text:
    G & T TERMINAL PACKAGING CO., INC., Plaintiff-Appellant, v. JOE PHILLIPS, INC., Defendant-Appellee.
    No. 83 Civ. 6351 (BN)(SWK).
    United States District Court, S.D. New York.
    July 25, 1985.
    Linda Strumpf, New York City, for plaintiff-appellant.
    Stephen P. McCarron, Sures, Dondero and McCarron, Silver Spring, Md., for defendant-appellee.
   OPINION, FINDINGS OF FACT AND CONCLUSIONS OF LAW

NEWMAN, Senior Judge of the United States Court of International Trade,

sitting by designation:

Introduction

This proceeding is an appeal pursuant to 7 U.S.C. § 499g(c) from an award of reparations to defendant Joe Phillips, Inc. by the United States Department of Agriculture (U.S.D.A.) in connection with seven railroad carloads of potatoes sold and shipped by defendant to plaintiff, G & T Terminal Packaging Co., Inc. In accordanee with the statute, this matter was tried to the court de novo; however the findings of fact and order of the Secretary are prima facie evidence of the facts therein stated.

Two issues are presented: (1) Did the parties agree upon a reduction of the prices in the seven transactions in question; (2) Was there a breach of contract by defendant in any of the seven transactions; if so, did plaintiff establish its damages?

The Facts

Defendant corporation is a growers’ representative and shipper of produce located in Fresno, California. Plaintiff corporation is a buyer and repacker of produce, mainly potatoes, located in The Bronx, New York. In June and July, 1980 defendant sold and shipped from California to plaintiff’s place of business in New York the seven railroad carloads of potatoes in question. All of the contracts were negotiated by Larry Stein-berg of Steinberg Bros. Co., a produce broker in Chicago, Illinois. A broker’s memorandum confirming each of the transactions was sent by Mr. Steinberg to both parties, specifying that the potatoes were “USONE” and were sold “FOB SP”. According to plaintiffs witness Robert M. Steinberg, brother and business partner of the late Larry Steinberg (who passed away in December, 1983), “FOB SP” designates that the potatoes were to be placed “free on board” the rail cars at the shipping point.

In conformance with the parties’ contracts, defendant shipped the following seven rail cars of potatoes, with a total invoice price of $35,599.50:

(1) June 19, 1980: UPFE 452139 invoiced as “900 100 # sks US IB LW potatoes” at $4.50 per cwt (hundred weight), plus a temperature recording device at $22.50, for a total invoice amount of $4,072.50.
(2) June 30, 1980: SFRC 55454 invoiced as “900 100 # US 1A LW potatoes” at $8.50 per cwt, plus a temperature recording device at $22.50, for a total invoice amount of $7,672.50.
(3) June 30, 1980: SPFE 451204 containing 900 cwt of potatoes invoiced as “840 100 # US 1 BEE LW potatoes” at $4.00 per cwt and “60 100 US # 1A LW potatoes” at $8.50 per cwt, plus a temperature recording device at $22.50, for a total invoice amount of $3,892.50.
(4) July 2, 1980: SPFE 452793 invoiced as “900 100 # US 1 BEE LW potatoes” at $4.00 per cwt, plus a temperature recording device at $22.50, for a total invoice amount of $3,622.50.
(5) July 3, 1980: SPFE 456453 invoiced as “900 100 # US 1A LW potatoes” at $8.50 per cwt, plus a temperature recording device at $22.50, for a total invoice amount of $7,672.50.
(6) July 3, 1980: SPFE 459800 with contents invoiced as “900 100 # US 1 BEE LW potatoes” at $4.00 per cwt, plus a temperature recording device at $22.50, for a total invoice amount of $3,622.50.
(7) July 8,1980: SPFE 456107 containing 900 cwt of potatoes invoiced as “316 100 # sks LW potatoes” at $8.50 per cwt plus “584 100 # sks BEE LW potatoes” at $4.00 per cwt, plus a temperature recording device at $22.50, for a total invoice amount of $5,044.50.

At the trial, plaintiff introduced in evidence U.S.D.A. inspection certificates on six of the above seven loads indicating that the potatoes arrived in New York in poor condition. The inspection certificates disclose that the potatoes in five of the seven shipments had enlarged lenticels and black or brown discoloration affecting one-fourth or more of the surface. Other defects noted were slimy soft rot, cuts and bruises.

The poor condition of the shipments was telephonically reported by plaintiff’s president, Anthony J. Spinale, to the broker, Larry Steinberg, who was advised that plaintiff “did not really want to handle the potatoes” (Tr. 12) because of their poor condition. Steinberg telephonically relayed the problems concerning the seven loads to defendant’s president, Joseph A. Phillips. Further, Steinberg asked that Spinale “work it out” (Tr.13, 54-55), inasmuch as “the shipper had no place else to go with them [the loads]” (Tr. 13). Phillips requested, through Steinberg, that Spinale submit substantiating documentation concerning the condition of the shipments which Phillips would review with his grower for consideration of whether or not any adjustments should be allowed.

After “working out” the seven loads, Spinale notified Steinberg of the allowances that he felt were “adequate” (Tr. 20) and deducted these allowances from the invoice prices when he remitted payment. Mr. Spinale explained how he calculated the allowances taken on each load (Tr. 16-17):

Well * * * there is a rule for what a shipper is allowed by U.S.D.A. standards as far as defects, * * * [i]t’s either 7 or 8 percent that they are allowed. So basically * * * I would have to first take off the 8 percent that they would be allowed and probably subtract that from the * * soft rot * * * and then I would take the percentage of what was left, and plus the sorting that would take me to try to clean up these potatoes * * * and that’s how I arrived at my allowance.

Thus, on August 6,1980 Spinale forwarded documentation (Federal inspection certificates, Ryan temperature recorder tapes, etc.) to Steinberg with a check in the amount of $12,806.00 on invoices totalling $35,599.50, as follows:

Unpaid Balance Car No. Invoice Plaintiff’s Price Payment

3.622.50 452139 4.072.50 450.00

4.522.50 55454 7.672.50 3,150.00

2.992.50 451204 3.892.50 900.00

2.722.50 452793 3.622.50 900.00

4.072.50 456453 7.672.50 3,600.00

2.722.50 459800 3.622.50 900.00

2.138.50 456107 5.044.50 2,906.00

The court finds that the allowances taken by plaintiff were never agreed to by Phillips. No credit memos were issued by Phillips to plaintiff on any of the seven loads in question. Moreover, no memorandum or documentation of any kind was made by the broker concerning the claimed allowances. Defendant refused to accept plaintiff’s check as full payment for the seven shipments and advised the broker that he was not willing to agree to any allowances.

By letter of August 19, 1980 defendant herein filed a complaint with U.S.D.A. to initiate reparation proceedings pursuant to 7 U.S.C. § 499a et seq. Thereafter, the parties agreed that the $12,806.00 paid to defendant was an undisputed amount and the complaint would proceed on the balance of the invoice price, $22,793.50. After an oral hearing, a decision and order was issued by U.S.D.A. on September 15, 1982 awarding reparations to defendant in the amount of $22,793.50 with interest, and further awarding an additional reparation for fees and expenses in the administrative proceeding in the amount of $3,148.57, plus interest. The U.S.D.A. Judicial Officer found that plaintiff herein had not produced sufficient evidence to prove that defendant had agreed to any adjustments or allowances on the invoice prices. Respecting the question of breach of contract, the Judicial Officer found against plaintiff herein concluding that plaintiff had failed to carry its burden of proof that the transportation conditions relating to these F.O.B. shipments were normal.

On September 27, 1982 plaintiff herein filed a petition to reopen the hearing before U.S.D.A. to receive the testimony of the broker, Larry Steinberg, who was unable to appear at the original hearing because of a critical illness. U.S.D.A. granted plaintiffs petition to the extent that the parties were permitted to take the broker’s deposition by written interrogatories in Florida. A stay order was issued on November 5, 1982. After reconsideration of the case in light of the new evidence submitted, a second decision was issued by the Judicial Officer on July 28, 1983, reaffirming his original decision awarding reparations to defendant herein. In the second decision, the Judicial Officer again concluded that plaintiff had failed to prove that defendant had agreed to any adjustments or allowances in the invoice prices on any of the seven loads.

Opinion

I.

We initially consider plaintiff’s claim that defendant agreed to the allowances taken by plaintiff on the invoice prices of the seven shipments in question. Defendant strenuously denies that any allowances or adjustments were granted on any of the loads. This issue is essentially one of fact, and involves to a large degree the credibility of the sharply conflicting evidence.

As noted, supra, U.S.D.A. found that Phillips did not agree to an allowance on any of the contracts. Pursuant to 1 U.S.C. § 499g(c) that finding must be regarded in this action as prima facie evidence on the factual issue presented. Based upon an assessment of the additional evidence presented to this court, we are constrained to adhere to U.S.D.A.’s finding.

At the trial, plaintiff offered the testimony of Robert Steinberg, brother and business partner of Larry Steinberg at the time of the subject shipments in 1980-81. Robert admittedly had “nothing to do with the actual transactions at that time” (Tr. 52), and testified on the basis of alleged telephone conversations he overheard between his brother and Phillips and discussions with his brother relating to the allowances. Credibility aside, Steinberg’s testimony, having no basis whatever in personal knowledge, is entitled to little if any weight as compared with the direct and convincing testimony of Phillips who emphatically denied that he had agreed to the allowances taken by plaintiff. Moreover, in view of defendant’s exhibits A and B, the court finds a problem with the credibility of Spinale and Steinberg in their testimony that “word of mouth” allowances were granted by Phillips. These exhibits raise a strong inference that the absence of a written confirmation or credit memo indicates that no allowances were granted with respect to the seven transactions at issue. Furthermore, the court finds it difficult to believe that the substantial allowances claimed by plaintiff would not have been documented in some fashion by either Larry Steinberg or Phillips if they had in fact been granted.

While the court fully agrees with the observations of U.S.D.A.’s Judicial Officer that ordinarily the testimony of an unbiased broker who is not an interested party in the proceeding would be given great weight, we also agree with the Judicial Officer’s observation: “in this case, because of the ambiguous, inconsistent nature of Mr. [Larry] Steinberg’s statements and actions, we must conclude that his claim that Mr. Phillips granted allowances to respondent [plaintiff herein], made in his answer to interrogatory 44, is not deserving of controlling weight.” Decision on Rehearing, Reargument and Reconsideration, July 28, 1983, at 2-3.

After having carefully reviewed U.S.D. A.’s finding on the allowance issue and the credibility and weight of the additional evidence of record in the current proceeding, the court concludes that plaintiff has failed to establish that defendant agreed to the allowances taken by plaintiff.

II.

We turn to plaintiffs breach of contract claim. Plaintiff maintains that even if the court should find that no allowances were agreed upon by the parties, plaintiff nevertheless is entitled to recover damages for breach of contract for six of the seven shipments on the ground that defendant shipped poor quality potatoes.

The U.S.D.A. inspection certificates covering car numbers 55454, 451204, 452793, 456453 and 456107 disclose that significant percentages of these five shipments had condition defects, particularly enlarged lenticels and brown discoloration, which have their genesis in the field or packing sheds rather than in abnormal transportation conditions (Tr. 85). The issue raised here of field-related versus transit-related defects was not considered by U.S.D.A. in its decision and order of September 15, 1982.

■ In support of its argument that enlarged lenticels and browning are field-related rather than transportation-related defects, plaintiff submitted a copy of pages 59 and 61 of Agricultural Handbook No. 479, Market Diseases of Potatoes, issued in March 1978 by the Agricultural Research Service, U.S. Department of Agriculture, available through the Superintendent of Documents, U.S. Government Printing Office. The court takes judicial notice of the facts stated in this authoritative government publication under Fed.Rules Evid. Rule 201, 28 U.S.C.A. See also Garden State Farms, Inc. v. Johnston-Gibson Sales Company, 42 A.D. 155 (1983).

A buyer may establish a breach of an F.O.B. contract by the seller even where there is abnormal transportation, if the nature of the defects or deterioration could not have been caused by the abnormal transportation. Farm Market Service, Inc. v. Albertson’s Inc., 42 A.D. 429 (1983); Horwath and Co., Inc. v. A & J Produce Corp., 42 A.D. 669 (1983) and Jack Baillie Co., Inc. v. S & K Farms, Inc., 32 A.D. 1874 (1973). The court holds, therefore, that irrespective of any abnormal transportation conditions in the five rail cars mentioned above, defendant breached its contracts of sale for U.S. No. 1 potatoes F.O.B. shipping point.

However, the court is unable to accept plaintiffs measure of damages based upon the percentage of decay of the potatoes, corresponding to the allowances deducted from the invoice prices as explained by Mr. Spinale at the trial. It is well established that to prove its damages for breach of contract, a buyer must produce evidence showing the price it obtained for the potatoes on resale, since the measure of damages is the difference between the actual value of the potatoes and the value of potatoes if they had been in the condition as warranted. Tom Bengard Ranch, Inc. v. Garden State Farms, Inc., 42 A.D. 922 (1983); Farm Market Service, Inc., supra; Horwath and Co., Inc., supra; “Big Red” Tomato Packers v. Kenneth P. Davis, 41 A.D. 1796 (1982); Douglas Case v. Samuel Simon Petro, 41 A.D. 1825 (1982); LaMantia-Cullum-Collier Co., Inc. v. Zia Brokerage Corporation, 41 A.D. 2450 (1982); Pleasant Valley Vegetable Co-Op v. Robert T. Cochran & Co., Inc., 41 A.D. 1208 (1982); C.J. Prettyman, Jr., Inc. v. D.J. LaMantia Inc., 41 A.D. 1614 (1982). Accordingly, plaintiff was required to submit a detailed accounting covering resale of the potatoes and its costs incurred in sorting. But plaintiff submitted no accounting whatever. Hence, this court, unfortunately, has no proper basis on which to award plaintiff damages for defendant’s breach of contract.

In summary, the court finds:

(1) Plaintiff failed to prove by a preponderance of credible evidence that the allowances unilaterally taken by plaintiff were agreed to by defendant.

(2) Plaintiff also failed to submit proper evidence of its damages for breach of contract respecting the field-related defects in the five shipments mentioned supra.

Judgment shall be entered in favor of defendant against plaintiff in the sum of $22,793.50 for the unpaid balance of the invoice prices; and judgment shall be entered in favor of defendant in the sum of $3,148.57 for fees and expenses in the reparation proceeding before U.S.D.A.

Additionally, judgment shall.be entered for defendant in the sum of $5,331.25 for attorney’s fees incurred by defendant in the present proceedings.

As noted supra (footnote 1), U.S. D.A. awarded defendant herein interest in its reparation order. Fundamentally, an award of prejudgment interest in a case under federal law is a matter left to the sound discretion of the court and is governed by considerations of equity and fairness. Twin City Sportservice, Inc. v. Charles O. Finley & Co., Inc., 676 F.2d 1291, 1310 (9th Cir.1981), cert. denied, 459 U.S. 1009, 103 S.Ct. 364, 74 L.Ed.2d 400 (1982); United States v. California State Board of Equalization, 650 F.2d 1127, 1132 (9th Cir.1981), aff'd., 456 U.S. 901, 102 S.Ct. 1744, 72 L.Ed.2d 157 (1982); Payne v. Panama Canal Co., 607 F.2d 155, 166 (5th Cir.1979). The present action, by statute, is a trial de novo, and clearly the court is not bound by an award of interest by U.S.D.A. Predicated on all the facts developed in the record before the court, equity and fairness dictate that the substantial prejudgment interest (approximately $16,-000.00) requested by defendant be disallowed. Defendant, of course, is awarded mandatory post-judgment interest in accordance with 28 U.S.C. § 1961.

Further, defendant’s request for costs is disallowed.

The foregoing constitutes the court’s findings of fact and conclusions of law in accordance with Rule 52(a), Fed.R.Civ.P.

      . Reparations were awarded to defendant in the sum of $22,793.50 plus 13 percent interest from August 1, 1980 for the unpaid balance of the invoice prices; additional reparations of $3,148.57 plus 13 percent interest from September 15, 1982 were awarded for fees and expenses.

      . See also the definition of an F.O.B. contract in 7 C.F.R. § 46.43(i) and the definition of “suitable shipping condition” in 7 C.F.R. § 46.43Q).

      . No inspection certificate was submitted by plaintiff covering car number SPFE 459800. An inspection certificate for car number 454700 (exhibit 15) was received in evidence, but that - car number is not one of the seven involved in act^on'

      . Phillips never directly communicated with Spinale (Tr. 112).

      . Exhibit A is a written confirmation in an unrelated transaction sent by the broker to these very parties of an allowance on a carload of potatoes shipped by defendant to plaintiff at the same time and under the same sale terms as the seven loads in this case. Exhibit B is a credit memo issued by Phillips to G & T Terminal Packaging Co., Inc. for the adjustments allowed on the same load which is the subject of exhibit A.

      . The allowances taken by plaintiff were nearly two-thirds of the invoice prices, viz., plaintiff paid but $12,806.00 on $35,599.50 total invoiced prices.

      . As noted supra, no U.S.D.A. inspection certificate for car No. 459800 was submitted by plaintiff. The inspection certificate for car No. 452139 discloses neither enlarged lenticels nor browning, but only slimy soft rot. Since plaintiff failed to establish normal transportation service and conditions for that load, the shipper cannot be held liable for abnormal deterioration. Tepeyac Produce, Inc. v. Cumberland Produce Co., Inc., 42 A.D. 612 (1983); O.P. Murphy Produce Company, Inc. v. Kelvin S. Ng, 41 A.D. 772 (1982); and Dave Walsh Co., Inc. v. Rozak’s Produce Co., Inc., 39 A.D. 281 (1980).

      . See United States Standards for Grades of Potatoes, published by U.S.D.A., Food Safety and Quality Service, Washington, D.C. (35 F.R. 18257), effective September 1, 1971, as amended (37 F.R. 2745), February 5, 1972, § 2851.1546 (Tolerances).

      . A determination of the appropriate amount of fees to be awarded involves consideration of a number of factors, such as the amount of time spent on this case, "the amount of work necessary, the amount of work done, the skill employed, the monetary amount involved and the result achieved". Orgel v. Clark Boardman Co., 301 F.2d 119, 122 (2d Cir.), cert. denied, 371 U.S. 817, 83 S.Ct. 31, 9 L.Ed.2d 58 (1962). See also City of Detroit v. Grinnell Corporation, 495 F.2d 448 (2d Cir.1974). The amount of counsel fees requested by defendant constitute a reasonable award under the above-described criteria, and the amount is not disputed.


source: Caselaw Access Project

author: LEISURE, District Judge:

license: Public Domain

text:
    In The Matter of The Arbitration Between TRANS-ASIATIC OIL LTD. S.A., As Disponent Owner of the M/V “SILVER LADY,” Respondent-Cross-Petitioner, v. UCO MARINE INTERNATIONAL LTD. a/k/a Landsea Corp., As Charterer, Petitioner-Cross-Respondent.
    No. 85 Civ. 1981 (PKL).
    United States District Court, S.D. New York.
    July 31, 1985.

      Milgrim Thomajan Jacobs & Lee, P.C., New York City, (James D. Kleiner and Leo G. Kailas, New York City, of counsel), for respondent-cross-petitioner.
    Dougherty, Ryan, Mahoney, Pellegrino, Giuffra & Zambito, New York City, (Robert J. Giuffra and James E. Ryan, New York City, of counsel), for petitioner-cross-respondent.
   MEMORANDUM & ORDER

LEISURE, District Judge:

UCO Marine International Ltd. (“UCO”) has petitioned the Court to vacate, pursuant to 9 U.S.C. § 10, the Final Decision and Award by the Arbitrators dated January 15, 1985 (“Award”) and direct that a rehearing be had before new arbitrators. Trans-Asiatic Oil Ltd. S.A. (“Trans-Asiatic”) has cross-petitioned the Court for an order, pursuant to 9 U.S.C. § 9, confirming the Award and directing entry of final judgment in its favor upon the Award, denying UCO’s counterclaim, awarding interest at a compounded rate from January 15, 1985, awarding interest on the judgment sum, awarding costs, legal fees and disbursements as stipulated in the parties’ agreement and awarding punitive damages in the amount of $200,000 or sanctions against UCO and its counsel.

UNDERLYING FACTS

Briefly stated, the facts of the underlying dispute are as follows. UCO entered into a sales contract, dated May 27, 1980, with a third-party, that provided the “delivered cargo to be heated to 145° F. mini-, mum.” The sales contract specified the pour point was 115° maximum. These provisions of the sales contract were not made known to Trans-Asiatic. UCO thereupon attempted to charter a vessel to transport this cargo consisting of 44,000 long tons of crude and/or dirty petroleum products. A number of vessels, including the M/V Silver Lady, owned by Trans-Asiatic, however, were unwilling to agree to the 145° F. heating requirement.

After UCO failed to find a ship capable of supplying the high heating requirement, UCO and Trans-Asiatic entered into an Asbatatank Charter Party form dated June 9, 1980 (“Charter Party”) for the M/V Silver Lady to transport a load of high pour low sulphur No. 6 fuel oil from Salvador, Brazil to New York. The Charter Party states that “heat 135° F. to be maintained throughout voyage and discharge.” The voyage orders stipulated that the “cargo is to be heated enroute and for arrival and discharge to a temperature of 135° F., basis a pour point on the cargo of 105° F.” The voyage orders further stated that if the actual pour point exceeded 105° F. that the “Vessel do its utmost to heat the cargo enroute and for arrival and for discharge to a level of not less than 30° F. above the actual pour point on the cargo.” In response to this suggested language Trans-Asiatic reminded UCO that the “Charter heating obligation was to a maximum of 135° F.” Trans-Asiatic asked UCO to amend the voyage instructions to provide that “in no event is this request to be construed as a request to heat beyond a maximum of 135° F.” UCO thereupon issued instructions that the ship should heat the cargo in the most economical manner for arrival temperature in New York and throughout discharge of 135° F.

After loading the cargo, the vessel sailed for New York on June 24,1980. The cargo was heated enroute. The major part of the cargo was drawn from three shore tanks, having temperatures ranging from 156° to 159° F. A fourth tank had a temperature of 148° F. Cargo temperatures were taken daily and logged, ranging from 135° F. to 154° F. in the ship’s individual tanks. No difficulties in heating were reported.

On arrival at the discharging berth in New York on July 6, 1980, pre-discharge temperatures and samples were taken. The temperatures ranged from a low of 134° F. to a high of 155° F., with an average of 143.9° F. Nevertheless difficulties were encountered in discharging the cargo with the result that 3,915 barrels remained on board. Due to the large residue, the Silver Lady sailed for Virginia to have her tanks cleaned.

Trans-Asiatic commenced arbitration to recover the costs of the cleaning operation which amounted to over $200,000. UCO counterclaimed for approximately $112,000, the value of the 3,915 barrels which were not delivered.

The arbitration panel conducted seven hearings between December 17, 1982 and May 1,1984. Seven witnesses testified and numerous exhibits were received into evidence. The Arbitrators denied UCO’s claims for non-delivery of cargo and attorneys’ fees and expenses. The panel awarded Trans-Asiatic a total of $371,502.67, representing excess demurrage incurred in connection with the discharge problems and cleaning, cleaning costs, additional bunkers, and interest from August 20,1980 to January 15, 1985 at 14.195% on the sum of $228,512.21. The Award also directed UCO to pay Trans-Asiatic $25,000 toward legal expenses, making for a grand total of $396,502.67. UCO was directed to pay the award within 30 days of January 15, failing which, interest would commence accruing on the principal sum of $228,512.21 at the rate of 10.5% until paid or reduced to judgment by a Court having jurisdiction. The Arbitration panel also allocated between the parties the costs of the arbitration.

THE PETITION TO VACATE

UCO petitions the Court to vacate the award on the following grounds. First, UCO alleges the Arbitrators manifestly disregarded the law by improperly allocating the burdens of proof on UCO. Second, the Arbitrators allegedly disregarded and avoided consideration of determinative facts favorable to UCO’s position for which there was no evidence. In other words, the Award does not meet the fundamental test of rationality. Finally, the Arbitrators acted ultra vires in awarding interest on the amount awarded to Trans-Asiatic since neither the contract between the parties nor the submission agreement provided for the award of interest.

The Court’s power to vacate an arbitration award is limited to the grounds set forth in 9 U.S.C. § 10. Wilko v. Swan, 346 U.S. 427, 74 S.Ct. 182, 98 L.Ed. 168 (1953). Arbitrators are not required to explain their conclusions in the awards they issue. Id. at 436, 74 S.Ct. at 187; Sobel v. Hertz, Warner & Co., 469 F.2d 1211, 1214 (2d Cir.1972). “When arbitrators explain their conclusions ... in terms that offer even a barely colorable justification for the outcome reached, confirmation of the award cannot be prevented by litigants who merely argue ... for a different result.” Andros Compania Maritima v. Marc Rich & Co., A.G., 579 F.2d 691, 704 (2d Cir.1978). It is not the function of the district court to review the record of the arbitration proceedings for errors of law or fact. Saxis S/S Co. v. Multifacs International Traders, Inc., 375 F.2d 577, 581-82 (2d Cir.1967).

UCO’s first basis for challenging the award relies upon the rule under the United States Carriage of Goods by Sea Act, 46 U.S.C. § 1300 et seq. (“COGSA”), that once non-delivery of cargo is established “the burden of proof is on the carrier to establish that the [loss] was not due to its negligence, or that it was occasioned by one of the ‘excepted causes’ listed in § 1304(2).” Amerada Hess Corp., 558 F.Supp. at 1167; Demsey & Associates v. S.S. Sea Star, 461 F.2d 1009, 1015 (2d Cir.1972). UCO alleges that although the Arbitrators were aware of this rule they deliberately refused to apply it. Such conduct, UCO claims, amounts to manifest disregard of the law on the part of the Arbitrators. “The ‘manifest disregard’ standard has been construed to require a showing that the arbitrator understood and correctly stated the law but proceeded to ignore it.” A/S Siljestad v. Hideca Trading, Inc., 541 F.Supp. 58, 60 (S.D.N.Y.1981), aff'd, 678 F.2d 391 (2d Cir.1982) (vacatur denied).

UCO claims that after it produced evidence Trans-Asiatic failed to deliver a portion of the cargo, the Arbitrators did not require Trans-Asiatic to produce evidence that the Silver Lady was seaworthy and fit to carry UCO’s cargo or that Trans-Asiatic had exercised due diligence to make the ship seaworthy and fit. UCO claims that the Arbitrators thereby placed the burden of establishing unseaworthiness and lack of diligence on UCO. UCO further alleges that the Arbitrators ignored unrefuted evidence proffered by UCO demonstrating unseaworthiness and unfitness of the vessel through improper design of the vessel’s heating coil system. Finally, UCO alleges that the Arbitrators failed to require Trans-Asiatic to make any showing that the loss was due to one of the excepted COGSA causes.

This argument is baseless. The Award itself states that Trans-Asiatic introduced various reports indicating that the ship was seaworthy and fit for the contracted voyage. See Award at 8. The Award also specifically states that UCO’s “allegations that the configuration of the Vessel’s coils prevented even and thorough heating of the cargo, are not supported by the evidence.” Id. at 15. The Arbitrators based their decision on records presented in evidence that on subsequent voyages the ship transported cargoes which required normal heating without incident. Id. Finally, there was substantial evidence introduced and considered by the panel that the problem resulted from “inherent defect, quality, or vice of the goods,” one of the excepted COGSA causes which relieves the carrier of responsibility for loss. 46 U.S.C. § 1304(2)(m).

With regard to this last issue concerning the quality of the cargo, the Arbitrators determined, based upon various pour points found by several laboratories, that the pour point of the cargo equalled 118.3° F. Addition of the margin of 30° F. set forth in the Charter Pary brought the temperature required for efficient discharging to 148.3 F., well above the Charter Pary requirement of 135° F. Furthermore, the panel considered other evidence which tended to support this conclusion, such as the very high temperature in the three shore tanks, the blockages of the shore line in the discharge port caused by congealing of the cargo, the difficulties experienced in stripping when the cargo dropped below the level of the heating coils and the extended efforts of the vessel to preheat the residue solids to very high temperatures in order to cause reliquification. Award at 15.

Moreover, evidence was introduced which established that UCO concealed the characteristics of its cargo. This evidence no doubt caused the Arbitrators to include in the Award a narration of the negotiating positions with respect to the Charter Party and the voyage orders in order to establish there could be no dispute that the parties agreed to a heating maximum of 135° F.

Next UCO attacks the Award as irrational. UCO claims there is no evidence to support the Panel’s finding that UCO knowingly chartered a tanker with a heating capacity of 135° F. for a high pour cargo which required a minimum temperature of 145° F. Id. at 12. UCO labels irrational the process by which the Arbitrators decided to rely on certain of the pour point laboratory results and disregard others. This argument is meritless. The panel considered each of the pour point analyses presented in evidence and stated valid reasons why they relied on some and not on others. Id. at 14. Furthermore, UCO ignores the fact that the contract of sale for the cargo in question states “CARGO DELIVERED TO BE HEATED TO 145 DEG F MIN.”

UCO next claims that the interest award was ultra vires the Arbitrators’ authority because neither the arbitration clause in the Charter Party nor the “Submission Agreement” expressly provides for an interest award. This contention is frivolous and rejected. First, the parties never entered into and delivered a submission agreement to the panel. Second, in its post hearing brief UCO itself asked for an award of interest at 12.5% per annum from July 8, 1980 on its counterclaim. See Charterer’s Post Hearing Brief at 32. (Trans-Asiatic, of course, also requested an award of interest in its post hearing memorandum of law.) Third, the case law and commentators recognize the power of an arbitrator to award interest. A/S Siljestad v. Hideca Trading Inc., 678 F.2d 391 (2d Cir.1982) (interest award upheld based on same arbitration provision invoked in present case). See e.g. Domke Comm. Arbitration, § 30.-03 (Rev. ed. 1984).

For all the foregoing reasons, UCO’s petition to vacate the Award is denied.

THE PETITION TO CONFIRM

For the reasons presented above, Trans-Asiatic’s petition to confirm the Award is granted. Accordingly, Trans-Asiatic is entitled to judgment on the Award, including principal amounts and interest as awarded. The judgment also includes interest on $228,512.21 at the rate of 10.5% per annum from January 15,1985 until payment of the Award or until the Award is otherwise reduced to judgment, whichever occurs first. Trans-Asiatic is further entitled to recover the amount paid to the Arbitrators that represents UCO’s share of the Arbitrators’ fees. Trans-Asiatic shall receive interest on this sum at the rate of 10.5% per annum compounded daily accruing from the date of payment until judgment is entered. Finally, UCO’s counterclaim is denied.

Trans-Asiatic has petitioned the Court for further relief. It asks the. Court to issue an order awarding interest on the full amount of the award, $396,502.67 from January 15, 1985 at a compensatory rate compounded daily until entry of judgment or until payment thereon. Trans-Asiatic further requests an order directing such compound interest formula to prevail after the date of judgment on the full amount of the judgment. In addition, Trans-Asiatic asks the Court to award it costs, legal fees and disbursements as stipulated for in the Charter Party and punitive damages or sanctions against UCO and its counsel. In this regard, Trans-Asiatic has requested the Court to hold a hearing on its claim for legal fees.

The general rule in the United States is that in the absence of legislation providing otherwise, litigants must pay their own legal fees. An exception to this rule is the existence of an agreement between the parties that legal fees are recoverable. In this case Clause 23 of the Charter Party provides:

Damages for breach of this Charter shall include all provable damages, and all costs of suit and attorney’s fees incurred in any action hereunder.

Clauses 21 and 24 of the Charter Party contain additional references which indicate that the parties intended to spare a wronged party damages in the form of legal fees and costs. Trans-Asiatic has requested specifically that the Court order UCO to pay all costs of suit and legal fees incurred in this Court. In addition, Trans-Asiatic argues that based upon UCO’s past dilatory practices and the very real possibility it will pursue its appellate remedies, that the judgment direct UCO to pay all costs and legal fees incurred hereafter in this Court and elsewhere in enforcing the Award against UCO.

Trans-Asiatic has also moved under Rule 11 for the imposition of sanctions against UCO and its counsel on the grounds that the petition to vacate the award was interposed in bad faith and merely for the purposes of delay. On this basis the Court should assess the costs and legal fees incurred in opposing the petition and pursuing the cross-petition. Cf. A/S Siljestad v. Hideca Trading Inc., 678 F.2d 391, 393 (2d Cir.1982).

Trans-Asiatic’s request for an order awarding interest on the full amount of the award from January 15, 1985 until judgment and that interest on this amount be compounded daily is denied. The Award reflects deliberation and care on the part of the Arbitrators in framing the relief granted and under the circumstances it would not be appropriate for the Court to modify the Award in this regard. Trans-Asiatic’s request for an award of attorneys’ fees pursuant to Clause 23 of the Charter Party is granted. Trans-Asiatic shall recover all court costs and reasonable attorneys’ fees incurred by reason of opposing the petition to vacate the Award and in support of the cross-petition to confirm the Award. In addition, in the event this Order is appealed or made the subject of a motion to reconsider, or if there is any further litigation ' with regard to the Award or this Order, the prevailing party shall be entitled to recover court costs and reasonable attorney’s fees incurred by reason of such further proceedings.

Trans-Asiatic’s request for an award of sanctions pursuant to Fed.R.Civ.P. 11 against UCO and its counsel is denied.

CONCLUSION

UCO’s petition to vacate the Award is denied. Trans-Asiatic’s petition to confirm the Award is granted. On or before August 15, 1985, Trans-Asiatic shall serve and file affidavits and any appropriate documents in support of its claims for costs and attorneys’ fees incurred in this Court. These papers should also include a request for the amounts paid by it to the Arbitrators representing UCO’s share of the Arbitrators’ fees. UCO shall serve and file on or before August 30, 1985 its papers, if any, in opposition to the amounts claimed by Trans-Asiatic.

SO ORDERED.

      . The pour point of oil is the temperature at which it begins to flow. Amerada Hess Corp. v.

        SS Phillips Oklahoma, 558 F.Supp. 1164, 1168 n. 9 (S.D.N.Y.1983) (Sprizzo, J.).

      . UCO allegedly has failed to remit timely all of its share of the Arbitrator's fees. Trans-Asiatic has undertaken to pay this sum and pursuant to Appendix "A” of the Award claims over against UCO for this amount, allegedly $6,000.

      . UCO has asserted as a reason for vacating the award that the Arbitrators ignored evidence presented by UCO through expert testimony that allegedly demonstrated the unseaworthiness of the vessel because its heating coil system was improperly designed. To the contrary, the Award specifically referred to the arguments asserted by UCO in this regard. Award at 11. The panel found persuasive, however, the findings of UCO’s own surveyor that there was nothing "derogatory" about the vessel’s heating equipment, id. at 16, and were less than impressed with the testimony of Mr. Van Rybach, UCO’s expert in this regard. See, e.g., Tr. at 354-55.


author: HARPER, District Judge.

text:
    Daryl IRVIN, Plaintiff, v. KROBLIN REFRIGERATED EXPRESS, INC., Defendant.
    No. 84-1365C (A).
    United States District Court, E.D. Missouri.
    Aug. 6, 1985.
    Eugene H. Fahrenkrog, Jr., St. Louis, Mo., for plaintiff.
    Gary W. Bomkamp, St. Louis, Mo., for defendant.
   MEMORANDUM AND ORDER

HARPER, District Judge.

This matter is before the Court on defendant’s motion for summary judgment made pursuant to Rule 56 of the Federal Rules of Civil Procedure, based upon the grounds that the statute of limitations has barred the bringing of this suit, and there is no genuine issue as to any material facts that would contradict this defense.

The plaintiff opposes the motion for summary judgment and has filed affidavits and documents in support of his opposition.

Summary judgment is an extreme remedy which is not to be entered unless the movant has established its right to a judgment with such clarity as to leave no room for controversy. Weber v. Towner County, 565 F.2d 1001, 1005 (8th Cir.1977). It is well settled that the party moving for summary judgment bears the burden of demonstrating the absence of a genuine issue as to any material fact. Adickes v. S.J. Kress & Company, 398 U.S. 144, 157, 90 S.Ct. 1598, 1608, 26 L.Ed.2d 142. For the purpose of determining whether any material fact remains disputed all factual inferences must be drawn in the light most favorable to the party opposing the motion. United States v. Diebold, Inc., 369 U.S. 654, 82 S.Ct. 993, 8 L.Ed.2d 176.

Plaintiff’s complaint states a cause of action for wrongful death on two counts, that of his wife and his child. The accident which took the lives of plaintiff’s wife and child allegedly occurred on November 25, 1976, in Laclede County, Missouri.

At the time of the accident, the statute creating plaintiffs causes of action was 537.080 R.S.Mo.1969.

Plaintiff originally filed these wrongful death actions in this Court on November 7, 1977 (No. 77-1184C(3)), only to have the case dismissed without prejudice on April 30, 1980, for failure to appear for a deposition. Plaintiffs affidavit, supporting his opposition to defendant’s motion, indicates that at the time of the deposition he was incarcerated in a Fulton County Jail in Georgia. From the plaintiff’s affidavit and the record in this case, the Court makes the following summary as to the pre-trial history of plaintiff’s case and plaintiff’s whereabouts:

TIME REMARKS
(a) March, 1974 to September, 1977 Missouri Department of Corrections
(b) November 7, 1977 First filing of suit
(c) February, 1978 to July 3, 1978 Missouri Department of Corrections
(d) Oct. 3, 1978 to August, 1979 St. Louis County Jail
(e) January, 1980 to May, 1980 Fulton County Jail (Atlanta, Georgia)
(f) April 30, 1980 Case dismissed without prejudice
(g) May, 1980 to June 20, 1980 Whereabouts unknown
(h) June 20, 1980 Arrested in Santa Ana, California
(i) Aug. 22, 1980 to June 11, 1985 Vacaville, California
(J) June 11, 1980 Plaintiff refiles his complaint
(k) May 15, 1985 Plaintiff lodes First Amended Complaint

Defendant predicates its Rule 56(b) motion on the expiration of the applicable statute of limitations, 537.100. In opposition, plaintiff wants the Court to apply 516.170, thereby tolling the statute of limitations for the period of his California incarceration. Plaintiff argues that to do otherwise would be inequitable and would shock the conscience.

Plaintiff’s right to recovery for the wrongful death of his family lasted for a period proscribed in 537.100. At the time of the accident, that right lasted for a period of two years. Hence, plaintiff had to file his lawsuit by November 25, 1978. Plaintiff complied with such a limitation when he filed this lawsuit in November, 1977. Plaintiff’s lawsuit was dismissed, however, on April 30, 1980, as a discovery sanction for plaintiff’s failure to attend his deposition.

In the event of a nonsuit, 537.100 provides a one-year grace period within which to re-institute the lawsuit. When plaintiff’s case was dismissed, plaintiff suffered a nonsuit, and thus, on April 30, 1981, his right to refile his lawsuit extinguished.

Plaintiff argues that 516.170 operates to toll the one-year refiling period for the time he spent in a California prison. From plaintiff’s affidavit it is clear that plaintiff has been incarcerated either in Georgia or California for all but one month of that one-year refiling period. Section 516.170 does operate to toll the statute of limitations; however, the expressed language of the statute limits its force to only certain statutes within Chapter 516. Moreover, Missouri case law clearly indicates that 516.170 will not operate to save plaintiff’s case. The Missouri Supreme Court in Frazee v. Partney, 314 S.W.2d 915 (Mo.1958) showed no willingness to toll the effects of 537.100 by any circumstances not delineated within that section.

Concerning motions of equity, this Court sympathizes far more with the plaintiffs in Frazee than with this plaintiff. In this case, plaintiff has shown no diligence in prosecuting his suit. Notwithstanding his current incarceration, plaintiff has managed to refile his suit in June, 1984. Hence, being incarcerated has not prevented him from re-instituting his lawsuit. Even if his incarceration affected his ability to refile, plaintiff was not incarcerated for a month during the one-year grace period. As a consequence, this Court finds no reason for justifying or excusing his delay.

Accordingly, the motion of defendant for summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure is sustained, and summary judgment is granted.

The Clerk of the Court will prepare and enter the proper order to that effect.

      . All statutory references are to R.S.Mo.1969, incorporating all pertinent amendments.


author: HAMILTON, District Judge.

text:
    SOWELL’S MEATS AND SERVICES, INC., Plaintiff, v. Peggy McSWAIN and Vivian Pilant, Defendants. SOWELL’S MEATS AND SERVICES, INC., Plaintiff, v. Kenneth C. BEAM, Frances McAllister, Martha Briggs, Amelia Helms, Joseph Bonds; J. Spratt White, Miller F. Coggins, James B. Cook, W. Waddell Gibson, Trudie B. Heemsoth, Anne S. Suite, and Robert L. Whitley, All Constituting Members of the Board of Trustees, School District No. 4; and Peggy Powers,  Defendants.
    No. 0:84-2635-15.
    United States District Court, D. South Carolina, Rock Hill Division.
    Aug. 8, 1985.

      Kenneth E. Sowell, Greenville, S.C., Thomas H. Curlee, Jr., Columbia, S.C., for plaintiff.
    Melvin B. McKeown, Jr., Stephen R. McCrae, Jr., York S.C., for defendants.

       Having been advised that certain parties were improperly identified in the original and subsequent pleadings, the court, sua sponte, properly identifies these defendants in this order.

   ORDER

HAMILTON, District Judge.

The present cases involve the propriety of certain bidding practices utilized in the administration of school lunch programs. Jurisdiction is founded upon 28 U.S.C. § 1343 and 42 U.S.C. § 1983. The matter is before the court upon motions by all defendants for summary judgment. Rule 56, Federal Rules of Civil Procedure.

The plaintiff instituted these two actions, respectively, in the Court of Common Pleas for York County, South Carolina, under 42 U.S.C. §§ 1983 and 1985 against (1) the State Director of Food Services and the York County Food Services Supervisor and (2) the Superintendent, the Assistant Superintendent for Finance, the members of the Board of Trustees, and cafeteria managers of the Fort Mill School District No. 4. The defendants removed the cases to this court under 28 U.S.C. § 1441(a). The plaintiff alleges that the defendants committed acts in the administration and management of school lunch programs of the Fort Mill School District No. 4 which deprived the plaintiff of certain rights, privileges and immunities secured by the Constitution and laws of the United States and the State of South Carolina. Specifically, the amended complaints allege that the plaintiff sells meats and services within the State of South Carolina and that the plaintiff was granted a “state and federally protected right” by guidelines promulgated by the United States Department of Agriculture (hereinafter “U.S.D.A.”) and the State of South Carolina for the procurement and purchase of foodstuffs for use in the school lunch programs administered by the defendants. The plaintiff seeks actual and punitive damages as a result of the alleged failure of the defendants to abide by rules and regulations of the U.S.D.A. and the State of South Carolina.

The defendants admit in their answers that certain guidelines have been promulgated by the U.S.D.A. and the State of South Carolina for use in school lunch programs, but they deny that they have engaged in any illegal or improper conduct, or subjected or caused the plaintiff to be deprived of rights, privileges or immunities secured by the Constitution and laws of the United States or the State of South Carolina.

In their present motions for summary judgment, the defendants aver that the present actions may not be maintained because the plaintiff lacks standing to bring these actions, either under 42 U.S.C. § 1983 or under the applicable laws, rules, or regulations of the U.S.D.A. or the State of South Carolina. The plaintiff contends that it has viable claims against defendants of allegedly unlawful deprivations of a property right and maintains these defendants were acting under color of state law in violation of due process and equal protection guarantees afforded the plaintiff by the Constitution and laws of the United States and of the State of South Carolina.

The plaintiffs due process claims depend in the first instance on the existence of an interest within the protection of the Fourteenth Amendment. In order to be accorded protection of the due process clause, the complaining party must have a liberty or property interest within the meaning of the Fourteenth Amendment. Board of Regents v. Roth, 408 U.S. 564, 569-70, 92 S.Ct. 2701, 2705, 33 L.Ed.2d 548 (1972). To determine whether due process requirements apply to the plaintiffs alleged deprivations, this court “must look not to the ‘weight’ but to the nature of the interest at stake.” Id. at 571-72, 92 S.Ct. at 2706 (emphasis in original). In the instant cases, the plaintiff makes only general, conclusory allegations concerning the defendants’ alleged violations of federal and state law.

In arguing against the defendants’ motions for summary judgment, however, the plaintiff acknowledged that the only claims upon which it bases its theory of the existence of an infringed “property right” are that 7 C.F.R. § 210.19a and OMB Circular A-102 have been violated by the defendants in awarding these state contracts to supply foodstuffs to the local school district. The plaintiff has not been able to cite any other state law, including a statute, rule or regulation, or any holding, ruling, or dicta in a South Carolina Supreme Court decision, which the defendants could have possibly violated under the facts alleged in the complaints. Succinctly, the plaintiff remains unable to answer the basic question of what state law defines the nature and extent of its alleged property interest. This court has not been presented any South Carolina law giving property rights to the plaintiff in cases such as these.

To the extent that the plaintiff argues that federal law creates its “property right” in the awarding of the contracts to supply foodstuffs to the Fort Mill School District No. 4, this court must disagree. It is axiomatic that property interests are not created by the Constitution. Rather, they are created and their dimensions are defined by existing rules or understandings that stem from an independent source such as state law — rules or understandings that secure certain benefits and support claims of entitlement to those benefits. Roth, 408 U.S. at 577, 92 S.Ct. at 2709. In fact the Roth case maintains:

To have a property interest in a benefit, a person clearly must have more than an abstract need or desire for it. He must have more than a unilateral expectation of it. He must, instead, have a legitimate claim of entitlement to it. It is a purpose of the ancient institution of property to protect those claims upon which people rely in their daily lives, reliance that must not be arbitrarily undermined.

Id.

Moreover, to the extent that the plaintiff argues that the bid speculation process defines the nature and extent of the property interest involved, this court disagrees; the plaintiff’s principal case, Three Rivers Cablevision v. City of Pittsburgh, 502 F.Supp. 1118, 1128 (W.D.Pa.1980), discussed below, disputes that conclusion. In addition, a simple reading of the bid speculations, also, disputes this contention.

Thus, the central question this court is faced with is whether the plaintiff has shown that the benefit it seeks to enjoy is one to which it is entitled or merely one it desires to enjoy. Two recent federal decisions, ARA Services, Inc. v. School District of Philadelphia, 590 F.Supp. 622 (E.D.Pa.1984), and Kasom v. City of Sterling Heights, 600 F.Supp. 1555 (E.D.Mich., S.D.1985), are directly dispositive of the issue now before the court as to whether the plaintiff has legitimate claims of entitlement to the Fort Mill School District No. 4 school lunch program awards. Moreover, since these cases distinguish the three cases upon which the plaintiff so heavily relies in opposition to the defendants’ motions for summary judgment, Three Rivers, supra, Teleprompter of Erie, Inc. v. City of Erie, 567 F.Supp. 1277 (W.D.Pa.1983), and L & H Sanitation, Inc. v. Lake City Sanitation, Inc., 585 F.Supp. 120 (E.D.Ark., N.D.1984), the court will undertake a discussion of the pertinent parts of these decisions and their applicability, as well as factual similarity, to the instant cases before the court.

The court in ARA Services, Inc. directly addressed the issue of standing of a disappointed low bidder to supply foodstuffs for the use in the school lunch programs of a school district. Similarities between ARA Services, Inc. and the instant cases abound. In ARA Services, Inc., the disappointed food supplier brought suit against the school district, the successful bidder, and the individual members of the school board. The plaintiff alleged that it submitted the lowest responsible bid, but that the contract had been awarded to the high bidder, arbitrarily, thereby violating the plaintiffs rights under the due process and equal protection clauses of the Four-, teenth Amendment, as well as state law. Jurisdiction of the court was invoked pursuant to both 28 U.S.C. § 1343 and 42 U.S.C. § 1983. As in the instant matter, the plaintiffs, also, alleged that the school district and the members of the school board were required by the contract specifications to award the contract to the lowest responsible bidder meeting the specifications and were, also, required by 7 C.F.R. § 210.19a to adhere to the procurement guidelines set forth in OMB Circular A-102. The court granted the defendants’ motion to dismiss the complaint on the ground that it failed to state a claim for the violation of the plaintiffs constitutional rights.

The ARA Services, Inc. court did, however, recognize that under Pennsylvania law a taxpayer has standing to challenge the award of a municipal contract to other than the lowest responsible bidder, but, nevertheless, did not recognize any individual entitlement such as is necessary to create a protected property interest. ARA Services, Inc., 590 F.Supp. at 627-29. In pointing out that distinction, the court disposed of the rationale of finding a due process property interest in two decisions relied on by the plaintiff, Three Rivers and Teleprompter of Erie, Inc.

Specifically, the ARA Services, Inc. court states that:

Three Rivers, relying in large part on Winsett v. McGinnes, 617 F.2d 996 (3d Cir.1980) (en blanc), cert. denied sub nom. Anderson v. Winsett, 449 U.S. 1093 [101 S.Ct. 891, 61 L.Ed.2d 822] (1981), held that a bidder for a municipal contract in Pennsylvania who submits a conforming bid pursuant to requirements that the lowest responsible bid be accepted acquires a property interest protected by the Fourteenth Amendment. The process due was defined in Three Rivers as “the nonarbitrary exercise by the city of its discretion in making the award.” 502 F.Supp. at 1131. Chief Judge Luongo of this District reached a contrary conclusion in J.P. Mascaro & Sons, Inc. v. Township of Bristol, 497 F.Supp. 625 ([E.D.Pa.] 1980). Mascaro held that a disappointed bidder had “no claim of entitlement to a public contract based on the requirement that the contract be awarded to the lowest responsible bidder, since in Pennsylvania that requirement is solely for the protection of the taxpayers.” 497 F.Supp. at 627. This Court believes that Chief Judge Luongo accurately stated Pennsylvania law, and that the Three Rivers decision and its progeny gave inadequate consideration to Pennsylvania’s long-standing refusal to recognize a property interest, or injury, on the part of a bidder who fails to receive a municipal contract. This Court has concluded the plaintiffs have failed to allege the existence of a property interest which commands due process protection.

Id. at 626-27.

Next, the court in ARA Services, Inc. addressed the plaintiffs equal protection claim under the Fourteenth Amendment. Citing Parham v. Hughes, 441 U.S. 347, 99 S.Ct. 1742, 60 L.Ed.2d 269 (1979), the court pointed out that the function of the equal protection laws is to measure the validity of classifications created by state law. Using the “rational relation test,” the court found that the plaintiffs failed to state a claim for violation of the equal protection clause of the Fourteenth Amendment by reasoning:

An equal protection claim fails when it “at most amounts to an allegation that state law was misapplied in [an] individual case.” Short v. Garrison, 678 F.2d 364, 368 (4th Cir.1982). The Supreme Court has made clear that the misapplication of state law alone does not constitute invidious discrimination in violation of the equal protection clause; “[w]ere it otherwise, every alleged misapplication of state law would constitute a federal constitutional question.” Beck v. Washington, 369 U.S. 541, 545, 555 [82 S.Ct. 955, 957, 8 L.Ed.2d 98] [sic] (1962). Although the plaintiffs have attempted to couch their claim in equal protection language, it is clear that they are, in essence, asserting that state law was misapplied in their case. This Court does not find in the equal protection clause the authority to review for constitutional error a decision of a local or state governmental body merely because the decision is alleged to be arbitrary or unlawful. The contention that the plaintiffs are members of a class of everyone who has had the law misapplied in particular cases, even assuming it were supported by some allegation in the complaint, merely suggests that others may have state law, but not federal constitutional, claims. The plaintiffs have failed to state a claim for violation of the equal protection clause of the Fourteenth Amendment.

ARA Services, Inc., 590 F.Supp. at 629-30.

The similarities between the facts alleged in the ARA Services, Inc. case, the truth of which were assumed by the court in granting the defendants’ motion for dismissal, and the facts alleged by the plaintiff in the instant cases, the truth of which this court assumes in considering the defendants’ motions for summary judgment, are substantial. The plaintiffs in each instance are food suppliers who alleged that they were unsuccessful responsible low bidders to supply foodstuffs in school lunch programs administered by local school districts. Members of the Board of Trustees for the School District of Philadelphia were named as defendants in ARA Services, Inc., whereas in the matter before the court, the defendants are administrators who allegedly “conspired” with other persons, including members of the Board of Trustees of Fort Mill School District No. 4, to deny plaintiff certain asserted constitutional rights and privileges. The plaintiffs in ARA Services, Inc. alleged that the defendants violated federal and state law, including certain procurement guidelines, and specifically 7 C.F.R. § 210.19a and OMB Circular A-102. In both this matter before the court and in ARA Services, Inc., the plaintiffs invoked the jurisdiction of the court under 42 U.S.C. § 1983: Also, the defendants in ARA Services, Inc. were alleged to have “arbitrarily” awarded the food services contract to a higher bidder, whereas, similarly, the defendants in this matter were alleged not to have followed the established procedures as required in the purchase of foodstuffs and to have conducted an illegal bidding practice.

In the present matter, the court notes with particular emphasis that, as in ARA Services, Inc., there is no South Carolina state law which grants the plaintiff a “protected right” or makes it “an intended beneficiary” of the laws, statutes, ordinances and regulations generally alleged in the complaints. The plaintiff lamely argues in its brief that the “state and federal laws” granting plaintiff its required property interest to assert due process violation claims are the rules and regulations promulgated by the U.S.D.A. and the procurement procedures adopted by the Fort Mill School District No. 4.

The court in ARA Services, Inc., neatly and convincingly disposed of that same rationale used by the plaintiff to assert a property interest commanding due process protection by maintaining:

[A] constitutional violation may not be made out merely by showing a breach of the provisions governing the award of the contract. As stated in Three Rivers:
Recognition of the fact that the violation of the law is not, ipso facto, a deprivation of due process to all persons affected thereby is fundamental to an understanding of procedural due process. The due process clause is a narrow, personalized guarantee which only protects against the deprivation of one’s own liberty and property; it is not a catchall provision designed to promote the interest of society generally in the obedience of its laws.
502 F.Supp. at 1128 (emphasis in original). See Logan v. Zimmerman Brush Co. [(1982)] 455 U.S. [422] at 430, 102 S.Ct. [1148] at 1155 [71 L.Ed.2d 265]. (“The hallmark of property ... is an individual entitlement grounded in state law ... ”) (emphasis added).

ARA Services, Inc., 590 F.Supp. at 627. Thus, even though the court recognized that Pennsylvania law did confer standing upon taxpayers to challenge government actions which otherwise might be immune from suit, the plaintiffs lacked standing as a disappointed bidder. South Carolina law recognizes neither “taxpayer standing” to challenge awards of state contracts nor the type of standing the plaintiff asserts in the instant cases as a disappointed bidder for the award to supply foodstuffs to a school district. This court is of the opinion that the above rationale and conclusion reached by the ARA Services, Inc. court is proper and dispositive in its application to the instant cases.

The second most salient case squarely presenting the major issue presently before the court is the 1985 Kasom, supra, decision. In Kasom, a landscaping business which was a disappointed bidder on a city contract for noxious weed cutting brought an action against the city under 42 U.S.C. § 1983, claiming that by reason of irregularities in the bidding process, his constitutional rights were violated. The plaintiff raised both equal protection and due process claims in his complaint. The court granted the defendants’ motion at trial for an involuntary dismissal pursuant to Federal Rule of Civil Procedure 41(b), holding that no statutory or case law in Michigan vested a property interest in the plaintiff in a case of that type. The court states that it:

believes that Three Rivers and later cases stand for the proposition that where a state statute requires public works contracts to be awarded to the lowest qualified bidder, and where a decision has been made to award such a contract, bidders have a limited property interest in not having the procedure, which regulates the enjoyment of benefits sought, applied in an arbitrary or capricious manner.

Kasom, 600 F.Supp. at 1559 (emphasis in original) (quoting L & H Sanitation, Inc., 585 F.Supp. 120, 123 (E.D.Ark., N.D.1984)).

As in ARA Services, Inc., the court in Kasom found no state law or statute requiring public works contracts to be awarded to the lowest qualified bidder; therefore, even the “limited property interest” in not having the bidding procedure applied in an arbitrary manner was found to be absent. Likewise, this court in the instant cases, where South Carolina law contains no provision defining the nature and extent of the plaintiff’s alleged property interest, is of the opinion that the plaintiff falls short of showing the existence of even the “limited property interest” described above in Kasom.

This court further acknowledges the importance of the Kasom decision in its proper recognition that the Three Rivers and L & H Sanitation, Inc. decisions, cases upon which the plaintiff relies, represent minority authority for recognition of only a limited property interest in a bidder not having the bidding procedure applied in an arbitrary or capricious manner only when state law so provides. Since South Carolina, like Michigan, provides no state law on which the plaintiff can establish his alleged property interest, this court is constrained to conclude that this plaintiff lacks standing in the instant cases.

As previously mentioned, the several recent federal district cases which recognize a “limited property interest” in disappointed bidders on state contracts are distinguished by ARA Services, Inc. and Kasom. Moreover, the Three Rivers, Teleprompter of Erie, Inc., and L & H Sanitation, Inc. trilogy of cases depart from the long-standing refusal of the federal courts to recognize a due process property interest of a disappointed bidder on a state contract and represent a minority viewpoint. Not only is ARA Services, Inc. contrary to these holdings, but other contemporaneous decisions by other federal district courts also reject this rationale. See, e.g., Douglas N. Higgins, Inc. v. Florida Keys, 565 F.Supp. 126 (S.D.Fla.1983); Kendrick v. City Council of Augusta, Georgia, 516 F.Supp. 1134 (S.D.Ga.1981). In addition, this court is of the opinion that the decisions representing the minority viewpoint relied upon by the plaintiff and listed chronologically by the plaintiff in its memorandum of law are readily distinguishable from the instant cases.

First, both Three Rivers and Teleprompter of Erie, Inc. involved claims by unsuccessful bidders for a cable television franchise. As stated by the court in Teleprompter of Erie, Inc.:

In the context of cable franchise awards courts have fashioned a narrow protected interest. It is the right of the most responsible bidder in full compliance with the specifications of state and municipal law to be awarded the cable franchise. ... In the context of an award of a cable franchise, it has been held that the process due the plaintiff was the non-arbitrary exercise by the municipality of its decision in making the award. As in Three Rivers, the denial here of the substantive benefit without the process is an actual wrong.

Teleprompter of Erie, Inc., 567 F.Supp. at 1287-88. Therefore, the courts in Three Rivers and Teleprompter of Erie, Inc. recognized there was something special about the award of a cable television franchise; the successful bidder was granted an exclusive right or monopoly on a long-term or even indefinite basis. For that reason, the Pennsylvania federal district courts fashioned an exception to the long-standing rule of no standing for disappointed bidders on state contracts.

Likewise, the case of L & H Sanitation, Inc., supra, is readily distinguishable from this case. In L & H Sanitation, Inc., the plaintiff was the lowest responsible bidder on a contract for collection, transportation and disposal of solid waste within the city of Lake City, Arkansas. It alleged that the waste collection contract was awarded to a higher bidder arbitrarily and capriciously. Again, the court was presented with a situation of a municipal contract, which really amounted to a franchise or monopoly, to dispose of all of the city’s solid waste.

A most important distinguishing feature between the present cases and the Three Rivers, Teleprompter of Erie, Inc. and L & H Sanitation, Inc. cases is that in each of the three latter cases the courts found some state statutory provision limiting the exercise of discretion by a state official awarding the contract or a state law conferring standing upon a taxpayer to challenge the award of state contracts. There are no similar South Carolina statutory provisions or other state laws which would confer standing upon the plaintiff in the matter before the court.

While the plaintiff properly begins its memorandum on the case development of the law on standing with Perkins v. Lukens Steel, 310 U.S. 113, 60 S.Ct. 869, 84 L.Ed. 1108 (1940), this court remains unpersuaded that the Three Rivers, Teleprompter of Erie, Inc., and L & H Sanitation, Inc. line of cases have “overruled” the long-standing holding of Perkins. The Court ruled in Perkins that, although government contract bidding procedures may benefit the public generally, those procedures do not independently create enforceable property rights in bidders. The Perkins ruling remains good law since the decision has not been overruled, and its basis is reiterated by the decisions of ARA Services, Inc., and Kasom.

This court has analyzed the long list of cases cited by the plaintiff in opposition to the motion for summary judgment and concludes that these cases are readily distinguishable on their faces from the instant matter. In fact, no cases are factually as similar to the instant cases as ARA Services, Inc. and Kasom. Furthermore, a recent Fourth Circuit decision, Phelps v. Housing Authority of Woodruff, 742 F.2d 816 (1984), presents a good discussion of what is properly addressable under 42 U.S.C. § 1983. The holding in Phelps, wherein the court upheld the lower court’s judgment for the defendants after trial, is contrary to what the plaintiff in the instant cases calls a trend in the case development in its favor.

For the foregoing reasons and based on the cited authorities, the court is constrained to conclude that the plaintiff lacks standing to establish any due process property interest or a violation of equal protection rights in the instant cases under 42 U.S.C. § 1983 or under the Constitution and laws of the United States and the State of South Carolina.

IT IS THEREFORE ORDERED that the defendants’ motions for summary judgment be, and the same hereby are, granted.

      . As a result of its ruling herein, the court deems it unnecessary to address the concomitant grounds upon which the defendants also couch their present motions; i.e., (1) the "good faith” claims of the respective defendants, (2) the "qualified immunity" from liability for damages under 42 U.S.C. §§ 1983 and 1985 by the respective defendants, (3) the inapplicability of the respondeat superior doctrine to the respective defendants, and (4) the "conspiracy” allegations under 42 U.S.C. § 1985. The court having concluded that the plaintiff lacks standing to pursue these actions, it is not necessary to address these issues on their merits.


author: COSTANTINO, District Judge.

text:
    In the Matter of the Application of Michael W. WARREN, Petitioner for a Writ of Habeas Corpus to Inquire Into the Cause of Detention of Samuel Lockett, Petitioner, v. Albert MONTEMANGO, Warden Brooklyn House of Detention, Respondent.
    No. CV 85-2388.
    United States District Court, E.D. New York.
    Aug. 9, 1985.

      Michael Warren, Brooklyn, N.Y., for petitioner.
    Elizabeth Holtzman, Dist. Atty., Kings County, New York by Debra Petrover, Brooklyn, for respondent.
   MEMORANDUM OF DECISION & ORDER

COSTANTINO, District Judge.

Petitioner, Samuel Lockett, moves this court pursuant to 28 U.S.C. § 2254 for a writ of habeas corpus alleging that further criminal proceedings against him will be in violation of the Constitution of the United States. The basis for petitioner’s claim is that (a) further prosecution of him is in violation of the Double Jeopardy clause; and (b) further prosecution of him in violation of New York State law is such that he will be denied the fundamental fairness guaranteed to him pursuant to the Due Process provisions of the Fifth and Fourteenth Amendments to the United States Constitution.

FACTS

Petitioner was indicated in Kings County under indictment numbers 46/1981 and 270/1981 for seven counts of Robbery in the First Degree, seven counts of Criminal Use of a Firearm in the First Degree, eleven counts of Robbery in the Third Degree, three counts of Grand Larceny in the Third Degree and one count Criminal Possession of Stolen Property in the Third Degree.

At some point in the proceedings relative to the above-stated indictments, Petitioner advised the court that he was not responsible for his actions by reason of mental disease or defect. Thereafter, petitioner was examined by at least five psychiatrists, only one of whom was chosen by petitioner.

The defendant, in support of his claim that he was not responsible by reason of mental disease or defect, cited his traumatic experience in Vietnam as well as his ingestion of massive quantities of dangerous narcotics.

On April 13, 1983 petitioner tendered a plea of not responsible by reason of mental disease or defect. The court, on April 13, 1983, considered the representations of petitioner’s counsel, conversations had by the court with defendant, as well as the findings of the psychiatrists who interviewed petitioner, and accepted the plea of not responsible by reason of mental disease or defect. The respondent District Attorney consented to the court’s acceptance of the plea. The court, accordingly, made findings of fact to support its acceptance of the plea.

In accordance with N.Y. Criminal Procedure Law § 220.15 a judgment of not responsible by reason of mental disease or defect was entered. The petitioner was thereupon remanded to the custody of the Commissioner of Mental Health for an examination pursuant to N.Y. Criminal Procedure Law § 330.20 for civil commitment proceedings.

Subsequent to the entry of the judgment of acquittal by reason of mental disease or defect, Respondent District Attorney obtained petitioner’s military records. These records disclosed that petitioner had never served in Vietnam.

Arguing that a fraud had been perpetrated upon the court, the District Attorney moved to vacate the “plea” of not guilty by reason of mental disease or defect. The motion was granted. People v. Lockett, 121 Misc.2d 549, 468 N.Y.S.2d 802 (Sup.Ct.Kings Co.1983), reversed, sub. nom., In the Matter of Lockett v. Juviler, 102 A.D.2d 869, 477 N.Y.S.2d 37 (2d Dept.1984), reversed, Lockett v. Juviler, 65 N.Y.2d 182, 490 N.Y.S.2d 764, 480 N.E.2d 378 (1985).

In upholding the vacatur of the verdict of acquittal by reason of mental disease or defect, the New York Court of Appeals interpreted CPL 220.15 as follows:

CPL 220.15 creates a procedure resembling plea bargaining but produces a kind of reverse guilty plea. It permits the defendant to enter a plea of “not responsible by reason of a mental disease or defect”, if the court and the prosecutor consent (CPL 220.15[1]). Before accepting the plea, the court must be satisfied that the People could establish all the elements of the crime beyond a reasonable doubt but could not meet their burden of proving the defendant’s mental responsibility (CPL 220.15[5][9], [b]). The statute provides that, if accepted by the court, the plea is equivalent to a verdict finding the accused not responsible by reason of a mental disease or defect (CPL 220.15[3][f]).

Id. at 184, 490 N.Y.S.2d 764, 480 N.E.2d 378.

Moreover, the Court of Appeals rejected petitioner’s argument that the plea could not be vacated in the absence of express statutory authority. The Court of Appeals noted that “CPL 220.60(3) expressly permits a court to vacate a plea of not responsible by reason of mental disease or defect on application of the defendant ... There is no comparable right granted to the People. However, the absence of express statutory authority is not controlling in this instance because the issue presented by the People’s application is one over which the courts have inherent power.” Id. at 186, 490 N.Y.S.2d 764, 480 N.E.2d 378.

Courts traditionally have inherent power to vacate orders and judgments obtained by fraud or misrepresentation. In this State, that power has been exercised in civil cases (Furman v. Furman, 153 NY 309 [47 N.E. 577]; Matter of Holden, 271 NY 212 [2 N.E.2d 631]) and criminal cases {Matter of Lyons v. Goldstein, 290 NY 19 [47 N.E.2d 425]). This power, it should be noted does not extend to intrinsic fraud, such as perjury at trial, which for policy reasons has been held not to invalidate a judgment. (Jacobowitz v. Herson, 268 NY 130 [197 N.E. 169]; Matter of Holden, supra [271 N.Y.], p. 218 [2 N.E.2d 631]). However, the power does not extend to a plea obtained by fraud and misrepresentation {Matter of Lyons v. Goldstein, supra.). Thus far, the inherent power to vacate a plea has been exercised upon application of the defendant. But there is no reason why the courts should not vacate a fraudulently obtained plea when the application is made by the prosecutor, provided there is no constitutional impediment.

Id. at 186-87, 490 N.Y.S.2d 764, 480 N.E.2d 378.

The Court of Appeals proceeded to address the constitutional question. In doing so, the court noted that

‘[t]he label which the Legislature has attached to the plea is not controlling for double jeopardy purposes (United States v. Martin Linen Supply Co., 430 U.S. 564, 571 [97 S.Ct. 1349, 1354, 51 L.Ed.2d 642]). It can only be said to constitute an aquittal if it actually represents a resolution of some or all of the factual elements of the crimes charged. (United States v. Martin Linen Supply Co., supra, p. 571 [97 S.Ct., p. 1354]). In addition, the factual consideration must occur after jeopardy has attached (Serfass v. United States, 420 U.S. 377, 390-392 [95 S.Ct. 1055, 1063-1065, 43 L.Ed.2d 265]). Jeopardy cannot be said to have attached until the accused has been subjected to the risk of conviction (Serfass v. United States, supra, p. 392 [95 S.Ct., p. 1064]; Green v. United States, 355 U.S. 184, 187 [78 S.Ct. 221, 223, 2 L.Ed.2d 199]). In the case now before us, the petitioner never, faced that risk during the plea proceedings. Under the statute governing this special plea (CPL 220.15), there were only two options available to the court. First, the court could accept the plea, thus terminating the criminal proceedings and initiating civil commitment proceedings (CPL 220.15[6]). Second, the court could reject the petitioner’s plea offer and permit the criminal proceedings to continue in the normal course. In no event could the court make a binding factual finding of the defendant’s guilt. Therefore, the trial court correctly held that the double jeopardy clause does not preclude restoration of the criminal charges because jeopardy had not attached when the special plea was accepted. As the Supreme Court has noted: ‘An accused must suffer jeopardy before he can suffer double jeopardy.’ (Serfass v. United States, supra, p. 393 [95 S.Ct., p. 1065]).

DISCUSSION

The New York Court of Appeals, in reaching its conclusion that vacatur of petitioner’s plea was proper, relied, in large measure, upon its analysis of the constitutional prohibition against Double Jeopardy. The Court of Appeals reasoning was premised upon its belief that since the trial court could not “make a binding factual finding of the defendant’s guilt,” Lockett v. Juviler, 65 N.Y.2d at 187, 490 N.Y.S.2d 764, 480 N.E.2d 378, jeopardy had not attached. The District Attorney argues that the “factual considerations raised by the trial court at the plea proceedings are of no consequence for double jeopardy purposes for without the risk of a determination of guilt, jeopardy did not attach.” Respondent’s Memorandum of Law in Opposition at 6, citing, Serfass v. United States, 420 U.S. 377, 95 S.Ct. 1055, 43 L.Ed.2d 265 (1975).

Respondent’s reliance upon Serfass, supra, is inapposite. Serfass is easily distinguished from the proposition espoused by respondent on two grounds.

First, Serfass held at 388, 95 S.Ct. at 1062, that, “[i]n a nonjury trial, jeopardy attaches when the court begins to hear evidence, (citations omitted).” In the present case, for the trial court to have satisfied its duty to insure that the people could have proven, if there were a trial, guilt of the offense beyond a reasonable doubt, the People had to have been “ready for trial.” Moreover, for the People to have conceded to the entry of the judgment of acquittal by reason of mental disease or defect, it is not unreasonable to presume that the District Attorney’s investigation must have been complete. Accordingly, the trial court proceeded to hear evidence and find facts with respect to the crime charged and the defense offered.

A defendant is acquitted only when, ‘the ruling of the judge, whatever its label, actually represents a resolution [in the defendant’s favor] correct or not, of some or all of the factual elements of the offense charged.’ Martin Linen, supra at 571 [97 S.Ct. at 1354],

United States v. Scott, 437 U.S. 82, 97, 98 S.Ct. 2187, 2197, 57 L.Ed.2d 65 (1978).

It is unquestionably true that the trial court, when it accepted Lockett’s plea, resolved, correctly or not, some or all of the factual elements of the crime charged. United States v. Martin Linen Supply, 430 U.S. at 571, 97 S.Ct. at 1354. By deciding that the People had failed to come forward with sufficient proof of petitioner’s capacity to be responsible for his criminal acts, the trial court was clearly saying that Lockett’s criminal culpability had not been established. The conclusion is inescapable that a judgment of acquittal has been entered and, of course, the Double Jeopardy prohibition embodied in the Constitution prohibits a new proceeding based upon the same offense. Burks v. United States, 437 U.S. 1, 10-11, 98 S.Ct. 2141, 2146-47, 57 L.Ed.2d 1 (1978); see also, Fong Foo v. United States, 369 U.S. 141, 82 S.Ct. 671, 7 L.Ed.2d 629 (1962); and also, Sapir v. United States, 348 U.S. 373, 374, 75 S.Ct. 422, 423, 99 L.Ed. 426 (1955).

The Double Jeopardy Clause forbids a second trial for the purpose of affording the prosecution another opportunity to supply evidence which it failed to muster in the first proceeding.

Burks, supra, 437 U.S., at 11, 98 S.Ct. at 2147; see also, United States v. DiFrancesco, 449 U.S. 117, 129, 101 S.Ct. 426, 433, 66 L.Ed.2d 328 (1980).

The New York Court of Appeals attempted to distinguish fraud in the inducement with fraud in fact and it characterized petitioner’s statements regarding his (non-existent) combat experience as fraud in the inducement. The Court of Appeals, however, apparently concedes that had Lockett testified before a jury at trial regarding his combat experience before a jury, and had received an acquittal by reason of mental disease or defect, Lockett’s perjury would not vitiate the verdict.

Clearly, Lockett’s statements were fraudulent in fact. Why should anything Lockett says “induce” the People to accept his plea? The People could have nevertheless caused a trial to be had. Presumably, the People conducted their own investigation. If the People were remiss in some manner of their investigation our jurisprudence does not penalize a defendant for capitalizing upon the People’s failure.

In any event, it is rather bold to suggest that the only factor influencing the People’s consent to the plea was petitioner’s claimed trauma in Vietnam. The fact that petitioner weaved such a tale is, in and of itself, indicative of petitioner’s insanity.

A judgment of acquittal whether based on a jury verdict of not guilty or on a ruling by the court that the evidence is insufficient to convict may not be appealed and terminates the prosecution when a second trial would be necessitated by a reversal.

United States v. Scott, supra, 437 U.S., at 91, 98 S.Ct. at 2194.

The essence of this case is that the People were permitted to appeal a verdict in defendant’s favor based upon “newly discovered evidence.” The prosecution has no such liberty under the United States Constitution. When called upon to proffer its case, the People must be prepared; if the People are not prepared, our system countenances the apparent windfall to the defendant.

Burks necessarily holds that there has been a ‘failure of proof’ (Burks [437 U.S.] at 16 [98 S.Ct. at 2149]), requiring an acquittal when the Government does not submit sufficient evidence to rebut a defendant’s essentially factual defense of insanity, though it may otherwise be entitled to have its case submitted to the jury.
The defense of insanity ... arises from “the notion that Congress could not have intended criminal punishment for a defendant who has committed all the elements of a proscribed offense, ‘United States v. Russell, 411 U.S. 423, 435 [93 S.Ct. 1637, 1644, 36 L.Ed.2d 366] (1975) where other facts established to the satisfaction of the trier of fact provided a legally adequate justification for otherwise criminal acts. Such a factual finding does ‘necessarily establish the criminal defendant’s lack of criminal culpability,’ post at 106 (Brennan, J. dissenting), under the existing law; the fact that the ‘acquittal may result from erroneous evidentiary rulings or erroneous interpretations of governing legal principles/ ibid. affects the accuracy of that determination but does not alter its essential character.

United States v. Scott, supra, 437 U.S., at 97, 98 S.Ct. at 2197 (emphasis in original).

Second, the Serfass court placed great reliance upon the fact that the petitioner therein “had not waived trial by jury, and of course, a jury trial could not be waived by him without consent of the Government and of the court.” Serfass, supra, 420 U.S., at 389, 95 S.Ct. at 1063.

CPL 220.15 required Lockett to waive trial by jury. Lockett also waived his Fifth Amendment rights against self-incrimination. Moreover, Lockett admitted to the court that he did, in fact, commit the robberies which resulted in Indictments 46/1981 and 270/1981. The only defense to these charges, other than insanity, was of degree; that is, Lockett denied the use of a weapon in the commission of these robberies.

Most disturbing to this court is the impression given by the District Attorney, at the hearing on this application, that the People would use Lockett’s admission to having committed the robberies, at the plea hearing, against him at trial. Under such circumstances, a trial of Lockett will be an illusory exercise of due process.

This Court simply does not accept the argument that the plea proceeding and the findings by the court pursuant thereto did not constitute jeopardy.

Furthermore, where a statute provides that an acquittal by reason of mental disease or defect is the equivalent of a verdict, and the defendant is remanded for proceedings to determine whether this defendant should be civilly committed, the defendant has clearly placed his liberty interest in jeopardy.

It is the opinion of this Court that civil commitment cannot be said to be ipso facto non-criminal to the extent that it was an admittedly criminal act which led to the initiation of civil commitment proceedings.

CONCLUSION

The Writ of Habeas Corpus is granted. The People of the State of New York are enjoined from further prosecution of petitioner under Indictments 46/1981 and 270/1981. The People are directed to examine petitioner pursuant to CPL 330.20

SO ORDERED.

      . New York Criminal Procedure Law § 220.15 provides:
      (3) Before accepting a plea of not responsible by reason of mental disease or defect, the Court must address the defendant in open court and determine that he understands each of the following:
      (a) The nature of the charge to which the plea is offered, and the consequences of such plea;
      (b) That he has the right to plead not guilty or to persist in that plea if it has already been entered;
      (c) That he has the right to be tried by a jury, the right to the assistance of counsel, the right to confront and cross-examine witnesses against him, and the right not to be compelled to incriminate himself;
      (d) That if he pleads not responsible by reason of mental disease or defect there will be no trial with respect to the charges contained in the indictment, so that by offering such plea he waives the right to such trial;
      (e) That if he pleads not responsible by reason of mental disease or defect the court will ask him questions about the offense or offenses charged in the indictment and that he will thereby waive his right not to be compelled to incriminate himself; and
      (f) That the acceptance of a plea of not responsible by reason of mental disease or defect is the. equivalent of a verdict of not responsible by reason of mental disease or defect after trial.

      . The People were not in possession of information establishing the true state of facts for a period of at least one year prior to the plea being accepted, and they did not obtain the military records until two months after the plea was accepted.