author: MYRON L. GORDON, Senior District Judge.

text:
    Carol and Stanley ZABKOWICZ, Plaintiffs, v. The WEST BEND COMPANY, et al., Defendants.
    No. 83-C-187.
    United States District Court, E.D. Wisconsin.
    Jan. 15, 1985.
    See also 585 F.Supp. 635.
    Michael R. Fox, Madison, Wis., Walter F. Kelly, Milwaukee, Wis., for plaintiffs.

      William Sosnay, Mary A. Moore, Mulcahy & Wherry, Milwaukee, Wis., for defendants.
   DECISION AND ORDER

MYRON L. GORDON, Senior District Judge.

This is an application for attorney’s fees. The plaintiffs brought this action pursuant to the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq., the Wisconsin Fair Employment Act, Wis.Stat. § 111.31 et seq., the National Labor Relations Act, 29 U.S.C. § 185 et seq., and the common law of torts. Mrs. Zabkowicz charged that she had been sexually harassed at her place of employment. She also maintained that her employer, after being notified of the problem, failed to take corrective steps. After a three-day trial, a judgment was entered in favor of Mrs. Zabkowicz against the defendant West Bend Company in the amount of $2763.20, representing back wages for the period of work missed by Mrs. Zabkowicz because of her being sexually harassed. 589 F.Supp. 780 (Wis.1984). Her claim for back wages was the only count that went to trial, and the only one on which she prevailed. All of the other claims of Carol and Stanley Zabkowicz were dismissed before the presentation of any evidence. While the plaintiffs may harbor hopes that Mrs. Zabkowicz’ tort claim will be reinstated on appeal, it is clear that attorney’s fees should not be awarded to plaintiffs’ counsel as to any of the dismissed counts; indeed, even if the plaintiffs prevailed on the tort claims, there could be no fee recovery under Title VII.

The fee applications of Mr. Fox and Mr. Kelly do not reflect any subtraction for time devoted to the non-compensable tort and labor claims made by Mr. and Mrs. Zabkowicz. The fee application of Mr. Hawkins shows that only 24.6 of his claimed 394 hours were devoted to noncompensable aspects of this litigation.

In their tort and labor claims which were dismissed before trial, the plaintiff and her husband sought $3.5 million. Their legal representatives were to be paid on a contingency basis. It is reasonable to assume that .a major incentive to the considerable time invested by counsel in this litigation was the possible fee to be earned if Mrs. Zabkowicz prevailed on her tort claim. Out of a total of over 800 hours of legal work claimed by the plaintiffs’ three lawyers, only 24.6 are now attributed by them to the $3.5 million claim; all of the rest of the 800 hours of labor performed by the plaintiffs’ counsel were directed at the back pay count in which there was a maximum possible recovery to Mrs. Zabkowicz of $2763.20.

After the trial, when I ordered the entry of judgment in her favor on the back pay issue, I fully contemplated that Mrs. Zabkowicz’ attorneys would be awarded a reasonable attorney’s fee pursuant to the standards of Hensley v. Eckerhart, 461 U.S. 424, 103 S.Ct. 1933, 76 L.Ed.2d 40 (1983), and Lynch v. Milwaukee, 747 F.2d 423 (7th Cir.1984). Plaintiff’s counsel have now submitted a claim for 822.10 hours of legal service and have requested fees of $127,-515, plus expenses of $20,785.

In two recent cases, the court of appeals for this circuit has considered the matter of exaggerated fees and has sustained the district court’s rejection of all fees under such circumstances. Vocca v. Playboy Hotel of Chicago, Inc., 686 F.2d 605, 606 (7th Cir.1982); Brown v. Stackler, 612 F.2d 1057 (7th Cir.1980). In Brown, counsel submitted a bill for 834.5 hours of time spent; that figure is remarkably similar to the 822 hours involved in the case at bar. In denying fees altogether, the district judge (Judge Grady) observed that the 834 hours spent on the uncomplicated case was “more than half the billable time that an attorney would have for a whole year____” Brown v. Stackler, 460 F.Supp. 446, 447 (N.D.Ill.1978). The court of appeals held, at 612 F.2d 1057, 1059, that the denial of all fees was appropriate as a means of encouraging counsel to “maintain adequate records and submit reasonable, carefully calculated and conscientiously measured claims when seeking statutory counsel fees.”

The plaintiffs fee petition is seriously flawed in that it almost entirely fails to distinguish hours spent on the Title VII claim from hours spent on non-compensable claims. The plaintiff is barred from seeking compensation from the defendant for work spent on non-Title VII claims, and it is prevailing counsel’s duty to assure that his petition excludes non-eompensable hours. The petition also appears to be based in part on an after-the-fact reconstruction rather than contemporaneous records as the statute requires. For example, Mr. Fox claims to have expended 13.0 hours daily on June 20, 21, 22 and 25, 1984, for “trial preparation and trial.” That exactly 13 hours would have been expended each day seems doubtful. Moreover, the court was not in session on June 21, 1984. The petition is thus neither “carefully calculated” nor based on “adequate records” as required by Brown.

In its brief in connection with the instant application for attorney’s fees, the defendant’s lawyers have brought to my attention (for the first time) matters relating to the settlement discussions that had taken place between the parties. In an affidavit submitted in opposition to the plaintiffs’ attorneys fee application, Attorney Mary Moore avers that before the trial but after the court dismissed the tort claims, the defendant West Bend Company conducted settlement negotiations with the plaintiffs and “offered to settle the entire litigation with the plaintiffs for Twenty Thousand Dollars ($20,000), but plaintiffs rejected this offer.” The plaintiffs have not contradicted this representation by the defendant’s counsel. Thus it appears that Mrs. Zabkowicz could have settled all her claims for $20,000 and, instead, chose to proceed to trial on her back wages claim wherein the highest recovery for her damages could have been $2763.20. In Vocea, the court of appeals for this circuit referred to the fact that “early on in the case counsel had refused a settlement offer which would have provided his client with only $1538 less than was ultimately agreed upon____” 686 F.2d at 606. The court of appeals affirmed the district court’s denial of the fee requested in its entirety, noting that one of the reasons for the denial of fees by the district court was “counsel's unreasonable refusal to settle the case earlier,____” Id. at 607.

In State of Illinois v. Sangamo Construction Co., 657 F.2d 855, 862 (7th Cir. 1981), the court commented on the standards that the district court should apply in making attorney’s fee awards. In addition to assessing the skill and competence of counsel, the court is to consider

“... the novelty or difficulty of the case, the benefits of the result achieved, and the reasonableness of the time counsel devoted to the case.”

Applying that standard and directing it solely to the count relating to sexual harassment upon which Mrs. Zabkowicz prevailed, I unhesitatingly find that there was relatively little novelty or difficulty with the case and that the benefits of the results achieved were modest. It is also abundantly clear that the number of hours that plaintiffs’ counsel claimed to have devoted to that portion of the case on which they prevailed is not only unreasonable but “intolerably inflated.” Brown v. Stackler, 612 F.2d at 1059.

Plaintiff’s counsel presented their case at the trial with competence, and it could well be that their refusal to settle for a figure many times what they could hope to win for their client as back wages was based on their expectation that the tort claim might be reinstated on appeal. Nevertheless, it is irresistibly apparent that no intelligent attorney would have invested 800 hours of work on a claim worth, at best, less than $3000. Hensley recognizes that the time spent on unsuccessful civil rights claims which share a common core of facts with successful claims need not be subtracted in computing the attorney’s fees. However, the “common core” approach can render little comfort to plaintiff’s counsel in the case at bar, because in any reasonable downward adjustment of the allowable fee, the limited success obtained by the plaintiff would demonstrate the gross inflation of the fee application.

The plaintiff’s motion also seeks an allowance of expenses in the sum of $20,-785.11. Of this sum, $9061.92 was expended for the investigative services of one George Woywod. Transcription charges were incurred in the amount of $4786.55. I believe that a substantial portion of the expenses were incurred in connection with the unsuccessful non-compensable claims advanced by the plaintiffs and that the defendant West Bend Company should not be responsible for the entire $20,785.11.

I have carefully examined the various items of expense incurred by the plaintiffs and believe that a portion of the filing fees, witness fees, service of process fees, transcript fees, and expenses of counsel for travel and duplicating materials for trial should be allowed. In my opinion, $10,000 is an ample sum to cover the portion of the plaintiffs’ expenses which are germane to Mrs. Zabkowicz’ civil rights claim for back wages.

Therefore, IT IS ORDERED that that portion of the plaintiff’s motion seeking the allowance of attorney’s fees be and hereby is denied, and

IT IS ALSO ORDERED that that portion of the motion seeking the award of expenses be and hereby is allowed in the amount of $10,000.


source: Caselaw Access Project

license: Public Domain

text:
    Walter H. ESKE, Plaintiff, v. Joseph C. HYNES, et al., Defendants.
    No. 84-C-959.
    United States District Court, E.D. Wisconsin.
    Jan. 15, 1985.

      Walter H. Eske, pro se.
    Beth A. Sabbath, Trial Atty., Tax Div., Dept, of Justice, Washington, D.C., for defendants.
   DECISION AND ORDER

MYRON L. GORDON, Senior District Judge.

After the plaintiff failed to pay taxes for 1979 and 1980, the Internal Revenue Service (IRS) levied the amount due, $12,-888.85, upon an account held for the plaintiff by a third party, pursuant to 26 U.S.C. § 6331. The pro se complaint seeks recovery of the amount levied, plus damages. The defendants now move to dismiss. The motion will be granted.

The defendants are IRS officials. Defendant Phillips sent the plaintiff a notice of deficiency dated December 1, 1982, relative to tax years 1979 and 1980. The notice advised the plaintiff of his right to petition for a redetermination of the amount assessed by the IRS. When no petition was filed, the assessment was confirmed, and the case was assigned to defendant Bolgrin for collection. On April 18, 1983, Mr. Bolgrin mailed the plaintiff notices of assessment for 1979 and 1980, requesting payment within 10 days. No payment was received, and the defendant Hynes then issued a levy on the Stanga Cheese Company, a buyer of the plaintiffs dairy products.

The plaintiffs claim for return of the money levied is barred by 26 U.S.C. § 7422, which forbids a suit for the recovery of taxes allegedly improperly collected unless the plaintiff has filed a refund claim with the Secretary of the Treasury. The plaintiff has not alleged that such a claim has been filed.

As executive officers acting within the scope of their official duties, all three defendants are immune “from liability for civil damages insofar as their conduct does not violate clearly established statutory or constitutional rights____” Davis v. Scherer, — U.S. -, -, 104 S.Ct. 3012, 3014, 82 L.Ed.2d 139 (1984), quoting Harlow v. Fitzgerald, 457 U.S. 800, 818, 102 S.Ct. 2727, 2738, 73 L.Ed.2d 396 (1982). This qualified immunity applies here since there was no violation of the plaintiffs rights. Indeed, the complaint fails to state a claim for which relief can be granted.

Although the plaintiff contends that the defendant’s actions violated numerous statutory and constitutional provisions, it is clear that the procedures followed were entirely proper. A notice of deficiency was sent pursuant to 26 U.S.C. § 6212. The notice of assessment and demand for payment was sent pursuant to 26 U.S.C. § 6303, and the levy on the plaintiff’s property was authorized by 26 U.S.C. § 6331. The constitutionality of the levy procedure is well established. Ginter v. Southern, 611 F.2d 1226 (8th Cir.), cert. denied 446 U.S. 967, 100 S.Ct. 2946, 64 L.Ed.2d 827 (1979); United States v. Heck, 499 F.2d 778 (9th Cir.), cert. denied 419 U.S. 1088, 95 S.Ct. 677, 42 L.Ed.2d 680 (1974); Shapiro v. Secretary of State, 499 F.2d 527 (D.C. Cir.1974), aff’d 424 U.S. 614, 96 S.Ct. 1062, 47 L.Ed.2d 278 (1976).

The defendants request an award of reasonable expenses, including attorney’s fees under Rule 11, Federal Rules of Civil Procedure:

The signature of an attorney or party constitutes a certificate by him that he has read the pleading, motion, or other paper; that to the best of his knowledge, information, and belief formed after reasonable inquiry it is well grounded in fact and is warranted by existing law or a good faith argument for the extension, modification, or reversal of existing law, and that it is not interposed for any improper purpose, such as to harass or to cause unnecessary delay or needless increase in the cost of litigation____ If a pleading, motion, or other paper is signed in violation of this rule, the court, upon motion or upon its own initiative, shall impose upon the person who signed it ... an appropriate sanction, which may include an order to pay to the other party or parties the amount of the reasonable expenses incurred because of the filing of the pleading, motion, or other paper, including a reasonable attorney’s fee.

Sanctions are appropriate here. The complaint is frivolous to a degree which the plaintiff’s lack of legal training cannot explain. Its premise is found in paragraph 24:

Plaintiff has in the past, does in the present, and forever will continue to disclaim jurisdiction of the IRS, or any other Public ministry to levy taxes, require returns, .or in any form that stems from usurpations, tyranny, and/or other such seditious crimes repugnant to the Republican form of government, [sic] (emphasis in the original)

The plaintiff’s position is unambiguously contradicted by the United States Constitution, a document frequently invoked in the complaint. Article 1, § 8 gives Congress the authority “to lay taxes, duties, imposts and excises.” This authority “is exhaustive and embraces every conceivable power of taxation____ And it has never been questioned from the foundation, ... that there was authority given, as the part was included in the whole, to lay and collect income taxes.” Brushaber v. Union Pacific, 240 U.S. 1, 12-13, 36 S.Ct. 236, 239-240, 60 L.Ed. 493 (1916). The 16th amendment removed the requirement that “direct” taxes be apportioned by state and explicitly empowered Congress “to lay and collect taxes on incomes, from whatever source derived ...”

The allegations of the complaint are intemperate. The defendants are charged with a conspiracy to commit fraud, extortion, conversion, and grand larceny “against Plaintiff and Plaintiff’s Republican form of government.” (II21). The plaintiff threatens that “[s]aid common scheme is seditious in nature as it violates Title 42 U.S.C. Seditious activity borders on the penalties of treason against Plaintiff’s government (Republican form) of which carries the death penalty ...” [sic].

It would appear that one purpose of the plaintiff’s action is to harass and intimidate government officials in the performance of their duties. This was demonstrated earlier in this litigation when the plaintiff attempted to add as defendants the government attorneys who appeared to defend the action. An assessment of expenses and fees is appropriate under both Rule 11, Federal Rules of Civil Procedure, and the holding of Alyeska Pipeline Company v. Wilderness Society, 421 U.S. 240, 258-9, 95 S.Ct. 1612, 1622, 44 L.Ed.2d 141 (1975).

Therefore, IT IS ORDERED that the defendants’ motion to dismiss be and hereby is granted.

IT IS ALSO ORDERED that the defendants are entitled to judgment for their costs in this action and reasonable attorney’s fee, which the court sets at $500.

IT IS FURTHER ORDERED that the plaintiff's action be and hereby is dismissed.


author: JOHN LEWIS SMITH, Jr., District Judge.

text:
    Evanna POWELL, Plaintiff, v. Anthony NIGRO, et al., Defendants.
    Civ. A. No. 81-2622.
    United States District Court, District of Columbia.
    Jan. 16, 1985.

      Evanna Powell, pro se.
    Lloyd Moore, Washington, D.C., for defendants.
   MEMORANDUM

JOHN LEWIS SMITH, Jr., District Judge.

Plaintiff Evanna Powell, unsuccessful in her attempt to pass the District of Columbia bar examination, brings this action pro se against several past and present members of the Committee on Admissions to the Bar of the District of Columbia Court of Appeals. In prior proceedings, after remand from the Court of Appeals, 711 F.2d 420, remanding 543 F.Supp. 1044, for reconsideration in light of District of Columbia Court of Appeals v. Feldman, 460 U.S. 462, 103 S.Ct. 1303, 75 L.Ed.2d 206 (1983), this Court dismissed those counts of the complaint dealing with plaintiff’s individual, particularized claims as being premature. Powell v. Nigro, No. 81-2622 (D.D.C. Nov. 14, 1983). In the remaining counts, ¶¶ 10a-10b, 13-16, and 17a-20b, plaintiff makes a broad challenge to the constitutionality of the bar examination, essentially alleging that defendants’ construction of the bar examination violated her rights under the equal protection and due process of law components of the Fifth Amendment. The action is before the Court on defendants’ motion to dismiss on the ground of immunity and a request, pursuant to Fed.R.Civ.P. 25(d)(2), to substitute the Committee on Admissions as the party defendant. For the reasons stated below, the motion is granted in part and denied in part.

Plaintiff’s complaint is predicated on a variety of allegations. She asserts that the bar examination was not “validated,” in general or pursuant to court-established criteria for test validation. Plaintiff contends the examination question asking each applicant about the number of unsuccessful examinations was used to prejudge an applicant’s proficiency in law. Similarly, plaintiff alleges that the examination numbers assigned bar applicants were used to “predetermine” examination scores. Plaintiff further asserts that the Committee on Admissions had no “ascertainable standard” in grading the bar examination or in establishing the passing score when combining the essay and multistate components of the examination. In addition to her constitutional claims, plaintiff relies on these same allegations to make out a violation of 42 U.S.C. § 1983.

A motion to dismiss may be granted only if it appears “beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.” Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 101-102, 2 L.Ed.2d 80 (1957) (footnote omitted), quoted in Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 1686, 40 L.Ed.2d 474 (1974). The material allegations of the complaint are presumed to be true for purposes of this motion.

It is well settled that a judge is entitled to absolute immunity for all acts committed within his judicial jurisdiction, even grave procedural errors. Stump v. Sparkman, 435 U.S. 349, 98 S.Ct. 1099, 55 L.Ed.2d 331 (1978); Pierson v. Ray, 386 U.S. 547, 87 S.Ct. 1213, 18 L.Ed.2d 288 (1967). This immunity attaches regardless of corruption or maliciousness. Bradley v. Fisher, 80 U.S. (13 Wall.) 335, 20 L.Ed. 646 (1872). The purpose of absolute immunity is to promote spirited public service and to prevent fearful decisionmaking that would result if the attention of judges was diverted away from public trust and toward personal liability. Judicial immunity benefits the public interest by ensuring judicial independence and by preventing judges from being subjected to vexatious actions. For these same policy reasons, independence and freedom from obstructive and harassing litigation, absolute immunity has been made applicable to certain other quasi-judicial officials when their activities are integrally related to the judicial process and involve the exercise of discretion comparable to a judge. See, e.g., Imbler v. Pachtman, 424 U.S. 409, 96 S.Ct. 984, 47 L.Ed.2d 128 (1976) (prosecutors initiating and pursuing a criminal prosecution); Simons v. Bellinger, 643 F.2d 774 (D.C.Cir.1980) (members of committee appointed by Court of Appeals to monitor unauthorized practice of law); Ashbrook v. Hoffman, 617 F.2d 474 (7th Cir.1980) (partition commissioners effecting a divorce settlement); Stift v. Lynch, 267 F.2d 237 (7th Cir.1959) (justices of the peace).

Absolute immunity, however, will be “extended no further than its justification would warrant.” Harlow v. Fitzgerald, 457 U.S. 800, 811, 102 S.Ct. 2727, 2735, 73 L.Ed.2d 396 (1982). When assessing whether absolute immunity should be afforded a quasi-judicial official, a court should focus on the official’s function at issue and consider three public policy factors: 1) the “functional comparability” of his judgments to those of a judge; 2) the nature of the controversy in which he participated; and 3) the adequacy of safeguards to control unconstitutional conduct. Simons, 643 F.2d at 778; Rosenfield v. Clark, 586 F.Supp. 1332, 1339 (D.Vt.1984). If the function involves an exercise of judge-like discretion, absolute immunity should be afforded; for all other acts, the individual members should enjoy only qualified immunity. Kane v. Yung Won Han, 550 F.Supp. 120, 123 (E.D.N.Y.1982).

Congress has vested in the District of Columbia Court of Appeals the authority and responsibility for determining the method of admitting attorneys to the practice of law in the District of Columbia. D.C.Code § 11-2501 (1981). The Court of Appeals has established that admission to the bar requires the successful completion of a two-part examination, an essay portion and the multistate examination. D.C. App.R. 46 I(b)(8)(i); 46(8)(i). The Court of Appeals has further prescribed the areas of law on which the applicants are to be examined in the essay portion and has set a scaled passing score of 133 for the essay component and a separate scaled passing score of 266 for the combined essay and multistate examination. D.C.App.R. 46 I(b)(8)(v), (b)(10)(i); 46(8)(v), b(10)(i).

Both portions of the examination are administered by the court-appointed Committee on Admissions (Committee) which is made up of seven members appointed for a term of three years. D.C.App.R. 46 1(a); 46(a). The Committee has the additional responsibilities of preparing and grading the essay portion of the examination. D.C. App.R. 46 I(b)(8)(vi); 46(b)(8)(vi). The Committee certifies applicants to the court for admission to the bar, a function within the exclusive control of the D.C. Court of Appeals. Kennedy v. Educational Testing Service, Inc., 393 A.2d 523, 525 (D.C.App. 1978).

It is well settled that acts of a state’s highest court in deciding matters pertaining to admission to the bar are judicial acts. In re Summers, 325 U.S. 561, 565 n. 6, 65 S.Ct. 1307, 1310 n. 6, 89 L.Ed. 1795 (1945); Brown v. Bd. of Bar Examiners of State of Nevada, 623 F.2d 605, 610 (9th Cir.1980); Richardson v. McFadden, 563 F.2d 1130, 1132 (4th Cir.1977) (Hall, J., concurring), cert. denied, 435 U.S. 968, 98 S.Ct. 1606, 56 L.Ed.2d 59 (1978); Louis v. Supreme Court of Nevada, 490 F.Supp. 1174, 1182 (D.Nev.1980); Woodward v. Virginia Bd. of Bar Examiners, 454 F.Supp. 4, 6 (E.D.Va.1978), aff'd 598 F.2d 1345 (4th Cir.1979); Brown v. Supreme Ct. of Va., 359 F.Supp. 549, 554 (E.D.Va.) (three judge court), aff'd 414 U.S. 1034, 94 S.Ct. 534, 38 L.Ed.2d 327 (1973); Keenan v. Bd. of Law Examiners of State of N.C., 317 F.Supp. 1350, 1355 n. 5 (E.D.N.C.1970). In administering the District of Columbia bar examination and judging the fitness of applicants to practice law, the individual committee members perform a judicial function on behalf of the District of Columbia Court of Appeals. Richardson, 563 F.2d at 1132 (Hall, J. concurring); Woodward, 454 F.Supp. at 6.

While indeed performing a judicial function, the Committee members are entitled to absolute immunity for those acts where they exercise judge-like discretion, not when they perform a purely ministerial act. A close look at each of plaintiff’s allegations reveals that all but one relate to the discretionary decisions arising from that portion of the judicial function of bar admissions delegated to the Committee by the Court of Appeals. Certainly the Committee members exercise judge-like discretion in both composing and grading the examination questions. (¶¶ 17a-18 of the complaint). Similarly, the Committee exercises the same discretion in choosing to ask applicants questions pertaining to previous attempts at passing the bar examination. (¶¶ 13, 20a, 20b of the complaint). Likewise, any issue of validation of the examination would involve a discretionary function delegated to the Committee by the Court of Appeals (¶¶ 10a, 10b of the complaint). As these allegations refer to discretionary acts delegated to the Committee, the defendants are entitled to share in the judge’s absolute immunity.

Plaintiff, in addition, alleges that the Committee members have no “ascertainable standard” for determining the passing score when combining the essay and multistate components of the examination or for determining the value to be given prior multistate examination scores used in combination with subsequent essay results (¶1115,16 of the complaint). An ascertainable standard, however, does exist, as provided by the D.C. Court of Appeals, and the individual Committee members are entitled to immunity in applying the standard. The D.C. Court of Appeals, in an exercise of its discretion, has set the scale scores needed to pass the bar examination. D.C.App.R. 46 I(b)(10); 46(b)(10). That same court has established both that “essay scores on each examination will be converted to scale scores using the equi-percentile method,” D.C.App.R. 46 1(b)(9); 46(b)(9), and the necessary criteria for using a prior multistate scale score in conjunction with a subsequent essay score. D.C.App.R. 46 1(b)(10)(ii)(B); 46(10)(ii)(B). The individual Committee members cannot be held liable for money damages when performing their delegated duties in conformance with directives from the D.C. Court of Appeals. As plaintiff has made no allegations that defendants went beyond the established rules, the individual Committee members are entitled to absolute immunity as to 11 ¶ 15 and 16 of the complaint.

Plaintiff’s allegation that the examination numbers assigned to applicants were used to predetermine test scores (¶¶ 14, 19 of the complaint) involves no exercise of discretion by the Committee members, and as such, the defendants are only entitled to qualified immunity. Harlow, 457 U.S. at 811, 102 S.Ct. at 2735. The assigning of numbers is purely a ministerial task, not involving any function similar to that of a judge. Thus, defendants are at most entitled to qualified immunity if their acts were performed in good faith. It would be premature for the Court to rule at this time on whether the defendants are protected by qualified immunity as “the scope of that immunity will necessarily be related to facts as yet not established either by affidavits, admissions, or a trial record.” Scheuer, 416 U.S. at 243, 94 S.Ct. at 1689. The allegations in Till 14 and 19 remain viable against the individual defendants.

There can be little question that disgruntled applicants unhappy with their failing scores would institute civil suits challenging the accuracy of the Committee members administering and grading of the bar examination. The threat of such litigation and time loss defending such actions would impair the members’ judgment. The intense nature of administering the bar examination and the likelihood of harassing litigation certainly supports granting the Committee members absolute immunity as to actions involving judge-like discretion.

Granting absolute immunity to the Committee members would not allow for widespread abuse in the administration of the bar examination. For applicants who do not pass the bar examination, the Committee provides its post examination review procedure. Under the review procedure,

[e]ach unsuccessful applicant is notified of his score on each essay question, his “raw score” for each section of the [multistate Bar Examination], and his combined score. Upon request, the applicant may meet with the Secretary to the Committee for a review of his essay paper and the questions as framed by the examiners and the examiners’ comments with respect to each question. An unsuccessful applicant may submit within a fixed time, without identifying himself a petition for regrading to each examiner he wishes with supporting reasons. The Secretary must submit to each examiner so petitioned, the petition, the petitioner’s examination book and the examiner’s questions and comments with respect to such questions. The unsuccessful applicant is notified by the Secretary of the examiner’s ultimate disposition of his petition for regrading and the applicant may obtain, upon request, finally a review of the regrading petition and the examiner’s disposition thereof by two other members of the Committee.

Harper v. District of Columbia Committee on Admissions, 375 A.2d 25, 26-27 (D.C.App.1977) (emphasis in the original).

Although the District of Columbia has no statutorily established procedure for petitioning the Court of Appeals for review of a final determination of the Committee denying certification that an applicant has passed the bar examination, the Court of Appeals nevertheless does accept and consider petitions for review. Kennedy, 393 A.2d at 525 (citing as an example Harper v. District of Columbia Committee on Admissions, 375 A.2d 25). Thus plaintiff would have the opportunity to point out the inaccuracies in the bar admissions without the need to bring a civil damage suit against the individual Committee members.

In addition to claims for money damages, plaintiff seeks certain equitable remedies which include a declaratory judgment stating that the Committee members violated her constitutional rights and an injunction enjoining the members from using grading techniques which continue to violate her constitutional rights. Plaintiff also requests that she be admitted to the District of Columbia bar and granted a licence to practice law in the District of Columbia. A finding of absolute immunity itself would not preclude plaintiff from bringing her equitable claims against the individual members. Pulliam v. Allen, — U.S. -, 104 S.Ct. 1970, 80 L.Ed.2d 565 (1984). It is clear, however, by the nature of the requested relief, that plaintiff is suing defendants in their official capacity, and pursuant to Fed.R.Civ.P. 25(d)(2), the Committee on Admissions should be inserted as the defendant to these equitable claims. The Court does not address at this time whether it is within the Committee’s power as a whole to provide the requested relief, though the Court does question whether the Committee is in a position to provide plaintiff with the relief she desires. See Feldman v. State Board of Law Examiners, 438 F.2d 699, 702 (8th Cir.1971) (The Committee “does not itself admit applicants to the bar, ... but merely makes recommendations ... the court may or may not elect to follow.”). Accord, Kennedy, 393 A.2d at 525.

Defendants request that the Court extend the protective order of January 17, 1984 to include plaintiff’s interrogatories nos. 7-14. Powell v. Nigro, CA No. 81-2622 (D.D.C. Jan. 17, 1984). In that January 17 order, the Court considered defendants’ motion for a protective order to plaintiff’s first set of interrogatories, granting the request in part but ordering defendants to answer interrogatories nos. 7-14. While the individual members are entitled to absolute immunity as to certain of the claims for money damages, enough of the complaint remains viable against the individual members and the Committee itself to lay a factual predicate for applying the Court’s reasoning in the earlier order to the request presently before it. For the same reasons used there, a balancing between “the broad (but not unbounded) scope of discovery and the strictures of Feldman,” Powell v. Nigro, slip op. at 3, the request for an extension of the protective order is denied, and defendants are required to answer interrogatories nos. 7-14.

Except for those allegations relating to the assigning of test numbers to the bar applicants contained in MI 14 and 19 of the complaint, the individual Committee members are entitled to absolute immunity from any claims for money damages. As to the allegations in ¶¶ 14 and 19, plaintiff has a viable cause of action against the individual members, subject only to a showing of qualified immunity. Though the request for equitable relief is not precluded by absolute immunity, the Committee on Admissions should be made the party defendant to those claims, dismissing the individual Committee members as parties to the claims for equitable relief. The requested extension of the January 17 protective order is denied and defendants must respond to interrogatories nos. 7-14.

Accordingly, defendants’ motion to dismiss is granted in part and denied in part.

An appropriate order follows.

      . The following discussion relating to judicial immunity applies equally to § 1983 claims. Pierson v. Ray, 386 U.S. 547, 554-55, 87 S.Ct. 1213, 1217-18, 18 L.Ed.2d 288 (1967).

      . For convenience sake, the Court has provided citations both to the Rules of the D.C. Court of Appeals in operation at the time the complaint arose and to the new rules which went into effect on January 1, 1985. The applicable text of the rules remains unchanged.


author: WARRINER, District Judge.

text:
    Robert T. CAREY v. UNITED STATES of America.
    Civ. A. No. 84-0529-R.
    United States District Court, E.D. Virginia, Richmond Division.
    Jan. 16, 1985.

      Robert T. Carey, pro se.
    Debra Prillaman, Asst. U.S. Atty., Richmond, Va., for defendant.
   OPINION

WARRINER, District Judge.

Presently before the Court is defendant’s Fed.R.Civ.P. 12(b)(6) motion to dismiss filed with this Court on 19 November 1984. Plaintiff on 29 November 1984 filed a pleading denominated as a Motion for Judgment on the Pleadings in Opposition to Defendant’s Motion to Dismiss. Defendant filed a brief in opposition to plaintiff’s motion and plaintiff filed a response to defendant’s opposition brief. Because under Fed.R.Civ.P. Rule 12(c) a motion for judgment on the pleadings may not be made until after the pleadings are closed and the pleadings were not closed at the time the motion was filed, plaintiff’s motion will be treated as a response to defendant’s motion to dismiss. Defendant’s motion will be considered on the basis of the record as it now exists. The matter is ripe for adjudication.

The operative facts are not in dispute. On or about 15 April 1984 plaintiff filed his income tax return for the year 1983. On Schedule A, line 4, of the return, as an itemized deduction, plaintiff claimed a $2,500 “conscientious objection to war” deduction which plaintiff claims reflected “the amount of deduction necessary to not pay 35% of my taxes that would pay for war.” Plaintiff’s Amended Complaint, attachment 2 (2 Oct. 1984). The conscientious war deduction reduced plaintiff’s tax liability by $507.00. Accompanying plaintiff’s tax forms was a written statement that expressed plaintiff’s opposition to the war, the reasons for taking the conscientious objection to war deduction, and an explanation that informed the Internal Revenue Service of what the plaintiff’s tax liability would be assuming that the conscientious objection to war deduction is invalid.

In a letter dated 25 June 1984 the Internal Revenue Service notified plaintiff that he had been assessed a $500.00 penalty pursuant to the provisions of 26 U.S.C. § 6702. On 10 July, 1984 plaintiff paid 15% of the assessed penalty, as required by 26 U.S.C. § 6703, and filed a request for a refund of the $75.00 (15% of $500) and an abatement of the remainder of the penalty. In a letter dated 16 August 1984 the IRS notified plaintiff that his request for a refund/abatement was denied. On 29 August 1984 plaintiff timely filed his complaint and on 2 October 1984 plaintiff filed an amended complaint.

In the complaint plaintiff asserts that:

The assessment under 26 U.S.C. § 6702 against the Plaintiff was made illegally and without authority under § 6702 for the following reasons.
(a) The return filed by the Plaintiff contains sufficient information to determine the correct amount of self assessment and the attached letter clearly states what the correct amount should be.
(b) The Plaintiff’s conduct was not due to a desire, appearing on the face of the return, to delay or impede the administration of the Federal Income tax laws.
(c) The conduct of the plaintiff was not due to a frivolous position.
In the alternative, assuming that 26 U.S.C. § 6702 applies to the Plaintiff, said statute violates Plaintiff’s rights under the First Amendment to the United States Constitution to
(a) Freedom of speech
(b) Free exercise of Religion.
Section 6702 provides:
Frivolous income tax return.
(a) Civil penalty. — If—
(1) any individual files what purports to be a return of the tax imposed by subtitle A but which—
(A) does not contain information on which the substantial correctness of the self-assessment may be judged, or
(B) contains information that on its face indicates that the self-assessment is substantially incorrect; and
(2) the conduct referred to in paragraph (1) is due to—
(A) a position which is frivolous, or
(B) a desire (which appears on the purported return) to delay or impede the administration of Federal income tax laws,
then such individual shall pay a penalty of $500.

According to the legislative history, section 6702 was enacted because Congress was “concerned with the rapid growth in deliberate defiance for the tax laws by tax protestors.” Senate Report No. 494, 97th Cong. 2nd Sess. 277, reprinted in 1982 U.S.C. Congressional & Administrative News 781, 1023. In explaining the provisions of § 6702 the legislative history states:

[T]he penalty is available against any individual filing a purported return in which insufficient information to calculate the tax is given or where the information given is clearly inconsistent (as where an individual claims 99 exemptions but lists only a few dependents) or where the return otherwise reveals a frivolous position or a desire to impede the tax laws. Moreover, the penalty could be imposed against any individual filing a “return” showing an incorrect tax due, or a reduced tax due, because of the individual’s claim of a clearly unallowable deduction, such as a “gold standard deduction” (i.e., a discount of dollars because the U.S. is not on the gold standard) or a “war tax” deduction under which the taxpayer reduces his taxable income or shows a reduced tax due by that individual’s estimate of the amount of his taxes going to the Defense Department budget, etc. In contrast, the penalty will not apply if the taxpayer shows the correct tax due but refuses to pay the tax. In such a case, of course, the Secretary can assess and collect a tax immediately. Id. at 1024 (emphasis added).

Plaintiff cites the opinion of a United States District Court for the Central District of California in Jenney v. United States, 581 F.Supp. 1309 (C.D.Ca.1984), in support of his position that the method he used for filing his tax return did not justify the imposition of the penalties set forth under section 6702. The Jenney case is factually very similar to the case at bar. In Jenney the plaintiffs in their 1982 income tax return claimed an $18,000 deduction in Schedule A, labelled as a “conscience deduction.” They also attached a statement to their Schedule A which stated:

Included among our miscellaneous deductions, we are listing a Conscience Deduction of $18,044 in order to bring our tax liability down to $5,273 which is 44% of what we would owe without such a deduction. We are claiming this deduction out of a conscientious objection to war and to preparations for war. The War Resisters League states that 44% of the 1982 federal budget went for non-military purposes____
This reduction in our taxable income will produce a sizeable refund to us. Without the deduction, we owe the Internal Revenue Service $1,082. With it, we will receive a refund of $5,617____ Jenney, 581 F.Supp. at 1309-10.

The Jenney court focused on the above quoted legislative history and stated that:

It is reasonably clear from the emphasized language that where, as here, the taxpayer shows the correct amount due to the IRS on their tax return, but refuse to pay such amount based on their personal convictions, the penalty prescribed in § 6702 was not meant to apply. This is also apparent from the general tenor of the Senate Finance Committee’s Report, which indicates that § 6702 was intended to authorize an immediately assessable penalty in those cases where “purported ‘returns’ are clearly not designed to inform the Secretary of the filer’s taxable income and are not in processable form.” Jenney, 581 F.Supp. at 1310 (quoting Senate Report at 1024).

I have carefully considered the Jenney opinion and my conclusion is that the decision is wrong. It is contrary to the clear language of the Act and the specific legislative history which mentioned exactly the type of deduction plaintiff claimed.

In order for a penalty to be assessed under section 6702, either subsection (a)(1)(A) or (B) must be met and either subsection (a)(2)(A) or (B) must be met.

Although, at least arguably, plaintiff’s return, including the statement accompanying it, contained “information on which the substantial correctness of the self-assessment may be judged,” the return also contained “information that on its face indicates that the self-assessment is substantially incorrect” so as to satisfy section 6702(a)(1)(B). By taking the war tax deduction, plaintiff represented he owed less than his actual tax liability and that he was entitled to a substantial tax refund. The statement by the district court in Drefchinski v. Regan, 589 F.Supp. 1516, 1522 (W.D. La.1984) (quoting 26 U.S.C. § 6702), supports my position that the requirements of section 6702(a)(1)(B) are met.

[TJhis Court does not agree with the District Court’s conclusion in Jenney that a statement in an attachment will preclude imposition of the Section 6702 penalty on the basis of an incorrect self-assessment____ At best, the materials attached to this case and in Jenney merely highlight the fact that the taxpayers have reported a tax liability which is substantially incorrect. That is, a supplementary statement which indicates the tax liability without the clearly unallowable deduction, ... itself serves as “information that on [the] face [of the return] indicates that the self-assessment is substantially incorrect.”

Plaintiff cites no authority to suggest that his position is not frivolous. To the contrary, “[T]he long and unbroken line of authorities establishing the impermissibility of these tax deductions dispels any doubt that plaintiff’s position [is] ‘frivolous’ within the meaning of the statute.” Franklet v. United States, 578 F.Supp. 1552, 1555 (N.D.Ca.1984) (citing Lull v. Commissioner, 602 F.2d 1166 (4th Cir. 1979), cert. denied, 444 U.S. 1014, 100 S.Ct. 664, 62 L.Ed.2d 643 (1980); First v. Commissioner, 547 F.2d 45 (7th Cir.1976) (per curiam); Autenrieth v. Cullen, 418 F.2d 586 (9th Cir.1969), cert. denied, 397 U.S. 1036, 90 S.Ct. 1353, 25 L.Ed.2d 647 (1970)). See also Drefchinski, 589 F.Supp. at 1521 (“Drefchinski's substantially incorrect self-assessment was due to a position which is frivolous within the meaning of section 67-02(a)(2)(A)____”); Welch v. United States, 53 AFTR2d 84-706, 84-707 (Mass.D.C.1984) (plaintiff penalized under § 6702 for a legally unsupportable position).

The United States Supreme Court in United States v. Lee, 455 U.S. 252, 260, 102 S.Ct. 1051, 1056, 71 L.Ed.2d 127 (1982) specifically held that a “war tax deduction” is invalid. The Supreme Court stated that:

If, for example, a religious adherent believes war is a sin, and if a certain percentage of the federal budget can be identified as devoted to war-related activities, such individuals would have a ... claim to be exempt from paying that percentage of the income tax. The tax system could not function if denominations were allowed to challenge the tax system because tax payments were spent in a manner that violates their religious belief, [citations omitted]____
Because of broad public interest in maintaining a sound tax system is of such higher order, religious belief in conflict with the payment of taxes affords no basis for resisting the tax.

The Fourth Circuit in 1979 reached a similar position in Lull v. Commissioner of IRS, 602 F.2d 1166 (4th Cir.1979). “Petitioners’ assertions under the heading[] of ‘conscientious objections’ ... that they should not be required to pay taxes that would be used for military expenditures again pertain to their religious and moral objections to such expenditures and do not present new or meritorious reasons for allowance of the deductions.” Id. at 1169 appendix.

Because the conditions of section 6702(a)(1)(B) and (a)(2)(A) have been met, the penalty assessed against plaintiff was within the authority granted under section 6702.

It is well settled that section 6702 does not violate plaintiff’s rights guaranteed under the First Amendment to free exercise of religion or freedom of speech. Under a free exercise of religion analysis, “[s]ection 6702 must be upheld if the underlying governmental interest override[s] and outweigh[s] the impairment of the asserted free exercise rights.” Drefchinski, 589 F.Supp. at 1525. In Franklet v. United States, 578 F.Supp. 1552, 1556 (N.D.Ca. 1984) the district court, dealing with § 6702, stated that “the necessities of revenue collection under enactments of general applicability raise governmental interests sufficiently compelling to outweigh the free exercise rights of those who find the tax objectionable on bona fide religious grounds.”

As the Supreme Court stated in United States v. Lee, 455 U.S. at 259, 102 S.Ct. at 1056, “[t]o maintain an organized society that guarantees religious freedom to a great variety of faiths requires that some religious practices yield to the common good. Religious beliefs can be accommodated ... [citations omitted], but there is a point at which accommodation would ‘radically restrict the operating latitude of the legislature.’ ” The interest in a sound tax system has been found sufficiently compelling to outweigh religious challenges to the administration of tax laws. See, e.g., Drefchinski, 589 F.Supp. at 1525.

Furthermore, section 6702 employs the least restrictive means of achieving these interests. The penalty is addressed to only those returns that fail to correctly represent a taxpayer’s tax liability due to either a position which is legally frivolous or a desire to impede the administration under the tax collection system. Id.

“The penalty in question here applies to any taxpayer adopting any frivolous position for any reason. It does not penalize plaintiffs’ exercise of conscience as such any more than the taxes they originally sought to avoid. ‘On matters religious, it is neutral.’ ” Franklet at 1556 (quoting Autenrieth v. Cullen, 418 F.2d 586, 588 (9th Cir.1969), cert. denied, 397 U.S. 1036, 90 S.Ct. 1353, 25 L.Ed.2d 647 (1970)).

“Section 6702 does not penalize the expression of ... religious beliefs held by ... plaintiff, however sincere____ Section 6702 simply penalizes the filing of a legally incorrect return, not due to mistake or inadvertence or based on a legally supportable legal position.” Welch v. United States, 53 AFTR2d 84-706-707 (1984).

Assuming, arguendo, that plaintiff’s conscientious war objection could be qualified as speech, the penalty imposed by section 6702 does not violate the rights guaranteed under the First Amendment to freedom of speech. In United States v. O’Brien, 391 U.S. 367, 377, 88 S.Ct. 1673, 1679, 20 L.Ed.2d 672 (1968) the Supreme Court stated that a statute will pass constitutional muster:

If it is within the constitutional power of the Government; if it furthers an important or substantial governmental interest; if the governmental interest is unrelated to the suppression of free expression; and if the incidental restriction on alleged First Amendment freedoms is no greater than is essential to the furtherance of that interest.

The Sixteenth Amendment to the United States Constitution gives Congress the power to lay and collect taxes on income. Inherent in that power is the power to assess penalties for an individual’s failure to pay the full amount of income tax due.

The penalty established by section 6702 acts as a disincentive to people contemplating filing frivolous tax returns, which serves to further the substantial governmental interest in maintaining a sound tax system. See United States v. Lee, 455 U.S. at 260, 102 S.Ct. at 1056 (1982); Drefchinski, 589 F.Supp. at 1526-27.

The penalty imposed by 6702 is unrelated to the suppression of free speech. Rather, the penalty is intended to discourage the filing of frivolous returns which would impede the tax collection system. See Drefchinski, 589 F.Supp. at 1527; Franklet, 578 F.Supp. at 1556-57.

“Section 6702 provides a modest and closely focused deterrent against precisely the behavior Congress legitimately sought to deter.” Franklet, 578 F.Supp. at 1557. The “incidental restriction on alleged First Amendment freedoms is no greater than is essential to the furtherance of that interest.” O’Brien, 391 U.S. at 377, 88 S.Ct. at 1679.

Plaintiff wants to appear to be a martyr for conscience’s sake but does not want to pay a penalty for doing so. He lacks the courage to refuse to pay the tax on the basis of his conscientious objection and he follows the method he does to put a fig leaf over his cowardice. He wants to be able to win the plaudits of his fellow protestors by filing his tax protest return, yet he followed the form that he did in an effort to make certain that he would have to pay no penalty for what he represents to be the exercise of his religious scruples. “Here the actor wants the best of both worlds: to disobey, yet be absolved of punishment for disobedience.” United States v. Malinowski, 472 F.2d 850, 857 (3d Cir.), cert. denied, 411 U.S. 970, 93 S.Ct. 2164, 36 L.Ed.2d 693 (1973). Such conduct impels no admiration.

This Court finds that plaintiff has failed to state a claim upon which relief can be granted. Accordingly, defendant’s’ Fed.R. Civ.P. 12(b)(6) motion to dismiss is hereby GRANTED.

And it is so ORDERED.


author: JOHN W. OLIVER, Senior District Judge.

text:
    Karla HARPER, Widow, et al., Plaintiffs, v. Spellmon C. GIBSON, Administratrix of the Estate of Reginald J. Gibson, Deceased, Defendant.
    No. 84-0605-CV-W-1.
    United States District Court, W.D. Missouri, W.D.
    Jan. 17, 1985.
    Gordon Dempsey, Sutherlin & Dempsey, Indianapolis, Ind., William Pickett, Kansas City, Mo., for plaintiffs.
    G. Spencer Miller, Kansas City, Mo., for defendant.
   MEMORANDUM OPINION AND ORDER

JOHN W. OLIVER, Senior District Judge.

This case pends on defendant’s alternative motion to dismiss or for summary judgment, filed November 14, 1984. We find and conclude that all counts of plaintiffs’ complaint are barred by the Tennessee one-year statute of limitations, which must be applied in accordance with Mo. Ann.Stat. § 516.190, Missouri's borrowing statute, and that defendant’s alternative motion for summary judgment should be granted.

I.

The material facts necessary to rule the motion are not in dispute. Plaintiffs’ decedent, Phillip W. Harper, was a resident of Indiana. On or about May 24, 1982, Harper’s vehicle collided with the vehicle of Reginald J. Gibson, a Missouri resident, in the State of Tennessee. Both men died. On May 24, 1984 plaintiffs filed their complaint in this Court. Each of the three states provides a cause of action for wrongful death by statute. The periods of limitation for filing such actions, however, are different: Missouri, three years; Indiana, two years; and Tennessee, one year. The controlling question of whether plaintiffs’ complaint is time barred depends on whether a Missouri court would apply Tennessee’s one-year statute of limitations pursuant to the mandate of Mo.Ann.Stat. § 516.190, Missouri’s borrowing statute. We find that it would and that this Court must apply that Missouri rule of decision to the undisputed factual circumstances of this case.

II.

Plaintiffs’ complaint alleges claims for wrongful death arising under the laws of the states of Indiana, Tennessee, and apparently Missouri. All three counts of plaintiffs’ complaint are based upon the same fatal Tennessee accident.

Plaintiffs contend that the Missouri three-year statute of limitations should be applied to the Tennessee and Indiana counts alleged in Counts II and III. As to Count I (Missouri), as we have already noted, plaintiffs also contend that the three-year Missouri statute of limitations should be applied to that count.

Defendant contends that any cause of action the plaintiffs may have had is barred by the running of the one-year Tennessee statute of limitations. Defendant expressly relies on the operation of the Missouri “borrowing statute.” Defendant further contends that Missouri would not recognize the claim plaintiffs attempt to assert under Indiana law.

III.

We conclude that Missouri would not recognize either of the claims that plaintiffs have attempted to assert under the wrongful death statutes of the State of Indiana and the State of Missouri. We also conclude that the State of Missouri would recognize plaintiffs’ claim as asserted under the wrongful death statute of Tennessee. We further conclude, however, that the courts of Missouri would determine that the one-year statute of limitations provided by Tennessee law, would be applied by a Missouri court in accordance with the mandate of Missouri’s borrowing statute, Section 516.190.

A.

A Missouri court obviously would not attempt to apply Indiana law to the Tennessee accident involved in this case. Allstate Insurance Co. v. Hague, 449 U.S. 302, 308, 313, 101 S.Ct. 633, 637, 640, 66 L.Ed.2d 521 (1981), makes clear that both the Due Process Clause and the Full Faith and Credit Clause limit the extraterritorial application of a state’s statutes. Cf. New York Life Insurance Co. v. Head, 234 U.S. 149, 161, 34 S.Ct. 879, 881, 58 L.Ed. 1259 (1914), in which the Supreme Court found the Full Faith and Credit Clause made it “impossible to permit the statutes of Missouri to operate beyond the jurisdiction of that State” and Home Insurance Co. v. Dick, 281 U.S. 397, 408, 50 S.Ct. 338, 341, 74 L.Ed. 926 (1930), in which the Court concluded Dick’s permanent residence in Texas was “without significance” and that, under the Due Process Clause, Texas was “without power” to affect the terms of the contract executed outside the state of Texas. See also McCluney v. Joseph Schlitz Brewing Co., 649 F.2d 578, 582 n. 4 (8th Cir.1981), and Gaston v. B.F. Walker, Inc., 400 F.2d 671, 672-73 (5th Cir.1968), in which the Court of Appeals for the Fifth Circuit appropriately stated: “[I]t is clear that even though such an action [for wrongful death occurring in Louisiana] is brought in a Texas court, if the tortious conduct occurred in another state, recovery must be based upon the foreign wrongful death statute because the Texas wrongful death statute does not have extraterritorial effect.”

Missouri courts have consistently refused to give extraterritorial effect to the Missouri Wrongful Death Statute. State ex rel. Broglin v. Nangle, 510 S.W.2d 699, 701 (Mo. en banc 1974). Rositzky v. Rositzky, 46 S.W.2d 591, 594 (Mo.1931), cited in Broglin, held that: “[I]t is settled law and almost axiomatic that the statutes of a state or country prescribe the law within its boundaries only, and have no extraterritorial effect.” See also State ex rel. Kansas City Stock Yards v. Clark, 536 S.W.2d 142, 145 (Mo. en banc 1976) (“Ordinarily the wrongful death statute of the state in which the fatal injury occurred would apply”) and Bigham v. McCall Service Stations, Inc., 637 S.W.2d 227, 229 (Mo.Ct. App.1982) (“the statute of a state does not ordinarily have any extra-territorial effect”). Nelson v. Hall, 684 S.W.2d 350, 354 (Mo.Ct.App.), modified (October 30, 1984), cited and discussed most of the cases just cited and stated that “[t]he rule that a statute enjoys no extraterritorial effect beyond the state of enactment remains the principle of our adjudicated decisions.”

Decedents’ only contact with each other occurred in Tennessee. Any interest which the State of Indiana or the State of Missouri might have in the results of this litigation is derivative from and subordinate to the undoubted power of the State of Tennessee over tortious acts committed within its borders. Accordingly, we find that Tennessee is the only state with the power to prescribe the laws which create and limit the only cause of action that may have been asserted in this case.

B.

The Court of Appeals for the Eighth Circuit recently considered Missouri’s borrowing statute, Section 516.190, in Patch v. Playboy Enterprises, Inc., 652 F.2d 754 (8th Cir.1981). Approximately twenty-three months after publication, plaintiff brought an action for libel against Playboy in connection with an article published in Illinois. Illinois law provided for a one-year statute of limitation for libel; Missouri law provided for a two-year statute of limitation for such an action.

The district court “determined that the Missouri borrowing statute [§ 516.190] required the application of the Illinois one-year limit because the cause of action ‘originated’ in Illinois, where the February 1976 issue of Playboy was first published.” 652 F.2d at 755.

The Court of Appeals affirmed. The per curiam opinion in Patch appropriately noted that: “In tort cases, Missouri courts have borrowed the statute of limitations of another state when the last act necessary for the cause of action or the injury occurred outside Missouri.” Patch further held that: “The purpose of a borrowing statute is primarily to prevent a plaintiff from forum shopping for a statute of limitations. The statute prevents a plaintiff from gaining more time to bring an action merely by suing in a forum other than where the cause of action accrued.” Id. at 756.

It should finally be noted that Patch, applying principles stated in Trzecki v. Gruenewald, 532 S.W.2d 209 (Mo. en banc 1976), rejected the argument that the district court should have adopted “a most significant contacts test for determining where [plaintiff’s] cause of action originated.” 652 F.2d at 757. In reliance upon the same Missouri case, Patch also appropriately noted that “residents and nonresidents are treated the same under the Missouri borrowing statute.” Id. at 756. Judge McMillian accurately stated in his concurring opinion in Patch that “[borrowing statutes, when applicable, largely preempt the court’s examination into alternative conflicts of law theories because the statute requires a mechanical and uniform result intended to discourage forum shopping.” Id. at 758-59.

A large number of Missouri and federal cases which supported the Court of Appeals’ affirmance of the district court’s application of Section 516.190 in Patch are cited in footnote 6 on page 755 of 652 F.2d. Those cases support the principles stated and applied in that case. We therefore need to discuss only a few other Missouri cases. Gates v. Trans World Airlines, 493 S.W.2d 668, 669 (Mo.Ct.App.1973), appropriately noted that Missouri’s borrowing statute “constitutes a codification by the Missouri Legislature of a conflicts rule.” See also Richardson v. Watkins Brothers Memorial Chapels, Inc., 527 S.W.2d 19, 21 (Mo.Ct.App.1975), which concluded that “Absent the Missouri borrowing statute, under general rules of conflict of laws ... the statute of limitations of the forum controls____ The borrowing statute has altered this rule____”

Missouri courts give effect to the legislatively expressed intent not to expand the period within which plaintiffs can file, but to impose “an additional limitation on the right to sue.” See Schnabel v. Taft Broadcasting Co., 525 S.W.2d 819, 825 (Mo.Ct.App.1975). If the statute of limitations of another state is more restrictive than that of Missouri, a longer Missouri statute will not be allowed to enlarge the time for filing. McIndoo v. Burnett, 494 F.2d 1311, 1313 (8th Cir.1974).

C.

Plaintiffs cite Cummings v. Cowan, 390 F.Supp. 1251, 1255 (N.D.Miss.1975), in support of their contention that Missouri’s three-year statute of limitations should be applied. Cummings is not in point for the reason that the Supreme Court of Mississippi, unlike the Supreme Court of Missouri, had consistently concluded that Mississippi’s borrowing statute may not be applied in cases in which a Mississippi resident is involved. Cummings did no more than apply the Supreme Court of Mississippi’s rules of decisions which imposed restrictions on the application of Mississippi’s borrowing statute. 390 F.Supp. at 1254.

As we have noted above, Missouri has expressly held that under Missouri’s borrowing statute, residents and nonresidents are to be treated the same. Trzecki v. Gruenewald, supra, 532 S.W.2d at 212. Indeed, the Supreme Court of Missouri has applied Section 516.190 to borrow Iowa’s two-year limitation and apply that statute to a personal injury case arising from a collision in Iowa in which all parties were Missouri residents. Girth v. Beaty Grocery Co., 407 S.W.2d 881 (Mo.1966). As in this case, plaintiffs argued that under conflict of laws principles the Missouri court should apply the longer Missouri statute of limitation. The Supreme Court of Missouri held:

... Section 516.190 makes the Iowa limitation statute our own. So there is no conflict ... and this Court may not ignore or by-pass such laws.
We rule that no conflict of law problem is presented but that under ... Section 516.190, plaintiff’s cause was barred at the time his petition was filed.

Id. at 882; accord Schnabel, supra, 525 S.W.2d at 826 (“No conflict of law question remains, and the effect of § 516.190 is to adopt as our own the provisions of the foreign statute of limitations.”).

Accordingly, we find and conclude that Missouri’s borrowing statute requires this Court to apply Tennessee’s one-year statute of limitations as a part of the statutory law of Missouri applicable to this case.

D.

Plaintiffs also attempt to rely on Malone ex rel. Alexander v. Jackson, 652 S.W.2d 170 (Mo.Ct.App.1983), to support their argument that Tennessee’s one-year statute should not be applied to plaintiffs’ wrongful death action. Malone does not support plaintiffs’ argument. The parties in that case were in agreement that the case should be tried and decided under Missouri’s wrongful death statute. See 652 S.W.2d at 171. See also footnote 7 of Judge Shangler’s recent decision in Nelson v. Hall, supra, which properly concluded that the dictum stated in Malone is aberrant from the controlling Missouri law and that such dictum is not supported by the authority cited in Malone.

IV.

For the reasons stated, it is

ORDERED that defendant’s alternative motion for summary judgment should be and is hereby granted. The Clerk shall enter judgment for the defendant on a separate document in accordance with Rule 58 of the Federal Rules of Civil Procedure.

      . Ind.Code Ann. § 34-1-1-2 [2-404] (Burns Supp.1984); Tenn.Code Ann. § 20-5-106 (1980); Mo.Ann.Stat. § 537.080 (Vernon Supp.1984).

      . Mo.Ann.Stat. § 537.100 states in applicable part: “Every action instituted under section 537.080 shall be commenced within three years after the cause of action shall accrue.”

      . Burns Ind.Code Ann. states in applicable part: "When the death of one is caused by the wrongful act or omission of another, ... the action shall be commenced by the personal representative of the decedent within two [2] years.”

      . There is no specific period of limitation contained in Tennessee’s wrongful death statute. The courts of that state apply the one-year statute of limitations governing actions for personal injuries to actions for wrongful death. Tenn. Code Ann. § 28-3-104; Jones v. Black, 539 S.W.2d 123 (Tenn. 1976).

      . The complaint filed May 24, 1984 does not specifically allege a cause of action under Missouri law or cite any Missouri statute. Plaintiffs’ response to motion to dismiss, filed December 11, 1984, however, contains a caption— "AS TO COUNT I (MISSOURI).” — which indicates that plaintiffs implicitly suggest that they may be entitled to rely on the Missouri Wrongful Death Statute.

      . Mo.Ann.Stat. § 516.190 (Vernon Supp.1984) states that ”[w]henever a cause of action has been fully barred by the laws of the state ... in which it originated, said bar shall be a complete defense to any action thereon, brought in any courts of this state."

      . In a case such as this where jurisdiction is based on diversity of the parties, this Court must apply that statute of limitations which would be applied by the Supreme Court of Missouri. See e.g., Guaranty Trust Co. v. York, 326 U.S. 99, 65 S.Ct. 1464, 89 L.Ed. 2079 (1945); Renfroe v. Eli Lilly & Co., 686 F.2d 642, 647 (8th Cir.1982).

      . The most recent Eighth Circuit case which considered Section 516.190 is Renfroe v. Eli Lilly & Co., 686 F.2d 642 (8th Cir.1982). The defendants did “not contest the district court’s application of the Missouri borrowing statute." Id. at 647. Nevertheless, the Court of Appeals recognized in its opinion: "When a cause of action ‘originates’ in a state other than Missouri, ... Missouri applies the foreign state’s statute of limitations through the borrowing statute. If that state’s statute of limitations bars the action, the borrowing state bars it in Missouri as well. Mo.Ann.Stat. § 516.190 (Vernon Supp.1982).”

      . In affirming the district court’s grant of summary judgment for the defendant based on the Missouri "borrowing statute,” the Court of Appeals held: "The plain meaning of the statute in question [§ 516.190] is that where the tort takes place in a foreign jurisdiction Missouri will adopt the statute of limitations of that jurisdiction barring the cause of action.” The Court of Appeals, as did the district court, relied in part on Restatement (Second) of Conflict of Laws § 142 comment f (1971). 494 F.2d at 1313-14.


author: WEBER, District Judge.

text:
    Helena J. FITZPATRICK v. DUQUESNE LIGHT COMPANY.
    Civ. A. No. 84-1575.
    United States District Court, W.D. Pennsylvania.
    Jan. 18, 1985.

      James Perieh, Pittsburgh, Pa., for plaintiff.
    Scott Zimmerman, Reed, Smith, Shaw & McClay, Pittsburgh, Pa., for defendant.
   OPINION

WEBER, District Judge.

This Title VII sex discrimination case is before the court on defendant’s motion for summary judgment. The court earlier severed the § 301 collective bargaining agreement issue pending ongoing grievance proceedings and that cause of action was settled by stipulation and order. Defendant has supported its motion with the affidavits of J.M. Mauer, Jr., W.J. Roy, and M.L. Green, Jr., all employees of defendant with personal knowledge of the facts. Plaintiff was granted a period of discovery to assist in defending against defendant’s motion, and thereafter plaintiff filed her response in opposition to this motion. Plaintiff filed no affidavits or other evidentiary material with her response but relied on defendant’s admissions which were later made part of the record. Subsequent to the motion and response, both parties addressed this court in letter form with arguments normally found in supplemental briefs. They will therefore be treated as such by this court.

Fed.R.Civ.P. 56 allows the court to dispose summarily of a case where there is no genuine issue of fact or where the dispute raises no real or substantial issue. Sanford v. O’Neill, 616 F.2d 92 (3d Cir.1980). On summary judgment the court does not resolve factual differences but only determines if any exist. Id. at 96. Furthermore, in making this determination every reasonable inference must be given to the party opposing the motion. Drexel v. Union Prescription Centers, Inc., 582 F.2d 781 (3d Cir.1978).

Defendant’s well supported motion establishes that plaintiff, Helena J. Fitzpatrick, was hired by the defendant company on August 7, 1978, and held a Jr. Chemist position in the Chemical Laboratory as of May 1, 1983. Plaintiff married Lawrence Fitzpatrick, a technical clerk in the Chemical Laboratory, on May 22, 1983. Both then reported to the same supervisor, A.C. Mazukna. Company policy prohibits both a husband and a wife reporting to the same supervisor. On May 3, 1983, plaintiff and her fiance were informed of the company policy and told that if neither had bid out of their positions within 30 days following their planned wedding, the less senior employee, Ms. Fitzpatrick, would be removed from her position. By June 22, 1983 neither had changed jobs; therefore the defendant placed Ms. Fitzpatrick in the Chemical Analyst position. Shortly thereafter Ms. Fitzpatrick was diagnosed as color blind which would prevent her from performing certain job duties required of Chemical Analysts. The diagnosis was confirmed on July 21, 1983, and on July 28, 1983, plaintiff was reassigned to a House and Yard Laborer position in the Power Stations Department, an entry level job, because there were no other vacant positions for which she was qualified and for which there were no other bidders. Since that time, plaintiff has been able to bid out of the entry level position. Defendant gives three additional examples of situations in which its policy against working for the same supervisor was implemented. They include:

a) Melinda and George Barnes, married April 4, 1980, were both working in Stores Department and reporting to same supervisor. They were advised of company policy and George, who had the least seniority, bid to another position;
b) Antoinette and Raymond Manns, married September 18, 1982, were both working for the same supervisor in the Treasury Department. Antoinette, who had the least seniority, was placed in a vacant position in another section of the Treasury Department.
c) Catherine and Robert Reiter, married on February 12, 1982, were both reporting to the same supervisor in the Accounting Department. They were advised of company policy and Robert, who had the least seniority, bid to Auto Dispatcher job in the Substations and Shops Department.

Plaintiff’s response concedes that, if defendant in fact maintained an anti-nepotism policy prohibiting married employees from working under the same supervisor in excess of 30 days following the marriage, and if such policy were facially neutral and evenly applied in a nondiscriminatory manner, defendant would be entitled to summary judgment on the issue of sex discrimination because of marital status. Plaintiff however claims that a factual dispute exists as to the existence of such a policy. To support this claim, plaintiff points to defendant’s admissions that

1) There is no written policy regarding married co-workers working for the same supervisor;
2) There is no written policy applying only to certain employees because they are married to other employees;
3) Defendant’s practice with regard to employees who must be removed from a position is not governed by the Collective Bargaining Agreement.

Plaintiff concludes that defendant does not provide any evidence of a company practice. We do not reach the same conclusion. Defendant’s affidavits provide four instances in which its unwritten policy or practice was maintained. Plaintiff does not provide any evidence which contradicts these instances, nor does plaintiff provide even one instance in which the policy was not applied to a married couple who worked for the same supervisor. Plaintiff does allege that the Reiter couple were permitted to work for the same supervisor in excess of 30 days. (Defendant indicates that they worked for 50 days after their marriage for the same supervisor, but that Mr. Reiter had successfully bid to another position within 30 days.) We do not believe that this refutes the existence of such a company policy. Rather plaintiff establishes that there may have been some flexibility in how the policy was applied, which we find reasonable under the circumstances.

Plaintiff further claims that the affidavits of M.L. Green, Jr. which established the instance in which the company practice was applied should be stricken as hearsay violative of Fed.R.Civ.P. 56(e). Mr. Green has been employed by defendant in the Human Resources Unit as the Supervisor Affirmative Action with access to the company’s personnel records since May 3, 1983. As such, we find that Mr. Green may appropriately identify business documents, that he has knowledge of the information contained therein, and that he must use the personnel records in the performance of his duties. There is therefore sufficient indicia of reliability to make his testimony admissible at trial. Fed.R.Evid. 803(24).

Since we do not believe that plaintiff has established any genuine issue of material fact, and since the type of policy held by this company does not constitute sex discrimination, George v. Farmers Electric Cooperative, Inc., 715 F.2d 175 (5th Cir. 1983), defendant’s motion for summary judgment will be granted.


author: ROVNER, District Judge.

text:
    Frederick D. WESTLAND, Plaintiff, v. SERO OF NEW HAVEN, INC., Defendant.
    No. 83 C 1823.
    United States District Court, N.D. Illinois, E.D.
    Jan. 18, 1985.

      Richard J. Grossman, New York City, for plaintiff.
    Harold Hirshman, Robert H. Oakley, Sonnenschein, Carlin, Nath & Rosenthal, Chicago, 111., for defendant.
   MEMORANDUM OPINION AND ORDER

ROVNER, District Judge.

Plaintiff Frederick D. Westland (“West-land”) brings this action based on an alleged wrongful termination of an oral employment agreement by defendant Sero of New Haven, Inc. (“Sero”). Westland acted as Sero’s midwest sales representative for Sero’s line of women's shirts and sportswear until his discharge on June 15, 1982. In Count I, Westland alleges that his termination breached his agreement with Sero and requests damages for all commissions that he would have earned in the remainder of 1982 and for all of 1983. Count II alleges that Sero’s termination of Westland interfered with and denied him a “prospective business advantage” and seeks, in addition to compensatory damages, $100,000 in punitive damages. Presently pending before this Court are several motions.

Sero’s Motion to Dismiss Count II

As part of its trial brief, filed on September 7,1984, Sero moved to dismiss Count II of the original complaint. On September 12, 1984, Westland filed a motion for leave to file an amended complaint. Count II of Westland’s proposed amended complaint is identical to Count II of the original complaint, and thus this Court will address Sero’s motion to dismiss Count II first.

In Count II, Westland claims in part that he expended substantial amounts of time and money in developing customers, that Sero’s wrongful termination left him “without a line of clothing to represent of the same character and quality” as that of Sero, and that he suffered a loss of commissions from sales for such lines as well as injury to his good will and business reputation because he was unable to service and meet the expectations of his customers. (Complaint, ¶¶ 28, 29.) He asserts that Sero’s actions “have denied plaintiff a prospective business advantage and prevented him from accepting any additional lines while he represented defendant.” (Complaint, H 32.) Both parties have treated these allegations as asserting a claim for tortious interference with prospective economic advantage.

As an initial matter, Westland argues that Sero failed to present its motion to dismiss prior to the time that Sero filed the answer to the complaint, and thus West-land moves in its brief to strike Sero’s motion to dismiss, presumably because Sero has waived dismissal for failure to state a claim as a defense. Sero counters by asserting that Westland’s argument “ignores the plain language of Rule 12(c), which states: ‘After the pleadings are closed but within such time as not to delay the trial, any party may move for judgment on the pleadings.’ ”

Both parties are in error. Sero has never moved for judgment on the pleadings pursuant to Rule 12(c) of the Federal Rules of Civil Procedure, and, indeed, the only relief it requests is dismissal of Count II for failure to state a claim of the tort of intentional interference with prospective economic advantage. Because Count II arguably states additional causes of action, and because Sero has not addressed all the claims presented in Count II, judgment dismissing Count II in its entirety is inappropriate. Nonetheless, Westland’s waiver theory for Sero’s alleged failure to timely file its motion to dismiss is also in error. Under Rule 12(h)(2) of the Federal Rules of Civil Procedure, Sero has not waived its Rule 12(b)(6) motion to dismiss because that defense was raised as its First Affirmative Defense in Sero’s answer to the complaint. Fed.R.Civ. Pro. 12(h)(2). Accordingly, this Court will address Sero’s substantive argument that Count II fails to state a claim for the tort of intentional interference with prospective economic advantage.

Under Illinois law, that tort consists of the following elements: (1) a reasonable expectation of entering into a valid business relationship; (2) knowledge of that relationship on the part of the interferer; (3) intentional interference by the defendant inducing or causing a third party to breach or terminate the relationship or expectancy; and (4) injury resulting from the interference. Parkway Bank & Trust Co. v. City of Darien, 43 Ill.App.3d 400, 2 Ill.Dec. 234, 357 N.E.2d 211 (2d Dist.1976); Tom Olesker’s Exciting World of Fashion, Inc. v. Dun & Bradstreet, Inc., 16 Ill.App.3d 709, 306 N.E.2d 549 (1st Dist.1973), aff'd in part, rev’d in part, 61 Ill.2d 129, 334 N.E.2d 160 (1975).

In this case, although Westland has alleged adequately the existence of a valid business expectancy with his customers to provide them with women’s shirts and sportswear of a quality comparable to that of Sero, Sero’s knowledge of that expectancy, and injury resulting from Sero’s conduct, Westland has not alleged in his complaint any conduct by Sero which interfered with his business opportunities with third parties.

Westland does not dispute that an allegation of conduct directed by defendant toward a third party through which the defendant purposely causes that third party not to enter into or continue with a prospective contractual relationship with the plaintiff is essential to stating a cause of action for the tort of intentional interference with a prospective business opportunity. McIntosh v. Magna Systems, Inc., 539 F.Supp. 1185 (N.D.Ill.1982); DP Service, Inc. v. AM International, Inc., 508 F.Supp. 162 (N.D.Ill.1981). Instead, he argues in his brief that under the liberal notice pleading standard for deciding motions to dismiss, this Court can infer from his allegations that he has in fact met the third party pleading requirement by asserting that Sero contacted his customers and told them “that they must now deal with them if they expect to continue to purchase Sero shirts ____” Such an inference, however, simply cannot be drawn from the allegations contained in the complaint.

The Court recognizes that in deciding a motion to dismiss for failure to state a claim, it must not only accept as true all well-pleaded facts in the complaint and inferences reasonably to be drawn therefrom, but must also construe those allegations in favor of the party opposing the motion. Conley v. Gibson, 355 U.S; 41, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957), Scheuer v. Rhodes, 416 U.S. 232, 94 S.Ct. 1683, 40 L.Ed.2d 90 (1974). Assertions made in a party’s brief, however, simply cannot substitute for allegations that should have been pled in that party’s complaint. «Moreover, even if this Court were to infer, as Westland suggests, that Sero contacted Westland’s customers and told them that they must deal with Sero if they wished to continue to purchase Sero shirts, that inference does not satisfy the third party pleading requirement. Assuming that Sero did contact Westland’s customers as Westland contends, Sero merely told them the truth: once Westland was terminated, for whatever reason, his customers had no choice but to deal with Sero, or Sero’s representative, if they wished to continue to purchase Sero products.

In this regard, Judge Shadur’s opinion in DP Service, Inc. v. AM International, supra, is instructive. The plaintiff in DP Service alleged that the defendant AM had terminated DP as a distributor so that it could acquire DP’s business for itself and sell directly to DP’s customers. The court granted the plaintiff’s motion to dismiss because the act that prevented DP from selling to those customers was its termination as a distributor by the defendant, not the defendant’s contacts with these third party customers. Judge Shadur stated, “Even were DP able to prove that AM’s motive in breaching the contract was to sell directly to DP’s customers, under the Illinois cases that would not constitute the tort of intentional interference with prospective economic opportunity.” 508 F.Supp. at 169.

The conduct alleged in DP Service conceivably was worse than that of Sero in this case. Here, Sero is merely alleged to have terminated Westland and assigned his territory to new sales representatives, whereas in DP Service, the defendant allegedly acquired the plaintiffs business with the purpose of selling directly to DP’s former customers. Here, as in DP Service, the mere allegation of “direct contact” between the defendant and a third party is not sufficient. The tort of intentional interference with a prospective economic opportunity requires allegations that the defendant’s contact with the third party caused the disruption of an economic relationship with that third party. For example, if Westland had alleged, either directly or by inference from well-pleaded allegations, that Sero contacted his customers and intentionally caused them not to purchase the products of any other manufacturer from Westland, that conduct would constitute the tort of intentional interference with prospective economic opportunity. Westland has made no such allegation. Accordingly, Sero’s motion to dismiss Count II of the complaint is granted in so far as it attempts to state a cause of action of intentional interference with prospective economic advantage.

Westland’s Motion For Leave To File An Amended Complaint

On September 12, 1984, Westland filed his motion for leave to file its First Amended Complaint. The First Amended Complaint contains two additional counts. Count III alleges the existence of an implied employment contract between West-land and Sero based on industry custom and usage, and Count IV seeks damages for Westland’s alleged loss of good will due to Sero’s wrongful termination.

Sero has objected to Westland’s motion, asserting that it will be prejudiced by the delay caused by a new complaint which Westland sought to file four months after discovery closed, after the parties have filed a pretrial order and jury instructions, and after the case was fully ready for trial. Westland correctly points out, however, that Sero has been aware, or should have been aware, of his claim for loss of good will from the commencement of this action because plaintiff complained of loss of good will in his original complaint. (Complaint, 1111 28, 32.) Because Sero had ample opportunity to depose Westland prior to the close of discovery on all aspects of this claim, including his alleged damages resulting from the loss of good will, Sero’s claim of prejudice in this regard is without merit.

Similarly, Sero cannot be heard to complain of surprise by Westland’s proposed Count III grounded on an implied employment agreement based on custom and usage in the industry. Westland fully disclosed that theory to Sero in its trial brief, and in its proposed jury instructions, and Sero has had the opportunity for discovery on that theory. Indeed, Sero has fully deposed Westland's trial expert on custom and usage and has presented this Court with a motion in limine to preclude his testimony at trial. Because leave to file an amended complaint should be “freely given,” Rule 14, Fed.R.Civ.Pro., and because Sero has not demonstrated adequately that it will be prejudiced, Westland is granted leave to file his First Amended Complaint.

Miscellaneous Motions

Sero has presented in its trial brief two motions in limine. First, Sero contends that Westland should not be allowed to present evidence of damages beyond the 1982 “Holiday Season.” Sero’s motion is based on the proposition that, even under Westland’s theory of the existence of an employment contract between Westland and Sero, Sero had the right to terminate Westland at any time if Sero gave Westland written notice of his termination “at least 60 days before the commencement of the next selling season.” This motion is granted in part. Westland was terminated in June, 1982. The parties agree that the next selling season at that time was the Spring of 1983 selling season which began in September, 1982 and ran until sometime in December, 1982. It is well-settled that Westland’s damages for lost commissions stop at the date he could have been rightfully terminated. Sierra Wine & Liquor Co. v. Heublein Inc., 626 F.2d 129, 132 (9th Cir.1980); United Protective Workers v. Ford Motor Co., 223 F.2d 49, 52 (7th Cir.1955). Accordingly, Westland cannot present evidence of damages for lost commissions incurred beyond the end of the first date he could have been rightfully terminated, which precise date is to be determined by the jury. In any event, evidence of damages for loss of commissions in 1983 will not be admitted.

Second, Sero asks this Court to bar the testimony of Westland’s expert, Steve Ellbogen, who is to testify concerning the custom and usage of the women’s clothing industry on employment contracts between manufacturers and representatives. After careful review of the briefs filed by the parties, this Court concludes that it must deny this motion because it is convinced that the expert’s testimony is admissible and that the weight accorded to this evidence must be decided by the jury.

Finally, Westland has moved for leave to amend his list of potential witnesses stated in the pretrial order to add one witness. That motion is granted because Sero has not objected to the motion and because a new pretrial order must be filed by the parties in any event following the format of this Court’s Standing Order. In light of this Court’s rulings on the motions discussed in this opinion, the parties are granted 30 days to file such a Final Pretrial Order, at which point the case will be placed on this Court’s trial calendar.

It is so ordered.

      . Perhaps these problems could be avoided if counsel were to follow the established formal procedures set forth in the Federal Rules of Civil Procedure and in the Local Rules for the Northern District of Illinois for filing motions and legal memoranda separately. See, e.g., Rule 7, Fed.R.Civ.Pro.; Rules 12 and 13 of the Local Rules for the United States District Court of the Northern District of Illinois.

      . Count II of the complaint is also dismissed insofar as it attempts to state a cause of action for interference with contractual relations. (Complaint, ¶ 32.) Westland has not alleged the existence of any contracts with third parties with which Sero interferred. Sero correctly pointed out, and Westland does not dispute, that Westland simply obtained orders from retail stores for the Sero line. These stores had no obligation to continue the purchase of the Sero line. Thus, Westland had no guarantee of continued sales, only an expectancy.

      . See n. 1, supra.

        . The term "selling season” refers to the period when clothes are marketed to retailers for later delivery. Because of the time lag involved, each season precedes its calendar counterpart by several months. Thus the so-called "Holiday Season” ran from July, 1982 to late August, 1982, and concerned clothes that would be delivered in October-November for sale during the Christmas shopping season.


author: PEREZ-GIMENEZ, Chief Judge.

text:
    Omegar Carlo LUCENA, Plaintiff, v. SECRETARY OF HEALTH AND HUMAN SERVICES, Defendant.
    Civ. No. 82-2325(PG).
    United States District Court, D. Puerto Rico.
    Jan. 21, 1985.

      Fernando A. Diez, Mayaguez, P.R., for plaintiff.
    Fidel A. Sevillano Del Rio, Asst. U.S. Atty., Hato Rey, P.R., for defendant.
   OPINION AND ORDER

PEREZ-GIMENEZ, Chief Judge.

This is an action brought under Section 205(g) of the Social Security Act, as amended, (the Act) for review of the decision of the Secretary of Health and Human Services (the Secretary) which denied plaintiff’s application for a period of disability and disability insurance benefits.

Through Opinion and Order of September 26, 1983, this case was remanded to the Secretary for further proceedings. 572 F.Supp. 130.

The claimant is a 61-year-old illiterate man with heavy work experience as janitor, watchman, handyman, car tire fixer and assistant mechanic for a government agency (Tr. 48, 67, 77).

After an evaluation of the evidence submitted, we found that aside from a medical report by Dr. Juan E. Acevedo (Tr. 127-136), the rest of the medical evidence established that plaintiff could not perform his past work.

The standard of judicial review in these actions requires from us careful examination of the record of each individual case to determine its adequacy to support the findings. While the court does not substitute its judgment for that of the Secretary, neither does it act as a “rubber stamp” of administrative determinations. Correa v. Secretary of the Department of Health and Human Services, 501 F.Supp. 236, 237 (S.D.N.Y.1980).

Accordingly, we determined that the medical evidence on file established plaintiff’s inability to perform his past work. Thus, having concluded that plaintiff established a prima facie case of disability, we remanded for further administrative action. A review of the five-step sequential evaluation process is appropriate in order to ascertain whether the Secretary complied with the specific purposes of the remand from this Court.

Under the guidelines promulgated by the Secretary pursuant to the authority delegated by the Act a five-step sequential process through which benefit claims are evaluated has been outlined.

First, the Secretary determines whether an individual is engaged in “substantial gainful activity”; if so, benefits are denied, 20 C.F.R. §§ 404.1520(h), 416.920(b). If not, the Secretary determines whether the claimant’s medical condition or impairment is “severe”; if found “not severe”, benefits are denied, 20 C.F.R. §§ 404.1520(c), 404.-1521, 416.920(c). Third, the Secretary determines whether the claimant suffers from an impairment acknowledged to be so severe that the claimant is presumed to be incapable of pursuing any gainful activity. If so, then the claimant meets or equals the Listing of Impairments and benefits are warded, 20 C.F.R. §§ 404.1520(d), 416.-920(d). However, if the claimant’s impairment does not satisfy the Listing of Impairments, the fourth step requires the Secretary to determine whether the individual has a sufficient “residual functional capacity” to perform his former work. If in the affirmative, then benefits are denied, 20 C.F.R. §§ 404.1520(e), 404.1545(c). Lastly, if an individual still has not been ruled ineligible for benefits, the fifth step requires the Secretary to take into account the additional considerations of age, education and past-work experience to determine whether the individual is capable of performing any other work available in the economy, 20 C.F.R. § 404.1520(f)(1).

In our Opinion and Order we found that there was not substantial evidence to support the Secretary’s finding to the effect that plaintiff’s impairments did not significantly limit his ability to perform basic work-related functions. Rather, from our review of the whole record we found plaintiff unable to perform his past work.

Our remand order directed administrative action in the light of this finding. Accordingly, the Secretary was under the duty to explore the fifth sequential test, to wit: to ascertain whether claimant’s impairments prevent him from performing other work of the sort found in the economy.

On review, the supplemental transcript discloses that during the administrative hearing held on April 5, 1984, (Tr. 171-190) the Secretary reevaluated the medical evidence with the aid of a medical advisor who testified during said hearing. Based on this testimony the administrative law judge concluded that claimant is not disabled because his impairments are not severe (Tr. 161-164).

Having established a prima facie case of disability, it was improper for the administrative law judge to reevaluate the medical evidence and to conclude, based on the testimony of a non-examining physician, that claimant’s impairments are not severe. This testimony does not constitute substantial evidence. The Secretary failed to develop the record as per the instructions of our Opinion and Order of September 26, 1983.

In view of the foregoing, we find “good cause” to remand under Section 205(g) of the Act (42 U.S.C. § 405(g)); and it is hereby

ORDERED that this case be and is hereby REMANDED to the Secretary to further develop the record and secure evidence in compliance with the fifth sequential test, to wit: whether claimant’s impairments prevent him from performing other work in the economy.

IT IS SO ORDERED.