jury the allowance of prejudgment interest is within the discretion of the trial court even if there is not a finding of unseaworthiness. 750 F.2d at 491. (Emphasis supplied)

      . 28 U.S.C. § 1961 provides:
      Interest shall be allowed on any money judgment in a civil case recovered in a district court. Execution therefor may be levied by the marshal, in any case where, by the law of the State in which such court is held, execution may be levied for interest on judgments recovered in the courts of the State. Such interest shall be calculated from the date of the entry of the judgment, at the rate allowed by State law.

      . The court also noted in Barrios that due to the amount of damages for future losses included in the judgment, it was “highly unlikely that prejudgment interest would have been awarded, even had the case been tried on the admiralty side of the court. Barrios, supra, at 1168.

      . In Mecom v. Levingston Shipbuilding Co., 622 F.2d 1209, 1217 (5th Cir.1980), the Fifth Circuit listed the following circumstances which the court should consider in determining whether to award pre-judgment interest: plaintiffs delay in bringing the suit; the existence of a genuine dispute regarding ultimate liability or the complexity of the factual and legal issues to be resolved; and, judgment in an amount substantially less than claimed.

      . See Dow Chemical Co. v. Dixie Carriers, 463 F.2d 120 (5th Cir.1972).

      . In Ceja v. Mike Hooks, Inc., 690 F.2d 1191 (5th Cir.1982), the court stated: “In the proper case, a high degree of contributory negligence might well be considered by the district court in invoking its discretion to deny prejudgment interest.” Ceja at 1197. See also Inland Oil and Transport Co. v. Ark-White Towing, 696 F.2d 321 (5th Cir.1983).

      . See Domangue v. Penrod Drilling Co., 748 F.2d 999, 1001 (5th Cir.1984); Wyatt v. Penrod Drilling Co., 735 F.2d 951, 956 (5th Cir.1984); Barton v. Zapata Offshore Co., 397 F.Supp. 778 (E.D.La.1975).


text:
    Alex CANOVA and the United States Fidelity and Guaranty Company (Intervenor) v. C.R.C., INC. OF LA. and Dresser Industries, Inc.
    Civ. A. No. 85-21-B.
    United States District Court, M.D. Louisiana.
    Feb. 20, 1985.
    William C. Dupont, Plaquemine, La., for plaintiff.
    Leah Barron, Baton Rouge, La., for intervenor.
    David S. Kelly, Breazeale, Sachse & Wilson, Baton Rouge, La., for defendants.
   POLOZOLA, District Judge.

This matter is before the Court on the motion of the plaintiff, Alex Canova, to remand this action to the 18th Judicial District Court, for the Parish of Iberville, State of Louisiana. No oral argument is required on this motion.

Plaintiff originally filed this suit in the 18th Judicial District Court for the Parish of Iberville, State of Louisiana, seeking to recover damages for personal injuries allegedly sustained by the plaintiff while working with an air operated high torque wrench. Named as defendants at the time the suit was filed were C.R.C., Inc. (C.R. C.), a Louisiana corporation that supplied the tool to the plaintiff’s employer, and Dresser Industries, Inc. (Dresser), a foreign corporation that manufactured the wrench. On the day this case was set for trial in state court, C.R.C. reurged a motion for summary judgment that had previously been taken under advisement by the state court. The state court granted C.R. C.’s motion for summary judgment and dismissed the plaintiffs suit with prejudice against C.R.C. Dresser then filed a petition for removal seeking to have the case removed to this Court. 28 U.S.C. § 1441. Dresser contends that complete diversity then existed between the plaintiff and the sole remaining defendant, Dresser. 28 U.S.C. § 1332.

The plaintiff has filed a motion to remand this action to the 18th Judicial District Court. The plaintiff contends that a case, originally not removable, cannot thereafter become removable due to the dismissal of a non-diverse party, unless such dismissal is by the voluntary act of the plaintiff. Weems v. Louis Dreyfus Corp., 380 F.2d 545 (5th Cir.1967). The voluntary-involuntary dismissal distinction was used by the courts prior to the 1949-amendment to 28 U.S.C. § 1446(b). Powers v. Chesapeake & O.R. Co., 169 U.S. 92, 18 S.Ct. 264, 42 L.Ed. 673 (1898); Whitcomb v. Smithson, 175 U.S. 635, 20 S.Ct. 248, 44 L.Ed. 303 (1900). It is the defendant’s position that this jurisprudence has been overruled by the 1949 amendment to 28 U.S.C. § 1446(b) and that as presently written, the statute permits removal when a non-diverse party has been dismissed by an order relating to the merits of the case. However, the Fifth Circuit in Weems, supra, has clearly and specifically held that the voluntary-involuntary distinction is still viable. This Court believes the Fifth Circuit’s decision in Weems is correct and is binding on this Court. Therefore, this Court declines to hold, as the defendant contends in its brief that “the Fifth Circuit has misconstrued the amendment to the applicable section to the United States Code (28 USC 1446).” In fact, this Court is especially reluctant to disregard such controlling jurisprudence when the Fifth Circuit has recently described Weems as reaffirming the “voluntary-involuntary rule.” Phillips v. Unijax, 625 F.2d 54 (5th Cir.1980). See also Royal v. State Farm Fire and Casualty Co., 685 F.2d 124 (5th Cir.1982). And, although the defendant states that the Weems interpretation of the 1949 amendment to 28 U.S.C. § 1446(b) is subject to an argument of “ratio ad absurdum,” this Court notes that other circuits’ interpretation of this statute agrees with the Fifth Circuit’s interpretation. See, e.g., Quinn v. Aetna Life & Casualty, 616 F.2d 38 (2nd Cir.1980); In re Iowa Manufacturing Company of Cedar Rapids, Iowa, 747 F.2d 462 (8th Cir.1984); Self v. General Motors Corp., 588 F.2d 655 (9th Cir.1978); and, DeBry v. Transamerica Corp., 601 F.2d 480 (10th Cir.1979). Many district courts have followed the voluntary-involuntary rule before and after Weems was decided by the Fifth Circuit.

Therefore:

IT IS ORDERED that the motion of the plaintiff, Alex Canova, to remand this case to the 18th Judicial District Court for the Parish of Iberville, State of Louisiana, be and it is hereby GRANTED.

Judgment shall be entered accordingly.

      . This Court has been advised that over 100 jurors were present in state court for jury selection at the time this case was removed to federal court.

      . 28 U.S.C. § 1446(b) presently provides, in pertinent part, that:
      If the case stated by the initial pleading is not removable, a petition for removal may be filed within 30 days after receipt by the defendant, through service or otherwise, of a copy of an amended pleading, motion, order or other paper from which it may first be ascertained that the case is one which is or has become removable.

      . In Weems the Fifth Circuit Court of Appeals stated: "[I]t would seem that the voluntary-involuntary rule was not affected by the amendment and therefore remains part of today's applicable case law." 380 F.2d at 548.

      . Although Black’s Law Dictionary, 5th Edition, does not define this phrase, this Court interprets it as meaning absurd reasoning.

      . The defendant, in support of its position that the Fifth Circuit misconstrued the amendment, lists three cases. Lyon v. Illinois Central Railroad Co., 228 F.Supp. 810 (S.D.Ms.1964) was expressly overruled by Weems. See Weems, 380 F.2d at 548, where the Court explained why the Lyon view was incorrect. Similarly, this Court feels that the dictum in Platt v. Illinois Central Railroad Co., 305 F.2d 136 (5th Cir.1962) is hardly controlling in the face of Weems' direct holding. And, Shultz v. Commercial Standard Ins. Co., 297 F.Supp. 1154 (W.D.Okla.1969) was overruled impliedly by the Tenth Circuit in DeBry v. Transamerica Corp., 601 F.2d 480 (10th Cir.1979), when it used the "voluntary-involuntary" test of Weems to decide if an action was removable.

      . See, e.g. Ennis v. Queen Insurance Co. of America, 364 F.Supp. 964 (W.D.Tenn.1973); Continental Oil Co. v. PPG Industries, Inc., 355 F.Supp. 1183 (S.D.Tex.1973); Oklahoma State Union of Farmers’ Educational and Cooperative Union of America v. Hartford Fire Insurance Co., 307 F.Supp. 415 (W.D.Okla.1970); McAfee v. Phillips Petroleum Co., 300 F.Supp. 651 (D.Montana 1969); Hum v. Missouri Pacific R. Co., 292 F.Supp. 65 (E.D.Ark.1968); Lauf v. Nelson, 246 F.Supp. 307 (D.Montana 1965); Putterman v. Daveler, 169 F.Supp. 125 (D.Delaware 1958); Stone v. Foster, 163 F.Supp. 298 (W.D.Ark.1958).


author: WEBER, District Judge.

text:
    LOGICAL MINICOMPUTERS OF ERIE, INC., Plaintiff, v. Harry M. FOX, Defendant.
    Civ. A. No. 84-219 ERIE.
    United States District Court, W.D. Pennsylvania.
    Feb. 20, 1985.
    Michael Dunlavey, North East, Pa., for plaintiff.
    Wallace J. Knox, Erie, Pa., for defendant.
   OPINION

WEBER, District Judge.

Plaintiff alleges a cause of action under 42 U.S.C. § 1983 against defendant in his individual capacity. Defendant is and was at all times relevant to this action a County Commissioner of Armstrong County, Pennsylvania. A county commissioner in Pennsylvania is a member of the three person board which constitutes the governing body, legislative and executive of a county. It is alleged that defendant’s actions described in the complaint were done under color of state law because of defendant’s position as County Commissioner. Jurisdiction is asserted under 28 U.S.C. § 1343.

Plaintiff’s cause of action sounds in defamation. It is alleged in the complaint that defendant, in his capacity as County Commissioner, sent to Commissioners of other counties certain communications which contained defamatory materials directed against plaintiff which interfered with plaintiff’s present or prospective business relationship with those counties.

Defendant has moved for summary judgment on the grounds that defendant was not acting under color of state law and that plaintiff has not been deprived of any property interest. We ordered the filing of a response, supporting evidentiary material, and briefs.

Defendant did not file any supporting evidentiary material with his motion and we are at a loss to know why Fed.R.Civ.P. 56 was employed rather than a Fed.R. Civ.P. 12(b)(6) motion which can be made at any time. Because this is essentially a motion under Rule 12(b)(6), for failure to state a claim upon which relief can be granted we must apply the rule of Conley v. Gibson, 355 U.S. 41, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957) that “a complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.”

Despite defendant’s failure to present an issue of fact in its motion, plaintiff’s response valiantly presents evidentiary matter to sustain his complaint. Plaintiff had attached the alleged defamatory communications as exhibits to its complaint, despite the admonition of Fed.R.Civ.P. 8 which requires only “a short and plain statement of the claim showing that the pleader is entitled to relief.” These communications were carried upon the letterhead of “The Board of Commissioners of Armstrong county” and bore defendant’s signature as “Harry M. Fox, Commissioner.” In addition, plaintiff's brief in opposition to the motion points to defendant’s answer and his deposition testimony that he acted in his capacity as a County Commissioner and in behalf of Armstrong County. (It would be better practice to make such offers of evidence as part of the record, by incorporating or attaching them to the Response filed with the Clerk so that any reviewing authority may see them; briefs are not part of the docket record).

Defendant must not only face the requirement of Conley v. Gibson, supra, but in moving for summary judgment must face the rule that all matters presented in connection with the motion must be construed most strongly in favor of the non-moving party. United States v. Diebold, Inc., 369 U.S. 654, 82 S.Ct. 993, 8 L.Ed.2d 176 (1962).

Thus there appears to be from the movant’s own pleadings, no genuine issue of material fact as to the essential element of state action as pleaded in plaintiff’s complaint. There is no denial that all of defendant’s actions were performed under the color of his office as County Commissioner.

Defendant’s only argument on the question of action under color of state law is that his actions as a County Commissioner are ultra vires without official authority or significance outside the county where he presides. Nevertheless all of the communications, public statements and press releases were issued from his office at the Armstrong County Courthouse in Kittanning, Pennsylvania, and were carried in the news media of that and other counties. While the effect here has been alleged to include damage in other counties, nevertheless the action took place in the seat of defendant’s power and part of the damage allegedly occurred in Armstrong County itself. We cannot find that because the effect of these statements and communications allegedly harmed plaintiff in other counties they cannot be considered as lacking the “color of state law” which is essential for a Section 1983 cause of action.

Defendant's second ground for summary judgment is that the Civil Rights Act does not give rise to a cause of action for defamation because defamation does not involve the infringement of a constitutional right, citing Paul v. Davis, 424 U.S. 693, 701, 96 S.Ct. 1155, 1160, 47 L.Ed.2d 405 (1976). However, the Court said that “the weight of our decision establishes no constitutional doctrine converting every defamation by a public official into a deprivation of liberty ... ”. The Court continued, “reputation alone, apart from some more tangible interest such as employment

The complaint alleges that as a direct and proximate result of defendant’s defamatory actions that plaintiff lost a bid with Westmoreland County, and had bids with Erie County and Armstrong County jeopardized. Because this is essentially a Rule 12(b)(6) motion attacking the sufficiency of the complaint we must allow plaintiff to prove any set of facts which can support the allegation.

The plaintiff has alleged a deprivation of a liberty interest, “later opportunities for employment” which is entitled to constitutional protection, Goss v. Lopez, 419 U.S. 565, 575, 95 S.Ct. 729, 736, 42 L.Ed.2d 725 (1975). It has alleged the curtailment of economic opportunities caused by the defamatory nature of defendant’s statement which is a proper claim under Section 1983, McKnight v. Southeastern Pennsylvania Transportation Authority, 583 F.2d 1229 (3d Cir.1978). See also Robb v. City of Philadelphia, 733 F.2d 286 (3d Cir.1984); Perri v. Aytch, 724 F.2d 362 (3d Cir.1983); Codd v. Velger, 429 U.S. 624, 97 S.Ct. 882, 51 L.Ed.2d 92 (1977); Board of Regents v. Roth, 408 U.S. 564, 92 S.Ct. 2701, 33 L.Ed.2d 548 (1972); Wisconsin v. Constantineau, 400 U.S. 433, 91 S.Ct. 507, 27 L.Ed.2d 515 (1971).

This is not a disappointed bidder who alleges that he has been deprived of due process in the award of the bid and brings suit against the public body whose alleged wrongful actions deprived him of the contract, as in Teleprompter of Erie, Inc. v. City of Erie, 567 F.Supp. 1277 (W.D.Pa.1983). It is a suit against a third party, whose alleged defamatory communications interfered with plaintiff’s legitimate expectations. Whether or not those economic expectations are legitimate cannot be decided now at this state of the record; it is enough that plaintiff has plead them and defendant has not come forth with evidence to show that there is no genuine issue of material fact as to this allegation. See also, Bartholomew v. Fischl, 534 F.Supp. 161 (E.D.Pa.1981); Petrone v. City of Reading, 541 F.Supp. 735 (E.D.Pa.1982); and Skrocki v. Caltabiano, 505 F.Supp. 916 (E.D.Pa.1981). The complaint asserts a proper claim under 42 U.S.C. § 1983.


author: BRITT, Chief Judge.

text:
    UNITED STATES of America, Plaintiff, v. Brown Costello RAMEY, Defendant.
    Nos. 84-49-02-CR-5, 85-10-04-CR-5.
    United States District Court, E.D. North Carolina, Raleigh Division.
    Feb. 20, 1985.

      Samuel T. Currin, U.S. Atty. by John S. Bruce, Asst. U.S. Atty., Raleigh, N.C., for plaintiff.
    Herman S. Gaskins, Jr., Washington, N.C., for defendant.
   ORDER

BRITT, Chief Judge.

Defendant stands indicted in two indictments for (1) two counts of conspiracy to violate the drug laws of the United States, (2) two counts of possession of controlled substances with intent to distribute, and (3) .two counts of interstate travel with the intent to carry on an unlawful activity related to controlled substances.

After defendant’s arrest, and upon motion of the government pursuant to Section 3142(f) of the Bail Reform Act of 1984, a detention hearing was held before Magistrate Charles K. McCotter, Jr., on 12 February 1985. 18 U.S.C. § 3142(f) (Supp. 1984). Finding that “... no conditions of release will reasonably assure the appearance of defendant as required and the safety of the community” Magistrate McCotter ordered the defendant to be detained. See id.

Defendant moved the court for a review of the Detention Order of Magistrate McCotter. 18 U.S.C. § 3145(b) (Supp.1984). Consistent with the requirement of 18 U.S.C. § 3145(b) that the motion be determined promptly, a hearing was held before the undersigned district judge at 2 p.m. on 15 February 1985.

Upon motion of a detainee to a district judge for review of a Detention Order of a magistrate it is the duty of the district court to conduct a de novo hearing. United States v. Williams and Hawkins, 753 F.2d 329 (4th Cir.1985). As the hearing before Magistrate McCotter was tape recorded, the court advised the parties at the beginning of the review hearing that it would rely on the tapes for a review of the evidence presented before Magistrate McCotter and would entertain such additional evidence and argument of counsel as they might desire.

The purpose of a detention hearing is “... to determine whether any condition or combination of conditions set forth in [18 U.S.C. § 3141] subsection (c) will reasonably assure the appearance of the person as required and the safety of any other person and the community____” 18 U.S.C. § 3142(f) (Supp.1984). The factors to be considered are:

(1) the nature and circumstances of the offense charged, including whether the offense is a crime of violence or involves a narcotic drug;
(2) the weight of the evidence against the person;
(3) the history and characteristics of the person, including—
(A) his character, physical and mental condition, family ties, employment, financial resources, length of residence in the community, community ties, past conduct, history relating to drug or alcohol abuse, criminal history, and record concerning appearance at court proceedings; and
(B) whether, at the time of the current offense or arrest, he was on probation, on parole, or on other release pending trial, sentencing, appeal, or completion of sentence for an offense under Federal, State or local law; and
(4) the nature and seriousness of the danger to any person or the community that would be posed by the person’s release____

18 U.S.C. § 3142(g) (Supp.1984).

Although a finding by the court that “no condition or combination of conditions will reasonably assure the safety of any other person and the community” must be supported by clear and convincing evidence, 18 U.S.C. § 3142(fX there is a rebuttable presumption that “... no condition or combination of conditions will reasonably assure the appearance of the person as required and the safety of the community if the judicial officer finds that there is probable cause to believe that the person committed an offense for which a maximum term of imprisonment of ten years or more is prescribed in the Controlled Substances Act (21 U.S.C. § 801 et seq.), ...” 18 U.S.C. § 3142(e) (Supp.1984).

From the evidence presented at the hearing before Magistrate McCotter and reviewed by the undersigned, the record in the case and the stipulations of the parties, the court makes the following

FINDINGS OF FACT

1. In late 1984, indictment No. 84-49-02-CR-5 was returned against the defendant by the grand jury for the Eastern District of North Carolina. That indictment charged him with (a) conspiracy to violate the drug laws of the United States, an offense punishable by imprisonment up to fifteen years; (b) possession with intent to distribute marijuana, an offense punishable by imprisonment up to fifteen years; and, (c) two counts of unlawful travel in interstate commerce with intent to promote an unlawful business activity involving narcotics and controlled substances, offenses punishable by imprisonment up to five years on each count.

2. In January 1985, indictment No. 85-10-02-CR-5 was returned against the defendant by the grand jury for the Eastern District of North Carolina which charged him with (a) conspiracy to violate the drug laws of the United States, an offense punishable by imprisonment up to fifteen years; and (b) possession with intent to distribute cocaine, an offense punishable by imprisonment up to fifteen years.

3. Defendant was aware that he was a target of an investigation by the grand jury. He employed counsel, Herman Gas-kins, Esq., who advised the office of the United States Attorney of his representation sometime during calendar year 1984.

4. The indictments in both of these cases were sealed by a United States magistrate upon motion of the government.

5. Warrants for the arrest of defendant were issued on 30 January 1985. A check by law enforcement officers at his residence and other places normally frequented by him proved to be fruitless as defendant could not be located. Members of his family professed to be unaware of his whereabouts.

6. Defendant voluntarily surrendered to the United States Marshal on 8 February 1985.

7. Defendant is a lifelong resident of Franklin County, North Carolina, and has lived in the same home for the past 23 years. He is married and the father of two adult children, both of whom live in fairly close proximity to defendant. For approximately 24 years defendant operated a Gulf service station in Franklinton, North Carolina.

8. Defendant is the owner of, or financially interested in, two western wear stores in Durham and Raleigh, North Carolina, Big Dukes Western Wear, one of which is operated by his daughter.

9. Defendant’s son operates a tire business in Youngsville, North Carolina, a short distance from Franklinton.

10. Defendant has two sisters living in Franklinton, North Carolina.

11. Defendant is a veteran of the United States Army, having served in Korea during the hostilities there. He was honorably discharged upon completion of his tour of duty.

12. Defendant has no criminal record and has no prior arrests.

13. Defendant is in good physical condition except for having high blood pressure, a condition for which he takes medication.

14. Defendant’s financial condition is not apparent to the court. Although he has several deeds of trust on his residence he is financially interested in the two western wear stores. His sisters are the owners of some real estate which they are willing to pledge as security for his release on bail.

15. The co-defendant, Douglas Freeman Ross, who has not yet been apprehended, is the reputed leader of an organization which has been dealing in controlled substances for many years, at least as far back as 1978. Since that time defendant has been a close associate of Ross. He is reputed to be second in command. During a period of time when co-defendant Ross was in prison in Florida the defendant was in charge of the local drug organization.

16. Defendant has been observed by at least three witnesses dealing in large quantities of controlled substances, including up to 2 kilos of cocaine, hundreds of pounds of marijuana and hundreds of thousands of quaalude tablets. He has a reputation in the drug community as the man to see if you are interested in transferring drugs.

17. Defendant is, himself, a drug user.

18. The investigation of defendant Ross and others was well known in Franklin County, North Carolina, and surrounding areas. On at least one occasion a witness who had been subpoenaed to testify before the grand jury was confronted by defendant who inquired of the witness what he was going to testify to. The witness was further advised by defendant that he would check back with the witness after his testimony. That witness was not again contacted by defendant. He was, however, contacted by telephone by the co-defendant Ross who threatened to kill the witness.

19. Co-defendant Ross employed a private investigator to interview grand jury witnesses, some of whom were interviewed on the premises of Big Dukes Western Wear.

20. Threats to the safety of one witness who testified before the grand jury were sufficiently serious that the United States Marshal’s service approved the witness for the witness protection program.

21. During the process of the investigation some witnesses have been told that if they cooperated with the government they, or members of their families, would be harmed.

Based on the foregoing findings of fact and in accordance with the legal principles discussed above, the court makes the following

CONCLUSIONS OF LAW

A. There is probable cause to believe that defendant has committed offenses under the Controlled Substances Act for which a maximum term of imprisonment of ten years or more is prescribed.

B. A rebuttable presumption has arisen that no condition or combination of conditions will reasonably assure defendant’s appearance as required and the safety of the community.

C. Defendant has failed to offer sufficient evidence to rebut the presumption.

D. There is clear and convincing evidence that no condition or combination of conditions will reasonably assure the appearance of defendant as required and the safety of other persons and the community. Although defendant has never been arrested or convicted of any other offense, the statutory presumption is bolstered by evidence from the government, from which the findings of fact were made, that defendant has longstanding ties with the leader of the drug organization, is himself a user of controlled substances and has participated in harassment and intimidation of grand jury witnesses.

E. The detention of defendant prior to trial is required.

IT, IS THEREUPON, ORDERED that defendant remain committed to the custody of the Attorney General, subject to the following provisions:

a. he shall be confined in a corrections facility separate, to the extent practicable, from persons awaiting or serving sentences or being held in custody pending appeal;

b. he shall be afforded reasonable opportunity for private consultation with his counsel; and,

c. on order of a court of the United States or on request of an attorney for the government the person in charge of the corrections facility in which he is confined shall deliver him to a United States Marshal for the purpose of an appearance in connection with a court proceeding.