author: NAUMAN S. SCOTT, District Judge.

text:
    Whittaker PAPPION, et al., v. DOW CHEMICAL COMPANY, et al.
    Civ. A. No. 83-2034.
    United States District Court, W.D. Louisiana, Lake Charles Division.
    Feb. 21, 1986.
    Provost, Umphrey, Swearingen & Ed-dins, Kurt B. Chacon and Herschel Hobson, Port Authur, Tex., for plaintiffs.

      Strong, Pipkin, Nelson & Bissell, David W. Ledyard, Beaumont, Tex., for Union Carbide Corp. and The Goodyear Tire & Rubber Co.
    Stoekwell, Stevert, Yiccellio, Clements & Shaddock, Robert W. Clements, Lake Charles, La., for Shell Oil Co., Texaco, Inc., Cities Service Co., Sun Oil Co., Mobil Oil Corp., BP Oil, Inc. and Exxon Co. U.S.A.
    Brame, Bergstedt & Brame, John E. Bergstedt, Lake Charles, La., for Monsanto Co.
    Woodley, Barnett, Cox, Williams, Fenet & Palmer, Edmund E. Woodley, Lake Charles, La., for Cypress Indus. Minerals Co., incorrectly named as Cypress Ind., Inc.
    Wyckoff, Russel, Dunn & Frazier, Jerry Kacal, Houston, Tex., for The Dow Chemical Co.
    Milling, Benson, Woodward, Hillyer & Pierson, Joseph E. LeBlanc, Jr., New Orleans, La., for B.F. Goodrich Co.
    Scofield, Bergstedt, Gerard, Mount & Vernon, Thomas M. Bergstedt, John R. Po-horelsky, Lake Charles, La., for Dresser Industries.
    Chaffe, McCall, Phillips, Toler & Sarpy, L. Harvard Scott, III, Harry McCall, Jr., New Orleans, La., John R. Bowman, Legal Dept., E.I. DuPont de Nemours, Wilmington, Del., for E.I. DuPont de Nemours and Co.
    Mehaffy, Weber, Keith & Gonsoulin, Arthur R. Almquist, Beaumont, Tex., for Uniroyal, Inc.
    Weller, Wheelus & Green, George A. Weller, Beaumont, Tex., Michael S. O’Brien, Lafayette, La., for Ribelin Sales, Inc.
    Rienstra, Rienstra & Dowell, Dale Dow-ell, Beaumont, Tex., for Mallinckrodt, Inc.
    Sewell & Riggs, Robert Scott, Houston, Tex., for Penwalt Corp.
    Raggio, Cappel, Chozen & Berniard, Frederick L. Cappel, Lake Charles, La., for The Milwhite Co., Inc.
    Mouton & Roy, John A. Bivins, Lafayette, La., for Whittaker, Clark & Daniels, Inc.
    Plauche, Smith & Nieset, James R. Nies-et, Lake Charles, La., for Nalco Chemical Co.
    W.F. Bliss, Jr., Chemical Solutions Corp., Alvin Tex., for Chemical Solutions Corp.
    Preis, Kraft, Laborde & Daigle, Gregory J. Laborde and Christopher R. Philipp, Lafayette, La., for Vinings Chemical Co.
    Allen, Gooch, Bourgeois, Breaux & Robi-son, St. Paul Bourgeois, Lafayette, La., for Aleo Standard Corp. and Aleo Chemical Corp.
    Baggett, McCall & Ranier, Drew Ranier, Lake Charles, La., for plaintiff Maurine Ann Pappion.
    Brinkhaus, Dauzat, Falgoust & Caviness, Jimmy L. Dauzat, Opelousas, La., for Thompson-Hayward Chemical Co.
    Camp, Carmouche, Barsh, Hunter, Gray, Hoffman & Gill, Randy J. Fuerst, Lake Charles, La., for Ameriehem, Inc.
    Mathews & Atkinson, Daniel R. Atkinson and Richard Creed, Jr., Baton Rouge, La., for R.T. Vanderbilt Co., Inc. and Ferro Corp.
    Walter Conrad, Houston, Tex., for BP Oil, Mobil Oil, Shell Oil, Sun Refining, Cities Service Co., Phillips Chemical Co. and Phillips Petroleum.
   RULING

NAUMAN S. SCOTT, District Judge.

This matter is now before us on Motions to Dismiss plaintiff’s Fourth and Fifth Amended Complaints. In these motions, defendants seek dismissal of both the survival and wrongful death claims of Maurine Pappion (“plaintiff”) and her ten major children. During oral argument on these motions, however, and in a supplemental memorandum filed on October 28, 1985, defendants agree that, for purposes of the motions now before us, we address only the question of whether the wrongful death claim should be dismissed. We therefore deny defendants’ motions to dismiss the survival action and treat defendants’ Motions to Dismiss plaintiff’s Fourth and Fifth Amended Complaints as a Motion to Dismiss the wrongful death claims in those complaints.

Defendants argue that the wrongful death claims are barred by the one-year Louisiana statute of limitations. Plaintiffs acknowledge that the wrongful death claims were filed more than one year after Whittaker Pappion’s death, but argue that under Fed.R.Civ.P. 15(c), the claims relate back to the original, timely petition, and therefore the wrongful death claims were timely as well. Alternatively, plaintiffs argue that the Texas two-year statute of limitation applies. For the following reasons, we find that the Texas two-year statute is the applicable limitations period, and Maurine Pappion’s wrongful death claim was therefore timely. Because the amendment adding the wrongful death claims of the ten major Pappion children was filed after the two-year limitations period, however, and because Federal Rule 15(c) does not apply, we grant defendants’ motion with respect to the Fifth Amended Complaint and dismiss those wrongful death claims.

FACTUAL BACKGROUND:

In March of 1983, Whittaker Pappion, a Louisiana resident, was diagnosed as having lung cancer. Pappion and his wife, Maurine Pappion, filed their original complaint on June 13, 1983 in the United States District Court for the Eastern District of Texas, alleging that defendants negligently manufactured and/or distributed dangerous chemicals, which caused Pappion’s lung cancer injuries when he was exposed to the chemicals at his place of employment in Lake Charles, Louisiana. In the original complaint, they set forth a claim for general and specific damages for Pappion’s illness in the name of Whittaker Pappion, and a claim for loss of consortium in the name of Maurine Pappion. Whittaker Pap-pion died on June 24, 1983. On August 17, 1983, the presiding judge in the Eastern District of Texas signed an order transferring the case under 28 U.S.C. § 1404(a) to the United States District Court for the Western District of Louisiana, on the grounds that the Western District was the more convenient forum. On March 15, 1984, Maurine Pappion filed her First Amended Complaint, which amended complaint added defendants and alleged soli-dary liability between them. Plaintiff’s Second Amended Complaint, /¡led August 31, 1984, and Third Amended Complaint, filed February 20, 1985, both simply added new defendants, and neither mentioned the fact that Whittaker Pappion had died.

In plaintiffs Fourth Amended Complaint, filed May 31, 1985, more than twenty-three months after Whittaker Pappion’s death, Maurine Pappion stated for the first time that Whittaker Pappion had died, and she brought a survival action and a wrongful death action in her behalf. In the Fifth Amended Complaint, filed on August 2, 1985, Maurine Pappion sought to add as plaintiffs her ten major children. The ten additional plaintiffs each claimed a survival action and a wrongful death action in his or her behalf.

MAURINE PAPPION’S WRONGFUL DEATH CLAIM: WHICH LIMITATIONS PERIOD APPLIES?

La.Civ.Code art. 2315(D) sets forth the recovery scheme for survival and wrongful death actions in Louisiana. The statute does not state the period of limitations for a wrongful death action. Rather, the applicable limitations period, one year from the date of death, is set forth in La.Civ.Code art. 3492. Thus, under Louisiana law, one must bring a wrongful death action within one year of the alleged victim’s death unless the limitations period is interrupted. Ayo v. Johns-Manville Sales Corp., 771 F.2d 902, 906 (5th Cir.1985). In Texas, a plaintiff has two years from the date of the victim’s death in which to bring his or her wrongful death action. Tex.Rev.Civ.Stat.Ann. art. 5526; Cox v. McDon nell-Douglas Corp., 665 F.2d 566, 568 (5th Cir.1982). Thus, because Maurine Pappion brought her wrongful death action more than one year, but less than two years, after her husband’s death, we must carefully determine which limitations period applies.

We have ruled previously that when the Texas court transferred this proceeding to this Louisiana federal district court under 28 U.S.C. § 1404(a), the transferee court should apply the Texas choice of law, Van Dusen v. Barrack, 376 U.S. 612, 84 S.Ct. 805, 11 L.Ed.2d 945 (1964), and that under that law Texas would apply in this case the substantive law of Louisiana and the procedural law of Texas. Pappion v. Dow Chemical Co., 594 F.Supp. 428 (W.D.La.1984). This claim was brought pursuant to substantive law of Louisiana under La.Civ. Code art. 2315, but this article does not contain any wrongful death period of prescription or limitation. The applicable pres-riptive period for wrongful death in Louisiana is the general one-year prescription rule for delictual actions under La.Civ.Code art. 3492. (Although article 3492 became effective on January 1, 1984, the comparable prior statute was article 3536 and the enactment of the new article did not change the law. Ayo v. Johns-Manville Sales Corp., 771 F.2d 902 (5th Cir.1985)). We find that Texas considers its two-year statute of limitations to be procedural in nature. Cox v. McDonnell-Douglas Corp., 665 F.2d 566 (5th Cir.1982). It is also well settled that La.Civ.Code art. 3492 (and its predecessor, La.Civ.Code art. 3536), establishing Louisiana’s one-year prescriptive period on actions in tort, is procedural in nature. Wright v. Fireman’s Fund Ins. Co., 522 F.2d 1376 (5th Cir.1975), reh’g denied, 526 F.2d 1407 (5th Cir.1976); Sewerage & Water Board of New Orleans v. Sanders, 264 So.2d 270 (La.App. 4th Cir.), writ denied, 266 So.2d 473 (La.1972).

We therefore conclude that we must apply the two-year statute of limitations of Texas, and plaintiff’s Fourth Amended Complaint, in which she asserted her own wrongful death claim, was timely and we therefore deny defendants’ Motion to Dismiss that complaint.

THE WRONGFUL DEATH CLAIMS OF THE TEN MAJOR PAPPION CHILDREN:

Plaintiff’s Fifth Amended Complaint, which attempts to add wrongful death and survival claims of the Pappions’ ten major children, was filed more than two years after Whittaker Pappion’s death, and therefore beyond the Texas limitations period. Plaintiffs argue, however, that Fed. R.Civ.P. 15(c) applies, and the wrongful death claims in the Fifth Amended Complaint relate back to either the original timely petition filed by Whittaker and Maurine Pappion, or the timely Fourth Amended Complaint, which set forth Maurine Pappion’s wrongful death claim, and because the children’s wrongful death claims relate back, they are timely. Defendants argue that 15(c) does not control in this case, because state statutes of limitation, not the Federal Rules of Civil Procedure, govern the determination of whether actions are timely. The rule, however, in the Fifth Circuit and other federal circuits, is that in diversity actions in federal court, amendments to pleadings is a procedural matter to be governed by federal law, even if the comparable state law would produce a different result. See Welch v. Louisiana Power & Light Co., 466 F.2d 1344, 1345 (5th Cir.1972); see also Newman v. Freeman, 262 F.Supp. 106, 110-12 (E.D.Pa.1966) (federal district court sitting in diversity must apply Rule 15(c) which would permit joinder of the two claims in question, rather than apply the pertinent Pennsylvania rule, which would disallow joinder of the claims). We therefore look to Federal Rule 15(c) to determine if the wrongful death claims of the ten major children relate back and are therefore timely.

Rule 15(c) states in pertinent part as follows:

“(c) Relation Back of Amendments. Whenever the claim or defense asserted in the amended pleading arose out of the conduct, transaction, or occurrence set forth or attempted to be set forth in the original pleading, the amendment relates back to the date of the original pleading. An amendment changing the party against whom a claim is asserted relates back if the foregoing provision is satisfied and, within the period provided by law for commencing the action against him, the party to be brought in by amendment (1) has received such notice of the institution of the action that he will not be prejudiced in maintaining his defense on the merits, and (2) knew or should have known that, but for a mistake concerning the identity of the proper party, the action would have been brought against him.”

Plaintiff relies almost exclusively on Giroir v. South Louisiana Medical Center, etc., 475 So.2d 1040 (La.1985), in arguing that Rule 15(c) allows the wrongful death claims of the ten major Pappion children. In Giroir, the Louisiana Supreme Court allowed a widower to amend his original complaint, which had included his own wrongful death claim, to add the wrongful death claims of his two major children, even though the applicable one-year prescriptive period for bringing wrongful death claims had expired three days before he sought the amendment. The court ruled that Louisiana’s relation back rule, La.Code Civ.Proc. art. 1153, allowed the untimely amendment because it sufficiently related back to the husband’s timely wrongful death claim.

Although the Louisiana court in Giroir looked to Federal Rule 15(c) in deciding the case before it, we note that we, in interpreting Rule 15(c), are not bound by the interpretation of the Louisiana court of its own procedural rule. See Welch, 466 F.2d at 1345 (amendments to pleadings is a procedural matter to be governed by federal law). Rather, we look to the decisions of other federal circuits, and our own analysis, in ruling on the scope of Rule 15(c).

We hold that Rule 15(c) does not extend to the Fifth Amended Complaint which attempted to add the untimely wrongful death claims of the major Pappion children. The Fifth Circuit decision of Williams v. United States, 405 F.2d 234 (5th Cir.1968), although a decision which allowed an amendment adding a new plaintiff, supports our ruling to not allow the untimely wrongful death claims of the children. In Williams, a 13-year old boy was injured from the explosion of an Army firecracker, and brought suit against the government. The boy’s mother sought leave to amend the complaint, after the applicable period of limitations had run, to appear as party plaintiff in her own right for recovery for loss of services due to her son’s injuries. The mother had been in the lawsuit from its inception as next friend of her minor son. The district court refused to allow the amendment because the mother had filed it after the applicable period of limitations had run. The Fifth Circuit reversed, holding that her claim related back to the date of the original pleading under Rule 15(c), and it was therefore timely.

The court in Williams said that notice is the critical element in Rule 15(c) determinations. 405 F.2d at 234. When a late amendment attempts to introduce a new party, not only must the adversary have had notice about the operational facts, but it must have had fair notice that a legal claim existed in and was in effect being asserted by the party belatedly brought in. Id. at 238. The court said that the defendant in that case had notice not only of the mother’s existence, but also had notice that the mother was already involved in the lawsuit. Id. at 239. Thus, because the defendant was already on notice both of the mother’s existence and her involvement in the action prior to the amendment which added her as a plaintiff, the untimely amendment related back to the date of the original pleading under Rule 15(c).

Unlike the defendant in Williams, defendants in the case before us had no notice that any claims of the ten major Pap-pion children were in any way involved in the lawsuit before the Fifth Amended Complaint which asserted their late wrongful death claims. Indeed, upon thorough ex-animation of the entire record, we find no mention of the children at all before the Fifth Amended Complaint. Even if defendants did know of the children’s existence, they certainly did not know that they were even remotely a part of this action.

As did the Fifth Circuit in Williams, the District of Columbia Circuit in Leachman v. Beech Aircraft Corp., 694 F.2d 1301 (D.C.Cir.1983), ruled that in addition to the requirement that the proposed amendment arises out of the same transaction or occurrence of the original pleading, the defendant must also have sufficient notice of both the new plaintiffs existence and his prior involvement in the action before Rule 15(c) would allow an untimely amendment which adds the late plaintiff. In Leachman, the plaintiff sued defendant for the wrongful death of the plaintiffs husband in an airplane crash. After the applicable statute of limitations had run, plaintiff sought to amend her complaint to add as plaintiff the corporation which owned the plane, which corporation sought compensation for the plane’s value. Plaintiff argued that although filed after the limitations period, the amended complaint adding the new plaintiff related back under Rule 15(c) and was therefore permissible.

The appellate court affirmed the district court’s refusal to allow the untimely amendment. The court noted that the crucial policy underlying Rule 15(c) is notice to the party opposing the amendment. 694 F.2d at 1308. Mere notice of the new plaintiff’s existence, however, is not sufficient. Rather, the defendant must have notice that the new plaintiff was already somehow involved in the action:

“The [reason for] the courts’ consideration of identity of interest is that that factor ensures that the old and new plaintiffs are sufficiently related so that the new plaintiff was in effect ‘involved in [the proceedings] unofficially from an early stage.’ [citations omitted]. The touchstone once again [in Rule 15(c) determinations] is whether the defendant knew or should have known of the existence and involvement of the new plaintiff (emphasis added).” 694 F.2d at 1309.

Because the defendant in Leachman had no notice either of the existence or prior involvement of the new corporation-plaintiff, the court did not allow it to enter the lawsuit after the statute of limitations had run.

We therefore conclude that Rule 15(c) will not allow a plaintiff to amend his or her complaint to add another prospective plaintiff, whose claim arises out of the same transaction or occurrence of the original pleading and whose claim would otherwise be time-barred, merely because the defendant had prior notice of the additional plaintiff’s existence. Rather, the additional plaintiff must have in some manner already been involved in the action, so that the defendant was on notice that it was in effect already defending the action against the new plaintiff who seeks to be added by the late amendment.

Our holding is consistent with the policies and purposes of statutes of limitations. Such statutes serve both to protect defendants from having to litigate claims which may be difficult to disprove because of lost evidence and unavailable witnesses, and also establishes a time at which defendants can stop worrying about prospective claims and can continue in the normal administration of their affairs. Gates Rubber Co. v. USM Corp., 508 F.2d 603, 611 (7th Cir.1975). Often, a defendant may have notice of the existence of a possible plaintiff or of a possible claim against it. When the applicable period of limitations passes, however, the purpose of the statute of limitations has been served, in that defendant no longer needs to retain evidence and witnesses that may be necessary for its defense, and can devote to more useful purposes the resources that it had been reserving for the defense of the possible claim. The policy for statutes of limitations would be circumvented if a plaintiff is allowed to amend his complaint and add a new plaintiff merely because the new plaintiffs claim arose from the same transaction or occurrence of the original claim and the defendant was aware that the new plaintiff existed.

Applying our conclusions to this case, we hold that the Fifth Amended Complaint of plaintiff Maurine Pappion, which attempts to add the wrongful death claims of her ten major children, is barred by the applicable two-year Texas statute of limitations, and we ORDER that the wrongful death claims in the Fifth Amended Complaint be DISMISSED.

      . La.Civ.Code art. 3492 states, "Delictual actions are subject to a liberative prescription of one year. This prescription commences to run from the day injury or damage is sustained."

      . Tex.Rev.Civ.Stat.Ann. art. 5526 states in pertinent part as follows:
      “There shall be commenced and prosecuted within two years after the cause of action shall have accrued, and not afterward, all actions or suits in court of the following description:
      ******

        5. Action for injury done to the person of another where death ensued from such injury; and the cause of action shall be considered as having accrued at the death of the party injured.”


source: Caselaw Access Project

author: OBERDORFER, District Judge.

license: Public Domain

text:
    UNITED FOOD AND COMMERCIAL WORKERS UNION, LOCAL 400, United Food and Commercial Workers International Union, AFL-CIO, CLC, Plaintiffs, v. Donald R. DOTSON, et al., Defendants.
    Civ. A. No. 84-1691.
    United States District Court, District of Columbia.
    June 26, 1984.
    Carey R. Butsavage, Lechner & Butsavage, P.C., Washington, D.C., for plaintiffs.
    Aileen A. Armstrong, Asst. Gen. Counsel for Special Litigation N.L.R.B., Washington, D.C., for defendants.
   MEMORANDUM

OBERDORFER, District Judge.

This case involves the straightforward question of whether, under Miami Newspaper Printing Pressman’s Union Local 46 v. McCulloch, 322 F.2d 993 (D.C.Cir.1963), this Court has jurisdiction to mandate that the National Labor Relations Board (hereinafter the “Board”) certify the results of a union representation election it conducted in 1982.

The facts are summarized in the Court’s memorandum of June 4, 1984, which is attached as Exhibit A. The order explained in that memorandum denied plaintiffs’ motion to enjoin a then imminent election, but required the Board to impound the ballots pending decision on a motion to dismiss. The Board has now moved to dismiss for lack of jurisdiction. The accompanying Order grants that motion, while briefly continuing the impoundment until the plaintiffs can, if they wish, seek relief in the Court of Appeals.

In Miami Newspaper, our Court of Appeals held that in certain circumstances district courts have jurisdiction to require the Board to comply with section 9(c)(1) of the National Labor Relations Act, 29 U.S.C. § 159(c)(1), by certifying the results of a union representation election. Citing Leedom v. Kyne, 358 U.S. 184, 79 S.Ct. 180, 73 L.Ed.2d 210 (1958), the Court refused to permit the Board to refuse to certify an election merely because a single board member, rather than a panel, had passed on the employer’s request for review of the direction of election. 322 F.2d at 998. Plaintiff here relies on Miami Newspaper to establish the jurisdiction of this Court to order the Board to certify an election in which, the Board maintains, four supervisors improperly participated. That reliance is misplaced, and defendants’ motion to dismiss must be granted.

Writing for the Court in Miami Newspaper, Judge McGowan expressly noted that section 9(c)(1) does not require the Board to certify the results of all elections, and that in many circumstances courts lack jurisdiction to review decisions of the Board not to certify an election:

Clearly, 9(c)(1) is not mandatory in all instances. This Court, other courts of appeals, and the Board have recognized the authority and duty of the Board to set aside an election which has been unfairly conducted either because of employer or union coercion, or for some reason having to do with the mechanics of the election process.

Miami Newspaper, supra, 322 F.2d at 997-98 & n. 9.

The case cited by Judge McGowan in the footnote quoted above is directly on point to today’s dispute, and establishes that defendants’ motion to dismiss should be granted. In N.L.R.B. v. National Truck Rental Co., then Circuit Judge Warren Burger wrote for a panel considering whether the Board had discretion to set aside an election in which four foremen had improperly participated. He ruled for the Board in the following language:

The Board rested its action in calling a new election on “possible confusion” resulting from its own error in permitting the foremen to vote. Our problem is whether it was within the administrative competence of the Board to say the probability that the situation gave rise to confusion warranted the calling of a new election. It was admitted that respondent threatened dismissal of two of the foremen if the union won the election. In a small unit of 20 to 30 employees it is not unreasonable to assume that some of the men were aware of the threats. Conceivably some employees, friendly to the foremen, might have voted against the unions in order to save the foremen’s jobs. On the other hand, since they were included in the unit, these supervisors may have taken part in the pre-election campaign and influenced employees in a way they could not have done if they had not been so included. Moreover, some of the employees might have favored a union but not one which included foremen.
These opportunities for “possible coercion” and “confusion” resulted from the Board’s erroneous action, and we believe it was not irrational or unreasonable for the Board, dealing with these close questions, to conclude that the first election did not represent a free and fair expression of the employees’ views. Certainly the Board is far better able than we to appraise the atmosphere surrounding an election and conclude that the situation justified setting aside the election.

239 F.2d at 425.

Of course, in today's case, unlike in National Truck Rental, there is no record evidence that any employee’s vote was coerced or affected by the participation of supervisors in the election. The Board merely stated in a footnote that:

Although the results of that election showed a unanimous union victory, it was conducted in a unit in which almost 40 percent of the voters are statutory supervisors. In such circumstances we cannot conclude that the election was a fair gauge of the sentiments of the unit employees.

Dale Service Corp. v. United Food & Commercial Workers Union, Local 400, AFL-CIO, 269 NLRB No. 164 (Apr. 10, 1984) at 4 n. 9. This bare statement gives no express indication that the Board actually “appraised the atmosphere surrounding” the election here before it “concluded that the situation justified setting aside the election.” Compare N.L.R.B. v. National Truck Rental Co., 239 F.2d at 425. Nevertheless, the National Truck Rental case, and its citation by Judge McGowan in Miami Newspaper, strongly suggest that our Court of Appeals has left to the Board considerable discretion to appraise the atmosphere surrounding an election in which supervisors have participated without requiring the Board to follow any particular procedure in making its appraisal or use any particular form of finding with respect to such appraisal. Although the question is not free from doubt, this Court concludes that it lacks jurisdiction to review the Board’s exercise of its discretion in the circumstances here. Because the question is a close one, however, the parties should have an opportunity to obtain a reaction from the Court of Appeals before the impounded ballots are released. Accordingly, the accompanying order dismissing the complaint on the merits will also continue in force, until July 10, 1984, the Court’s Order of June 4, 1984, impounding the disputed ballots.

EXHIBIT A

MEMORANDUM

Plaintiff, a union local which won a unanimous victory in a representation election among employees at a sewage treatment plant operated by the Dale Service Corporation, seeks a temporary restraining order against the National Labor Relations Board (the “Board”). The election in question occurred on January 21, 1982. The results were certified on January 29, 1982. Alleging that four senior operators were improperly included in the bargaining unit, Dale Services Corporation refused to bargain. The union duly sought and obtained a bargaining order from the Board, and on January 25, 1988, the Board filed suit in the United States Court of Appeals for the Fourth Circuit seeking enforcement of its order.

While the case was pending in the Fourth Circuit, the Board in an unrelated case reversed its own prior decision governing the standards to be applied to determine the supervisory status of employees. The proper classification of the four senior operators who voted in the 1982 Dale Services Corporation election was accordingly thrown into question. The Board thereafter withdrew its petition in the Fourth Circuit and, on April 10, 1984, issued a supplemental decision and order vacating its bargaining order and remanding to the District Director to conduct a new election. The April 10, 1984, decision stated that four senior operators had incorrectly been included in the bargaining unit in the 1982 election, and that although their votes were not essential to the outcome, “we cannot conclude that the election was a fair gauge of the sentiments of the unit employees.” Supplemental Decision and Order of April 10, 1984, at 4 n. 9. The District Director has scheduled a new election for June 7, 1984, three days hence.

Citing Leedom v. Kyne, 358 U.S. 184, 79 S.Ct. 180, 3 L.Ed.2d 210 (1958), and Miami Newspaper Printing Pressmen’s Union Local 46 v. McCulloch, 322 F.2d 993 (D.C.Cir.1963), the union urges the Court to enjoin the impending election and to order the Board to certify the results of the 1982 election. At a hearing on this request on June 4, 1984, the Board orally moved to dismiss the case for lack of jurisdiction. Counsel argued at the hearing that the Board had properly, exercised its discretion to order a new election in the circumstances of this case, and that such a decision is not subject to review in this Court.

The jurisdictional question is a difficult one. On the one hand, direct review of Board actions in representation cases is the exception rather than the rule, and the exception has been interpreted extremely narrowly. See Hartz Mountain Corporation v. Dotson, 727 F.2d 1308, 1312 (D.C.Cir.1984). On the other hand, there is more than superficial similarity between this case and Miami Newspaper Printing, supra, in which our Court of Appeals set aside a rerun election, ordered the Board to certify the results of an earlier election, and held that the District Court had jurisdiction to consider the suit under Leedom v. Kyne, supra. As in Miami Newspaper Printing, 322 F.2d at 996, counsel for the Board at the hearing in this case stated that part of the reason for ordering the new election might have been the Board’s expectation that the Court of Appeals might order a rerun anyway upon challenge by the employer on appeal of the unfair labor practice charge. A possible distinction between Miami Newspaper Printing and this case is that the Board there refused to certify an election; here the Board certified the election but then later set it aside. Whether that distinction is sufficient to divest this Court of jurisdiction requires more careful consideration than is possible on the scant record before the Court, at least without more extensive briefing.

It is axiomatic that a federal court has jurisdiction to determine its jurisdiction, and to issue orders to preserve the status quo pending that determination. United States v. United Mine Workers of America, 330 U.S. 258, 67 S.Ct. 677, 91 L.Ed. 884 (1947); Brotherhood of Locomotive Firemen and Engineers v. Bangor & Aroostook Railroad Co., 380 F.2d 570, 583 (D.C.Cir.1967). The Board has undertaken promptly to file a motion to dismiss together with a memorandum of supporting points and authorities. Pending a ruling on that motion, the accompanying order requires the Board to impound the ballots in the June 7, 1984, election. See Miami Newspaper Printing, supra, 322 F.2d at 996.

Date: June 4, 1984.

        N.L.R.B. v. National Truck Rental Co., 99 U.S.App.D.C. 259, 239 F.2d 422 (1956), cert. denied, 352 U.S. 1016, 77 S.Ct. 561, 1 L.Ed.2d 547 (1957).

       It is immaterial whether or not the foremen’s jobs were actually in danger as long as the employees thought they were.

       On a question like this it is of some importance that the prejudice resulting from failure to set aside the election, if in fact votes were affected by the Board’s mistake, is much greater than the prejudice resulting from a new election, if in fact there was no confusion or coercion.

      † Pending decision on the motion to dismiss, other aspects of the emergency relief sought by plaintiff are denied. Plaintiff will suffer no irreparable injury pending decision on the merits of the jurisdictional question as long as the ballots in the new election are properly impounded.


author: COPENHAVER, District Judge.

text:
    UNITED STATES of America, Plaintiff v. VARIOUS DENOMINATIONS OF CURRENCY AND COIN TOTALING $4,280.45, Assorted Checks and Money Order Totaling $1,136.76, One Power Ski Machine Serial Number 601115, and the One-Story Masonry Structure Known as the “Sportsman,” Located at 217 Tenth Street, Dunbar, West Virginia, its Fixtures, Contents and Real Property Upon Which it is Situated, Defendants.
    Civ. A. No. 80-2530.
    United States District Court, S.D. West Virginia, Charleston Division.
    Oct. 5, 1984.

    Mary S. Feinberg, Asst. U.S. Atty., Charleston, W.Va., for plaintiff.
    Frederick D. Fahrenz, Preiser & Wilson, Charleston, W.Va., for defendants.

       Although this opinion is over one year in age, the court has had several requests that it be published; hence, its submission at this time.

   MEMORANDUM ORDER

COPENHAVER, District Judge.

This matter is before the court on the motion of Carl Junior Higginbotham, Julia Higginbotham and the Escape Restaurant Lounge, Inc., named as parties in interest in the complaint, to dismiss the complaint for forfeiture to the extent that it seeks forfeiture of real property.

I.

The government has sought to have the property forfeited pursuant to the provisions of 18 U.S.C. § 1955 (1976), which makes it a federal offense to engage in certain illegal gambling businesses. Carl Junior Higginbotham, a party in interest, was convicted of a violation of § 1955 on March 14, 1980. On December 14, 1980, plaintiff filed its complaint in forfeiture against certain currency and coins, assorted checks, a money order and a power ski machine which were seized from the premises of “The Sportsman” Tavern located at 217 Tenth Street, Dunbar, West Virginia, on or about June 3, 1978. A partial summary judgment in favor of the United States with respect to all of these items of personal property was granted by order of this court entered on December 16, 1982, following affirmance of defendant’s conviction on appeal. The complaint in forfeiture also claimed that the Sportsman Tavern, a one-story masonry structure, the fixtures therein and the property on which it is situated, were subject to forfeiture because they were used in the conduct of the illicit gambling business. 18 U.S.C. § 1955(d).

The issues before the court on this motion to dismiss are whether 18 U.S.C. § 1955(d) applies to real property and, if so, whether the real property of one not charged with a crime can be forfeited.

II.

The bare language of the statute, “any property,” appears unambiguous and, inasmuch as it is not limited in any way, may be read to include real as well as personal property. See United States v. Turkette, 452 U.S. 576, 580, 101 S.Ct. 2524, 2527, 69 L.Ed.2d 246 (1981). The parties in interest contend, however, that if Congress had intended to include real property within the scope of the statute, it would have made specific reference to such property. They also contend that inasmuch as forfeiture proceedings under § 1955(d) are to be governed by the rules governing forfeiture under the customs laws which, in turn, involve only personal property, § 1955(d) should be similarly limited. As authority for these propositions, they cite DiGiacomo v. United States, 346 F.Supp. 1009 (D.Del.1972).

DiGiacomo v. United States, supra, and United States v. Building and Property Known As 123-125 East Twelfth Street, Erie, Pennsylvania, 527 F.Supp. 1167 (W.D.Pa.1981), which relies on DiGiacomo, axe the only two reported cases of which the court is aware addressing the question of whether real property is forfeitable under § 1955(d). The analysis in DiGiacomo is not persuasive.

Section 1955 was part of the Organized Crime Control Act of 1970, Pub.L. 91-452, which also included provisions relating to Racketeer Influenced and Corrupt Organizations (RICO), 18 U.S.C. §§ 1961-1968. In 1970, Congress also enacted the Controlled Substance Act, Pub.L. 91-513, which includes provisions relating to Continuing Criminal Enterprises (CCE) involving five or more persons, 21 U.S.C. § 848. Both RICO and the CCE provide for forfeitures of property, 18 U.S.C. § 1963(a) and 21 U.S.C. § 848(a). Both of these provisions have been interpreted to include real property within the term “any ... property” even though the procedures provided for forfeiture utilize the customs laws and are thus no more suited for the forfeiture of real property than those provided under § 1955(d). 18 U.S.C. § 1963(c), 21 U.S.C. § 881(b), (c), (d). See United States v. Godoy, 678 F.2d 84 (9th Cir.1982), cert. denied, 464 U.S. 959, 104 S.Ct. 390, 78 L.Ed.2d 334 (1983) (RICO; forfeiture of night club and commercial real estate); United States v. Tunnell, 667 F.2d 1182 (5th Cir.1982) (RICO; forfeiture of motel); United States v. Mannino, 635 F.2d 110 (2nd Cir.1980) (CCE; forfeiture of personal residence); United States v. Grammatikos, 633 F.2d 1013 (2nd Cir.1980) (CCE; discotheque-motel); United States v. Smaldone, 583 F.2d 1129 (10th Cir.1978), cert. denied, 439 U.S. 1073, 99 S.Ct. 846, 59 L.Ed.2d 40 (1979) (forfeiture under RICO; violations of § 1955 also involved).

These cases undercut the approach of the DiGiacomo court that “if Congress had intended to include real property in the forfeiture provisions it could easily have said so.” 346 F.Supp. at 1011. In enacting the Organized Crime Control Act of 1970, Congress set out to eradicate organized crime in the United States by, inter alia, “providing enhanced sanctions and new remedies to deal with the unlawful activities of those engaged in organized crime.” Pub.L. 91-452, § 1. To the extent that real property may be “used in violation of” § 1955, it is more logical to conclude, as did the court in United States v. Godoy, supra, in interpreting RICO § 1963, that if Congress did not want § 1955 to apply to particular kinds of property, it would have specifically excluded them. Moreover, there is reason to construe these two sections similarly inasmuch as racketeering activity as defined in RICO includes violations of § 1955(d). 18 U.S.C. § 1961(1)(B). See United States v. Smaldone, supra.

The parties in interest assert that forfeitures under RICO and CCE are in person-am criminal penalties invoked following conviction whereas the forfeiture provided for in § 1955 is in rem, obtainable through a civil proceeding and thus distinguishable. The assertion is true, but the parties in interest have failed to mount a plausible argument as to why this distinction in itself should make a difference in how the term property is construed. The courts have found little significance generally in the fact that some forfeitures may be in personam while others may be in rem. See United States v. United States Coin and Currency, 401 U.S. 715, 91 S.Ct. 1041, 28 L.Ed.2d 434 (1971); United States v. Grande, 620 F.2d 1026 (4th Cir.1980). Moreover, the Supreme Court has held that statutes enacted “to suppress a public wrong,” as was the Organized Crime Control Act of 1970, “although they impose penalties or forfeitures, [are] not to be construed, like penal laws generally, strictly in favor of the defendant; but are to be fairly and reasonably construed so as to carry out the intention of the legislature.” United States v. Stowell, 133 U.S. 1, 12, 10 S.Ct. 244, 246, 33 L.Ed. 555 (1890). See DiGiacomo v. United States, 346 F.Supp. at 1011.

The court in United States v. Building and Property Known As 123-125 East Twelfth Street, Erie, Pennsylvania found the DiGiacomo opinion most compelling in its consideration of the rights of innocent third parties and the complications attendant on disposing of various interests in real estate as they reflect on Congressional intent with respect to forfeiture of real property under § 1955. These factors point up what may be a significant difference between § 1955 on the one hand and RICO and CCE on the other. What is forfeitable under the latter two statutes is the “interest in, security of, claim against, or property or contractual right(s) of any kind” of the person convicted. 18 U.S.C. § 1963(a); 21 U.S.C. § 848(a)(2). Thus, RICO and CCE do not reach the rights and interests of third parties in the property. Indeed, RICO provides that the United States is to make “due provision for the rights of innocent persons” in disposing of forfeited property. 18 U.S.C. § 1963(g).

Civil, in rem forfeitures, such as those provided for in § 1955, have, however, traditionally not taken the rights of third persons into account except to the extent that such persons can seek remission of a forfeiture in a separate proceeding. Thus, in Calero-Toledo v. Pearson Yacht Leasing Co., 416 U.S. 663, 94 S.Ct. 2080, 40 L.Ed.2d 452 (1974), the Court held that, under the Puerto Rican Controlled Substances Act, which provided for in rem forfeitures of conveyances used in violation of its provisions in a manner similar to 21 U.S.C. § 881, a yacht owned by a third party and allegedly used by the lessee for an unlawful purpose was forfeitable even though the lessor was neither involved in nor aware of the act of the lessee which resulted in forfeiture. Calero-Toledo distinguished the Puerto Rican statute from one involved in a prior case, United States v. United States Coin and Currency, 401 U.S. 715, 91 S.Ct. 1041, 28 L.Ed.2d 434 (1971), which the Court found to manifest a “clear intention to ‘impose a penalty only upon those who [were] significantly involved in a commercial enterprise.’ ” 416 U.S. at 688, 94 S.Ct. at 2094, quoting from United States Coin and Currency, 401 U.S. at 721-22, 91 S.Ct. at 1044-45.

In Calero-Toledo, the Court noted the proliferation of forfeiture enactments which “reach virtually any type of property that might be used in the conduct of a criminal enterprise” and observed that “the innocence of the owner of property subject to forfeiture has almost uniformly been rejected as a defense.” 416 U.S. at 683, 94 S.Ct. at 2092. In rejecting that defense in Calero-Toledo, the Court found that forfeiture prevented further illegal use of the property in question and, by imposition of an economic penalty, rendered “illegal behavior unprofitable.” Id. at 687, 94 S.Ct. at 2094. Additionally, the Court stated that:

To the extent that such forfeiture provisions are applied to lessors, bailors, or secured creditors who are innocent of any wrongdoing, confiscation may have the desirable effect of inducing them to exercise greater care in transferring possession of their property.

Id. at 687-88, 94 S.Ct. at 2094. Calero-Toledo did, nevertheless, leave open the possibility that, for constitutional reasons, forfeiture might not be proper where an owner could prove not only that he was uninvolved and unaware but also “that he had done all that reasonably could be expected to prevent the proscribed use of his property.” Id. at 689, 94 S.Ct. at 2095. See Goldsmith-Grant Co. v. United States, 254 U.S. 505, 512, 41 S.Ct. 189, 191, 65 L.Ed. 376 (1921) (forfeiture of car under tax laws); United States v. One 1957 Rockwell Aero Commander, 671 F.2d 414 (10th Cir.1982) (forfeiture of aircraft under customs laws).

In United States v. Stowell, supra, the Court sustained forfeiture of the interest in real property of a non-innocent owner who had allowed a distillery to be set up on the premises where the statute in question specifically provided for forfeiture in such event. The Court refused, however, to extend the reach of another section of the statute, also providing for the forfeiture of real property, to innocent owners even though the language of that section, literally construed, might have been so interpreted. The Court did not believe that Congress intended the result dictated by a literal construction, although it did read the personal property forfeiture provisions to extend to property owned by those lacking knowledge of or participation in the illegal activity. See Dobbins’s Distillery v. United States, 6 Otto 395, 96 U.S. 395, 24 L.Ed. 637 (1877).

The holdings in these cases suggest alternate analyses of the statute at issue in this case. The most reasonable- construction would appear to be one that deems the phrase “any property” as used in § 1955(d) to embrace real property while affording protection from forfeiture to innocent third parties. In this connection, it is noted that § 1955, unlike RICO and the CCE, does not require the forfeiture of property used in gambling. The language is: “Any property ... may be seized and forfeited.” 18 U.S.C. § 1955(d). Cf. Calero-Toledo v. Pearson Yacht Leasing Co., supra; United States v. One 1957 Rockwell Aero Commander, supra. Accordingly, forfeiture of real property owned by or leased to third persons may be refused where the requirements for a Calero-Toledo exception are met. Additionally, it would appear appropriate to decline forfeiture where only a minor portion of the property was used for gambling, or the forfeiture, taking into account its effect on the interests of third persons, would effect a disproportionate penalty or fail to effect the purposes of forfeiture.

In this case, an affidavit filed by the parties in interest states that the real estate which encompasses “The Sportsman” Tavern and the land on which it sits is owned by the Escape Corporation,100% of whose stock is owned by Julia Higginbotham, the wife of Carl Junior Higginbotham. This relationship suggests that Julia Higginbothan and Escape Corporation may not meet the requirements of the Calero-Toledo exception or be entitled to the benefit of mitigating factors such as those just noted. The parties in interest, however, should have an opportunity to develop the record with respect to these factors.

III.

Accordingly, it is ORDERED that the motion to dismiss of Carl Junior Higginbotham, Julia Higginbotham and the Escape Restaurant Lounge, Inc., be, and it hereby is, denied.

It is further ORDERED that a hearing to allow the parties in interest to show cause why “The Sportsman” Tavern, the fixtures therein and the property on which it is situate should not be forfeited shall be held.

      . Title 18, United States Code, Section 1955 provides that:
      § 1955. Prohibition of illegal gambling businesses
      (a) Whoever conducts, finances, manages, supervises, directs, or owns all or part of an illegal gambling business shall be fined not more than $20,000 or imprisoned not more than five years, or both.
      (b) As used in this section—
      (1) "illegal gambling business" means a gambling business which—
      (1) is a violation of the law of a State or political subdivision in which it is conducted;
      (ii) involves five or more persons who conduct, finance, manage, supervise, direct, or own all or part of such business; and
      (iii) has been or remains in substantially continuous operation for a period in excess of thirty days or has a gross revenue of $2,000 in any single day.
      (2) “gambling” includes but is not limited to pool-selling, bookmaking, maintaining slot machines, roulette wheels or dice tables, and conducting lotteries, policy, bolita or numbers games, or selling chances therein.
      (3) "State” means any State of the United States, the District of Columbia, the Commonwealth of Puerto Rico, and any territory or possession of the United States.
      (c) If five or more persons conduct, finance, manage, supervise, direct, or own all or part of a gambling business and such business operates for two or more successive days, then, for the purpose of obtaining warrants for arrests, interceptions, and other searches and seizures, probable cause that the business receives gross revenue in excess of $2,000 in any single day shall be deemed to have been established.
      (d) Any property, including money, used in violation of the provisions of this section may be seized and forfeited to the United States. All provisions of law relating to the seizure, summary, and judicial forfeiture procedures, and condemnation of vessels, vehicles, merchandise, and baggage for violation of the customs laws; the disposition of such vessels, vehicles, merchandise, and baggage or the proceeds from such sale; the remission or mitigation of such forfeitures; and the compromise of claims and the award of compensation to informers in respect of such forfeitures shall apply to seizures and forfeitures incurred or alleged to have been incurred under the provisions of this section, insofar as applicable and not inconsistent with such provisions. Such duties as are imposed upon the collector of customs or any other person in respect to the seizure and forfeiture of vessels, vehicles, merchandise, and baggage under the customs laws shall be performed with respect to seizures and forfeitures of property used or intended for use in violation of this section by such officers, agents, or other persons as may be designated for that purpose by the Attorney General.

      . This conviction was affirmed on appeal to the Fourth Circuit Court of Appeals. United States v. Carl Junior Higginbotham, 691 F.2d 498 (4th Cir., 1982) (unpublished).

      . 18 U.S.C. §§ 1955(a), 1963(c) and 21 U.S.C. § 881 all provide that the customs laws shall apply to forfeitures “insofar as applicable and not inconsistent with the provisions hereof."

      . In Godoy, a restraining order preventing disposition of the properties involved during litigation was entered under the authority of both 18 U.S.C. § 1955(d) and § 1963(b). See note 5, infra.

      . In a footnote, the Court observed that “seizure and forfeiture statutes also help compensate the Government for its enforcement efforts and provide methods for obtaining security for subsequently imposed penalties and fines." 416 U.S. at 687, n. 26, 94 S.Ct. at 2094, n. 26.

      . In Stowell, the owner would be rendered non-innocent, in the terms of the statute, when he consented to the carrying on of a regulated business on the property, even though he personally committed no offense.

      . 18 U.S.C. § 1963(a).

      . 21 U.S.C. § 848(a)(2).

      . The record is unclear as to the proper name of this corporation or its relationship to the Escape Restaurant Lounge, Inc.


author: EGINTON, District Judge.

text:
    Irwin A. SCHIFF, Petitioner, v. UNITED STATES of America, Respondent.
    Civ. Nos. N-84-242 (WWE), N-84-243 (WWE).
    United States District Court, D. Connecticut.
    Oct. 19, 1984.
    Benson A. Snaider, New Haven, Conn., for petitioner.
    Frank Santoro, Asst. U.S. Atty., New Haven, Conn., and Peter Sklarew, Tax Div., U.S. Dept, of Justice, Washington, D.C., for respondent.
    RULINGS ON PETITIONS TO QUASH AND RESPONDENT’S MOTION FOR SUMMARY DENIAL OF PETITIONS, ENFORCEMENT OF SUMMONSES, AND AWARD OF ATTORNEY’S FEES AGAINST PETITIONER’S COUNSEL
   EGINTON, District Judge.

The petitioner, Irwin A. Schiff (taxpayer), has filed a petition to quash two Internal Revenue Service summonses served upon the American National Bank and the Connecticut Bank and Trust Company. The respondent has filed a cross motion for summary denial of the petitioner’s motion, for summary enforcement of the two summonses, and for an award of attorney’s fees against petitioner’s counsel.

This court has jurisdiction pursuant to 26 U.S.C. § 7609(b). The respondent has met its burden of establishing a prima facie case for the enforcement of the summonses by its filing of an affidavit by the agent seeking enforcement. Godwin v. United States, 564 F.Supp. 1209 (D.Del.1983). The burden then shifts to the petitioner to either rebut the respondent or to demonstrate that enforcement of the summonses would be an abuse of process or otherwise improper. Id. at 1213.

The petitioner asserts numerous grounds to meet its burden. First, he contends that the summonses were issued for the illegal purpose of accumulating evidence for a criminal prosecution. This argument is without merit. Under the “bright-line” test established by the Tax Equity and Fiscal Responsibility Act of 1982, Pub.L. No. 97-248, 96 Stat. 324 (“TE-FRA”), a summons may be issued for a criminal purpose as long as there was no Department of Justice referral. Godwin v. United States, 564 F.Supp. at 1211. The Declaration of Revenue Agent Cingo clearly states that there has been no Justice Department referral under 26 U.S.C. § 7602(c) in this case. In addition, the summonses were issued in order to determine petitioner’s tax liabilities for the year 1979, a purpose which is of a legitimate nature.

Second, petitioner asserts that 26 U.S.C. § 7602(b) is unconstitutional in that it is overly broad, vague and unenforceable. This argument is also without merit. Section 7602(b) clearly defines the scope of an administrative summons. It puts the taxpayer on notice that an administrative summons may be used to investigate any violations of the Internal Revenue Code as well as for the purposes enumerated in §§ 7602(a)(1), 7602(a)(2), 7602(a)(3). Reed v. United States, 54 AFTR2d 84-5336 (1984). Section 7602(b) is also not overly broad. To determine whether a statute is overly broad, it must be determined whether the enactment reaches a “substantial amount of constitutionally protected conduct.” Village of Hoffman Estates v. The Flipside, Hoffman Estates, Inc., 455 U.S. 489, 494, 102 S.Ct. 1186, 1191, 71 L.Ed.2d 362 (1982). Section 7602(b) does not create any new offense, nor does it restrict the scope of petitioner’s conduct. It merely clarifies the circumstances under which the I.R.S. may investigate a' taxpayer’s return or failure to file a return. Reed v. United States, 54 AFTR2d 84-5336 (1984).

In addition, . the petitioner’s Fourth and Fifth Amendment rights have not been violated. He possesses no Fourth Amendment interest in the bank records. United States v. Miller, 425 U.S. 435, 96 S.Ct. 1619, 48 L.Ed.2d 71 (1976). It is also well settled that there is no self-incrimination privilege with respect to records in the hands of a third party, even where the records are owned by the party asserting the privilege. Couch v. United States, 409 U.S. 322, 93 S.Ct. 611, 34 L.Ed.2d 548 (1973).

The remaining grounds asserted by the petitioner are without merit and are unsupported by the law.

Accordingly, the petition to quash the summonses is DENIED. The respondent’s motion to enforce the summonses is GRANTED. Because the court finds that the petition to quash was brought in violation of Fed.R.Civ.P. 11, it is ORDERED that the respondent file and serve upon the petitioner within 10 days from the date hereof an accounting of the expenses incurred and hours expended by the reason of the petition, together with a statement of respondent’s hourly rates. Petitioner has until 10 days thereafter with which to respond.

SO ORDERED.


author: BENSON, Chief Judge.

text:
    Wesley C. LAUGHERY, Plaintiff, v. Margaret M. HECKLER, Secretary, Department of Health and Human Services, Defendant.
    Civ. No. A2-84-73.
    United States District Court, D. North Dakota, Northeastern Division.
    Jan. 25, 1985.
    Larry R. Spain, Legal Aid Ass’n, U.N.D. School of Law, Grand Forks, N.D., for plaintiff.
    Rodney S. Webb, U.S. Atty., Fargo, N.D., for defendant.
   ORDER

BENSON, Chief Judge.

In this action for judicial review, the plaintiff, Wesley C. Laughery, seeks reversal of a final decision of the Secretary of Health and Human Services which denied Plaintiff’s application for disability insurance benefits under Title II of the Social Security Act, 42 U.S.C. § 401 et seq.

After Plaintiff’s application was denied, both initially and upon reconsideration, an evidentiary hearing was held at his request before an administrative law judge (AU), who determined that Plaintiff was not disabled. The Appeals Council of the Social Security Administration affirmed the AU’s decision and it thus became the final decision of the Secretary. The matter is now before the court on cross-motions for summary judgment.

FACTS

Plaintiff was born October 27, 1930, and was 52 years of age when he appeared before the AU. He has an 8th grade education, with a recent work history of 15 years as a welder and fabricator in a manufacturing plant. Plaintiff suffered a stroke on October 19, 1980, and has not worked since that date. On February 24, 1981, he filed an application for disability insurance benefits in which he alleged a disability due to the 1980 stroke, arthritis, and high blood pressure. An AU found him to be disabled but the Appeals Council reversed that decision and the plaintiff did not seek judicial review of the denial of benefits.

On November 1, 1982, Plaintiff filed the instant application in • which he again claimed to be disabled due to stroke, arthritis, and high blood pressure. In reaching his decision that Plaintiff was not under a disability, the AU considered only evidence presented pertaining to the period of time subsequent to the denial of the prior application, holding the decision to be res judicata as to any impairment existing before that date. Section 223(b) of the Act, 42 U.S.C. § 423(b).

The evidence in the record, including Plaintiff’s testimony, reveals that he suffers from arthritis, bursitis of the left shoulder, dizziness, pain in the right knee, carpal tunnel syndrome of the left hand, depression, and a hearing loss. The AU considered each of the claimed impairments, both singly and in combination, and concluded they did not significantly limit his ability to perform basic work-related activities even though a vocational rehabilitation evaluation suggested he was unemployable.

The court has carefully reviewed the record to determine whether the decision denying disability insurance benefits is supported by substantial evidence, Ledoux v. Schweiker, 732 F.2d 1385 (8th Cir.1984), and is satisfied it is. The decision is not clear whether the AU found that Plaintiff could return to his former work but there is ample evidence to support the finding that neither his pain nor related medical impairments prevented him from performing basic work-related activities.

IT IS ORDERED the Secretary’s motion for summary judgment is granted and that of the Plaintiff denied. Judgment shall be entered affirming the final decision of the Secretary.


author: WEINER, District Judge.

text:
    Leonard J. FEINBERG and Abby Feinberg v. UNITED STATES of America.
    Civ. A. No. 84-3220.
    United States District Court, E.D. Pennsylvania.
    March 1, 1985.

      Allen Pechter, Langhorne, Pa., for plaintiff.
    Frederick J. Baker, Washington, D.C., for defendant.
   MEMORANDUM OPINION AND ORDER

WEINER, District Judge.

Plaintiffs brought an action, pursuant to 28 U.S.C. § 1346(a), seeking a refund of tax penalties imposed pursuant to section 6672 of the Internal Revenue Code of 1954 (the Code). 26 U.S.C. § 6672. Plaintiffs paid the penalty assessment of $9,131.88 together with interest charges of $2,448.92 on April 30, 1984. On July 3, 1984, plaintiffs filed in this court an action for refund, having previously exhausted their administrative remedies. On October 15, 1984, subsequent to a pre-trial conference held five days earlier, the United States deposed plaintiff Leonard Feinberg. As a result of this deposition, the United States agreed to a stipulation of an entry of judgment against it. This stipulation was filed on December 24, 1984.

Presently before the court is plaintiffs’ application for counsel fees filed pursuant to § 7430 of the Code. After careful consideration of the parties’ memoranda and the applicable law, we deny plaintiffs’ application.

In civil proceedings regarding tax issues Congress has expressly provided that a party may be awarded attorneys’ fees against the United States. Section 7430 . provides in pertinent part:

(a) In general. — In the case of any civil proceeding which is—
(1) brought by or against the United States in connection with the determination, collection, or refund of any tax, interest, or penalty under this title, and
(2) brought in a court of the United States (including the Tax Court), the prevailing party may be awarded a judgment for reasonable litigation costs incurred in such proceeding.

26 • U.S.C. § 7430(a) (emphasis supplied).

Congress, in using the word “may”, has given this court discretion as to an award of fees and costs to a prevailing party in a tax refund suit. Merely because a plaintiff has asked for attorneys’ fees and costs in the prayer of his complaint does not guarantee such an award, even if judgment is entered in his favor. Randazzo v. United States Department of Trea sury Internal Revenue Service, 581 F.Supp. 1235, 1237 (W.D.Pa.1984).

However, before we may even exercise this discretion, we must determine whether the plaintiffs qualify as “prevailing parties” as this term is defined in § 7430(c)(2):

(A) In general. — The term “prevailing party” means any party to any proceeding described in subsection (a) ... which—
(i) establishes that the position of the United States in the civil proceeding was unreasonable, and
(ii) (I) has substantially prevailed with respect to the amount in controversy, or
(II) has substantially prevailed with respect to the most significant issues or set of issues presented.
(B) Determination as to prevailing party. —Any determination under subparagraph (A) as to whether a party is a prevailing party shall be made—
(i) by the court, or
(ii) by the agreement of the parties.

Therefore, under the statute, two conditions must be met in order to establish that a party has “prevailed” and thus, may be awarded attorneys’ fees:

1. The position of the United States in the proceeding was unreasonable, and

2. The other party has substantially prevailed in the proceeding.

The United States concedes that the plaintiffs have prevailed on the issues: that the Internal Revenue Service’s (the Service) penalty assessment was not justified. Therefore, we need only decide whether the position of the United States in the civil proceeding was unreasonable.

The parties disagree about whether the “position of the United States in the civil proceeding”, which must be proved to be unreasonable, refers to the government’s position at litigation or to its pre-litigation stance. To resolve this issue, the Government directs our attention to Greenburg v. United States, 1 Cl.Ct. 406 (1983), a case construing the Equal Access to Justice Act, 28 U.S.C. § 2412. Like § 7430 of the Code, 28 U.S.C. § 2412 provides that a prevailing party in a suit brought by or against the United States shall be awarded costs and fees. However, despite the similarities between the statutes, we find that reference to § 2412 is inapposite here. Unlike § 7430, the language of § 2412(d)(1)(A), stating that the fees shall be awarded unless the court finds that “the position of the United States was substantially justified”, is somewhat ambiguous because it fails to set forth exactly what “position” it refers to. (emphasis added). In contrast, § 7430(c)(2)(A)(i) clearly states that the pertinent position is that which the government took “in the civil proceeding,” meaning the position that the government assumed once it was presented with. the fact that an action had been commenced.

The fact that plaintiffs’ claim was settled by the government’s stipulation to an entry of judgment does not of itself, however, bar plaintiffs’ application for attorneys’ fees. A civil action is commenced when a complaint is filed. Fed.R.Civ.P. Rule 3. A case need not proceed to trial for fees and costs to be accumulated. The stipulation does', however, bear upon this court’s determination of the reasonableness of the government’s position, in that the government’s pre-litigation stance, under which it justified the collection of the penalties, was later substantially abandoned when it conceded the claim.

At least one case has held that this pre-litigation stance is determinative of the reasonableness of the government’s position if the claim is later settled. In Kaufman v. Egger, 584 F.Supp. 872 (D.Maine 1984), the court stated that:

... where Defendants’ (the government) stipulation to a judgment in Plaintiffs’ favor implies an admission of the Defendant’s wrongdoing, it is necessary to determine whether that guilt was predicated upon the unreasonableness of Defendants’ conduct, or some other factor. The Court holds that where Defendants stipulate to entry of judgment, that “position of the United States” which it shall examine for the purposes of determining reasonableness shall be their prelitigation conduct which engendered the civil proceeding.

Id. at 878. The Kaufman case involved a seizure by the Service of the Kaufmans’ 1982 tax refund to satisfy a deficiency from 1978. The Service had previously mailed two notices of the deficiency to an incorrect address. Not until eleven days after it sent notice of the seizure to the Kaufmans’ correct address did the Service mail a new notice of deficiency. This procedure was held violative of § 6212 of the Code.

The case sub judice does not involve an acknowledged violation by the Service of any of the Code’s procedural provisions; the reasons for the Service’s stipulation was evidentiary. Prior to the initiation of the instant action, the Service was of the opinion that the plaintiffs were the responsible officers of a corporation that was liable under the Federal Insurance Contribution Act for penalties assessed for the second, third and fourth quarters of 1979. Not until after the instant action was commenced did the Service depose plaintiff Leonard Feinberg. On the basis of that deposed testimony, the Service conceded the dispute. Since the Service’s concession was based on additional evidence and not on any perceived violations of its own procedures, we find the government’s stipulation cannot be construed, per se, to imply an admission of its own wrongdoing or unreasonableness.

Because we find the government’s stipulation does not of itself imply unreasonableness in its pre-litigation position, we reject the plaintiffs’ contention that the entry of judgment for the full amount of the claim shifted the burden to the government to demonstrate that it had substantial justification for its actions. On the contrary, the statute in no way contemplates the imposition of a primary burden upon the government. It is for the plaintiff to show his eligibility under § 7430. The structure of the statute, in defining the prevailing party as one “which establishes that the position of the United States in the civil proceeding was unreasonable,” § 7430(c)(2)(A)(i), is unambiguous. The burden is on the plaintiff to establish the unreasonableness.

£8] Since the plaintiffs have made no showing of unreasonableness on the part of the government, we deny the application of the plaintiff for counsel fees.


author: MUIR, District Judge.

text:
    UNITED STATES of America, Plaintiff, v. JERSEY SHORE STATE BANK, Defendant.
    Civ. No. 83-1879.
    United States District Court, M.D. Pennsylvania.
    March 20, 1985.

      James W. Walker, U.S. Attys. Office, Scranton, Pa., and Mark G. Gellar, Tax Div., U.S. Dept, of Justice, Washington, D.C., for plaintiff.
    Martin A. Flayhart, Jersey Shore, Pa., for defendant.
   ORDER

MUIR, District Judge.

THE BACKGROUND OF THIS ORDER IS AS FOLLOWS:

The United States of America filed this lawsuit against the Defendant, Jersey Shore State Bank (Bank), seeking payment of Federal Insurance Contribution Act (FICA) taxes which were withheld from the wages of employees of Pennmount, Industries, Inc. (Pennmount) pursuant to 26 U.S.C. § 3505(a) and (b) of the Internal Revenue Code of 1954. Presently pending before this Court are the parties’ cross-motions for summary judgment. These motions are now ripe for this Court’s consideration.

The undisputed facts in this case are as follows. The Bank is an authorized Pennsylvania banking institution with its main office at 115 South Main Street, Jersey Shore, Pennsylvania. Pennmount Industries, Inc. was a corporation located in Lock Haven, Pennsylvania engaged in the manufacture of wooden tables and chairs. In February of 1976, Pennmount opened a checking account at the Bank and the Bank made Pennmount a working capital loan of $20,000. Between February of 1976 and July of 1977, the Bank provided Penn-mount with additional loans which totalled $270,000, secured by mortgages on Penn-mount property and by specific receivables of Pennmount. Beginning with the fourth quarter of 1977, and continuing through the first quarter of 1980, Pennmount failed to pay over to the United States of America federal income taxes and FICA taxes which it withheld from the wages of its employees. The-parties do not dispute the validity of these taxes.

In June of 1977, Pennmount set up a separate checking account at the Bank, No. 154-261, which was only to be used for the deposit of withholding and FICA taxes. In July of 1977, Pennmount paid to the United States by certified check on the Bank part of the proceeds of a loan from the Bank in satisfaction of Pennmount’s delinquent withholding and FICA taxes. Because the company was experiencing financial troubles, Pennmount began paying its employees in cash rather than by check during the latter part of 1977 until October 28, 1977. On that date, Penmount began paying its employees by means of money orders issued by the Bank. From October 28, 1977 through January of 1979, Pennmount procured from the Bank a money order for each Pennmount employee in the amount of that employee’s net wages. Pennmount paid for the money orders by a check to the Bank for the total amount of the net payroll. These payroll payments by money order were made from a third bank account, No. 166-308, opened on October 26, 1978. In January of 1978, the tax account, No. 154-261, which Pennmount had established for the purpose of depositing withheld FICA taxes became overdrawn and remained overdrawn through September of 1979. Although checks were drawn payable to the Internal Revenue Service on that special account, the Bank did not pay those checks because the account lacked sufficient funds. In January of 1979, Pennmount ceased its manufacturing operations, and in order to preserve its security, the Bank began directly paying the wages of those Pennmount employees whose services were necessary to conserve the assets of the company. The Bank did not at that time pay to the United States any withholding or FICA taxes for which Pennmount had been delinquent since the first calendar quarter of 1979.

While the Bank concedes that it is liable for Pennmount’s withholding and FICA taxes beginning in 1979, the parties dispute whether the Bank’s involvement in the payment of wages to Pennmount’s employees from October 28, 1977 to December 31, 1979 renders it liable under either 26 U.S.C. § 3505(a) or (b) for the withholding and FICA taxes Pennmount was required to pay to the United States. Section 3505(a) makes a third party personally liable in an amount equal to unpaid withholding and FICA taxes where that third party pays wages directly, or through an agent, to a taxpayer’s employees. 26 U.S.C. § 3505(a) provides as follows:

Direct payment by third parties. — For purposes of sections 3102, 3202, 3402, and 3403, if a lender, surety, or other person, who is not an employer under such sections with respect to an employee or group of employees, pays wages directly to such an employee or group of employees, employed by one or more employers, or to an agent on behalf of such employee or employees, such lender, surety, or other person shall be liable in his own person and estate to the United States in a sum equal to the taxes (together with interest) required to be deducted and withheld from such wages by such employer.

The companion provision to Section 3505(a) is Section 3505(b) which imposes personal liability on third parties who supply funds to an employer for the purpose of paying wages knowing that the employer does not intend to or will be unable to pay withholding taxes to the Government. 26 U.S.C. § 3505(b) provides:

Personal liability where funds are supplied. — If a lender, surety, or other person supplies funds to or for the account of an employer for the specific purpose of paying wages of the employees of such employer, with actual notice or knowledge (within the meaning of section 6323(i)(l)) that such employer does not intend to or will not be able to make timely payment or deposit of the amounts of tax required by this subtitle to be deducted and withheld by such employer from such wages, such lender, surety, or other person shall be liable in his own person and estate to the United States in a sum equal to the taxes (together with interest) which are not paid over to the United States by such employer with respect to such wages. However, the liability of such lender, surety, or other person shall be limited to an amount equal to 25 percent of the amount so supplied to or for the account of such employer for such purpose.

On October 30, 1984, the United States moved for summary judgment on Count 1 of the complaint which states a claim against the Bank under 26 U.S.C. § 3505(a) which in brief relates to wages paid directly to employees by a third person. The United States argues that the undisputed facts show that by issuing money orders in the net amount of Pennmount employee’s wages from October 1, 1977 through December 31, 1978, the Bank directly paid the wages of Pennmount employees so as to be liable for Pennmount’s withholding and FICA taxes for that period under 26 U.S.C. § 3505(a) in the amount of $15,011.57 plus interest. The Bank filed a brief in opposition to which the United States filed a reply. On October 31,1984, the Bank filed its cross-motion for summary judgment in which it requested that it be granted summary judgment on both counts of the complaint because the undisputed facts show that the United States never gave the Bank or Pennmount Industries notice of the filing of an assessment against either the Bank or Pennmount Industries and that that failure was in contravention of the statutory notice requirement set forth in 26 U.S.C. § 6303(a). Failure to comply with the notice provisions of 26 U.S.C. § 6303(a), the Bank argues, precludes the United States from maintaining this action against the Bank. We will first address the Defendants’ cross-motion for summary judgment because, if it is granted, it will dispose of this lawsuit.

FICA and employment withholding taxes fall within Subtitle C of the Internal Revenue Code governing employment taxes. Congress added to Subtitle C what are now §§ 3505(a) and 3505(b) in order to provide the IRS a remedy against third persons, such as creditors and banks who directly or indirectly pay the net wages of a taxpayers’ employees. Subtitle C does not set out a special procedure which the IRS must follow in order to affix tax liability pursuant to §§ 3505(a) and 3505(b) but instead relies on Subtitle F of the Internal Revenue Code which generally governs procedure and administration of tax-related prosecutions. Within Chapter 64 of Subtitle F, 26 U.S.C. § 6303 sets forth the procedure by which notice and demand for a tax shall be made. That section provides as follows:

(a) General Rule. — Where it is not otherwise provided by this title, the Secretary or his delegate shall, as soon as practicable, and within 60 days, after the making of an assessment of a tax pursuant to section 6203, give notice to each person liable for the unpaid tax, stating the amount and demanding payment thereof. Such notice shall be left at the dwelling or usual place of business of such person, or shall be sent by mail to such person’s last known address.

Jersey Shore argues that because more than five (5) years elapsed between the initial date of notice of the filing of the tax lien assessment against Pennmount and the institution of the present action against the Bank, section 6303(a) has been violated. When Pennmount failed to pay employee withholding and FICA taxes from the beginning of 1977 through the first quarter of 1980, the Government made tax lien assessments against Pennmount. The Government gave Pennmount notice of the filing of its first tax lien against Penn-mount on June 22, 1978. The Government admits that it did not provide the Bank with any notice of filing of this tax lien or any other subsequent tax lien assessments against Pennmount until the Government filed this lawsuit against the Bank on December 30, 1983. What this Court must determine is whether the Government’s failure to give the Bank prior notice of its potential liability for the assessment made against Pennmount violates § 6303(a) and, if so, what are the consequences of that violation.

Relying on the recent case of United States v. Associates Commercial Corporation, 721 F.2d 1094 (7th Cir.1983), the Bank argues that a lender cannot be held liable under 26 U.S.C. § 3505(b) where the Government fails to provide the lender with notice of a filing of a tax lien assessment against the company to which the lender has made loans or extended credit. The Associates Commercial Court held that § 6303(a) mandates notice to a lender subject to § 3505(b) liability, and that failure to provide notice pursuant to § 6303(a) bars a subsequently filed civil action. Id. at 1098. The Court pointed out that because no specific enforcement procedure applied to proceedings under § 3505(b), those sections of the Internal Revenue Code which created liability such as § 3505(b) had to be read and interpreted in conjunction with those Code Sections setting forth the procedure for enforcement of such liabilities, including the notice requirement of § 6303(a). We agree with the conclusion of the Seventh Circuit Court of Appeals that § 6303(a) is the general notice provision for all liability created under the Internal Revenue Code, including § 3505(b).

The United States of America, in its memorandum in opposition to Jersey Shore’s motion for summary judgment, argues that the notice provision of § 6303(a) is only a part of the administrative collection process and not a prerequisite to the collection of taxes by means of civil lawsuit. However, the United States acknowledges that an assessment is “simply a bookkeeping notation.. .made when the Secretary [of the Treasury] or his delegate establishes an account against the taxpayer on the tax rolls.” Laing v. United States, 423 U.S. 161, 170 n. 13, 96 S.Ct. 473, 479 n. 13, 46 L.Ed.2d 416 (1976). See 26 U.S.C. § 6203. Once an assessment is made, an automatic lien arises against the taxpayers’ property by statute. 26 U.S.C. §§ 6321 and 6322. Once an assessment has been made, the IRS has the power to collect that tax using certain summary methods of collection which do not necessitate court action. See, United States v. Rodges, 461 U.S. 677, 682-83, 103 S.Ct. 2132, 2137, 76 L.Ed.2d 236 (1983). But before the IRS can levy on property on which an assessment has been made, the United States admits that the taxpayer must first be notified. See Memorandum in Opposition to Defendants’ Motion for Summary Judgment, page 12. 26 U.S.C. § 6331(a) and (b). Furthermore, it is undisputed that the function of the notice and demand requirement in § 6303(a) is to protect the taxpayer. Macatee, Inc. v. United States, 214 F.2d 717, 719 (5th Cir. 1954). Yet, the United States argues that § 6303(a) requires notice only to those parties whose names appear on the assessment list. Such an interpretation runs afoul of the plain language of the statute which specifically requires that notice be given each person liable for the unpaid tax, stating the amount due and demanding payment thereof. While the United States properly contends that § 6303(a) does not mandate perfect technical compliance so that belated or constructive notice of the assessment may suffice to render a third party liable, in the case before us absolutely no notice of the assessment was received by the Bank for almost six years until this civil suit was filed in 1983. No claim for constructive notice is made.

The Government also argues that failure to provide notice to the Bank under 26 U.S.C. § 6303(a) does not preclude this litigation because it is simply not practical to require the IRS to notify the person potentially liable for a tax within 60 days of assessment. Reading such a requirement into section 6303(a), the Government argues, will impose an impossible requirement on the IRS which will impose a great economic and investigatory burden, requiring the IRS to identify potentially liable third parties. The IRS takes the position that requiring the IRS to notify potentially liable third parties will undermine the purpose of § 3505(b) under which Congress intended to create an additional source for the recovery of unpaid withholding taxes. But as pointed out by the Bank, 26 U.S.C. § 6501(a) provides that the Government has three years from the time that a tax return is filed to impose an assessment. Therefore, the Government has three years to identify lenders who are potentially liable for an employer’s withholding and FICA taxes and to file an appropriate assessment before the 60 day notice period begins to run. Hence, we are not persuaded that requiring the IRS to comply with 26 U.S.C. § 6303(a) will unduly impede its ability to collect withholding and FICA taxes as Congress intended under § 3505(b). We also note that the notice provision of § 6303(a) is only one of the many limitations which Congress has placed on § 3505(b). Because section 3505(b) in effect imposes derivative liability on a lender for an employer’s withholding and FICA taxes, it is all the more necessary to insure that lenders receive adequate, prompt notice of a potential claim against them by the Government. United States v. Associates Commercial Corp., 721 F.2d 1094, 1099 (7th Cir.1983). We therefore conclude that instead of defeating Congress’s intent, as the Government argues, applying the notice provisions of § 6303(a) to lenders subject to section 3505(b) liability gives effect to that intent. If Congress had intended that the notice provisions of 26 U.S.C. § 6303(a) not apply to persons whom the Government seeks to hold liable under 26 U.S.C. § 3505(b) then Congress would have created such an exception in the statute.

Lastly, the Government argues that even if section 6303(a) required the United States to give notice to the Bank of the assessment made against Pennmount, failure to give such notice does not impair the United States’s right to sue the Bank under § 3505(b) for Pennmount’s employee withholding and FICA taxes. But as noted by the Seventh Circuit Court of Appeals in Associates Commercial, section 6303(a) itself does not indicate that the right to notice is dependent on which tax collection option the Government uses. 721 F.2d 1094, 1100. Section 6303(a) requires notice of the assessment of unpaid taxes in order to protect the person liable for paying taxes from surprise without regard to the collection mechanism that the government employs. Id. Nor are we persuaded by the Government’s argument that it has an independent common law right to collect a debt for tax liability independent of the assessment process for which no notice pursuant to § 6303(a) is required.

For the foregoing reasons, we will grant the motion of the Defendant Jersey Shore State Bank for summary judgment.

NOW, THEREFORE, IT IS ORDERED THAT:

1. The motion of the United States for summary judgment is hereby denied.

2. The motion of the Defendant Jersey Shore State Bank for summary judgment is hereby granted.

3. The Clerk of this Court shall enter judgment in favor of the Defendant Jersey Shore State Bank.

4. The Clerk of this Court shall close this file.


author: JOHN W. OLIVER, Senior District Judge.

text:
    James E. BARNETT, Sr., Plaintiff, v. INTERNATIONAL UNION, UNITED AUTOMOBILE AND AGRICULTURAL IMPLEMENT WORKERS OF AMERICA, and Ford Motor Company, Defendants.
    No. 81-0783-CV-W-1.
    United States District Court, W.D. Missouri, W.D.
    April 11, 1985.
    Buck, Bohm & Stein, Kansas City, Mo., for plaintiff.
    Colbert & Fields, Kansas City, Mo., for Ford Motor Co.
    Whiddle & Kraft, Kansas City, Mo., for UAW.
   MEMORANDUM AND ORDER

JOHN W. OLIVER, Senior District Judge.

This case pends on defendants’ motions for summary judgment filed February 4, 1985. Defendants contend that the decision of the Public Review Board (PRB) to reinstate plaintiff’s grievance is final and binding upon plaintiff and that, additionally, plaintiff is time-barred under the six-month statute of limitations for hybrid § 301/fair representation litigation adopted in Del Costello v. Teamsters, 462 U.S. 151, 155, 103 S.Ct. 2281, 2285, 76 L.Ed.2d 476 (1983).

Plaintiff opposes defendants’ revived, present motions for summary judgment and requests that the case be reinstated for “trial preparation and trial.” For reasons stated, infra, defendants’ motions for summary judgment will be granted.

There is no dispute as to the material facts necessary to rule defendants’ motions. On July 23, 1982 the parties filed a stipulation of facts to which were attached and incorporated seven documentary exhibits. Both plaintiff and defendants rely on the stipulations in support and in opposition to the pending motions. Accordingly, we make the following findings of fact:

1. Plaintiff’s employment at Ford Motor Company’s Claycomo, Missouri plant was terminated on May 5, 1980. (H’s 3, 4).
2. Thereafter plaintiff’s local union representative filed a timely written grievance. (11 6).
3. On or about July 1, 1980 Orville E. “Sonny” Catón, the Bargaining Chairman of plaintiff’s local, withdrew the grievance. (¶ 7).
4. Sometime in September 1980, plaintiff inquired of Mr. Catón about the status of his grievance and Mr. Catón advised him that his grievance had been withdrawn. Plaintiff told Mr. Catón that he had not been aware of the withdrawal and asked “why his grievance had been withdrawn and could Mr. Catón send him a letter stating that it had been withdrawn.” (118).
5. On October 14, 1980 plaintiff sent a certified letter to the local union “in regards to a phone call ... made on Thursday Oct. 8, 1980 in which at this time I spoke . .■. reference to the grievance that was filed about the middle of May 1980 [and] was withdrawn ... without my knowledge____ (¶ 9 and Exh. 5).
6. In “approximately October” 1980 plaintiff had conversations with the International Representative for the union, concerning the withdrawal of his grievance. “Mr. Bartlett proceeded to investigate both Mr. Barnett’s grievance and its handling. (1110).
7. On April 13, 1981, Mr. Bartlett advised Mr. Barnett by certified mail that his grievance had been withdrawn for lack of sufficient evidence to win the case.” (¶10).
8. Plaintiff filed suit in the Circuit Court of Clay County, Missouri on August 10, 1981. (If 11).

Plaintiff’s original suggestions in opposition to defendants’ motions for summary judgment, filed August 20, 1982, conceded that “Plaintiff’s cause of action accrued against both these Defendants when his grievance was withdrawn. Butler v. Local Union 823, 514 F.2d 442 (8th Cir.1975).” Furthermore, plaintiff, states he “has no quarrel with Defendants’ statement of the applicable [six months] statute of limitations [under Del Costello, supra].Pl. Sug. in Op., filed Feb. 15, 1985 at 5.

Plaintiff now contends, however, that “[i]n view of the fact that Mr. Bartlett apparently had authority to re-open Plaintiff’s grievance it was not until Plaintiff received Bartlett’s letter of April 13, 1981, that he was finally notified that his grievance had been finally withdrawn. The statute of limitations, therefore, should run from April 13, 1981____” Id. at 6. Both defendants contend that, at the very latest, the cause of action accrued and the statute of limitations began to run when plaintiff became aware of the fact his grievance had, in fact, been withdrawn during the course of his September 1980 conversation with Mr. Catón. The substance of that conversation was stated in paragraph 8 of the stipulation, upon which paragraph 4 of our findings of fact is based.

The dispositive issue is when plaintiff’s cause of action accrued and the six-month statute began to run. The cause of action accrued no later than September 1980, the time when plaintiff learned his grievance had been withdrawn on or about July 1, 1980. It was not necessary for plaintiff to have been actually aware that he had a claim, let alone for him to have received the certified letter as contended by plaintiff. To hold otherwise would extend limitation periods indefinitely. Wilcoxen, supra.

Here any question of plaintiff’s knowledge is foreclosed by plaintiff's certified letter of October 14,1980 which establishes that plaintiff was aware of and that he had again verbally complained to the local union bargaining chairman on October 8,1980 in regard to the withdrawing of his grievance. Under the facts agreed upon by the parties we find that plaintiff’s cause of action accrued at the very latest on October 14, 1981, the date on which plaintiff stated in writing that he knew that his May 5, 1980 grievance had been withdrawn.

The period from October 14, 1980 until August 10, 1981 was longer than the six-month limit announced in Del Costello. Furthermore, it is clear that the six-month statute of limitations must be applied retroactively to causes of action which predate Del Costello. See, e.g., Lincoln v. District 9, International Association of Machinists, 723 F.2d 627 (8th Cir.1983); accord, Craft, supra at 803 n. 4.

Because we find and conclude that plaintiff’s complaint is time-barred, we need not rule the other grounds alleged in defendants’ motion to dismiss.

Accordingly, it is

ORDERED that defendants’ motions for summary judgment should be and are hereby granted.

      . Defendants originally filed motions for summary judgment and supporting suggestions on August 6, 1982. On January 7, 1983 pursuant to agreement of the parties, this Court entered an order permitting plaintiff to pursue his available internal remedies and provided that "for good cause shown, this Court may reassert its jurisdiction ... at any time upon the application of any party." On November 9, 1984 plaintiff filed his application to the Court to reassert jurisdiction over this cause. Defendant Ford Motor Company filed suggestions in support of [original] motion for summary judgment or in the alternative to set briefing schedule on November 20, 1984 and on the same date defendant Union filed its application for status conference or in the alternative to set schedule for filing motion for summary judgment by defendants. Following conference with counsel for the parties, the parties proposed and this Court approved a briefing schedule which was completed on February 25, 1985.

      . ’ The Public Review Board is a panel of seven individuals, established under Article 32 of the UAW constitution and serves as the forum of “ultimate resort" for appeals brought to it under provisions of the UAW constitution. Affidavit attached as Exh. C to defendant’s sug. in support, of motion for summary judgment, filed August 6, 1982.

      . In pleadings filed November 20, 1984 defendant Ford inconsistently alleged that plaintiff failed to exhaust his administrative remedies under the collective bargaining agreement. Ford did not reiterate this contention in later pleadings and had it continued to assert the argument we would have found it to be without merit.

      . ¶ numbers refer to the paragraph in the stipulation providing the basis for the finding.

      . Butler, supra at 449-50; Wilcoxen v. Kroger Food Stores, 723 F.2d 626, 627 (8th Cir.1983) (citing Butler). Craft v. Automotive Petroleum & Allied Industries Employees Union Local 618, 754 F.2d 800, 803 (8th Cir.1985), is the latest case which applies Butler and Wilcoxen.

        . Gustafson v. Cornelius Co., 724 F.2d 75, 79 (8th Cir.1983), held that under the analysis in Butler, the appellant’s cause of action against both his employer and his union accrued when the union decided not to pursue appellant’s grievance about his discharge. The court took judicial notice of appellant’s unfair labor practice charge and the date therein on which appellant charged the union decided not to pursue his grievance. Id.