author: STAFFORD, Chief Judge.

text:
    Lonnie MARTIN, Plaintiff, v. TEXACO, INC., Defendant.
    No. TCA 84-7081-WS.
    United States District Court, N.D. Florida, Tallahassee Division.
    Feb. 7, 1985.
    Edward S. Stafman, Tallahassee, Fla., for plaintiff.
    Bruce C. Bailey, J. Burke McCormick, Houston, Tex., Carolyn Raepple, Carlos Alvarez, Tallahassee, Fla., for defendant.
   ORDER

STAFFORD, Chief Judge.

At the pre-trial conference held in this case on February 1, 1985, the court left open the issue of strict compliance with the notice requirements of the Petroleum Marketing Practices Act (“PMPA”), 15 U.S.C. §§ 2801-2806. After reviewing the trial memoranda and the relevant case law, and hearing argument of counsel, the court determines that both of the following questions should be submitted to the jury: (1) whether plaintiff received the summary statement and, if he did not, (2) was he thereby deprived of adequate notification.

Plaintiff denies having received the summary statement at all, even though the termination letter says that the statement is attached and references an enclosure. See complaint, exhibit D (document 1). Whether plaintiff received the statement is purely an issue of credibility and must be submitted to the jury. If the jury finds that plaintiff did not receive the statement, the question arises as to whether plaintiff suffered any harm or injury. From the representations of counsel at pre-trial, plaintiff will show that he went immediately to a lawyer, but that the lawyer had to spend some time researching before he found the PMPA, even though the letter contains a citation to the Act. In any event, whether plaintiff was harmed is purely an issue of damages and must also be submitted to the jury.

Plaintiff relies on Blankenship v. Atlantic-Richfield, Co., 478 F.Supp. 1016 (D.Ore.1979), for the proposition that “the failure to strictly comply with the notice requirements of the PMPA invalidates a termination.” Plaintiffs trial memorandum, document 166 at 5. Plaintiff would have this court rule that if defendant did not include the required summary statement in the notice that is in all other respects sufficient, that notice is now invalid and the termination null and void. This court doubts the wisdom of such a rule that elevates form over substance to the exclusion of reason. And, in fact, such a rule is not compelled by the statute.

Perhaps the best place to begin the analysis is with the Blankenship case itself. First, the Blankenship court was dealing with a question of first impression. Blankenship at 1018 n. 5. Of the four cases preceding Blankenship, only one dealt with the notice provisions, and that case involved a section of the Act different from what was under consideration in Blankenship. Id. Secondly, it should be pointed out that the Blankenship court was construing the time limitation of section 2804(a) of the Act and not section (c) which relates to the form of the notice. This distinction is significant because had the court been dealing solely with the form of the notice, it might not have reached its conclusion that Congress did not intend the court “to have the power to cure or waive a notice defect.” Id. at 1018. Indeed, this court would be more responsive to an argument of strict compliance based on time limitations where plaintiff did not have time to act to protect his rights. But that is not the claim advanced by plaintiff. Thirdly, the conclusion in Blankenship is nothing more than an ipsi dixit; that court divines the intent of Congress for a new law without any reference at all to its legislative history. This in itself would not nullify the persuasive value of the case except that the conclusion itself is not logical. The defendant in Blankenship argued that under section 2805, the enforcement provisions of the Act, the court could only grant the franchisee whatever relief is necessary to remedy the effects of the failure to comply with the notice provisions. The court dismissed this argument out of hand, saying:

Section 2805(b)(1), when read in context with the rest of the Act, refers to relief of the kind plaintiff was requesting. Section 2805 is the enforcement provision of the Act, and outlines the relief afforded plaintiff-franchisee in a civil action under the Act. Defendant cannot rely on plaintiffs remedy provision to argue that the Court can waive a statutory prerequisite to the defense.

Id.

This court does not agree that the defendant in Blankenship or the defendant in the case at bar are relying on the remedy provisions to argue that the court can waive the notice requirement. Rather, a fairer characterization of defendant’s argument is that under section 2805 Congress granted to the courts the discretion to determine what equitable relief plaintiff is entitled to to remedy the effects of failure to comply with the notice requirements. In this case, there was apparently no effect from the failure to attach the summary statement because the letter referred to the summary as being attached and plaintiff immediately consulted his attorney and was thereby advised of his rights. It is true that the burden is not on plaintiff to educate himself as to his rights, but since he did so, what relief can this court provide? What relief is necessary to remedy the effects of failure to provide the summary statement when there simply were no effects? To ask the question is to answer it.

Plaintiff may complain that a right without a remedy is no right at all. If so, plaintiff misconceives his rights under the PMPA. Rather than a right to receive the summary statement, he has a right to be relieved by the court from any effects of not receiving the statement. That is why the court has determined that the question of deprivation of notification should be submitted to the jury, so that the jury can determine if plaintiff suffered any harm.

To make a jury issue of defendant’s failure to provide the statement is consistent with the language of section 2805(d) and (e) that plaintiff may recover actual damages even if the court determines that the defendant should not be compelled to continue the franchise. In effect the issue is one of damages and is necessarily a jury question. See Thompson v. Kerr Mc-Gee Refining Corp., 660 F.2d 1380 (10th Cir.1981).

The cases following Blankenship adhere to the principles therein announced but do so without analysis. One notable exception is Brown v. American Petrofina Marketing, Inc., 555 F.Supp. 1327 (M.D.Fla.1983), aff'd 733 F.2d 906 (11th Cir.1984). The problem confronting Judge Black in that case was whether defendant had 'complied with the written notice provisions of section 2802(c)(4). The court concluded that the plaintiffs had actual notice of all the information required by the section. The court found the question of strict compliance regardless of actual notice to be a close one “involving an examination of several countervailing factors.” Brown at 1335. After noting the ameliorative purpose of the PMPA and the easy application of the Blankenship approach, the court expressed a preference for a more flexible approach that would “permit the Court to go beyond form and examine the true substance of the matter. The Court could determine whether plaintiffs were actually aware of the information which Congress required they have under section 2802(c)(4) and whether they were prejudiced by not having had the notice in writing.” Id. Of course, Judge Black ultimately did not resolve this issue. However, her suggestion that the Blankenship approach be refined is persuasive because it makes sense.

Most of the cases that deal with the strict compliance issue do not involve the summary statement. Those cases that deal with the summary are distinguishable. In Mobil Oil Corp. v. Vachon, 580 F.Supp. 153 (D.Mass.1983), although plaintiff alleged there was no statement, the court granted an injunction because the statement of reasons was insufficient. In Scheele v. Mobil Oil Corp., 510 F.Supp. 633 (D.Mass.1981), defendant Mobil Oil advanced a constitutional challenge to the Act. Defendant claimed it could not have provided the summary prior to termination because the summary had not yet been published. Of course, the Act itself provided for this situation and so was held to be constitutional. Id. at 636. In Daniels v. Dilmar Oil Co., 502 F.Supp. 178, 181 (D.S.C.1980), where the defendant admitted it had not provided the summary statement, the court, citing Blankenship, noted that there were “serious questions raised as to the validity of the notice of termination actually given.” Id. Of course, Daniels involved a preliminary injunction and was not a decision on the merits and so has no precedential value.

In Thompson v. Kerr-McGee Refining Corp., 660 F.2d 1380 (10th Cir.1981), the court did hold that franchisors must strictly comply with the notice provisions of the PMPA, including the summary statement. However, the court also points out that “the trial court submitted the issues presented by the evidence with appropriate instructions to the jury.” Id. at 1388. The court then sets out in full the trial court’s instructions on the issue of compliance with the notice provisions. Id. at n. 4. At the trial level, it was uncontroverted that defendant did not provide the statement. Id. Nevertheless, the trial court allowed the jury to decide whether defendant’s failure was reasonable and whether plaintiff was deprived of adequate notification.

Whether the Tenth Circuit agreed with the trial court’s submission of the question is difficult to discern. The holding is clear that strict compliance is required, and the court may have left the instruction undisturbed because it was apparently not appealed by plaintiff and not objected to by defendant. Id. at 1389. However, by affirming the district court and by setting out the instruction at such length, the Tenth Circuit seemed to implicitly approve the instruction.

The court would cite one other case to support the decision to modify the Blankenship approach. In Sutton v. Atlantic Richfield Co., 539 F.Supp. 658 (C.D.Cal.1982), plaintiff claimed defendant’s notice was insufficient because he could not verify whether the stated reason was a valid one under the PMPA. If the stated reason was insufficient, the defendant would not have been in strict compliance with the Act. In ruling on plaintiff’s motion for summary judgment, the court noted that “[cjompliance with PMPA’s notice provisions is a matter of first impression in the Central District of California and in the Ninth Circuit.” Id. at 659. The court does not cite Blankenship at all. While the court could have been unaware of Blankenship, it is more likely that the court did not consider the case to be binding. Thus, the ease should be accorded no more weight in this district than it was given in the Central District of California. The court went on to say, “In determining the sufficiency of notices of non-renewal, courts have considered, not only the reason stated in the formal notice, but all the facts about nonrenewal known to the franchisee.” Id. at 660. This court also believes that sufficiency of the notice should be determined in light of all the surrounding circumstances.

This court has considered the purpose of the PMPA in reaching its decision. However, under the facts of this case, it would be an unreasonable construction of the statute to allow plaintiff to stand on the single technicality of lack of a summary statement to invalidate the termination if he was not thereby prejudiced.

Whether the summary was in fact included is a disputed issue, and the court has already determined that defendant has the burden of proof on the issue. Additionally, in order to strike a balance consistent with the purposes of the PMPA, the court now rules that if defendant fails to prove that the statement was provided, it must carry the burden of proving that plaintiff was not prejudiced. The court intends to submit the issue to the jury and directs the parties to submit appropriate instructions.


source: Caselaw Access Project

author: FOREMAN, Chief Judge:

license: Public Domain

text:
    David ORRELL, Plaintiff, v. AMERICAN HOIST & DERRICK CO., and Holekamp Equipment Co., and Dana Corporation d/b/a Formsprag Company d/b/a Formsprag-Warren, Defendants, and AMERICAN HOIST & DERRICK CO., Third-Party Plaintiff, v. HOEFFKEN BROTHERS, INC., Third-Party Defendant.
    Civ. No. 82-3227.
    United States District Court, S.D. Illinois, East St. Louis Division.
    Feb. 8, 1985.
    Dennis W. Shevlin, Cook, Shevlin, Keefe & Chatham, Ltd. Belleville, Ill., for plaintiff.
    Howard Boman, John W. Leskera, Dun-ham, Boman & Leskera, East St. Louis, Ill., for American Hoist & Derrick.
    Harold A. Donovan, Clark D. Smith, Donovan, Hatch & Constance, P.C., Belleville, Ill., for Hoeffken Bros., Inc.

      Donald J. Dahlmann, Walker & Williams, Belleville, 111., for Holekamp Equipment Co.
    Robert W. Sehmieder, Wagner, Bertrand, Bauman & Sehmieder, Belleville, 111., for Dana Corp.
   MEMORANDUM AND ORDER

FOREMAN, Chief Judge:

Before the Court is defendant Dana Corporation d/b/a Formsprag Company’s (Dana) Motion for Summary Judgment (Document No. 90). Plaintiff brings this action for damages sustained from an injury incurred while working on a platform attached to the end of a crane manufactured by American Hoist & Derrick Co., distributed by Holekamp Equipment Co., and sold to Hoeffken Brothers, Inc., the plaintiff’s employer. Dana was the manufacturer of a component part of the crane in question. The plaintiff’s third amended complaint is based on theories of strict product liability, negligence, and warranty.

Counts 7, 8, 9, and 10 of the third amended complaint are directed at Dana. On March 5, 1984, Dana moved to dismiss Counts 7, 9, and 10 on the theories that Count 7, sounding in strict liability, was barred by the statute of limitations, and that Counts 9 and 10 were improper under warranty theories. On July 16, 1984, this Court dismissed Count 9, but refused to dismiss Counts 7 or 10. Dana now moves for summary judgment as to all remaining counts or in the alternative as to Count 7.

Summary judgment is appropriate only where the record shows that “there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” Fed.R.Civ.P. 56. The party moving for summary judgment has the burden of establishing the lack of a genuine issue of material fact. Korf v. Ball State University, 726 F.2d 1222, 1226 (7th Cir.1984). The Court must view the evidence, and the reasonable inferences to be drawn therefrom, in the light most favorable to the party opposing summary judgment. Where the moving party fails to meet its strict burden of proof, summary judgment cannot be entered even if the opposing party fails to respond to the motion. Yorger v. Pittsburgh Corning Corp., 733 F.2d 1215 (7th Cir.1984).

Where the moving party has met its initial burden and the opposing party asserts the existence of a question of fact, the Seventh Circuit has identified two considerations to be used in determining whether the non-moving party has established that there is a genuine issue as to that fact.

To create a question of fact, an adverse party responding to a properly made and supported summary judgment motion must set forth specific facts showing that there is a genuine issue for trial ____ A party may not rest on mere allegations or denials of his pleadings; similarly, a bare contention that an issue of fact exists is insufficient to raise a factual issue.

Posey v. Skyline Corp., 702 F.2d 102, 105 (7th Cir.), cert. denied, _ U.S. _, 104 S.Ct. 392, 78 L.Ed.2d 336 (1983). Furthermore, the disputed fact must be material, that is, it must be outcome-determinative under the applicable law. Egger v. Phillips, 710 F.2d 292, 296 (7th Cir.) (en banc), cert. denied, _ U.S. _, 104 S.Ct. 284, 78 L.Ed.2d 262 (1983).

Dana raises a number of points in its motion for summary judgment. First, it argues that Count 7 of the third amended complaint is barred by the twelve or ten year cap on a product liability action expressed in Ill.Rev.Stat.Ann. ch. 110, § 13-213 (Smith-Hurd 1984). Section 13-213(b) provides:

Subject to the provisions of subsections (c) and (d) no product liability action based on the doctrine of strict liability in tort shall be commenced except within the applicable limitations period and, in any event, within 12 years from the date of first sale, lease or delivery of possession by a seller or 10 years from the date of first sale, lease or delivery of possession to its initial user, consumer, or other non-seller, whichever period expires earlier, of any product unit that is claimed to have injured or damaged the plaintiff, unless the defendant expressly has warranted or promised the product for a longer period and the action is brought within that period.

Both parties agree that this action was not commenced within 12 years from the first sale to Holekamp or 10 years from the sale to Hoeffken Brothers. Plaintiff contends now, as he did in response to Dana’s earlier motion to dismiss, that subsection (c) of § 13-213 tolls the above caps. Subsection c states:

No product liability action based on the doctrine of strict liability in tort to recover for injury or damage claimed to have resulted from an alteration, modification or change of the product unit subsequent to the date of first sale, lease or delivery of possession of the product unit to its initial user, consumer or other non-seller shall be limited or barred by subsection (b) hereof, if
(1) the action is brought against a seller making, authorizing, or furnishing materials for, the accomplishment of such alteration, modification or change (or against a seller furnishing specifications or instructions for the accomplishment of such alteration, modification or change when.the injury is claimed to have resulted from failure to provide adequate specifications or instructions), and
(2) the action commenced within the applicable limitation period and, in any event, within 10 years from the date such alteration, modification or change was made, unless defendant expressly has warranted or promised the product for a longer period and the action is brought within that period, and
(3) when the injury or damage is claimed to have resulted from an alteration, modification or change of a product unit, there is proof that such alteration, modification or change had the effect of introducing into the use of the product ' unit, by reason of defective materials or workmanship, a hazard not existing prior to such alteration, modification or change.

Subsection (a) defines alteration, modification or change as an “alteration, modification or change that was made in the original makeup characteristics, function or design of a product or in the original recommendations, instructions and warnings given with respect to a product including the failure properly to maintain and care for a product.” Plaintiff argued, and still argues, that such a modification, alteration, or change occurred in 1977 when Dana changed the recommendations with regard to the proper oil mix for the boom sprag. Both parties agree that this is the only alteration or modification relevant to this inquiry. Based on these assertions the Court denied Dana’s earlier motion to dismiss Count 7. Dana now argues and supports with proper affidavits, that the injury or damage could not have resulted from the recommendations or instructions since the new recommendations were designed to improve the performance of the clutch at low temperatures.

The Court agrees. The original maintenance instructions listed the proper type of oil to be used for lubrication in the clutch assembly. The 1977 revised instructions recommended that the prescribed oils be cut with kerosene so that a 75 percent oil and 25 percent kerosene mixture be employed as the lubricant. Ted Zlotek, Chief Engineer for Dana, stated that the new mixture was recommended to avoid slippage of the crane when it operated in 15 degrees Fahrenheit and below temperatures. (Affidavit of Ted Zlotek at page 1). This fact has been confirmed by Art Woods from American Hoist. (Art Woods’ Deposition, page 100). Dana further presents documents to indicate that the temperature on the date in question, was above fifteen degrees. The plaintiff does not contest these facts. Based on these facts, the Court does not see how the accident could have been a result of the new recommendations for the lubrication mix. Every fact indicates that the change was recommended to improve the performance of the clutch at low temperatures. To avoid the time limitations by reason of § 13-213(c), the plaintiff must allege and show that a material fact exists as to whether his injury resulted from the alteration, modification, or change. When the alleged alteration, modification, or change was a change in the original recommendation or instructions for use, as here, the plaintiff must demonstrate that the new recommendations or instructions were faulty in such a way so as to “introduce into the product a hazard” not existing prior to the change. Here the plaintiff has failed to do so. Therefore, the Court finds that there exists no issue material fact, and that the defendant Dana is entitled to judgment as a matter of law as to Count 7 of the third amended complaint.

Count 8 of the third amended complaint alleges that Dana

(a) Negligently and carelessly failed to warn of the danger of varnish and sludge being allowed to build up on the sprag when they knew or in the exercise of due care should have known that such presented a hazard to plaintiff;
(b) Negligently and carelessly failed to warn of the need to change sprag oil, when they knew or in the exercise of due care should have known that such presented a hazard to plaintiff;
(c) Negligently and carelessly failed to warn of the need for regular maintenance to the boom sprag when they knew or in the exercise of due care should have known that such presented a hazard to plaintiff;
(d) Negligently and carelessly failed to warn of the need to check the safety dog when they knew or in the exercise of due care should have known that such presented a hazard to plaintiff;
(e) Negligently and carelessly failed to advise of the proper installation of the boom sprag when they knew or in the exercise of due care should have known that such presented a hazard to plaintiff;
(f) Negligently and carelessly failed to advise of the proper installation of the safety dog when they knew or in the exercise of due care should have known that such presented a hazard to plaintiff; and
(g) Negligently and carelessly failed to provide adequate safety warnings when they knew or in the exercise of due care should have known that such presented a hazard to plaintiff.

Dana asserts that no material issues of fact exist as to paragraphs (a), (b), (c), and (g) because warnings were given by Dana and American Hoist through service manuals, bulletins, and the decal riveted onto the oil reservoir. However, Dana does not support this assertion with any evidence or affidavits. Without such evidence, the Court cannot say that there exists no issue of material fact as to paragraphs (a), (b), (c), or (g). Similarly, without some supporting evidence the Court cannot say that there exists no issue of material fact as to paragraph (e).

Finally, as to paragraphs (d) and (f), Dana asserts that no issue of material fact exists since the “safety dog” was manufactured by Dana. However, the deposition presented to support this assertion does not indicate this fact. Therefore, an issue of material fact exists as to these paragraphs. Dana presents no other reason why summary judgment as to Count 8 or Count 10 should be granted.

Accordingly, Dana’s motion for summary judgment (Document No. 90) is GRANTED IN PART and DENIED IN PART. Count 7 of the third amended complaint is hereby DISMISSED and said Motion is DENIED in all other respects.

IT IS SO ORDERED.


author: PEREZ-GIMENEZ, Chief Judge.

text:
    Edward STIEHL, Plaintiff, v. UNITED STATES of America, Defendant.
    Civ. No. 84-1276(PG).
    United States District Court, D. Puerto Rico.
    Feb. 11, 1985.
    Luis A. Limeres Grau, Hato Rey, P.R., for plaintiff.
   OPINION AND ORDER

PEREZ-GIMENEZ, Chief Judge.

Plaintiff, Edward Stiehl, filed the present action on May 11, 1984. Plaintiff alleges that the Veterans Administration denied him the right to due process under the Fifth Amendment to the United States Constitution and discriminated against him on account of his handicapped condition. He prays for damages, back pay and promotion to the position of Chief Vocational Rehabilitation and Counseling Division of the Veterans Administration Medical and Regional Office Center, at San Juan, Puerto Rico (hereinafter Chief, VR & CD).

The case is properly before this Court under section 717 of the Civil Rights Act of 1964, as amended (42 U.S.C. § 2000e-16). This statute provides the exclusive remedy for discrimination claims in federal employment. Brown v. G.S.A., 425 U.S. 820, 835, 96 S.Ct. 1961, 1969, 48 L.Ed.2d 402 (1976); Castro v. United States, 584 F.Supp. 252, 257-258 (D.P.R.1984).

The case is presently before this Court upon defendant’s motion to dismiss and/or for summary judgment.

From the documentation submitted, the Court finds that the following uncontroverted facts are established.

1. Mr. Edward Stiehl, the plaintiff herein, is a disabled and handicapped veteran.

2. Mr. Stiehl has been employed with the Veterans Administration since 1968 and at the present has a pay grade of GS-12 as a Counseling Psychologist.

3. Plaintiff filed an application to the position of Chief, VR & CD.

4. Plaintiff was qualified for the position of Chief, VR & CD.

5. Plaintiff was found qualified and was considered for the position of Chief, VR & CD.

6. The factors upon which the selection of the Chief, VR & CD was based were: the internal management appraisals, experience, education, training and awards and recognitions.

7. The internal management appraisals corresponding to Mr. Stiehl, and which were considered in the selection process, rated him either very good or outstanding. The appraisals were based on Mr. Stiehl’s earlier performance as he had been on leave without pay for the period comprising the subject appraisals.

8. There were five candidates for the position. All were found to be qualified. The point summary given to all candidates for the factors mentioned hereinabove in paragraph 6 reveals that Mr. Stiehl was rated fifth.

9. Mr. Stiehl was not selected.

10. Ms. Dorothy Starbuck, Chief Benefits Director of the Veterans Administration, selected Ms. Sonia Moreno to the position of Chief, VR & CD because she felt that Ms. Moreno was the person best qualified amongst the qualified candidates.

For plaintiff to prevail in the present action it is imperative for him to prove that his non-selection to the position of Chief, VR & CD was due or caused by the purposeful discrimination on the part of the defendant. Washington v. Davis, 426 U.S. 229, 239-241, 96 S.Ct. 2040, 2047-2048, 48 L.Ed.2d 597 (1976); T & S Service Associates, Inc. v. Crenson, 666 F.2d 722, 724 n. 2 (1st Cir.1981). That is, under the facts of this case, plaintiff herein must prove that his handicapped condition was a determinative factor in the non-selection. Loeb v. Textron, 600 F.2d 1003, 1010-1011 (1st Cir.1979).

On October 23, 1984, plaintiff was deposed by defendant. This deposition was filed with the Court on December 28, 1984.

It appears from Mr. Stiehl’s testimony at the deposition that he was discriminated against on account of his handicapped condition because he had been absent for one year, that his absence was an indirect result of his handicapped condition, and that in his opinion, his previous performance was not carried over and reflected in the evaluation covering that period of absence (Tr. 12, 17, 20, 21, 33). This presumptive belief has been denied and explained by Ms. Dorothy Starbuck in paragraph four (4) of her verified statement and clearly supported by Exhibits 1 and 2 to the same. Exhibits 1 and 2 are the appraisal forms corresponding to May 1983 and which were submitted to the Evaluation Board. These appraisals reflect that Mr. Stiehl was rated as very good or outstanding in all areas and that the evaluation was based on his earlier performance.

Furthermore, plaintiffs own testimony establishes that he has not been denied any promotion or step while working for the Veterans Administration (Tr. 11) and that he does not know of any discrimination animus, past or present, towards him (Tr. 35). Basically, plaintiff finds that there is discrimination because he was qualified and not selected (Tr. 14). Definitely, such testimony fails to establish any indicia of purposeful discrimination.

On the other hand, the defendant, through the verified statement by Ms. Dorothy Starbuck, who was responsible for the selection of the Chief, VR & CD has shown that the decision to select Ms. Moreno, and not Mr. Stiehl, was not motivated in any way by a discriminatory animus. In fact, her reasons were fully explained to the National Employment Director for Disabled American Veterans, Mr. Ronald D. Drach, in the verified statement (filed as Exhibit K) in support for defendant’s motion for summary judgment.

This statement, in its pertinent part, reads:

My first priority in filling this, as well as other key positions, is to select the person who is best qualified for the position. I approved the selection of Ms. Sonia Moreno because, of the five highly qualified candidates referred, Mr. Moreno was the person best qualified to perform the duties of this particular position.
sfc * * Sfc # Sfc
As you know, the position in question is also a supervisory position. Each applicant was evaluated on factors which reflect those elements of performance that are relevant to the requirements of positions with substantial responsibility for administration, supervision and professional leadership. This appraisal was not only a measure of the applicant's current performance, but also an indicator of their potential performance in supervisory and managerial positions. Ms. Moreno’s appraisal was superior to the appraisals of the other four candidates. I fully support the Veterans Administration affirmative action program for disabled veterans. Our plan requires selecting officials to give serious consideration to all qualified disabled veterans referred for vacancies. I can assure you that Mr.
Stiehl was given full consideration. After reviewing each candidate’s complete record, I felt that Ms. Moreno was the person best qualified to fill the position. Her selection is in no way a negative reflection on Mr. Stiehl’s qualification and accomplishments. We recognize his many contributions to the field of vocational rehabilitation and his involvement in professional and divic activities.

The aforecited excerpts from Ms. Star-buck’s letter clearly indicate that she made an honest and considered judgment decision in selecting Ms. Sonia Moreno as the best qualified applicant, and, consequently, in not selecting Mr. Edward Stiehl. Robinson v. Polaroid, 732 F.2d 1010, 1014 (1st Cir.1984); Johnson v. Allyn & Bacon, Inc., 731 F.2d 64, 70 (1st Cir.1984).

The principle that a judgment decision based on a legitimate reason does not constitute discrimination was adopted by the First Circuit in Loeb v. Textron, Inc., supra, at 1012 n. 6, wherein the court held that:

While an employer’s judgment or course of action may seem poor or erroneous to outsiders, the relevant question is simply whether the given reason was a pretext for illegal discrimination. The employer’s stated legitimate reason must be reasonably articulated and nondiscriminatory, but does not have to be a reason that the judge or jurors would act on or approve. Nor is an employer required to adopt the policy that will maximize the number of minorities, women, or older persons in his workforce. See Furnco Construction Corp. v. Waters, 438 U.S. 567, 576-577, 98 S.Ct. 2943 [2949-2950], 57 L.Ed.2d 957 (1978). An employer is entitled to make his own policy and business judgments, and may, for example, fire and adequate employee if his reason is to hire one who will be even better, as long as this is not a pretext for discrimination.

In view of the foregoing, this Court finds that the non-selection of Mr. Edward Stiehl to the position of Chief, VR & CD was not due to a discrimination animus and, therefore, the defendant is entitled to summary judgment in its favor. Rule 56(e) F.R.Civ.P.; Hahn v. Sargent, 523 F.2d 461, 464 (1st Cir.1975); Maiorana v. MacDonald, 596 F.2d 1072, 1076-1077 (1st Cir.1979).

The Clerk of Court shall enter judgment dismissing the complaint.

IT IS SO ORDERED.

      . Plaintiffs constitutional claim is preempted by 42 U.S.C. § 2000e-16. Castro v. U.S.A., supra, at 258, n. 3; Kizas v. Webster, 707 F.2d 524, 542 (D.C.Cir.1983); Gissen v. Tackman, 537 F.2d 784, 786 (3rd Cir.1976).

      . At pages 25 and 26 of plaintiffs deposition it appears that he stated as follows:
      BY MR. LAMOUTTE:
      Q. It is your testimony, ins’t it, that in those narrative comments it was mentioned that you had not been present for some time?
      A. I haven’t seen that document, but I presume that since that is an evaluation and recommendation for the position, and that is sent to the central office, it can actually be — it can add as much as you want to favor a person, or reduce as much as you want, just to comply with the document.
      Q. And you have not seen that appraisal?
      A. No. I asked for it and it was not given to us. (Emphasis ours)


author: MENCER, District Judge.

text:
    Gerald William MEANS, Plaintiff, v. Leonard MAHAROWSKI, Jr., and Cyril Laffey, Deputy Commissioner and Acting Commissioner of the Pennsylvania State Police, Defendants.
    Civ. A. No. 84-2538.
    United States District Court, W.D. Pennsylvania.
    Feb. 11, 1985.
    Charles C. Gentile, Uni'ontown, Pa., for plaintiff.
    Jean O. Davin, Deputy Atty. Gen., Pittsburgh, Pa., for defendants.
   MEMORANDUM OPINION

MENCER, District Judge.

Plaintiff has instituted this action pursuant to 42 U.S.C. § 1983 alleging that he was deprived of rights, privileges and immunities guaranteed by the Constitution and the laws of the United States. We have jurisdiction over this action by virtue of 28 U.S.C. § 1343(3). Defendants have filed a Motion to Dismiss under Rule 12(b)(6) of the Federal Rules of Civil Procedure. Both sides have submitted briefs in support of their respective positions.

On or about August 29, 1984, a criminal complaint was signed by the defendant Maharowski, Jr., a Pennsylvania State Police Officer, charging the plaintiff with the crimes of rape and simple assault upon information received from Brenda Lee Price. The plaintiff was subsequently arrested on these criminal charges. At the time the incident occurred, the defendant Laffey was the Deputy Commissioner and the Acting Commissioner of the Pennsylvania State Police. Plaintiff alleges that both defendants were acting within the scope of their authority.

On or about September 7,1984, a hearing was held before Magistrate Williams. At the conclusion of the alleged victim’s testimony at the hearing, defendant Maharowski withdrew the rape charge and the simple assault charge was settled to the satisfaction of the parties.

The plaintiff in his brief has agreed that the action against Cyril Laffey, the then Acting Commissioner of the Pennsylvania State Police (now deceased), should be dismissed since the Complaint did not allege active participation by him in this case. In a section 1983 action, the doctrine of respondeat superior does not apply. Consequently, Laffey was not a proper defendant, and the Complaint will be dismissed as to him.

The standard to be applied by the court in a Motion to Dismiss is to liberally construe the Complaint in favor of the plaintiff and to take the material allegations of the Complaint as admitted. Gomez v. Toledo, 446 U.S. 635, 636 n. 3, 100 S.Ct. 1920, 1921 n. 3, 64 L.Ed.2d 572 (1980). The Complaint should not be dismissed unless it appears that the plaintiff could 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).

Any section 1983 action must establish two essential elements: “(1) that the conduct complained of was committed by a person acting under color of state law; and (2) that this conduct deprived a person of rights, privileges, or immunities secured by the Constitution or laws of the United States.” Parratt v. Taylor, 451 U.S. 527, 535, 101 S.Ct. 1908, 1913, 68 L.Ed.2d 420 (1981). The first prong is clearly satisfied in this case. The complaint alleged that the defendant State Police Officer acted under color of statutory authority and acted within the scope of that authority.

Our inquiry must focus on the second element, whether the plaintiff’s complaint established a violation of some right, privilege or immunity guaranteed under the Constitution or laws of the United States. The plaintiff has not alleged a violation under any section of or any amendment to the Constitution, nor has he alleged a violation of any law of the United States. He has merely alleged certain facts. From these facts we determined that he has alleged violations of state law by defendant Maharowski, such as false arrest, malicious prosecution, and defamation.

He has alleged, however, the fact that his arrest was without reasonable or probable cause. Since that allegation is taken as true for purposes of this motion, he has stated a deprivation of his rights under the Fourteenth Amendment. That amendment guarantees that no state shall “deprive any person of life, liberty, or property without due process of law____”

The plaintiff, having thus satisfied the second prong of the test for a section 1983 action by establishing that the conduct complained of deprived him of a right secured by the Constitution, must then establish that this violation occurred without due process of law.

Under the rule announced in Parratt v. Taylor, 451 U.S. 527, 101 S.Ct. 1908, 68 L.Ed.2d 420 (1981), even if there has been a negligent property deprivation, plaintiffs due process rights have not been violated if the state provides a meaningful postdeprivation remedy and the deprivation did not occur as the result of an established state procedure. Id. at 541, 101 S.Ct. at 1916. The plaintiff here is not claiming an unconstitutional state procedure, but a deviation from that procedure resulting in a violation of his rights.

The Supreme Court in Hudson v. Palmer, 468 U.S. _, 104 S.Ct. 3194, 82 L.Ed.2d 393 (1984), extended the rule to include intentional deprivations of property. Some courts have reasoned that liberty interests also fall within the Parratt rule. In Rutledge v. Arizona Board of Regents, 660 F.2d 1345 (9th Cir.1981), the plaintiff alleged that his football coaches at the State University engaged in acts under col- or of state law that deprived him of rights, privileges or immunities secured by the Constitution. The Ninth Circuit assumed, for purposes of its opinion, that the assault and battery alleged by the plaintiff deprived him of liberty within the meaning of the Fourteenth Amendment. The court focused on whether this deprivation occurred without due process of law. Parratt had established that if there was no practical way to afford the plaintiff a predeprivation hearing, a postdeprivation hearing provided at a meaningful time and in a meaningful manner would satisfy due process requirements. The Rutledge court determined that the remedies available in the state courts, having already been pursued by the plaintiff and absent any suggestion that they were deficient, were sufficient such that the alleged deprivation was not without due process of law. We note, however, that there is no requirement that the available state remedies actually have been pursued by the plaintiff. The Parratt court relied on the mere existence of state tort procedures to find that due process requirements had been satisfied.

In Barnier v. Szentmikolosi, 565 F.Supp. 869 (E.D.Michigan, 1983), the court assumed, without deciding, that the plaintiffs’ liberty interests had been implicated. The plaintiffs in Barnier brought a section 1983 action against the city, police department, and individual officers, alleging assault and battery, false arrest, malicious prosecution and deprivation of their due process, equal protection and eighth amendment rights in violation of federal statutory law. The court dismissed the federal statutory claims holding that since plaintiffs were provided adequate state tort remedies, they were not denied due process of law.

We may assume, as did the courts cited above, that the plaintiff’s fourteenth amendment liberty interests were implicated here. The plaintiff has not, however, established that this deprivation occurred without due process of law. The process provided by the state to the plaintiff does comport with constitutional requirements. Since the plaintiff has available a number of tort remedies, including false arrest, malicious prosecution and defamation, and there has been no suggestion that the state tort remedies are in any way inadequate in this case, due process has been satisfied. Even if less relief was afforded to the plaintiff under state law than would be available to him under section 1983, it is sufficient so long as the state remedies are “adequate to satisfy the requirements of due process.” Parratt, 451 U.S. at 544, 101 S.Ct. at 1917.

Therefore, even taking the material allegations of the Complaint as admitted, the plaintiff has failed to state a claim upon which relief may be granted.

An appropriate order will issue.


author: REYNOLDS, Chief Judge.

text:
    UNITED STATES of America, Plaintiff, v. Donald H. WINDFELDER, Defendant.
    No. 84-CR-07.
    United States District Court, E.D. Wisconsin.
    Feb. 12, 1985.
    Joseph P. Stadtmueller, U.S. Atty. by Melvin K. Washington, Asst. U.S. Atty., Milwaukee, Wis., for plaintiff.
    William M. Coffey, Milwaukee, Wis., for defendant.
   DECISION AND ORDER

REYNOLDS, Chief Judge.

The issue before the Court in this criminal tax case is the Government’s motion to determine the scope of the attorney-client privilege in relation to the preparation of an estate tax return. The Government seeks to compel production of documents generated after the estate tax return was filed, and to compel discovery of post-filing discussions. The disputed documents have been produced for in-camera inspection, and the issues were argued at a hearing held on February 8, 1985. The Government’s motion will be granted.

Count 1 of the indictment charges the defendant with filing a false income tax return, and Count 2 charges the defendant with filing a false estate tax return. The Government claims underlying facts show the defendant misappropriated funds from the estate. The defendant was appointed personal representative of his aunt’s estate, and he hired the law firm of Godfrey and Kahn to prepare the estate tax return. The defendant concedes that the Government is entitled to discovery of documents generated prior to the filing of the estate tax return, but argues that the attorney-client privilege bars discovery of documents which were not provided to enable the law firm to prepare the estate tax return. United States v. Schenectady Savings Bank, 525 F.Supp. 647 (N.D.N.Y.1981).

The defendant was removed as personal representative of the estate on February 15, 1983. The documents in dispute were all generated prior to the defendant’s removal as personal representative. The current personal representative, however, has informed the Court that the estate waives any privilege it may have in regard to these matters. The issue to be decided, therefore, is whether the personal representative of an estate may prevent discovery of documents related to the filing of the estate tax return but prepared after the return was filed by personally asserting the attorney-client privilege.

The documents produced for in-camera inspection include two memos to the estate file which were prepared by a member of the law firm, entitled “Reconciliation of Assets.” The memo dated June 15, 1981, begins with the following sentence: “Don Windfelder has forwarded to us a revised reconciliation of assets relative to the assets reported on the Estate’s United States Estate Tax Return as compared to the assets known to have been owned by the decedent within two years prior to her death.” The remaining documents are lists of assets and checks prepared by the defendant as personal representative.

My review of these documents convinces me that they were all generated on behalf of the estate. The defendant has produced no evidence which indicates that he personally hired the law firm of Godfrey and Kahn; rather, it is apparent that the law firm was acting at all times on behalf of the estate. It defies logic and reason and would be poor public policy to allow a defendant who is alleged to have misappropriated funds from an estate to personally assert a privilege belonging to the estate. Consequently, the attorney-client privilege does not bar discovery of documents and discussions between the personal representative and the estate’s law firm, which relate solely to the estate’s tax return even though they were prepared or occurred after the return was filed.

IT IS THEREFORE ORDERED that the motion of the United States to compel discovery is granted.


author: BRIMMER, District Judge.

text:
    John C. HULL, Plaintiff, v. CHEVRON U.S.A., INC., Defendant and Third-Party Plaintiff, v. CHASE DRILLING COMPANY, Third-Party Defendant.
    No. C83-0407-B.
    United States District Court, D. Wyoming.
    Feb. 12, 1985.
    Jack R. Gage, James E. Burke, Cheyenne, Wyo., for plaintiff.
    Michael J. Sullivan, Mark W. Gifford, Casper, Wyo., for defendant/third-party plaintiff.
    Wes W. Reeves, Casper, Wyo., for third-party defendant.
   ORDER ON MOTION FOR PARTIAL INDEMNITY

BRIMMER, District Judge.

The above-entitled matter came before the Court pursuant to defendant Chevron’s third-party claim against third-party defendant Chase Drilling for partial indemnity. The Court, having reviewed the pleadings and the evidence offered, and being fully advised in the premises, FINDS and ORDERS as follows:

Plaintiff Hull sued defendant Chevron for negligence involving an accident at Chevron’s drill site. Chase Drilling, plaintiff’s employer, had been hired by Chevron to do the actual drilling. Plaintiff was injured when a drill collar rolled off a forklift and crushed his leg. The jury found that while plaintiff himself had been 30 percent negligent, Chevron and Chase were each 35 percent negligent. The jury also found that Chevron had retained the right to control Chase’s operation, and that Chase was not an independent contractor. Therefore, Chevron was found liable, under respondeat superior theory, for Chase’s negligence as well as its own. Judgment was entered for plaintiff against Chevron for $420,000 (the $600,000 jury award reduced by plaintiff’s 30 percent negligence). Chevron now asks the Court to order Chase to indemnify it for one-half of this judgment, based on the following provision of their contract:

Contractor (Chase) agrees to protect, indemnify, and save Operator (Chevron) harmless from and against all claims, demands and causes of action of every kind and character arising in favor of Contractor’s employees, ... on account of bodily injuries, ... in any way resulting from the, ... negligent acts or omissions of Contractor and/or Contractor’s, ... employees, ... (identity of parties added).

Chase contends that this indemnity clause is void under Section 30-1-131 of the Wyoming Statutes of 1977. That statute reads, in pertinent part, as follows:

(a) All agreements, covenants or promises contained in, collateral to or affecting any agreement pertaining to any well for oil, gas or water, or mine for any mineral, which purport to indemnify the indemnitee against loss or liability for damages for:
(i) Death or bodily injury to persons;
(ii) Injury to property; or
(iii) Any other loss, damage, or expense arising under either (i) or (ii) from:
(A) The sole or concurrent negligence of the indemnitee or the agents or employees of the indemnitee or any independent contractor who is directly responsible to such indemnitee; or
(B) From any accident which occurs in operations carried on at the direction or under the supervision of the indemnitee or any employee or representative of the indemnitee or in accordance with methods and means specified by the indemnitee or employees or representatives of the indemnitee, are against public policy and are void and unenforceable to the extent that such contract of indemnity by its terms purports to relieve the indemnitee from loss or liability for his own negligence.

The Court does not agree that the indemnity clause is void under this language. The Wyoming Supreme Court stated in Mountain Fuel Supply Co. v. Emerson, 578 P.2d 1351, 1358 (Wyo.1978):

Although the parties’ agreement may be void to the extent that it attempted to indemnify (the indemnitee) from its own negligence, this is not to say that the agreement is void to the extent it implicitly sought to indemnify (the indemnitee) from (the indemnitor’s) own negligence. Such an agreement is not prohibited.

Since Chevron only seeks to be indemnified for the 35 percent of the negligence apportioned to Chase by the jury, it is not seeking indemnification for its own negligence. Rather, Chevron asks for indemnification only for that portion of the judgment'which was based upon its vicarious liability. In Heckart v. Viking Exploration, Inc., 673 F.2d 309 (10th Cir.1982), the court remanded the case for decision as to whether the indemnitee could show it was potentially liable under the respondeat superior doctrine. The Tenth Circuit held that:

If it makes that showing, it is entitled to indemnity according to its contract with (the indemnitor). Id. at 313.

This case is even clearer. The jury specifically found that Chase was responsible for 35 percent of the negligence, which amounts to one-half of the entire judgment assessed against Chevron. Chevron was vicariously liable for Chase’s half, and was not liable because of any concurrent negligence of its own for that portion of the judgment.

We agree with the court in Guitard v. Gulf Oil Co., 100 N.M. 358, 670 P.2d 969 (1983), which in dealing with a similar case held that to void an entire indemnity clause, even as to liability based solely on respondeat superior, would violate important public policies. Statutes like W.S. § 30-1-131 are intended to promote safety. If a drilling company like Chase realized it could void an entire indemnity contract merely because the drill site owner was found to be even one percent negligent, then it might lose much of its incentive to conduct its operations in as safe a manner as possible, because it would rarely have to pay any judgments entered jointly against it and the owner.

Furthermore, if even one percent negligence would void an indemnity agreement, parties would no longer have freedom to contract on this issue. As the Mountain Fuel case makes clear, Wyoming has no policy against indemnity contracts, and in fact such agreements are standard business practice. Were this Court to hold that any negligence on the part of an indemnitee voids the entire agreement, parties would have few reasons to bother with indemnity provisions. See Guitard, 670 P.2d at 973.

Finally, and we think persuasively, the result requested by Chase would be unfair. Chase expressly contracted to indemnify Chevron against all claims in any way resulting from Chase’s own negligent acts. Chevron merely seeks to enforce this agreement. The jury told the Court that Chase’s negligence was responsible for one-half of the ultimate damages awarded to plaintiff, and Chase now asks the Court to let it escape this finding.

The Court concludes that W.S. § 30-1-131 makes it clear that Chase should not be allowed to avoid liability under these circumstances. The statute states that indemnity agreements, such as the one between Chevron and Chase, are only “unenforceable to the extent that such contract ... purports to relieve the indemnitee from loss or liability for his own negligence.” (emphasis added). Chevron must pay for its own negligence, but to the extent that Chevron seeks indemnification for Chase’s negligence, the contract is enforceable under this provision of the statute.

In refusing to dismiss an indemnity claim in Bean v. Woods Petroleum Corp., C81-0231, this Court held in its December 22, 1981 Order that:

(A)n express indemnification agreement will be enforced to the extent that remuneration is sought for the indemnitor’s own negligence, as determined by the finder of fact____ Once each participant is assigned a percentage of negligence by the trier of fact, it is simply a matter of enforcing the indemnification provision to the extent any part of the negligence is attributed to the indemnitor.

The Court is convinced that this procedure, especially in the light of later case law, is as proper in 1985 as it was in 1981. Therefore, it is

ORDERED and ADJUDGED that defendant Chevron U.S.A., Inc., recover of the third-party defendant, Chase Drilling Company, one-half of any monies paid to plaintiff as a result of judgment entered against Chevron U.S.A., Inc., in the above-entitled matter, with interest thereon at the rate of 9.09 percent as provided by law.


author: LASKER, District Judge.

text:
    Arnold D. GOODRIDGE, Plaintiff, v. The HARVEY GROUP INC. and Components Plus, Inc., Defendants-Counterclaimants, v. Frank FERNANDEZ and Alfonse Daula, Additional Defendants on the Counterclaims. Arnold D. GOODRIDGE and New Wave Electronics, Inc., Plaintiffs, v. The HARVEY GROUP INC. and Components Plus, Inc., Defendants-Counterclaimants, v. Frank FERNANDEZ and Alfonse Daula, Additional Defendants on the Counterclaims.
    Nos. 82 Civ. 8691 (MEL), 82 Civ. 8692 (MEL).
    United States District Court, S.D. New York.
    Feb. 13, 1985.

      Grutman, Miller, Greenspoon, Hendler & Levin, New York City, for plaintiffs Arnold D. Goodridge and New Wave Electronics, Inc.; Richard E. Hahn, New York City, of counsel.
    Seyfarth, Shaw, Fairweather & Gerald-son, New York City, for defendant-counter-claimant The Harvey Group Inc.; Michael L. Hirschfeld, Alice Baron, Robert J. Feinstein, New York City, of counsel.
    Ferber, Greilsheimer & Chan, New York City, for additional defendants on the counterclaims, Frank Fernandez and Alfonse Daula; Robert N. Chan, New York City, of counsel.
   MEMORANDUM

LASKER, District Judge.

The Harvey Group, Inc. (“Harvey”), moves, pursuant to Rule 65(a) of the Federal Rules of Civil Procedure for a preliminary injunction restraining Frank Fernandez (“Fernandez”), and any other party to this action from prosecuting certain third-party claims asserted by Fernandez against Harvey in an action commenced by Goodridge against Fernandez in the Supreme Court of the State of New York, County of New York. The motion is denied.

I.

On December 3, 1982 Arnold Goodridge (“Goodridge”) and New Wave Electronics, Inc. (“New Wave”), commenced actions against Harvey and Components Plus, Inc. (“CPI”) in the Supreme Court, New York County, to recover (1) on a promissory note, (2) for breach of an employment agreement and (3) for the breach of a consulting agreement. Harvey and CPI later removed the actions to this court. In their answer to the pleadings they asserted various counterclaims and sued Fernandez as one of the additional defendants on the counterclaims. On June 23, 1983 summary judgment was granted as to Harvey on the ground that there was no basis for “piercing the corporate veil” to hold Harvey liable for agreements to which CPI, and not Harvey, was the signatory. At a later date, Fernandez moved to disqualify Seyfarth, Shaw, Fairweather & Geraldson (“Seyfarth, Shaw”) as counsel for Harvey and CPI, and the motion was denied on July 30, 1984.

On August 28, 1984 Goodridge and New Wave commenced an action in the Supreme Court, New York County, against Fernandez on his guaranty of payment of the obligations under the promissory note, the employment agreement and the consulting agreement which are the subject of the present federal suit. Fernandez then filed third-party claims against Harvey for indemnification. It is the litigation of Fernandez’ third-party claims which Harvey now seeks to enjoin.

II.

Harvey asserts that two issues which have been decided previously by this Court, i.e., Harvey’s liability for CPI’s obligations and whether Seyfarth, Shaw should be disqualified as counsel, are likely to be relitigated in the New York action. Goodridge and Fernandez argue that they are asserting claims in the state court which have not been asserted in this action and therefore this court is barred by 28 U.S.C. § 2283 (1982) (hereinafter “the anti-injunction statute”) from enjoining the state court proceeding. Harvey answers that under the circumstances of this case the anti-injunction statute does not prevent enjoining the state proceeding because the case falls within the exceptions which allow a court to issue an injunction to “protect or effectuate its judgments” and “where necessary in aid of its jurisdiction.”

However, the policy of comity which prompted the enactment of the anti-injunction statute requires that the exceptions be narrowly construed. As stated by the Supreme Court,

[Sjince the statutory prohibition against such injunctions in part rests on the fundamental constitutional independence of the States and their courts, the exceptions should not be enlarged by loose statutory construction. Proceedings in state courts should normally be allowed to continue unimpaired by intervention of the lower federal courts. * * *

Atlantic Coast Line Railroad Company v. Brotherhood of Locomotive Engineers, 398 U.S. 281, 287, 90 S.Ct. 1739, 1743, 26 L.Ed.2d 234 (1970).

Generally, under the statute an injunction is considered to be “necessary in aid of a court’s jurisdiction” in an in rem proceeding in which, to secure or retain jurisdiction, control over the res must be asserted. See Vendo Co. v. Lektro-Vend Corp., 433 U.S. 623, 642, 97 S.Ct. 2881, 2893, 53 L.Ed.2d 1009 (1977); Heyman v. Kline, 456 F.2d 123, 131 (2d Cir.), cert. denied, 409 U.S. 847, 93 S.Ct. 53, 34 L.Ed.2d 88 (1972); Companion Life Insurance Co. v. Matthews, 547 F.Supp. 836, 839 (S.D.N.Y.1982). However, even when an action is not in rem, injunctive relief may be “necessary to prevent a state court from so interfering with a federal court’s consideration or disposition of a case as to seriously impair the federal court’s flexibility and authority to decide that case.” Atlantic Coast Line R.R. v. Brotherhood of Locomotive Engineers, 398 U.S. 281, 295, 90 S.Ct. 1739, 1747, 26 L.Ed.2d 234 (1970); accord Complaint of Cosmopolitan Shipping Co. S.A., 453 F.Supp. 268 (S.D.N.Y.1978).

In this action Goodridge seeks recovery from CPI on the promissory note, employment agreement and consulting agreement. In contrast, in the state action Goodridge seeks recovery from Fernandez on Fernandez’ guaranty of the above obligations and Fernandez, in turn, seeks recovery from Harvey on third-party claims which Fernandez has not asserted in the federal action. Based upon these facts we conclude that the state court action does not, at least on the present state of the record, pose a threat to “the very authority of the federal court.” Vernitron Corporation v. Benjamin, 440 F.2d 105, 108 (2d Cir.), cert. denied, 402 U.S. 987, 91 S.Ct. 1664, 29 L.Ed.2d 154 (1971). If it later becomes apparent that the state proceedings constitute a genuine threat to this court’s jurisdiction Harvey is free to renew his application based upon those developments.

Further, Harvey’s assertion that a motion by Fernandez to disqualify Harvey’s counsel “will make a mockery” of this court’s prior order is at best premature. Even if the state court were to entertain a motion to disqualify Harvey’s counsel in the proceedings before it, such a ruling, were it to be granted, could not be said to interfere with the jurisdiction of this court so long as it did not purport to affect the proceedings here in any way. As stated in Vendo Co. v. Lektro-Vend Corp., 433 U.S. 623, 642, 97 S.Ct. 2881, 2893, 53 L.Ed.2d 1009 (1977) (plurality opinion)

[Ejach court is free to proceed in its own way and in its own time, without reference to the proceedings in the other court. Whenever a judgment is rendered in one of the courts and pleaded in the other, the effect of that judgment is to be determined by the application of the principles of res judicata____

However, if, as Harvey fears, Fernandez were to move to disqualify Seyfarth, Shaw from acting as counsel to Harvey in [the state court matters] and “in connection with any other matters involving the same or related subject matter,” at that point it would be necessary to stay the assertion of that claim in state court “in aid of (this court’s) jurisdiction”. Upon appropriate application we would grant relief promptly.

In sum, we conclude that the jurisdictional exception presently does not apply to the proscription against the issuance of an injunction in this case.

III.

The exception which permits the stay of state court proceedings to protect or effectuate the judgments of a federal court, is commonly referred to as “the relitigation exception.” See Complaint of Cosmopolitan Shipping Co. S.A., 453 F.Supp. 268, 270 (S.D.N.Y.1978). In this circuit, the exception applies to interlocutory orders as well as final decrees. Sperry Rand Corporation v. Rothlein, 288 F.2d 245, 249 (2d Cir.1961).

Fernandez asserts three claims in his third-party action against Harvey in the state court. The first and third causes of action do not seek to relitigate Harvey’s liability for CPI’s obligations. They assert claims against Harvey directly, pursuant to agreements to which Harvey was itself a signatory. Fernandez’ second cause of action in the state suit asserts that Harvey is liable for the obligations of CPI as a result of the merger of CPI into Harvey. Although this claim may involve allegations already decided by this Court in favor of Harvey, Fernandez (1) was not yet a party to this action when the issue of Harvey’s liability, if any, for CPI’s obligation was litigated and (2) has never raised this claim in the federal action. These facts render the relitigation exception inapplicable in the circumstances since, as we construe the decisions, it governs only the case in which the parties enjoined from relitigating issues in state court were the same as those who were before the federal court. See, e.g., Browning Debenture Holders’ Committee v. DASA Corp., 605 F.2d 35 (2d Cir.1978); Ward v. Pennsylvania New York Central Transportation Co., 456 F.2d 1046 (2d Cir.1972).

Finally, as to the possibility that Fernandez may move to disqualify Harvey’s counsel, for substantially the same reasons that were stated in Point II., we conclude it is not necessary at this time to stay the assertion of the state court claim to “protect or effectuate” any earlier judgment of this court.

For the foregoing reasons, we conclude that 28 U.S.C. § 2283 prohibits the stay of the proceedings currently pending in the New York court.

The motion is denied.

It is so ordered.

      . Plaintiffs’ motion for reconsideration and reargument was denied on this same date.

      . Harvey asserts that the anti-injunction statute is not a bar "where no state court action is pending, or where the claims whose prosecutions is sought to be enjoined have not been asserted in the pending state action.” However, as the plaintiffs correctly point out, this is irrelevant here because the state action has already commenced and the claims which Harvey seeks to enjoin have already been asserted.

      . Harvey also asserts that in addition to the exceptions enumerated in the anti-injunction statute, there is a judicially recognized exception permitting injunctions against baseless and vexatious state court actions. Whether this exception is still viable is questionable at best. See, e.g., Browning Debenture Holders' Committee v. DASA Corp., 454 F.Supp. 88, 100 n. 15 (S.D.N.Y.), aff’d 605 F.2d 35 (2d Cir.1978). However, we do not answer this question because we find Fernandez’ assertion of the third-party claims as a defense against the complaint filed by Goodridge cannot be characterized as "vexatious.”

      . As stated previously, Harvey seeks to enjoin Fernandez’ third-party claims and is not moving for a preliminary injunction to halt Goodridge and New Wave’s claims against Fernandez. The effect, therefore, of granting Harvey’s motion would be to deprive Fernandez of the ability to defend against the charges in the state complaint. As an equitable consideration, this result weighs heavily against the issuance of an injunction staying the third party claims. However, we do not reach the point of balancing the equities in this case because we have concluded that the anti-injunction statute bars the stay of the state court proceedings.

      , We do not here consider Fernandez’ request for attorneys fee because such a request must be made by motion. Rule 11, Federal Rules of Civil Procedure.


author: ALLEN SHARP, Chief Judge.

text:
    UNITED STATES of America and William D. Lutgen, Revenue Agent, Internal Revenue Service, Petitioners, v. CARTER FAMILY TRUST, James R. Sattler, Trustee, Respondent. UNITED STATES of America and William D. Lutgen, Revenue Agent, Internal Revenue Service, Petitioners, v. James R. SATTLER FAMILY TRUST, Helen Sattler, Trustee, Respondent. UNITED STATES of America and William D. Lutgen, Revenue Agent, Internal Revenue Service, Petitioners, v. Jalen JE PEUX TRUST, Helen L. Sattler, Trustee, Respondent. UNITED STATES of America and William D. Lutgen, Revenue Agent, Internal Revenue Service, Petitioners, v. James R. SATTLER and Helen L. Sattler, Respondent.
    Nos. L 84-62 to L 84-65.
    United States District Court, N.D. Indiana, Hammond Division.
    Feb. 13, 1985.

      David H. Miller, Asst. U.S. Atty., Fort Wayne, Ind., for petitioners.
    James R. Sattler, trustee, pro se.
    Helen Sattler, trustee, pro se.
   MEMORANDUM AND ORDER

ALLEN SHARP, Chief Judge.

I.

These actions are presently before the court on the second motion for show cause order of petitioners, United States of America (the Government), and William D. Lutgen, Revenue Agent, Internal Revenue Service (IRS) filed July 30, 1984.

The facts underlying this cause are as follows. The Government served summonses for tax information on respondents, Carter Family Trust, James R. Sattler, Trustee, James R. Sattler Family Trust, Helen L. Sattler, Trustee, Jalen Je Peux Trust, Helen L. Sattler, Trustee, and James R. Sattler and Helen L. Sattler, (taxpayers) pursuant to 26 U.S.C. § 7602 on September 19, 1983. The taxpayers did appear at the offices of the IRS but they refused to provide the summonsed information.

The Government commenced these cases by filing petitions to enforce the IRS summonses pursuant to 26 U.S.C. § 7604 on May 16, 1984. In such motions, the Government requested this court to order respondents to show cause why they should not comply with the IRS summonses issued September 19, 1983 and to appear to give testimony with respect to their tax liability for the taxable years 1980 and 1981. The Government further requested costs for maintaining these actions. The court entered the order to show cause on May 16, 1984; however, the taxpayers did not comply with such order.

Thereafter, on August 22, 1984, this court once again ordered the taxpayers to appear and show cause why they should not be held in contempt of court for failing to obey this court’s order of May 16, 1984. A show cause hearing was held on October 25, 1984 in Lafayette, Indiana, at which time the taxpayers did appear but without counsel. At that hearing, both parties were to supplement the record with any further briefs by November 11, 1984. A letter from the taxpayers was filed November 23, 1984.

II.

In order to establish a right to summons enforcement, the IRS need only show:

1. the investigation is conducted pursuant to a legitimate purpose;
2. that the materials sought may be relevant to that purpose;
3. that the information being sought is not already in the possession of the IRS; and,
4. that all administrative steps required by the Internal Revenue Code with respect to summons have been followed.
United States v. Powell, 379 U.S. 48, 57-58, 85 S.Ct. 248, 254-255, 13 L.Ed.2d 112 (1964). See also United States v. Kis, 658 F.2d 526, 536 (7th Cir.1981).

The requisite showing is generally made by the affidavit of the Agent who issued the summons and who is seeking enforcement. Indeed, no more than that is necessary to make the prima facie case. Kis, 658 F.2d at 536. Moreover, the threshold of relevance is a low one. Id. at 537. Internal Revenue Code § 7602, 26 U.S.C. § 7602 authorizes the IRS, in the course of an audit, to “examine any books, papers, records, or other data which may be relevant ... to such inquiry” (emphasis added). Thus, “the government need show only that inspection of the desired record ‘might throw light’ upon the correctness of the taxpayer’s return and liabilities.” Kis, 658 F.2d at 537.

In support of its enforcement motion in each of the above captioned cases, the Government filed a Declaration by William D. Lutgen, the Internal Revenue Agent who issued the summonses and who is conducting the IRS tax investigation. That declaration is sufficient to establish the requisite standards for enforcement of the summonses.

Once the government has established its prima facie case, the taxpayer must answer the government’s case alleging specific facts in rebuttal, facts that permit at least an inference that some wrongful conduct by the government exists. Mere allegations of bad faith will not suffice, nor will legal conclusions or memoranda of law. Kis, 658 F.2d at 539. The taxpayers must prove that “the government has abandoned in the institutional sense its pursuit of possible civil penalties.” Id. at 538.

The taxpayers in this case have made no such showing. They base their refusal to comply with the IRS summonses on The Privacy Act, 5 U.S.C. § 552a. Both at the October 25, 1984 hearing and in their November 19, 1984 letter to this court, the taxpayers have contended that The Privacy Act requires that the IRS submit a notice of some type stating the purpose for which information is sought. They further argue that the IRS is intent on subjecting them to an “illegal fishing expedition” the results of which may be used “to concoct charges” of a criminal nature against them. See Transcript of Show Cause Hearing of October 25, 1985 at pp. 9-10.

The court finds the arguments of the taxpayers to be without merit. As discussed above, the Government has established its prima facie case by meeting the standards set out in Powell, supra, and Kis, supra, for enforcement of the summonses. The taxpayers’ arguments are tantamount to mere allegations of bad faith, evidence held to be insufficient to rebut the government’s case under the standards set forth in Kis, supra. Moreover, taxpayers’ reliance on The Privacy Act is misplaced. The purposes of The Privacy Act is to protect citizens against improper disclosure of information about them that may be held by government agencies; it was not intended to be used to shield individuals from compliance with disclosure requirements mandated by law.

Accordingly, it is the order of this court that the taxpayers COMPLY with the summonses issued by the Government on September 19, 1983 at a date and time designated by the IRS upon receipt of this order. The Government’s petition for costs is DENIED. The court further notes this record reflects that the taxpayers chose to ignore a prior order of this court issued May 16, 1984; the taxpayers are here advised that this court expects strict compliance with this order. A failure to comply will result in a fine, imprisonment or both, together with the costs of prosecution, pursuant to 26 U.S.C. § 7210. SO ORDERED.


author: NORTHROP, Senior District Judge.

text:
    Pauline SULLIVAN v. Margaret M. HECKLER, Sec’y, Dept. of Health & Human Services.
    Civ. A. No. N 84-3621.
    United States District Court, D. Maryland.
    Feb. 15, 1985.
    Timothy J. Paulus and Gary Jacobs of the Legal Aid Bureau, Inc., Silver Spring, Md., for plaintiff.
    Larry D. Adams, Asst. U.S. Atty., and J. Frederick Motz, U.S. Atty., D. Md., Baltimore, Md., for defendant.
   NORTHROP, Senior District Judge.

Plaintiff, a Social Security disability claimant, brings this action under 42 U.S.C. § 405(g), seeking review of the denial of her disability benefits by the Secretary of Health and Human Services (the “Secretary”).

The Secretary has moved to dismiss the complaint, arguing that since there has been no “final decision” on the merits of the disability claim, this Court is entirely without jurisdiction to review the matter. (Paper # 5). The plaintiff has filed a memorandum in opposition to the Secretary’s motion to dismiss. (Paper # 6). No hearing is necessary. Local Rule 6(E). For the reasons set forth hereinbelow, the Court concludes that there is no reviewable “final decision” on the merits of plaintiff’s claim within the meaning of the Social Security Act, 42 U.S.C. §§ 401-33 (1976 & Supp. 1981) (hereinafter sometimes referred to as the “Act”). Notwithstanding this conclusion, the Court holds that it does have limited jurisdiction to remand this case for either a reversal or a de novo determination of whether plaintiff’s request for Appeals Council review was timely. A brief statement of the procedural history of this case is essential to put the within rulings in context.

I.

Plaintiff began her quest for Social Security benefits on December 2, 1983. In a decision dated April 17, 1984, the Administrative Law Judge (“AU”) affirmed the denial of plaintiff’s claims for benefits. Under the applicable regulation, 20 C.F.R. § 404.968, plaintiff had 60 days from receipt of the AU’s decision to request review by the Appeals Council. Receipt of the decision is presumed to be within five days of mailing; thus, plaintiff had until June 21, 1984 to file a timely request for review.

Through affidavit, plaintiff’s attorney claims the request for Appeals Council review was mailed on June 15, 1984 even though it was postmarked June 23, 1984. The letter was physically received by the Appeals Council on June 26, 1984. The affidavit also states, in part, the following:

4. I was aware of the deadline for requesting review of the Administrative Law Judge’s decision in this case, so I took care to get this request mailed within the deadline.
5. I used our office’s postage meter to put the first class postage on the envelope, which reflected the date of June 15, 1984.
6. I personally carried and deposited this letter in a mailbox on June 15, 1984 prior to the last scheduled pick-up of the mail from that mailbox.

Without communicating with counsel concerning the eight-day discrepancy between the June 15, 1984 date of the letter and the June 23, 1984 postmark, the Appeals Council dismissed plaintiff’s request for review on the ground that it was untimely and held “there is no good cause to extend the time for filing ...” This civil action was timely instituted on September 28, 1984.

II.

Subsumed within the Social Security Act is a comprehensive plan for administrative and judicial review of claims for disability benefits. Pursuant to 42 U.S.C. § 405(a), the Secretary has promulgated regulations to effectuate this plan. See 20 C.F.R. § 404.900-404.983. Regulation 20 C.F.R. § 404.968, at issue here, requires that a written request for review be filed “[w]ithin 60 days after the date [the claimant] receive[s] notice of the hearing decision or dismissal.” As noted previously, an additional five days is added to compensate for mailing time, 20 C.F.R. § 404.901, and thus the claimant actually has 65 days from the date of the Aid’s decision to file a request for review. The Appeals Council has authority to dismiss an untimely request for review. 20 C.F.R. §§ 404.900(b); 404.971. It may also extend the time for filing if “good cause” is shown. 20 C.F.R. § 404.-968(b).

Section 205(h) of the Social Security Act, 42 U.S.C. § 405(h), makes it clear that the Secretary’s decisions are not reviewable except as provided in Section 205(g), 42 U.S.C. § 405(g). Weinberger v. Salfi, 422 U.S. 749, 756-758, 95 S.Ct. 2457, 2462-2463, 45 L.Ed.2d 522 (1975). Section 405(g) provides that only “final decisions of the Secretary” may be reviewed by the district court. The Secretary argues that the Appeals Council’s decision not to review an untimely appeal is not a “final decision” within the meaning of the Act because the plaintiff failed to exhaust her administrative remedies and, therefore, this Court lacks subject-matter jurisdiction.

To this Court’s knowledge, the Fourth Circuit has not passed on the precise issue of whether the Appeals Council’s refusal to consider an untimely request for review constitutes a “final decision by the Secretary.” Cf. Holloway v. Schweiker, 724 F.2d 1102 (4th Cir.1984) (the district court lacks subject-matter jurisdiction to review a decision not to reopen a benefits claim). A majority of courts that have considered the issue have concluded that such a dismissal is not reviewable by the district court. See Deitsch v. Schweiker, 700 F.2d 865, 867 (2d Cir.1983); Watters v. Harris, 656 F.2d 234, 238-40 (7th Cir.1980); Sheehan v. Secretary, Health, Educ. and Welfare, 593 F.2d 323, 326 (8th Cir.1979); Maloney v. Harris, 526 F.Supp. 621, 622 (E.D.N.Y.1980), aff'd, 657 F.2d 264 (2d Cir.1981); Cf. Califano v. Sanders, 430 U.S. 99, 97 S.Ct. 980, 51 L.Ed.2d 192 (1977); but see Bloodsworth v. Heckler, 703 F.2d 1233, 1236-1239 (11th Cir.1983). After careful consideration of the applicable Social Security Act provisions, the relevant regulations and the cited case law, this Court concludes that it does not have subject-matter jurisdiction to review the merits of plaintiff’s disability claim. This ruling does not, however, dispose of this case.

In Bellantoni v. Schweiker, 566 F.Supp. 313 (E.D.N.Y.1983), Judge Glasser was faced with a virtually identical factual pattern. After analysis, he too concluded that an untimely request for Appeals Council review was not a “final decision” on the issue of the claimant’s liability. Id., at 315. Nonetheless, Judge Glasser found that there was “a final decision of the Secretary on the question of whether the plaintiff’s request for Appeals Council review was timely.” Id., at 315. In Bellantoni, the plaintiff indicated she had not received a copy of the ALJ’s decision until after she made an inquiry. Mrs. Bellantoni, like the plaintiff in the instant case, noted her appeal two days late. The Bellantoni court remanded the case to the Appeals Council to determine whether “good cause” existed for missing the filing deadline. Id., at 316. This Court finds the reasoning of Bellantoni v. Schweiker, supra, persuasive and equitable.

Turning to the facts of this case, there is nothing in the record to indicate whether the Appeals Council was aware of plaintiffs assertions that her notice of appeal was actually mailed on June 15, 1984. In this connection, the Court notes that some courts have construed “mailing of notice” to be the equivalent of “filing of notice.” Dietsch v. Schweiker, 700 F.2d 865, 868 (2d Cir.1983); Monferrato v. Schweiker, 700 F.2d 869, 870 (2d Cir.1983) (companion case). Under this construction, assuming the veracity of the submitted affidavit, the appeal was in fact timely filed.

Furthermore, even assuming the June 23, 1984 postmark date (two days beyond the June 21, 1984 appeal deadline) was the determinative date considered by the Appeals Council, it would appear to this Court that “good cause” exists for extending the filing deadline. Regulation 20 C.F.R. § 404.911(b)(9) gives one of several concrete examples where “good cause” for missing a filing deadline can exist:

Unusual or unavoidable circumstances exist which show that you could not have known of the need to file timely, or which prevented you from filing timely. (emphasis added).

Surely an eight-day delay between physically mailing a letter and the same being postmarked could reasonably be construed as an unusual circumstance which prevented plaintiff from timely filing her notice of appeal.

Because it is not clear that the Secretary had the opportunity to review the peculiar factual circumstances surrounding plaintiffs appeal, and in deference to the Secretary’s primary fact finding role, this matter will be remanded to the agency for a redetermination of the timeliness of the claimant’s request for Appeals Council review. The Secretary may either accept this Court’s analysis that the appeal was timely filed or that “good cause” exists for extending the deadline, or it may offer the plaintiff an opportunity for a hearing in order to make its own determination of credibility and timeliness.

A separate Order confirming the within ruling will be entered.

      . 20 C.F.R. § 404.901.

      . Rather than an attorney, the person who actually mailed the letter and submitted the affidavit was a legal assistant with the Legal Aid Bureau. Because it appears the legal assistant was acting under the direction and supervision of plaintiff's attorney of record, the Court will attribute her acts to that of the attorney.

      . A copy of the envelope is attached to the Secretary’s motion to dismiss. Unfortunately, because of the copy quality, the Court cannot determine the date of postage. In any event, the date of the office postage meter is not determinative of the issues raised herein.

      . Bloodsworth v. Heckler, 703 F.2d 1233 (11th Cir.1983), adopts an attractive although not compelling line of reasoning in finding jurisdiction to review an Appeals Council denial of a request to review for reason of untimeliness. That court draws a technical distinction between review and reopening of a case. This Court will not follow the Bloodsworth reasoning because it is against the weight of authority and because a decision not to review an untimely appeal to the Appeals Council is a discretionary one. Moreover, adoption of the Bloodsworth position would frustrate the legislative interest in the finality of administrative decisions contrary to the Supreme Court’s holding in Califano v. Sanders, 430 U.S. 99, 97 S.Ct. 980, 51 L.Ed.2d 192 (1977).

      . Finally, the Court notes that even if jurisdiction under § 405(g) of the Act were unavailable here, mandamus jurisdiction under 28 U.S.C. § 1361 would be available to review otherwise unreviewable procedural issues not related to the merits of a claim for benefits. See Dietsch v. Schweiker, 700 F.2d 865, 868 (2d Cir.1983); Bellantoni v. Schweiker, 566 F.Supp. 313, 316 n. 4 (E.D.N.Y.1983); Soberal-Perez v. Schweiker, 549 F.Supp. 1164 (E.D.N.Y.1982) (and cases cited therein); Caswell v. Califano, 435 F.Supp. 127, 132-33 (D.Me.1977).