IN RE UNITED TAX GROUP, LLC, Debtors.
Pending before the Court is an appeal (D.I. 1) by appellants SWZ Financial II, LLC (“SWZ”) and Tax Help MD, Inc. (“Tax Help”) (“Appellants”) from the Bankruptcy Court's December 28, 2017 bench ruling and subsequent order (B.D.I. 162, 172) (“Order”) denying Appellants' motion for leave to commence state court proceedings (B.D.I. 118, 119) (“Barton Motion”) against George L. Miller, as Chapter 7 Trustee (“Trustee”) for the estate of United Tax Group, LLC (“Debtor”), and his counsel. On January 16, 2018, Appellants filed an emergency motion seeking expedited consideration of the appeal (D.I. 4) (“Emergency Motion”) on the basis that the statute of limitations to bring the action under Florida law will expire on March 13, 2018. On January 25, 2018, the Court granted the Emergency Motion and set an expedited briefing schedule. (D.I. 8) The merits of the appeal are fully briefed. (D.I. 9, 10, 11) The Court did not hear oral argument because the facts and legal arguments are adequately presented in the briefs and record, and the decisional process would not be significantly aided by oral argument. For the reasons that follow, the Court will affirm the Order.
On May 26, 2017, Appellants filed the Barton Motion, seeking permission to sue the Trustee and his bankruptcy counsel, Ciardi Ciardi & Astin (“Ciardi”), including for claims of conversion and tortious interference with business relationships against the Trustee. (D.I. 10 at 3) The Barton doctrine is traced to the Supreme Court's decision Barton v. Barbour, 104 U.S. 126, 128-29 (1881), and it “requires a party-in-interest to seek stay relief from the bankruptcy court in order to sue a bankruptcy trustee in another forum.” In re Day, 2014 WL 636797, *22 (Bankr. D.N.J. Feb. 7, 2014). “It is for the appointing court, in its discretion, to decide whether it will determine for itself all claims of or against the receiver, or will allow them to be litigated elsewhere.” In re VistaCare Group, LLC, 678 F.3d 218, 225 (3d Cir. 2012) (internal quotations and citation omitted). “Because a judgment against the trustee, whether ultimately satisfied out of the assets of the estate or out of the trustee's pockets, may affect the administration of the estate, the requirement of uniform application of bankruptcy law dictates that all legal proceedings that affect the administration of the bankruptcy estate be either brought in the bankruptcy court or with the permission of the bankruptcy court.” Id. at 228 (internal quotations and citation omitted).
Certain courts have recognized two exceptions to the Barton doctrine - that is, situations in which leave of the appointing court is not necessary - the “business exception” and the “ultra vires exception.” The “business exception” is codified in 28 U.S.C. § 959(a) and provides, in relevant part, that “Trustees, receivers or managers of any property, including debtors in possession, may be sued, without leave of the court appointing them, with respect to any of their acts or transactions in carrying on business connected with such property.” As the Trustee has never operated the Debtor's business, the parties agree that the business exception is not at issue. (See D.I. 9 at 2; D.I. 10 at 7) At issue in this case is the ultra vires exception. A classic example of the ultra vires exception is an action against a receiver who seizes or otherwise attempts to administer property that is not receivership property, but that actually belongs to a third party. See In re DMW Marine, LLC, 509 B.R. 497, 506 (Bankr. E.D. Pa. 2014) (citations omitted).
The Bankruptcy Court issued a bench ruling on December 28, 2017. (See B.D.I. 162) At the outset of the ruling, the Bankruptcy Court reviewed a recent Third Circuit case, VistaCare, which applied the Barton doctrine to trustees in bankruptcy (id. at 3:25-5:18); the Barton decision itself (id. at 5:19-8:11); and leading cases construing the ultra vires exception (id. at 8:12-14:10). The Bankruptcy Court then carefully reviewed its findings of fact, based on witness testimony, regarding the events that led to the Trustee's possession of the Debtor's mail. (See Id. at 15:14-20:25) The Bankruptcy Court held that: (i) the Third Circuit has not expressly recognized the ultra vires exception to the Barton doctrine (id. at 5:8-18); (ii) to the extent the Third Circuit would recognize such an exception, it would be limited to “seizures of property from a third party, and by that I mean taking by force” (id. at 14:12-15); and (iii) none of the three ways in which the Trustee came into possession of the Debtor's mail (by redirection via the post office, by picking up same at SWZ's invitation, or by SWZ voluntarily sending the Trustee the mail) constituted a seizure of the mail by force that would fall within the ultra vires exception to the Barton doctrine (id. at 19:9-20:25).
This Court has jurisdiction to hear appeals “with leave of the court, from interlocutory orders and decrees, of bankruptcy judges entered in cases and proceedings referred to the bankruptcy judges under section 157 of this title.” 28 U.S.C. § 158(a)(3). Appellants contend that the Order is a final order because denial of the Barton motion conclusively and finally resolved the dispute before the Bankruptcy Court with respect to such motion and no complaint or further actions raised in the Barton motion are currently before the Bankruptcy Court. The Court agrees the Order is final. The Court reviews the Bankruptcy Court's findings of fact for clear error and exercises plenary review over questions of law. See Am. Flint Glass Workers Union v. Anchor Resolution Corp., 197 F.3d 76, 80 (3d Cir. 1999). The Court must “break down mixed questions of law and fact, applying the appropriate standard to each component.” Meridian Bank v. Alten, 958 F.2d 1226, 1229 (3d Cir. 1992). “A finding is ‘clearly erroneous' when although there is evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed.” United States v. U.S. Gypsum Co., 333 U.S. 364, 395 (1948).
In VistaCare, a chapter 7 trustee was appointed to oversee the liquidation of an estate which consisted of a 12.2-acre parcel of land consisting of 45 lots, 44 of which were subdivided and zoned for mobile homes. VistaCare, 678 F.3d at 222. Lot 45 contained a retirement and assisted living facility. See Id. The lots were subject to several restrictions, including restriction on the sale of the 44 lots to the residents of the mobile homes. See Id. The trustee sold lot 45. See Id. Thereafter, and notwithstanding the restrictions, the trustee sold some of the 44 lots to residents of the mobile homes. See Id. Although the trustee obtained relief from the township to do so, the trustee did not notice the purchaser of lot 45. See Id. at 222-23. The purchaser of lot 45 asserted that the sale of the 44 lots in derogation of the restriction was unlawful and damaged the value of his property, and therefore sought leave to sue the trustee in Pennsylvania state court. Id. at 223. The bankruptcy court expressed doubt as to whether leave was needed, opining that Barton was “antiquated and probably not controlling in the Third Circuit.” Id. Nonetheless, the bankruptcy court performed a Barton analysis and granted the purchaser's motion to sue in state court. Id.


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ARTHUR N. HOLCOMBE & another vs. WILLIAM P. CREAMER & others.
The provisions of the statute creating the minimum wage commission, contained in St. 1912, c. 706, as amended, which are not mandatory as to rates of wages, contain no words of compulsion either upon employer or employee and do not restrain freedom of action by either employer or employee as to the wages to be paid or received, are not in violation of any of the articles of the Declaration of Rights nor in violation of the Fourteenth Amendment to the Constitution of the United States.
The provisions of the statute creating the minimum wage commission in no way exceed the limits of the right of the public to inquire into private affairs.
Nor are the provisions of that statute open to objection as an unconstitutional delegation of legislative power.
The facts which the minimum wage commission is authorized to ascertain and the evidence which it is empowered to seek from employers cannot form the basis of a criminal proceeding, because no crime is created and no prosecution is provided for.
It here was unnecessary to consider the provisions relating to newspapers contained in St. 1912, c. 706, s.s. 15, 16, of the statute creating the minimum wage commission, because those provisions were not before the court, but it was pointed out, that, even if those provisions should be found to transcend in any way the power of the Legislature under the Constitution, they are quite separable from the rest of the statute.
law would violate the provisions of our Constitution or the rights guaranteed by the Fourteenth Amendment to the Constitution of the United States.
PETITION, filed in the Supreme Judicial Court on January 7, 1916, by the members of the minimum wage commission established under St. 1912, c. 706, amended by St. 1913, cc. 330, 673, and St. 1914, c. 368, for an order of the court compelling certain witnesses to testify before the commission.
precedent to the establishment of the laundry wage decree by the minimum wage commission be reserved without prejudice for determination in any other proceeding. " The single justice granted this request. The counsel for the respondents then asked the single justice to rule that the minimum wage commission statutes St. 1912, c. 706, and acts in amendment thereof, were unconstitutional. The justice refused so to rule, and ordered process to issue as prayed for. At the request of the respondents he reported all questions of law involved for determination by the full court.
E. M. Sullivan, for the respondents.
A. D. Hill, (J. G. Palfrey & H. W. Brown with him,) for the petitioners.
business at a reasonable profit, shall be entitled to a review of such recommendations by the Supreme Judicial Court or the Superior Court according to equity procedure. If the court finds that the averments of the declaration are sustained, it may restrain the publication of the complainant's name, but not otherwise affect the determination of the commission. Section 8 provides for reinvestigation after a minimum wage has been established, with the same procedure as in an original inquiry. Section 9 authorizes the commission to issue special certificates for employment in certain instances to women physically defective. Section 10 confers upon the commission similar powers respecting wages paid to minors in any occupation in which the majority of employees are minors. Section 11 enjoins employers to keep registers of the names, addresses, occupation and weekly wages of women and minor employees and to submit them to the commission or director of the bureau of statistics on request. Section 12 relates to the gathering of statistics. Section 13 prohibits employers from discrimination against employees because of testifying or serving on a wage board or giving information concerning conditions of employment. Section 15 imposes a penalty upon "any newspaper refusing or neglecting to publish the findings, decrees or notices of the commission at its regular rates for the space taken," and s. 16 exonerates the members of the commission and publishers of newspapers from actions for damages for publishing the names of employers in accordance with the act unless such publication contains some wilful misrepresentation."
The facts in the case at bar are that proceedings were had in accordance with the terms of the act respecting wages paid female employees in laundries. A determination finally was made by the commission fixing a minimum weekly wage schedule varying according to experience in the work from $6 to $8. No review of this determination appears to have been sought in the courts. Publication thereof was made as provided in the act. Thereafter the commission proceeded to investigate wages actually paid to such employees in order to ascertain what employers were complying with its recommendations. The respondents, who are owners or officers of corporate owners of laundries, refused to furnish the required information. This proceeding is brought to compel them to do so.
invoking the power of the State to that end, so far as necessary. The whole act shows that "decree" used in this statute was not intended to have any such meaning.
Doubtless one aim of the act is to bring to bear the force of public opinion in support of the acceptance of the recommendations of the commission. This may be a kind of coercion. But it can go no further than ascertained and published facts induce members of the public as individuals to the action of giving or withholding custom or patronage. The public money could not be expended for the support of the commission unless its functions related to a public as distinguished from a private matter. It hardly can be pronounced a matter utterly devoid of common interest to ascertain whether and to what extent substantial numbers of working women are receiving wages "inadequate to supply the necessary cost of living and to maintain the worker in health." Restraint upon freedom of contract by women and children has been recognized as an appropriate exercise of the police power in numerous cases. See, for example, Berdos v. Tremont & Suffolk Mills, 209 Mass. 489; Commonwealth v. Riley, 210 Mass. 387; Desmond v. Young, 173 Mass. 90. The kind of constraint, which may arise from making public facts and conclusions at the expense of the Commonwealth, would involve other considerations if directed to affairs in which there could be no legitimate general interest directed to the rational promotion of the public health, order, morals and in a restricted sense the common welfare.
Merely for the purpose of illustrating the extent of the public interest in matters involving primarily and chiefly private concerns, numerous decisions are pertinent.
increasing the risk of loss, shall avoid the policy, Nugent v. Greenfield Life Association, 172 Mass. 278; and parties may be prohibited in casualty insurance from contracting that the insured must pay his loss before being permitted to recover from the insurer, Lorando v. Gethro, 228 Mass. 181.
Amendment to the Federal Constitution. McLean v. Arkansas, 211 U. S. 539. An act of Congress prohibiting the payment in advance of seamen's wages to be earned in interstate or foreign commerce does not violate constitutional freedom of contract. Patterson v. Bark Eudora, 190 U. S. 169. The validity of legislation penalizing the sale of cigarettes without license, Gundling v. Chicago, 177 U. S. 183, prohibiting contracts for options to sell or buy grain or other commodity at a future time, Booth v. Illinois, 184 U. S. 425, barring the employment of women more than a limited number of hours per day or week in manufacturing or mechanical establishments, Riley v. Massachusetts, 232 U. S. 671, Miller v. Wilson, 236 U. S. 373, forbidding contracts between employer and employee limiting the right of the latter to recover damages at common law, Chicago, Burlington & Quiney Railroad v. McGuire, 219 U. S. 549, and prescribing the particular method of compensation to be paid by employers to miners for the production of coal, Rail & River Coal Co. v. Ohio Industrial Commission, 236 U. S. 338, 349, has been sustained against attacks founded on interference with the freedom of contract secured by the Fourteenth Amendment to the United States Constitution. A statute imposing an absolute duty upon the owner to provide safeguards for machinery in manufacturing establishments has been held to prohibit a contract against liability arising from a failure to comply with the statute even with one expressly employed to furnish and install such safeguards. Bowersock v. Smith, 243 U. S. 29. In most if not all of these cases it also was held that the statutes did not deprive anybody of property without due process of law, or of the equal protection of the law.
Reference is made to these authorities solely to indicate the range of the public interest respecting matters of private relations, and not to intimate whether they afford any foundation for a compulsory minimum wage law. These decisions rest at bottom on the proposition that the public welfare in respect to health, morals and safety bears so close a relation to the subjects dealt with in the several statutes as to justify legislative regulation.
than enough to provide them support in healthful surroundings as to food, clothing and home and under conditions suitable for the normal activity of the moral faculty. In its broad aspects this general subject is one having some relation to the welfare of the community. The ascertainment of the facts respecting this subject at a given time and the making of recommendations for the remedy of evil conditions, if found to exist, by a temporary commission acting under the sanction of public authority, would be a lawful expenditure of public moneys. It does not seem to us unreasonable to contend that wages insufficient for the bare essentials of the cost of support and the nourishment of the health of women laborers have such relation to the public morals, good order and health that the dissemination of information upon the subject of such wages from time to time by a permanent commission is within the power of a Legislature clothed, as is our General Court, with full power and authority to make "all manner of wholesome and reasonable" statutes not repugnant to the Constitution. The circumstance that the commission further is directed to make recommendations as to wages to be paid, does not add an element of compulsion in law in connection with all the other factors. The recommendation in the nature of things must correspond more or less closely to the facts found. The members of the public are free to decide from the facts stated and their own experience whether the conclusions of the commission are just and wise or oppressive and vain, and to act according to their own conceptions of their private advantage and the public welfare. It is not for us to pass upon the question whether such legislation is wise. Unless it can be said to bear no relation whatever to legitimate public interests or to be a palpable invasion of private right, liberty and property without constitutional warrant, the decision of the General Court as embodied in the statute must stand.
United States, said Mr. Justice Harlan, "embraces the right to be free in the enjoyment of one's faculties; 'to be free to use them in all lawful ways; to live and work where be will; to earn his livelihood by any lawful calling; to pursue any livelihood or avocation, and for that purpose to enter into all contracts that may be proper.' Allgeyer v. Louisiana, 165 U. S. 578, 589." Lottery Case, 188 U. S. 321, 357. Booth v. Illinois, 184 U. S. 425, 428, 429. Adair v. United States, 208 U. S. 161, 173. Coppage v. Kansas, 236 U. S. 1, 14, Hitchman Coal & Coke Co. v. Mitchell, 245 U. S. 229, 251. "Liberty" wherever it occurs in the Declaration of Rights of the Constitution of this Commonwealth has at least as comprehensive a meaning. Wyeth v. Cambridge Board of Health, 200 Mass. 474, 478. O'Keeffe v. Somerville, 190 Mass. 110. Gleason v. McKay, 134 Mass. 419. Opinion of the Justices, 208 Mass. 619, 622. Bogni v. Perotti, 224 Mass. 152. But these guarantees are subject to the police power. Without undertaking to define that power, it comprehends rational action by the legislative department for the protection of the public health, morals and good order. These guarantees do not go to the extent of protection against publicity respecting contracts with women and minors, which the consensus of opinion of the Commonwealth, as formulated in a statute requiring impartial investigation by a public board, declares wanting in affording to them necessary support. Assuming that these and other constitutional safeguards protect the individual in the enjoyment of privacy, they do not afford immunity against police regulations requiring knowledge touching subjects which may within reason be thought to promote the health, safety and morals of the community.
pensation act, which abolished the defences of assumption of risk, contributory negligence, and the fellow servant doctrine as to employers who do not become subscribers, but left those rules of law in force without the benefit of the employers' liability act as to employees who elect to rely upon their common law rights. Yet that act has been held valid as not depriving the employer or employee of property without due process of law, limiting unduly freedom of contract, or interfering with other constitutional rights. Young v. Duncan, 218 Mass. 346. Opinion of the Justices, 209 Mass. 607.
As has been pointed out, the present statute does not impair liberty of contract. Absolute freedom to make any contract respecting wages is left untouched. Notwithstanding its terms, still "An employer has a right to engage all persons who are willing to work for him, at such prices as may be mutually agreed upon; and persons employed or seeking employment have a corresponding right to enter into or remain in the employment of any person or corporation willing to employ them." Vegelahn v. Guntner, 167 Mass. 92, 97. The right of every man is undisturbed "to determine what branch of business be will pursue, and to make his own contracts with whom be pleases and on the best terms be can." Carew v. Rutherford, 106 Mass. 1, 14. Opinion of the Justices, 163 Mass. 589, 595. Commonwealth v. Perry, 155 Mass. 117.
There is no undue invasion of the right of privacy assuming that that is an element of the constitutional right to seek and obtain "safety and happiness."
The principles on which the boycott and blacklist are held unlawful, as set forth in Pickett v. Walsh, 192 Mass. 572, Burnham v. Dowd, 217 Mass. 351, Cornellier v. Haverhill Shoe Manufacturers' Association, 221 Mass. 554, and other decisions, have no application to the official publications authorized by this statute.
The statute does not take property of the employer for the reasons already stated.
declared in Opinion of the Justices, 220 Mass. 627, 631, Cotting v. Kansas City Stock Yards Co. 183 U. S. 79, 111, and Barrett v. Indiana, 229 U. S. 26, 30, are not applicable.
The analysis of the act already made demonstrates that it is not open to objection as an unconstitutional delegation of legislative power. In this respect the statute is well within the authority of numerous decisions. Brodbine v. Revere, 182 Mass. 598. Commonwealth v. Kingsbury, 199 Mass. 542. Commonwealth v. Sisson, 189 Mass. 247. Commonwealth v. Hyde, 230 Mass. 6. Boston, petitioner, 221 Mass. 468. It is plain also that it does not confer judicial powers upon the commission. Nelson v. State Board of Health, 186 Mass. 330. Dinan v. Swig, 223 Mass. 516, 520. It follows that the statute does not violate art. 30 of the Declaration of Rights. Boston v. Chelsea, 212 Mass. 127.
There is no criminal element about the act so far as it concerns the employer. The facts which the commission is authorized to ascertain and the evidence which it is empowered to seek from employers cannot form the basis of a criminal proceeding, because no crime is created and no prosecution is provided for. Revealing the information or answering the questions required by the statute cannot subject the employer to penalty or forfeiture, and does not expose him to imputation of crime. Therefore the constitutional prohibition against a subject being " compelled to accuse, or furnish evidence against himself " is not violated. Art. 12 of the Declaration of Rights. Commonwealth v. Willard, 22 Pick. 476, 477. It follows that there is no foundation for the contention of the respondents that they are subjected to punishment without proper notice, or complaint, or hearing, or trial by jury.
Legislature under the Constitution, they are quite separable from the rest of the act. It cannot be thought that the rest of the statute would not have been enacted without them, and therefore the constitutionality of the sections here assailed would not be affected. Ashley v. Three Justices of the Superior Court, 228 Mass. 63, 81, and cases there collected. Brazee v. Michigan, 241 U. S. 340.
The act as it has been interpreted does not seem to us to violate any provision of the Fourteenth Amendment to the United States Constitution. The reasons upon which this decision rests, as already stated, appear to us to make this conclusion clear. Holding ourselves strictly bound by the decisions of the United States Supreme Court upon which the respondents rely, such as Coppage v. Kansas, 236 U. S. 1, 17, 18, Adair v. United States, 208 U. S. 161, Smith v. Texas, 233 U. S. 630, Lochner v. New York, 198 U. S. 45, (see Bunting v. Oregon, 243 U. S. 426,) Japanese Immigrant Case, 189 U. S. 86, 100, Loewe v. Lawlor, 208 U. S. 274, Gompers v. Bucks Stove & Range Co. 221 U. S. 418, 437, 438, 439, Hawkins v. Bleakly, 243 U. S. 210, Cummings v. Missouri, 4 Wall. 277, 320, 327, Louisville & Nashville Railroad v. Garrett, 231 U. S. 298, 307, and Yick Wo v. Hopkins, 118 U. S. 356, none of them in our opinion are at variance with the result here reached.
The grounds upon which this decision is put make wholly unnecessary consideration of the question whether a mandatory minimum wage law would violate the provisions of our Constitution. They also render superfluous a prophecy whether such an act will be held by the United States Supreme Court to be contrary to the rights and liberties guaranteed by the Fourteenth Amendment to the United States Constitution. See, in this connection, Stettler v. O'Hara, 69 Ore. 519, affirmed by an equally divided court, Mr. Justice Brandeis taking no part in the consideration and decision, in Stettler v. O'Hara, 243 U. S. 629, State v. Crowe, 130 Ark. 272, Williams v. Evans, 139 Minn. 32, and Larsen v. Rice, 171 Pac. Rep. 1037.

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On May 13, 2015, a three-judge panel of the Federal Circuit issued its long-awaited opinion on remand in Akamai Techs., Inc. v. Limelight Networks, Inc. This decision came in the wake of the Federal Circuit’s en banc decision and Supreme Court review in the same case. In August 2012, the en banc court had held that the predicate act of infringement for induced liability under § 271(b) did not need to qualify as direct infringement under § 271(a). In June 2014, the Supreme Court unanimously rejected that analysis of § 271(b) as “fundamentally misunderstand[ing] what it means to infringe a method patent.” Limelight Networks, Inc v. Akamai Techs., Inc., 134 S. Ct. 2111, 2117 (2014).
On remand, the Federal Circuit addressed liability for direct infringement of a method claim under § 271(a). Akamai Techs., Inc. v. Limelight Networks, Inc., Nos. 2009-1372, 2009-1380, 2009-1416, 2009-1417, slip op. at 8. The majority opinion, authored by Judge Linn and joined by Judge Prost, held that under principles of vicarious liability, such direct infringement occurs only when all of the claimed steps are performed by or attributed to a single entity (i.e., the single-entity rule). Id. at 15-16. According to the majority, vicarious liability includes principal-agent relationships, contractual arrangements beyond those typically found in arms-length seller-customer agreements, and joint enterprises. Id. at 18-19.
The majority rejected the argument by Akamai and the dissent that § 271(a) incorporates joint tortfeasor liability. Id. at 9. The majority explained that § 271(b) and (c) define the only situations “in which individuals not completing an infringing act under § 271(a) could nevertheless be liable.” Id. at 11-12. It stated that adopting joint tortfeasor liability under § 271(a) would render § 271(b) and (c) redundant. Id. at 13-15. The majority also expressed concern that including joint tortfeasors in § 271(a) would expose unwitting customers to liability. Id. at 23-24.
On the facts of the case, because Limelight’s customers did not perform the claimed method steps as agents for Limelight or under contractual obligation to Limelight, the Court held that Limelight is not vicariously liable for those customers’ actions. Id. at 26-28. Consequently, it affirmed the District Court’s post-trial grant of judgment as a matter of law of no infringement. Id. at 27-28.
Judge Moore dissented, arguing that the majority “divorces patent law from mainstream legal principles by refusing to accept that § 271(a) includes joint tortfeasor liability” and stating that the majority “creates a gaping hole in what for centuries has been recognized as an actionable form of infringement.” Akamai Techs., Inc., dissent slip op. at 1. She stated that the single entity rule “is a recent judicial creation” and that the majority’s opinion “is inconsistent with the common law, the plain language of the Patent Act, and centuries of patent law . . .” Id. at 2, 4. Looking to the text of § 271(a) itself, Judge Moore noted that the plain language of “whoever” includes any person or persons, and that because "whoever" is used elsewhere in the Patent Act to refer to multiple persons, it should be construed in the same way in § 271(a). Id. at 9-10.
The dissent concluded with the statement that “to do either what the majority proposes or what I propose requires en banc action, as it is admittedly at odds with binding precedent.” Id. at 31.
This decision highlights the continuing and vigorous differences of opinion among members of the bench and bar about the basic concept of joint or divided infringement. Moreover, the majority’s reference to “joint enterprise” as a potential basis for liability under § 271(a) hints at the possibility of further evolution of the doctrine. These circumstances raise the question of if and when the en banc Federal Circuit and the U.S. Supreme Court will revisit this issue.


UNITED STATES OF AMERICA, Plaintiff, v. TIMOTHY WEDDLE, Defendant.
On November 7, 2011, Timothy Weddle, pro se, filed a motion under 18 U.S.C. § 3582(c)(2) for reduction of sentence based on retroactive guideline Amendment 750, effective November 1, 2011, concerning cocaine base ("Crack") (Doc. 806). The Court appointed counsel to represent Weddle on the issue of a sentencing reduction in light of the amendment to the United States Sentencing Guidelines, and Counsel has now moved to withdraw on the basis that he can make no non-frivolous arguments in support of a reduction pursuant to 18 U.S.C. § 3582(c) (Doc. 822). See Anders v. California, 386 U.S. 738, 744 (1967). Thereafter, the Court allowed Weddle an opportunity to respond to the motion to withdraw; he did so on February 1, 2013 (Doc. 826).
Section 3582(c)(2) allows the Court to reduce a defendant's previously imposed sentence where "a defendant . . . has been sentenced to a term of imprisonment based on a sentencing range that has subsequently been lowered by the Sentencing Commission pursuant to 28 U.S.C. 994(o)." In doing so, the Court must consider the factors set forth in 18 U.S.C. 3553(a) and must ensure that any reduction "is consistent with applicable policy statements issued by the Sentencing Commission." 18 U.S.C. § 3582(c)(2). Thus, a defendant urging a sentence reduction under § 3582(c)(2) must satisfy two criteria: (1) the Sentencing Commission must have lowered the applicable guideline sentencing range, and (2) the reduction must be consistent with applicable policy statements issued by the Sentencing Commission. If the defendant cannot satisfy the first criterion, the Court has no subject matter jurisdiction to consider the reduction request. United States v. Lawrence, 535 F.3d 631, 637-38 (7th Cir. 2008); see United States v. Forman, 553 F.3d 585, 588 (7th Cir.), cert. denied sub nom McKnight v. United States, 129 S.Ct. 1924 (2009).
Weddle cannot satisfy the first criterion of the statute because he was not "sentenced to a term of imprisonment based on a sentencing range that has subsequently been lowered by the Sentencing Commission pursuant to 28 U.S.C. 994(o)." 18 U.S.C. § 3582(c)(2). The Sentencing Commission issued U.S.S.G. Amendment 750, effective November 1, 2011, intending to alter the disparity in sentences involving crack cocaine and sentences involving powder cocaine. Weddle, however, was sentenced on his base level set forth in U.S.S.G. § 4B1.1 ("Armed Career Offender"), not his base offense level set forth in U.S.S.G. § 2D1.1. Thus, his guideline range has not been lowered, and he cannot satisfy the first criterion under 18 U.S.C. § 3582(c)(2) for obtaining a sentence reduction. See United States v. Williams, 694 F.3d 917, 918 (7th Cir. 2012) (Career offenders are not eligible for crack disparity reductions.). The Court lacks subject matter jurisdiction to consider Weddle's reduction request. See Forman, 553 F.3d at 588; Lawrence, 535 F.3d at 637-38.
Moreover, even if Weddle was not a "career offender" and not sentenced accordingly, he would still be ineligible to have his sentence reduced. Amendment 750 and the Fair Sentencing Act of 2010 pertain only to offenses regarding crack cocaine. But Weddle was sentenced for a crime involving powder cocaine only; in excess of 5 but less than 15 kilograms of powder cocaine. Consequently, Weddle's guideline range has not been lowered and he is not entitled to a benefit from Amendment 750 on that basis either. His motion is frivolous.
Accordingly, the Court GRANTS counsel's motion to withdraw (Doc. 822) and DISMISSES for lack of jurisdiction the motion for sentence reduction (Doc. 806).


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By an Act of Congress of February 16, 1889, the President was authorized to allow Indians residing on reservations to cut and dispose of dead timber, standing or fallen, on such reservations, for the sole benefit of such Indians. Defendants made five different contracts with individual Indians for the cutting of an aggregate of 2,750,000 feet. As a matter of fact, they cut and removed 17,000,000 feet. Held: that as to such excess, both the Indians and the defendants were trespassers.
The objection that the several defendants were not responsible for the acts of each other is one which should be taken at the trial, and if not so taken, cannot be made available upon writ of error from this Court.
In designating the number of feet to be cut under certain contracts, the use of the words "about" or "more or less" will not justify the cutting of a quantity materially and designedly greater than the amount provided for in the contract.
The fact that the parties themselves disregarded the amount stipulated in the contract, and the further fact that the agent of the Indian Department, who personally directed what timber should be cut and supervised such cutting, assented to their construction of the contract, is no excuse for a material departure from the terms of a contract, which had been approved by the Commissioner of Indian Affairs, acting under the authority and regulations of the President.
With the contracts before them, the agents of the government had but one duty, and that was to see that they were honestly and faithfully carried out according to their spirit and letter.
Damages were properly assessed at the value of the logs as they were banked upon the streams and lakes near where they were cut.
Defendants, being either willful trespassers or purchasers from such trespassers, were held not to be entitled to credit for the labor expended upon the timber, but were liable for its full value when seized, although if the trespass had been the result of inadvertence or mistake, and the wrong was not intentional, the stumpage value of the timber when first cut would be the proper measure of damages.
The defendants were held not to be entitled to credit for a percentage of the stipulated compensation paid to the Indian Department as trustee for the benefit of helpless Indians.
In civil cases, the United States recover the same costs as if they were a private individual.
The reporter's fee for a transcript of the record used by the plaintiff in preparing its bill of exceptions on appeal should not be taxed as costs.
This was an action in the nature of trover begun in the Circuit Court for the District of Minnesota by the United States against the Pine River Logging & Improvement Company, a corporation (hereinafter called the logging company), Joel B. Bassett, and William L. Bassett, copartners under the name of J. B. Bassett & Co., and John L. Pillsbury (for whom his administrators have since been substituted) and Charles A. Smith, copartners as C. A. Smith & Co., defendants, to recover damages for an alleged wrongful entry by the defendants upon an Indian reservation, and the cutting and removing of certain pine timber thereon.
delivered to the defendants, who thereupon caused the logs to be floated down the river to the City of Minneapolis, to be there manufactured into lumber, which they had subsequently sold and appropriated the proceeds thereof to their own use.
as principal, and the other by the firm of J. B. Bassett & Co. It was next set up in the answer of the logging company that the United States had accepted the bond in lieu of the logs, and that, relying upon said acts of the complainant, the logging company had disposed of the logs to others. It was then again specifically set up in the answer, as to the fourth, seventh, and eighth counts of the complaint, that the claim of the United States was solely against J. B. Bassett & Co., and not against the logging company; that the claim set up in the first, second, third, fifth, and sixth counts was solely against the logging company, and that there was therefore a misjoinder of causes of action in improperly uniting in one complaint causes affecting solely the logging company and other causes of action affecting solely the firm of J. B. Bassett & Co.
A separate answer was filed by the firm of C.A. Smith & Co., who admitted receiving from the logging company a certain amount of the pine saw logs described in the complaint, and that they manufactured the same into lumber, and disposed of it in the ordinary course of their business; that the amount of the lumber so manufactured was 15,628 feet, and that the value of the same was not greater than the sum of $132.84; that the defendants, in receiving and manufacturing said logs, honestly believed that the logging company was the owner and entitled to dispose of them. They also pleaded a misjoinder and nonliability for the acts of the other defendants.
The answer of the logging company admitted in substance that under and by virtue of the three contracts between itself and the Indians, it had received into its possession, converted into lumber, and ultimately sold pine saw logs cut upon Indian reservations which had yielded in the aggregate 13,463,400 feet. The defendants, J. B. Bassett & Co., likewise admitted that, under two contracts with the Indians, they had received saw logs which had yielded in the aggregate 4,136,860 feet of lumber.
contracts and a large portion of the logs cut under other contracts were cut from pine trees that were alive and standing, while the contracts authorized only the cutting of dead and down timber.
The case being at issue upon these pleadings, the logging company and Bassett & Co. moved for a judgment against the government upon the pleadings for the sole reason, as stated in the motion, that on the facts admitted, the plaintiff was not entitled to maintain an action of trover or conversion against these defendants, or either of them, for the matters and things set out in said cause of action; but that the remedy of the government was upon the bonds given when the logs were surrendered to the defendants. This motion was sustained by the circuit court, and a judgment entered against the United States which, however, was reversed by the court of appeals, holding that neither of the bonds became available to the United States until a judgment had been obtained in its favor. The case was remanded for a new trial. 78 F. 319.
Upon the case's being sent back to the circuit court, there was a second trial, which also resulted in a judgment in favor of the defendants. The court of appeals reversed this judgment upon exceptions taken by the United States at the trial. 89 F. 907.
A third trial of the case resulted in a verdict, by direction of the court, in favor of the United States for $88,269.94. This judgment was affirmed by the circuit court of appeals. Whereupon a writ of error was sued out from this Court.
selected a quality of timber wholly unauthorized by the contracts or by the acts of Congress, or the regulations of the President in connection therewith. The questions to be considered arise upon objections to the testimony and the instruction of the court to the jury to return a verdict for the plaintiffs.
"That the President of the United States may, from year to year, in his discretion, under such regulations as he may prescribe, authorize the Indians residing on reservations or allotments, the fee to which remains in the United States, to fell, cut, remove, sell, or otherwise dispose of the dead timber standing or fallen, on such reservation or allotment for the sole benefit of such Indian or Indians. But whenever there is reasonable cause to believe that such timber has been killed, burned, girdled, or otherwise injured for the purpose of securing its sale under this act, then in that case such authority shall not be granted."
It will be observed that, by this statute, no general authority is given to Indians to cut timber upon their reservations. The act contemplates that the authority shall be temporary only, "from year to year," and it is further limited to "dead timber standing or fallen," and that it shall be disposed of solely for the benefit of the Indian or Indians to whom the authority is given.
"to the end that no green or growing timber may be cut, and that no live trees are damaged in any manner so as to cause them to die; . . . and to inspect the scaling of the logs;"
that, with the exception of a superintendent and of foremen and blacksmiths, all white labor was to be excluded from the reservation; that the logs cut should be sold at public sale to the highest bidder, either by auction or by calling for sealed proposals at the discretion of the Secretary of the Interior, after at least two weeks' notice by publication in the newspapers, and no sale of the logs should be valid until approved by the Commissioner of Indian Affairs, and that ten percent of the gross proceeds derived from such sale of the logs should go to the stumpage or poor fund of the tribe, from which the old, sick, and otherwise helpless might be supported.
The timber in this case was cut under five different contracts made between individual Indians and the defendants, all of which were limited to dead and down timber, to be cut during the season of 1891 and 1892. The first provided for 250,000 feet; the second for 500,000 feet; the third for 500,000 feet; the fourth for 1,000,000 feet, and the fifth for 500,000 feet. The whole amounted to 2,750,000 feet. These contracts were approved by the Commissioner of Indian Affairs, and, although in some of their provisions they differed from the general regulations above stated, which provided for a public sale of logs at auction or under sealed proposals, they must be regarded as superseding those regulations in that particular, and as constituting new regulations approved by the President and Commissioner of Indian Affairs.
quantity of dead and down timber under the superintendence of a properly qualified white man, and to use the proceeds for their support in exact proportion to the scale of logs banked by each, provided that ten percent of the gross proceeds should go to the stumpage or poor fund of the tribe, from which the old, sick, and otherwise helpless might be supported. The rights of the government to the unimpaired value of the land and to the standing timber were carefully guarded by the proviso that no green or growing timber should be cut, and no live trees damaged, so as to cause them to die, that they might be marketed under the provisions of the act. Nothing can be plainer than that there was no intention on the part of Congress or the President to authorize promiscuous logging operations, or the felling of live standing timber, or that a few Indians should be permitted to monopolize the proceeds, but that they should be divided among the individuals of the tribe in proportion to the scale of the logs banked by each.
1. The first assignment of error takes exception to the action of the circuit court in instructing the jury to return a verdict for the United States, because it required the logging company to become responsible for, any pay the obligations of, Bassett & Co., and required that firm to pay the obligations of the logging company, and also required the firm of C. A. Smith & Co. to pay the obligations both of the logging company and Bassett & Co., when there was no evidence in the case to justify the court in holding any of the parties liable for the obligations of the others, or if such evidence existed at all, it was a question of fact for the jury.
which the court denied, and plaintiff excepted, and thereupon the court instructed the jury to return its verdict in favor of the plaintiff, to which an exception was also taken. No such objection upon the ground of misjoinder was taken in the assignment of errors filed in the circuit court of appeals to review that judgment, or in the original assignment of errors filed in this Court and incorporated in the record. It would appear that the objection was made on behalf of the defendants in the first trial of the case, inasmuch as it is mentioned in the first opinion of the circuit court of appeals. 78 F. 320. It will be remembered that, upon this first trial, the case was submitted upon the pleadings alone, defendants taking an objection in the nature of a demurrer that, upon the facts admitted by the pleadings, the government could not recover, but was relegated to an action upon the bonds given when the logs were surrendered to the defendants. The circuit court of appeals held that the complaint did not disclose a misjoinder of causes of action, and also that the judgment rendered by the circuit court was in such form that, if sustained, it would bar a subsequent suit against either of the defendants for a wrongful conversion of the property. The point was therefore held not to be well taken, and from that time seems to have been waived or abandoned, as it does not appear to have been raised upon the second or third trials.
This clearly precludes the defendants from raising the question at this stage of the case. It is well settled in this Court that an objection that the evidence does not support a joint action against all of the defendants -- in other words, a variance between the pleadings and proofs -- is one which should be taken at the trial, and cannot be raised for the first time in the appellate court. In Roberts v. Graham, 6 Wall. 578, it was said that an objection of variance between the allegations and proofs must be taken when the evidence is offered, and will not even be available upon motion for new trial. See also O'Reilly v. Campbell, 116 U. S. 418; Patrick v. Graham, 132 U. S. 627; Boston & Albany R. Co. v. O'Reilly, 158 U. S. 334.
Indians were separately made by each defendant, and their accounts of logs cut and money paid were kept distinct from each other, and each averred that it had nothing to do with the contracts of the other, two of the defendants testified that the logs cut under the five contracts were equally divided between C. A. Smith & Co. and J. B. Bassett & Co., and not according to the amounts named in the contracts, that the logging company was practically controlled by C. A. Smith & Co., and that the logging operations were conducted under the supervision of three men who were acting as agents of these firms. We do not undertake to say that there was not evidence upon this point which, if the attention of the court had been called to it, should not have been submitted to the jury, but, as the question was not made in the circuit court or in the court of appeals it is too late to raise it upon a writ of error from this Court.
2. By the second assignment, it is insisted that the court should either have instructed the jury, or left to them to determine, that under the contracts between the logging company and Bassett & Co. respectively, on the one hand, and the Indians, on the other, as those contracts had been construed and acted upon by all parties in interest, including the United States, these companies respectively had a good title to all the dead and down timber delivered to them by the Indians under the contracts, without regard to the specific quantity of timber mentioned therein.
In two of the contracts, the designation of the quantity of timber to be cut is preceded by the word "about," and in the other three is followed by the words "more or less." It is contended that, by the use of these words, the contracts were susceptible of a wide latitude of construction, and if the parties themselves disregarded the limitations, the court, in interpreting those contracts, will adopt the construction given them by the parties interested.
"more or less, as shall be determined to be necessary by the post commander, for the regular supply, in accordance with army regulations, of the troops and employees of the garrison of said post."
It was held that the latter were the determinative words of the contract, and the quantity, designated at 880 cords, was to be regarded merely as an estimate of what the officer making the contract at the time might suppose would be required, and that the government was not liable for more than forty cords of wood which was accepted by the officers. So, in Watts v. Camors, 115 U. S. 353, it was held that, where a ship was described in a charter party as of the burden of 1,100 tons "or thereabouts," registered measurement, the charterer was bound to accept her although her registered measurement, unknown to both parties, was 1,203 tons.
But, upon the other hand, if the agreement be to manufacture, furnish, or deliver certain property not then in existence or to be taken from a larger quantity, the addition of the words "more or less" will be given a narrow construction, and held to apply only to such accidental or immaterial variations in quantity as would naturally occur in connection with such a transaction. Norrington v. Wright, 115 U. S. 188.
authorizing the cutting of an unlimited quantity, so long as the price paid was that stipulated in the contract.
Defendants' main reliance, however, is upon the construction of these contracts by the parties themselves, including the United States, and in support of their position they invoke the general rule that where both parties to a contract have by their subsequent conduct given it a construction different from what the law might have given it, the courts will adopt that construction, and that the statutes under which the cutting was done, the correspondence between the Secretary of the Interior and the President upon the subject, the regulations which the latter adopted for carrying the act into effect, and the conduct of the parties to the contracts tend to show that they were intended to authorize the removal of all the dead and down timber on the public land described in them. Undoubtedly there is some support for the proposition in the disregard by the parties to the contract of the limitations of quantity to be cut; but upon the statute and regulations we put, as before stated, an entirely different interpretation. The argument overlooks the fact that the Indians had no right to the timber upon this land other than to provide themselves with the necessary wood for their individual use or to improve their land, United States v. Cook, 19 Wall. 591, except so far as Congress chose to extend such right; that they had no right even to contract for the cutting of dead and down timber unless such contracts were approved by the Commissioner of Indian Affairs; that the Indians in fact were not treated as sui juris, but every movement made by them, either in the execution or the performance of the contract, was subject to government supervision for the express purpose of securing the latter against the abuse of the right given by the statute. It is true that, as a matter of fact, the work was done under these contracts under the superintendence of a government agent who personally directed what timber should be cut, and when the timber had been cut and a final settlement was made with the Indians, the amounts found to be due them were paid to the Indian agent, who, with the contracts before him, must have known when he received his payments the quantity of timber which had been cut under the different contracts.
It is unnecessary to inquire what excuses may be made by these officers for thus indirectly approving the construction put upon the contracts by the parties interested, since they could not bind the government in this particular. With the contracts before them, they had but one duty, and that was to see that they were honestly and faithfully carried out according to their spirit and letter. No authority had been given them to extend the contracts either as to the quantity or quality of timber to be cut. In fact, they were placed in charge of the operations for the express purpose of seeing that there should be no violation of the contracts in these particulars. They, as well as the parties thereto, were equally bound by its provisions. No discretion had been given them to waive or alter the contracts in any particular. No conduct of theirs can estop the government from asserting its rights to recover for timber cut beyond the quantity and quality specified in the contract. Lee v. Munroe, 7 Cranch 366; The Floyd Acceptances, 7 Wall. 666; Whiteside v. United States, 93 U. S. 247. We are therefore of opinion that the defendants cannot take refuge under the consent or acquiescence of the government agent in the disregard of these contracts.
of the act to the exclusion of the many. It will be observed that, while the defendants were interested in all these contracts, care was taken that one contract should not be made for the delivering of the gross amount of logs, but that five different contracts should be entered into with different Indians, undoubtedly for the very purpose of preventing a monopoly by a single person, the largest of these contracts being only for a million feet.
3. The third assignment of error is directed to the proper measure of damages, which were assessed at the value of the logs as they were banked upon the streams and lakes in the neighborhood of where they were cut. It is insisted that the proper measure was the value to the government of the timber before the Indians or the contractors had, by their labors, added to that value.
To determine the proper measure of damages, it is necessary to consider the exact relation of the defendants to this timber. They were certainly not innocent purchasers for value of the logs that were cut. All the logs were cut under contracts with individual Indians, by which the latter had agreed to cut, haul, and deliver to the defendant, upon the Mississippi River or waters tributary thereto, an aggregate of 2,750,000 feet of dead and down timber, defendants agreeing to pay to the Indian Department ten percent of the purchase price as stumpage for such timber, which should be deducted from the price of $4 per thousand agreed to be paid. As a matter of fact, there were delivered on these contracts over 17,000,000, instead of 2,750,000 feet contracted for, a large proportion of which seems to have been cut from green and growing timber, though the quality of the timber is not in issue here. Defendants could not have failed to know that they were paying for a very much larger amount than they had agreed to buy, or than the Indians had any power to sell. They knew that their contracts had been approved by the Commissioner of Indian Affairs upon the basis of a certain quantity of dead and down timber, and that, if the agent of the Indian Department had acquiesced in the amount and quality of timber actually cut, he had exceeded his authority, and his acts were not binding upon the government.
Granting that the question that what constituted "dead and down" timber might be the subject of a bona fide dispute, there was no question but that the amount of timber received grossly exceeded the amount contracted for, and that an agreement to cut 2,750,000 feet could not be glossed over by the words "about" or "more or less" in any such way as to cover 17,000,000 feet.
property than his vendor had. It is not a case where an innocent purchaser can defend himself under that plea. If it were, he would be liable to no damages at all, and no recovery could be had. On the contrary, it is a case to which the doctrine of caveat emptor applies, and hence the right of recovery in plaintiff."
The cases involving this distinction and in line with the Woodenware case are abundant both in the federal and state courts, and are too numerous even for citation. We do not see that the defendants are in any better position by the fact that the contracts were approved by the Commissioner of Indian Affairs, since it was not what was done in pursuance of these contracts, but what was done in disregard of them, which lies at the basis of plaintiff's action. Had the contracts been adhered to, clearly there could have been no recovery. We are not called upon to explain the conduct of the government agent who superintended the cutting of this timber. It is sufficient to say, as already stated, that his acts in excess of his authority, which must have been well known to the defendants, afford them no protection. To say that all parties, including the Indians, the government agent, and the defendants, may have honestly supposed that their right extended to all dead and down timber upon the lands described in the contracts is to impute to them an ignorance of the English language. This might be ascribed to the Indians, but not to the other parties. It is unnecessary to say that the defendants do not stand in a position of innocent purchasers in good faith.
It may admit of some question whether their advances of money and supplies to the Indians to carry on the logging operations was not a violation of the regulation that "each Indian shall provide his own logging outfit and supplies," but, however this may be, it gives no color to the assertion that the defendants acted in good faith, since they could hardly have failed to know that their advances must have been greatly in excess of what was needed for preparing for market less than three million feet of logs.
no credit for the labor he may have expended upon the property at the time of its conversion as an eminently proper and wholesome one. It is and has for many years been notorious that under the various guises of Indian contracts, purchases of timber entries, or cutting timber for railway, mining, or agricultural purposes, the timber lands of the United States are being denuded of all their substantial value by logging concerns gradually gathering to themselves all the valuable timber of the country, which Congress intended to reserve for the benefit of homestead entrymen or the purchasers of land in small parcels. If trespassers under these circumstances were permitted to escape by the payment of the mere stumpage value of the standing timber, there would be a strong inducement upon the part of these operators to avail themselves of every opportunity of seizing this timber, since they would incur no greater liability than the payment of a nominal sum. It is only by denying them a credit for their labor expended upon it that the government can obtain an adequate reparation for this constantly growing evil and trespassers be made to suffer some punishment for their depredations.
4. The fourth assignment is based upon the proposition that the contractors should have been allowed credit for the amount paid to the United States for stumpage on account of the 14,850,260 feet included in the verdict. The stumpage representing this quantity of timber would be $6,400.
This payment was not made to the United States in reimbursement of their claim for timber, but under regulations of the President and under their contracts with the Indians that they would pay 10 percent of the stipulated compensation of $4 per thousand feet to the Indian Department as stumpage, which should be deducted from the price of $4 per thousand feet, and under the condition that such stumpage should go to the poor fund of the tribe, from which its helpless members might be supported. This payment was not made to the government as vendor, but to be held by the Indian Department as trustee for the benefit of helpless Indians, and was as much a part of the stipulated price to be paid for the timber as the other ninety percent of the $4 per thousand feet.
5. The fifth objection assigns as error the exclusion by the trial court of a telegram of March 16, 1898, from the Acting Commissioner of the Land Office to the logging company, stating simply that the commissioner had accepted the bond of the defendants in lieu of the logs, and that the government agent had been directed to release the logs. A like exception was taken to a letter from the special agent of the Land Office to the logging company, repeating the telegrams, and stating that the logs had been released. We do not see the materiality of these papers. There is no doubt that the bonds were accepted in lieu of the logs themselves, and as security for any judgment that might be obtained. Neither the telegram nor the letter adds anything to the inferences to be derived from the face of the instruments.
6. The same remark may be made as to the exclusion of certain conversations of Charles A. Smith with Indians in the fall of 1891, wherein the Indians informed him that there was a large amount of dead and down timber on the reservation which could be cut. Of course, there was, or the contract would not have been made. We fail to see that these conversations have any bearing upon the question of the good faith of the defendants. The seventh, eighth, and ninth assignments of error need no comment.
7. In the tenth assignment, it is insisted that the court erred in taxing costs against the defendants. While the rule is well settled that costs cannot be taxed against the United States, the rule is believed to be universal, in civil cases at least, that the United States recover the same costs as if they were a private individual. We know of no case in this Court directly adjudicating the liability of unsuccessful defendants for costs in actions brought by the United States, although it was assumed in United States v. Sanborn, 135 U. S. 271, 135 U. S. 281, where the question arose as to particular fees included in a general bill. Throughout the elaborate opinion of MR. JUSTICE HARLAN the liability of the defendant for costs was assumed, and such has been the ruling generally in the lower courts, although the reported cases upon the subject are rare. United States v. Davis, 54 F. 147. It has been assumed, rather than decided.
8. The item of $353.39, reporter's fees for a transcript of the record used by the plaintiff in preparing its bill of exceptions on the former appeal, was improperly allowed.
"lawful fees for exemplifications and copies of papers necessarily obtained for use on trials in cases where by law costs are recoverable in favor of the prevailing party, shall be taxed by a judge or clerk of the court,"
and by Rule 31, subdivision 3, of the circuit court of appeals, "the cost of the transcript of the record from the court below shall be taxable in that court as costs in the case." It has been held in a number of cases that section 983 did not include a transcript of the evidence for the personal use of counsel in preparing a case for an appellate court. Wooster v. Handy, 23 F. 49, 60, by Judge Blatchford, who says the language implies that the copies must have been actually used on or in the trial or final hearing, or at least obtained for such use. In The William Branfoot, 52 F. 390, 395, it was held by MR. CHIEF JUSTICE FULLER that a copy of the official stenographer's notes, obtained for libellant by his counsel, was simply for convenience, and not a copy necessarily used on the trial, and the charge therefor was properly rejected. To the same effect are Gunther v. Liverpool &c. Insurance Co., 10 F. 830; Kelly v. Springfield Railway Co., 83 F. 183, and Monahan v. Godkin, 100 F. 196. This error, however, does not render it necessary to reverse the judgment of the court below. The amount of the reporter's fees, $356.69, may be deducted from the judgment.
In conclusion, we are of opinion that there was no error committed upon the last trial. The case was an aggravated one, the conduct of the companies wholly indefensible, and the right of the government to recover is entirely clear.

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Argued November 4, 5, 1903.
This is a bill in equity to enjoin the city of Owensboro, Kentucky, from regulating the rates of the appellee, the Owensboro Waterworks Company.
Lawson Reno, police judge of the city, was made a party. The circuit court granted a temporary injunction. Before final hearing, a motion was made before Circuit Judge Lurton to dissolve the injunction, the motion was denied on the ground of the seriousness of the questions involved, and the propriety of following the previous ruling. On final hearing, the injunction was made perpetual against the city, and the bill dismissed as to Lawson Reno. The city then took an appeal to circuit court of appeals. The appeal was dismissed on the ground that the jurisdiction of the circuit court having been invoked on a constitutional question, the appeal should have been taken directly to this court. 53 C. C. A. 146, 115 Fed. 318. The city then brought the case here from the circuit court.
On the 10th of June, 1889, relying upon the ordinance of the 3d, the appellee consummated the purchase from the water company of its works, franchises, and contracts, and received them from that company, and it 'has ever since then under the orders and direction' of the city, maintained and extended its system, on account of which it has expended large sums of money, and its plant is now reasonably worth not less than $250,000, and could not be constructed for less than that sum.
Then followed a statement of the rates fixed, graduated according to the amount of water consumed or kind or purpose of use. And it was provided (§ 8), 'that if any person, firm, company, or corporation engaged in the business of furnishing water to consumers thereof in said city of Owensboro shall demand, charge, exact, or receive, directly or indirectly, of or from any consumer or consumers of water in said city, as consideration or compensation for water furnished or supplied to such consumer, any money, property, or other thing of value over and above or in excess of the rates and prices for water herein named and prescribed, or shall fail or refuse for ten days, without reasonable excuse, to supply water as prescribed and required in and by section seven (7) of this ordinance; or shall fail or refuse to keep the accounts or the books required to be kept at Owensboro, or make the reports in writing to the common council, as required by section sixth (6th) of this ordinance, such person, firm, company, or corporation so offending shall be fined, upon conviction, in a sum not less than ten, and not exceeding fifty, dollars for each offense.' The ordinance in full is inserted in the margin.
It is alleged that the enforcement of the ordinance will cause appellee irreparable injury, and in what manner that will be done is detailed, and that, appellee 'could not, under the most prudent management, earn any per cent upon its investment, but would be compelled to operate its plant at an actual loss.' For the reasons alleged the ordinance of March 19 violates the Constitution of the state of Kentucky, and the 5th and 14th Amendments of the Constitution of the United States. It is also alleged, with much amplification, that the passage of the ordinance was 'ex parte and partisan,' without deliberation or investigation or knowledge, and, besides, the city had no power to pass the ordinance, and that the latter violates the contract existing between appellee and the city. It is also alleged that financial injury will result to appellee from the enforcement of the ordinance in regard to meters (§ 2), and from the prohibition to collect rates in advance, 'except by voluntary consent of the consumer.' (§ 3.) Prosecutions are threatened under the ordinance, which will result, it is alleged, in irreparable injury to appellee, and an injunction is hence prayed against the city.
A demurrer to the bill was overruled. An answer was then filed, which denied the allegations of the bill, and justified the action of the city.
Mr. George W. Jolly for appellant.
Messrs. Robert W. Bingham, William T. Ellis, W. W. Davies, and Messrs, Sweeney, Ellis, & Sweeney for appellee.
'If the city of Owensboro had no lawful power or authority to pass the ordinance at all, then the enforcement of it would clearly be a taking from the complainant of its right to certain property. First, without compensation; sation; second, without due process of law; third, without giving to it the equal protection of the law.
Interpreting the section, the court held that the word 'thereof' in the last sentence of the section had for its antecedent the words 'works of its own.' Substituting these words for the word 'thereof,' the sentence would read, and the city's power would be, 'to make regulations for the management of its own works, and to fix and regulate the prices to consumers and customers.' But another ambiguity appears, viz., Of what is the city to fix and regulate the prices? Certainly of something, and it would seem from the context, the same thing, of which it was to regulate the management. But this leads to an absurdity, and we must find a purpose (antecedent) to which both powers can refer. The city might, indeed, make regulations for the management of its works, but it could not fix and regulate the prices of them to consumers and customers. Besides, we cannot conceive that an explicit grant of power was necessary to enable the city to manage its own works. The power to construct would have implied the power to manage and operate. It must not be overlooked that the section was intended to apply to not only to the appellant city but to all cities of the third class, and confer power not only to provide water, but other services, and it might have seemed necessary by the legislature, or at any rate prudent, to reserve to the cities the power over the management of works constructed by private persons, and as prudent to reserve a power to fix and regulate the prices to consumers of the services afforded. It is certainly not difficult to conceive the necessity of the exercise of those powers, and if attempted to be exercised without a reservation, the cities might be met (and there are examples of this) with the contention that the power had been bartered away and was precluded by the obligation of a contract. The construction urged by appellee must, therefore, be rejected. There is a more natural one. The purpose of § 3290 was to provide the inhabitants of cities of the third class with the services mentioned,—water, light, power, heat, and telephone. They could be provided by the cities directly or they could be provided by private persons; but whatever way provided, the power was given to regulate the management and fix the rates of the services, and this was but the endowment of a common governmental power.
It is, however, contended that the ordinance is in violation of the contracts between the city and appellee, constituted by the resolutions and ordinance of the 3d of June, 1889. The argument is that the city had entered into contracts with the Owensboro Water Company, the predecessor of appellee, to which contracts and their obligations and rights, it is contended, the appellee succeeded by assignment from the water company, with the consent and approval of the city, as expressed in the resolutions and ordinance of June 3, 1889. To determine their legal effect, however, it will be necessary to consider the law which authorized them.
But counsel go farther. They deny the right of the city to fix rates, and yet assert its power to enter into an irrevocable contract with the water company giving it such power, that is, giving it power to fix rates free from any regulation by the city, not only under any authority the city then possessed, but under any authority the city might be given by the legislature.
In this contention there are several elements, but we pass their consideration, and determine what contract, if any, the city entered into with the water company. Of course, it is implied in the grant to the company that it might charge some rates to consumers, but the question is, Were those rates exempt from regulation by the city under any power it then had or might be given? An affirmative answer is contended for by the appellee under §§ 9, 10, and 14 of the granting ordinance. Section 9 is the pivotal section. The others are complementary. By it the company was given 'power and authority to make and enforce as a part of the condition (italics ours) upon which it will supply water to its consumers, all needful rules and regulations, (italics ours) not inconsistent with the law or provisions of this ordinance.' The section is concerned with the rules between the company and consumers alone. The company may enforce all needful rules and regulations as part of the condition upon which it will supply water. What is the other part of the condition? It must be the payment of rates, but to that part of the condition the power to make regulations does not apply. It would ignore the distinctions made by the section, and give, besides, the words 'rules and regulations' too large a meaning to make them include the power of fixing rates to consumers. They have adequate and useful signification without that. There were many things in the supply of water to consumers and in the orderly and prudent conduct of the business of the company which might need rules and regulations.
This doctrine has been affirmed numbers of times since. Freeport Water Co. v. Freeport, 180 U. S. 587, 45 L. ed. 679, 21 Sup. Ct. Rep. 493; Rogers Park Water Co. v. Fergus, 180 U. S. 624, 45 L. ed. 702, 21 Sup. Ct. Rep. 490; Joplin v. Southwest Missouri Light Co. 191 U. S. 43, ante, 43, 24 Sup. Ct. Rep. 43. And the same doctrine prevails in Kentucky. Winchester & L. Turnp. Road Co. v. Croxton, 98 Ky. 738, 33 L. R. A. 177, 34 S. W. 518.
From these views it follows that if the city had no power under the charters of 1836 and 1882 to fix rates, and we only assume this, not decide it, such power was conferred by § 3290 of the act of June 14, 1893, and the city is not precluded from the exercise of that power by §§ 9, 10, and 14 of the original ordinance granting the Owensboro Water Company the right to construct waterworks, nor by the ordinance of June 3, 1889, approving the transfer of the rights and contracts of that company to the Owensboro Water Works Company, the appellee herein. Nor is the city, by said ordinance, precluded from regulating the business of the appellee in the manner provided in the ordinance of March 19, 1900, which is the subject of the present controversy. It is true that it is contended that § 3 of the ordinance forbids the appellee from collecting rates in advance from all consumers. But the city does not contend for that construction. It claims only that the provision in regard to the collection of rates in advance applies only to consumers using meters, and even as to those consumers appellee can make reasonable regulations to secure the payment of rates. The ordinance is not absolutely clear, and we may resolve its ambiguities in accordance with the concession of the city. It may be presumed that there was no intention to enact unreasonable and oppressive regulations.
Two other contentions remain to be considered,—one made by appellant, and the other made by the appellee. It is difficult to assign a place or purpose in the discussion of the issues to that made by the appellant. The contention is that the Owensboro Water Company had no power to transfer its property and rights and franchises to the appellee. To what consequence is the contention directed? Surely the city wants an object for its regulation. The appellee is in possession of the waterworks, and is supplying the inhabitants of the city with water. It is that service which the city desires to regulate, and it is to 'every person, firm, company, and corporation' engaged in that service the ordinance of March 21, 1900, is addressed. No other person, firm, or corporation than the appellee is so engaged in Owensboro, or has been so engaged for some years. We do not think that the legality of the ordinance can be questioned or measured by either the company or the city by the defects or perfections of the title of the company to its franchises or property. It may be, however, that it is not intended to press the contention so far, but to confine it to the denial of the exemption claimed by appellee as successor of the Owensboro Water Company. But, as we hold that the Owensboro Water Company had no such exemption, the contention becomes unimportant.
The other contention made by appellee is that the rates fixed by the city are unreasonable. Upon this contention we shall not pass. It depends upon many questions of fact and of values to which the circuit court gave no attention, and on which it expressed no judgment. It is better for a trial court to determine such questions in the first instance. Chicago, M. & St. P. R. Co. v. Tompkins, 176 U. S. 167, 179, 44 L. ed. 417, 422, 20 Sup. Ct. Rep. 336.
Decree of the Circuit Court is reversed, and the case remanded for further proceedings in accordance with this opinion.
An Ordinance to Fix and Regulate Rates Prices, and Charges for Water Furnished Consumers in the City of Owensboro, and for Other Purposes.
(1) In all cases where the amount of water consumed averages 2,000 gallons per day, or less, estimated by the month, $.10 per thousand gallons; (2) where the daily consumption of water averages 2,000 gallons, or more, and less than 4,000 gallons, estimated by the month, $.09 per thousand gallons; (3) where the daily consumption of water averages 4,000 gallons, or more, and less than 10,000 gallons, estimated by the month, $.08 per thousand gallons; (4) where the daily consumption of water averages 10,000 gallons, or more, and less than 15,000 gallons, estimated by the month, $.07 per thousand gallons; (5) where the daily consumption of water averages 15,000 gallons, or more, and less than 25,000 gallons, estimated by the month, $.05 per thousand gallons; (6) where the daily consumption of water averages 25,000 gallons, or more, and less than 40,000 gallons, estimated by the month, $.04 per thousand gallons; (7) where the daily consumption of water averages 40,000 gallons, or more, estimated by the month, $.03 1/2 per thousand gallons.
That for the purpose of ascertaining and estimating accurately the quantity of water consumed by consumers in the classification of this section, and the compensation to be paid therefor, it is hereby made the duty of the persons, firms, companies, and corporations, and they shall, on request made in writing, and within thirty days after such request is made, place a water meter, in good condition and repair, in connection with the pipe or main leading into and supplying water to such consumers, and the said meter shall be kept in good repair by the person, firms, company, and corporation furnishing or supplying the water to such consumers, and the said meters shall be examined and read monthly, for the purpose of ascertaining its condition and the quantity of water consumed.
Provided, that the minimum annual rate to be paid by all consumers of water described in the classifications thereof in this section, per annum, shall be twenty-four (24) dollars; and in no case shall the consumer of water who uses or consumes, annually, 240,000 gallons of water, or less, be charged or pay more or less than twenty-four (24) dollars per annum.
(1) for each wash stand, wherein warm and cold water, or either, is used, $2; (2) for each kitchen sink, wherein warm and cold water, or either, is used, $2; (3) for each bath tub, wherein warm and cold water, or either, is used, $2; (4) for each water closet and urinal, $2; for sprinkling premises, lawn, pavement, and street in front of or adjacent to the premises, per annum, $2.50 for the first 200 square yards or less, $.01 for each additional square yard; (6) for private dwelling per annum where only one tap or faucet is used, containing four rooms or less, excluding hallways, garrets, bath rooms, water closets, $2, and for each additional room, $.50; (7) for each cow, $1, for each horse, $1; and for each carriage, buggy, and spring wagon, $1; (8) for filling cisterns, $.20 each thousand gallons.
For each wash stand, wherein warm and cold water, or either, is used, $3; (2) for each water closet and urinal, $3; (3) for hydrant, $3; (4) for barber shops, for first chair, $3, for each additional chair, $1; (5) for blacksmiths, for first forge, $2, and for each additional forge, $1; (6) for plasterers, 1/4 of 1 cent per square yard; (7) for bricklayers, $.06 per one thousand brick, sprinkling and laying.
pay for the water furnished at the minimum rate of $12 per annum, and for all water consumed in excess of 120,000 gallons per annum there shall be paid $.10 for each thousand gallons; but such meters shall not be attached except by the written request of the consumer.
And, provided further, that before meters are attached to or connected with the pipes or mains leading into the premises of any consumer described in the classification of this section, by the person, firm, company, or corporation supplying the water, consent of such consumer shall be first obtained, and if objection shall be made by the consumer, the mayor of the city, upon complaint by the person, firm, company, or corporation furnishing the water, shall summon the consumer to appear before him, and shall hear and determine the matter, and decide whether the meter shall be attached, and his decision shall be final.
If said persons, firms, companies, or corporations furnishing water shall attach a meter in any case to the pipe leading into any consumer's premises, without his consent, or against his objection, and the water annually consumed shall not be as much as 120 gallons, the consumer shall pay for the water actually consumed at the rate of $.10 per thousand gallons, and no more.
Sec. 3. That water rates may be collected by said persons, firms, companies, and corporations from all consumers falling within the provisions of §§ 1 and 2 of this ordinance who have water meters attached, monthly, quarterly, or semiannually, at the election of said persons, firms, companies, or corporations furnishing the water, but water rates shall not be collected in advance except by voluntary consent of the consumer.
Water may be shut off from any consumer for nonpayment of water rates, or other sufficient reason, only after ten days' written notice served upon said consumer or his wife, in his absence from home, or in case of absence from premises of both husband and wife, then the said notice shall be delivered by depositing same in the Owensboro post office, addressed to said water consumer.
Sec. 4. That if any person, firm, company, or corporation shall be or become a consumer of water, and shall not be included in the classification made and contained in the 2d section of this ordinance, the quantity of water used or consumed by such consumer shall be ascertained by meter, and compensation made therefor at the rates and charges specified in the 1st section of this ordinance.
November in each year, cause all water mains of said persons, firms, companies, and corporations to be washed and cleaned, and for this purpose shall cause all fire hydrants to be open to their full capacity and water discharged from each for at least five minutes once in every two weeks; and during the months of December, January, February, and March shall, for said purpose, cause all fire hydrants to be open to their full capacity for at least five minutes once in each and every of said months last mentioned.
Sec. 6. That hereafter all persons, firms, companies, and corporations engaged in the business of furnishing water to consumers shall keep an exact, complete, and true account of all its incomes, gains, and receipts from all and every source whatever, in detail, giving all the items thereof, and date of receipt of the same, and an exact, complete, and true account of all expenditures, showing date and amount of each and every item of expense, costs and expenditure and the whole thereof; and the books containing said accounts shall be kept at Owensboro, and shall be open at any time to inspection and examination by the common council or a committee thereof appointed for that purpose, and shall make and return to the common council, at the end of each six months hereafter, on the first day of January and July of each year, a true and complete summary of the same, which shall be verified by the oath of the president, secretary, or treasurer of said persons, firms, companies, or corporations furnishing water, and the said report shall be spread on the journal and filed and preserved by the city clerk in his office.
Sec. 7. That it shall be the duty of any person, firm, company, or corporation engaged in the business of furnishing water to consumers thereof, in the city of Owensboro, through pipes, mains, or conduits laid in the streets, alleys, and ways of said city, to furnish water to all persons who may make application therefor in writing, and within ten days after the date fixed in such written application, and who desire the same furnished in houses or places situated on any of the streets, alleys, or ways or places in the city, wherein any of the said mains, pipes, or conduits are located or laid, and the said person, firm, company, or corporation shall put down all necessary pipes therefor, at the expense of the person, firm, company, or corporation furnishing the water to the boundary line of the lot or premises of the applicant for water or consumer, and the remainder of the pipes, machinery, or appliances necessary for conveying the water into the houses or upon the premises shall be borne by the said applicant or consumer of water.
or other thing of value over and above, or in excess of the rates and prices for water herein named and prescribed; or shall fail or refuse for ten days, without reasonable excuse, to supply water as prescribed and required, in and by section seven (7) of this ordinance, or shall fail or refuse to keep the accounts, or the books required to be kept at Owensboro, or make the reports in writing to the common council, as required by section six (6) of this ordinance, such person, firm, company, or corporation so offending shall be fined, upon conviction, in a sum not less than $10 and not exceeding $50, for each offense.
Sec. 9. This ordinance shall go into full force and effect on and after the 1st day of April, in the year of our Lord nineteen hundred.