This is an appeal from a decision of the Arizona Supreme Court upholding the constitutionality of an Arizona statute requiring a year's residence in a county as a condition to an indigent's receiving nonemergency hospitalization or medical care at the county's expense. Held: The durational residence requirement, in violation of the Equal Protection Clause, creates an 'invidious classification' that impinges on the right of interstate travel by denying newcomers 'basic necessities of life.' Shapiro v. Thompson, 394 U.S. 618, 89 S.Ct. 1322, 22 L.Ed.2d 600. Pp. 253—270.
(a) Such a requirement, since it operates to penalize indigents for exercising their constitutional right of interstate migration, must be justified by a compelling state interest. Shapiro v. Thompson, supra; Dunn v. Blumstein, 405 U.S. 330, 92 S.Ct. 995, 31 L.Ed.2d 274. Pp. 253—262.
(b) The State has not shown that the durational residence requirement is 'legitimately defensible' in that it furthers a compelling state interest, and none of the purposes asserted as justification for the requirement—fiscal savings, inhibiting migration of indigents generally, deterring indigents from taking up residence in the county solely to utilize the medical facilities, protection of longtime residents who have contributed to the community particularly by paying taxes, maintaining public support of the county hospital, administrative convenience in determining bona fide residence, prevention of fraud, and budget predictability—satisfies the State's burden of justification and insures that the State, in pursuing its asserted objectives, has chosen means that do not unnecessarily impinge on constitutionally protected interests. Pp. 262—269.
Mary M. Schroeder, Washington, D.C., for appellants.
William J. Carter, III, Phoenix, Ariz., for appellees.
This case presents an appeal from a decision of the Arizona Supreme Court upholding an Arizona statute requiring a year's residence in a county as a condition to receiving nonemergency hospitalization or medical care at the county's expense. The constitutional question presented is whether this durational residence requirement is repugnant to the Equal Protection Clause as applied by this Court in Shapiro v. Thompson, 394 U.S. 618, 89 S.Ct. 1322, 22 L.Ed.2d 600 (1969).
* Appellant Henry Evaro is an indigent suffering from a chronic asthmatic and bronchial illness. In early June 1971, Mr. Evaro moved from New Mexico to Phoenix in Maricopa County, Arizona. On July 8, 1971, Evaro had a severe respiratory attack and was sent by his attending physician to appellant Memorial Hospital, a nonprofit private community hospital. Pursuant to the Arizona statute governing medical care for indigents, Memorial notified the Maricopa County Board of Supervisors that it had in its charge an indigent who might qualify for county care and requested that Evaro be transferred to the County's public hospital facility. In accordance with the approved procedures, Memorial also claimed reimbursement from the County in the amount of $1,202.60, for the care and services it had provided Evaro.
This action was instituted to determine whether appellee Maricopa County was obligated to provide medical care for Evaro or was liable to Memorial for the costs it incurred because of the County's refusal to do so. This controversy necessarily requires an adjudication of the constitutionality of the Arizona durational residence requirement for providing free medical care to indigents.
The trial court held the residence requirement unconstitutional as a violation of the Equal Protection Clause. In a prior there-judge federal court suit against Pinal County, Arizona, the District Court had also declared the residence requirement unconstitutional and had enjoined its future application in Pinal County. Valenciano v. Bateman, 323 F.Supp. 600 (D.C.Ariz.1971).4 Nonetheless, the Arizona Supreme Court upheld the challenged requirement. To resolve this conflict between a federal court and the highest court of the State, we noted probable jurisdiction, 410 U.S. 981, 93 S.Ct. 1499, 36 L.Ed.2d 176 (1972), and we reverse the judgment of the Arizona Supreme Court.
In determining whether the challenged durational residence provision violates the Equal Protection Clause, we must first determine what burden of justification the classification created thereby must meet, by looking to the nature of the classification and the individual interests affected.5 The Court considered similar durational residence requirements for welfare assistance in Shapiro v. Thompson, 394 U.S. 618, 89 S.Ct. 1322, 22 L.Ed.2d 600 (1969). The Court observed that those requirements created two classes of needy residents 'indistinguishable from each other except that one is composed of residents who have resided a year or more, and the second of residents who have resided less than a year, in the jurisdiction. On the basis of this sole difference the first class (was) granted and second class (was) denied welfare aid upon which may depend the ability . . . to obtain the very means to subsist food, shelter, and other necessities of life.' Id., at 627, 89 S.Ct., at 1327. The Court found that because this classification impinged on the constitutionally guaranteed right of interstate travel, it was to be judged by the standard of whether it promoted a compelling state interest.6 Finding such an interest wanting, the Court held the challenged residence requirements unconstitutional.
Appellees argue that the residence requirement before us is distinguishable from those in Shapiro, while appellants urge that Shapiro is controlling. We agree with appellants that Arizona's durational residence requirement for free medical care must be justified by a compelling state interest and that, such interests being lacking, the requirement is unconstitutional.
The right of interstate travel has repeatedly been recognized as a basic constitutional freedom.7 Whatever its ultimate scope, however, the right to travel, was involved in only a limited sense in Shapiro. The Court was there concerned only with the right to migrate, 'with intent to settle and abide'8 or, as the Court put it, 'to migrate, resettle, find a new job, and start a new life.' Id., at 629, 89 S.Ct., at 1328. Even a bona fide residence requirement would burden the right to travel, if travel meant merely movement. But, in Shapiro, the Court explained that '(t)he residence requirement and the one-year waiting-period requirement are distinct and independent prerequisites' for assistance and only the latter was held to be unconstitutional. Id., at 636, 89 S.Ct., at 1332. Later, in invalidating a durational residence requirement for voter registration on the basis of Shapiro, we cautioned that our decision was not intended to 'cast doubt on the validity of appropriately defined and uniformly applied bona fide residence requirements.' Dunn v. Blumstein, 405 U.S. 330, 342 n. 13, 92 S.Ct. 995, 1003 (1972).
The appellees argue that the instant county residence requirement is distinguishable from the state residence requirements in Shapiro, in that the former penalizes, not interstate, but rather intrastate, travel. Even were we to draw a constitutional distinction between interstate and intrastate travel, a question we do not now consider, such a distinction would not support the judgment of the Arizona court in the case before us. Appellant Evaro has been effectively penalized for his interstate migration, although this was accomplished under the guise of a county residence requirement. What would be unconstitutional if done directly by the State can no more readily be accomplished by a county at the State's direction. The Arizona Supreme Court could have construed the waiting-period requirement to apply to intrastate but not interstate migrants;9 but it did not do so, and 'it is not our function to construe a state statute contrary to the construction given it by the highest court of a State.' O'Brien v. Skinner, 414 U.S. 524, 94 S.Ct. 740, 38 L.Ed.2d 702 (1974).
'An indigent who desires to migrate . . . will doubtless hesitate if he knows that he must risk making the move without the possibility of falling back on state welfare assistance during his first year of residence, when his need may be most acute.' Id., at 629, 89 S.Ct., at 1329.
Second, the Court considered the extent to which the residence requirement served to penalize the exercise of the right to travel.
Finally, appellees seek to distinguish Shapiro as involving a partially federally funded program. Maricopa County has received federal funding for its public hospital18 but, more importantly, this Court has held that whether or not a welfare program is federally funded is irrelevant to the applicability of the Shapiro analysis Pease v. Hansen, 404 U.S. 70, 92 S.Ct. 318, 30 L.Ed.2d 224 (1971); Graham v. Richardson, 403 U.S. 365, 91 S.Ct. 1848, 29 L.Ed.2d 534 (1971).
We turn now to the question of whether the State has shown that its durational residence requirement is 'legitimately defensible,'20 in that it furthers a compelling state interest.21 A number of purposes are asserted to be served by the requirement and we must determine whether these satisfy the appellees' heavy burden of justification, and insure that the State, in pursuing its asserted objectives, has chosen means that do not unnecessarily burden constitutionally protected interests. NAACP v. Button, 371 U.S. 415, 438, 83 S.Ct. 328, 340, 9 L.Ed.2d 405 (1963).
'Absent a residence requirement, any indigent sick person . . . could seek admission to (Maricopa County's) hospital, the facilities being the newest and most modern in the state, and the resultant volume would cause long waiting periods or severe hardship on (the) county if it tried to tax its property owners to support (these) indigent sick . . ..' 108 Ariz. 373, 376, 498 P.2d 461, 464.
First, a State may not protect the public fisc by drawing an invidious distinction between classes of its citizens, Shapiro, supra, 394 U.S., at 633, 89 S.Ct., at 1330, so appellees must do more than show that denying free medical care to new residents saves money. The conservation of the taxpayers' purse is simply not a sufficient state interest to sustain a durational residence requirement which, in effect, severely penalizes exercise of the right to freely migrate and settle in another State. See Rivera v. Dunn, 329 F.Supp. 554 (D.C.Conn.1971), aff'd, 404 U.S. 1054, 92 S.Ct. 742, 30 L.Ed.2d 743 (1972).
'(T)he class of barred newcomers is all-inclusive, lumping the great majority who come to the State for other purposes with those who come for the sole purpose of collecting higher benefits.' 394 U.S., at 631, 89 S.Ct., at 1330.
Moreover, 'a State may no more try to fence out those indigents who seek (better public medical facilities) than it may try to fence out indigents generally.' Ibid. An indigent who considers the quality of public hospital facilities in entering the State is no less deserving than one who moves into the State in order to take advantage of its better educational facilities. Id., at 631—632, 89 S.Ct., at 1329—1330.
It is also useful to look at the other side of the coin—at who will bear the cost of indigents' illnesses if the County does not provide needed treatment. For those newly arrived residents who do receive at least hospital care, the cost is often borne by private nonprofit hospitals, like appellant Memorial—many of which are already in precarious financial straits.23 When absorbed by private hospitals, the costs of caring for indigents must be passed on to paying patients and 'at a rather inconvenient time' adding to the already astronomical costs of hospitalization which bear so heavily on the resources of most Americans.24 The financial pressures under which private nonprofit hospitals operate have already led many of them to turn away patients who cannot pay or to severely limit the number of indigents they will admit.25 And, for those indigents who receive no care, the cost is, of course, measured by their own suffering.
'(Such) reasoning would logically permit the State to bar new residents from schools, parks and libraries or deprive them of police and fire protection. Indeed it would permit the State to apportion all benefits and services according to the past tax contributions of its citizens. The Equal Protection Clause prohibits such an apportionment of state services.' Shapiro, 394 U.S., at 632—633, 89 S.Ct., at 1330 (footnote omitted).
Appellees express a concern that the threat of an influx of indigents would discourage 'the development of modern and effective (public medical) facilities.' It is suggested that whether or not the durational residence requirement actually deters migration, the voters think that it protects them from low income families' being attracted by the county hospital; hence, the requirement is necessary for public support of that medical facility. A State may not employ an invidious discrimination to sustain the political viability of its programs. As we observed in Shapiro, supra, at 641, 89 S.Ct., at 1335, '(p)erhaps Congress could induce wider state participation in school construction if it authorized the use of joint funds for the building of segregated schools,' but that purpose would not sustain such a scheme. See also Cole v. Housing Authority of City of Newport, 435 F.2d 807, 812—813 (CA1 1970).
The appellees allege that the waiting period is a useful tool for preventing fraud. Certainly, a State has a valid interest in preventing fraud by any applicant for medical care, whether a newcomer or old-time resident, Shapiro, 394 U.S., at 637, 89 S.Ct., at 1333, but the challenged provision is ill-suited to that purpose. An indigent applicant, intent on committing fraud, could as easily swear to having been a resident of the county for the preceding year as to being one currently. And, there is no need for the State to rely on the durational requirement as a safeguard against fraud when other mechanisms to serve that purpose are available which would have a less drastic impact on constitutionally protected interests. NAACP v. Button, 371 U.S., at 438, 83 S.Ct., at 340. For example, state law makes it a crime to file an 'untrue statement . . . for the purpose of obtaining hospitalization, medical care or outpatient relief' at county expense. Ariz.Rev.Stat.Ann. § 11—297C (Supp.1973—1974). See Dunn, 405 U.S., at 353—354, 92 S.Ct., at 1008—1009; U.S. Dept. of Agriculture v. Moreno, 413 U.S. 528, 534, 93 S.Ct. 2821, 2825, 37 L.Ed.2d 782 (1973).
'The records . . . are utterly devoid of evidence that (the County) uses the one-year requirement as a means to predict the number of people who will require assistance in the budget year. (The appellees do not take) a census of new residents . . .. Nor are new residents required to give advance notice of their need for . . . assistance. Thus, the . . . authorities cannot know how many new residents come into the jurisdiction in any year, much less how many of them will require public assistance.' 394 U.S., at 634—635, 89 S.Ct., at 1331 (footnote omitted).
Whatever the difficulties in projecting how many newcomers to a jurisdiction will require welfare assistance, it could only be an even more difficult and speculative task to estimate how many of those indigent newcomers will require medical care during their first year in the jurisdiction. The irrelevance of the one-year residence requirement to budgetary planning is further underscored by the fact that emergency medical care for all newcomers and more complete medical care for the aged are cuttently being provided at public expense regardless of whether the patient has been a resident of the County for the preceding year. See Shapiro, supra, at 635, 89 S.Ct., at 1331—1332.
The Arizona durational residence requirement for eligibility for nonemergency free medical care creates an 'invidious classification' that impinges on the right of interstate travel by denying newcomers 'basic necessities of life.' Such a classification can only be sustained on a showing of a compelling state interest. Appellees have not met their heavy burden of justification, or demonstrated that the State, in pursuing legitimate objectives, has chosen means which do not unnecessarily impinge on constitutionally protected interests. Accordingly, the judgment of the Supreme Court of Arizona is reversed and the case remanded for further action not inconsistent with this opinion.
The legal and economic aspects of medical care1 are enormous; and I doubt if decisions under the Equal Protection Clause of the Fourteenth Amendment are equal to the task of dealing with these matters. So far as interstate travel per se is considered, I share the doubts of my Brother REHNQUIST. The present case, however, turns for me on a different axis. The problem has many aspects. The therapy of Arizona's atmosphere brings many there who suffer from asthma, bronchitis, arthritis, and tuberculosis. Many coming are indigent or become indigent after arrival. Arizona does not deny medical help to 'emergency' cases 'when immediate hospitalization or medical care is necessary for the preservation of life or limb,' Ariz.Rev.Stat.Ann. § 11—297(A) (Supp.1973—1974). For others, it requires a 12—month durational residence.
The Act is not aimed at interstate travelers; it applies even to a long-term resident who moves from one county to another. As stated by the Supreme Court of Arizona in the present case: 'The requirement applies to all citizens within the state including long term residents of one county who move to another county. Thus, the classification does not single out non-residents nor attempt to penalize interstate travel. The requirement is uniformly applied.' 108 Ariz. 373, 375, 498 P.2d 461, 463.
What Arizona has done, therefore, is to fence the poor out of the metropolitan counties, such as Maricopa County (Phoenix) and Pima County (Tucson) by use of a durational residence requirement. We are told that eight Arizona counties have no county hospitals and that most indigent care in those areas exists only on a contract basis. In San Antonio Independent School Dist. v. Rodriguez, 411 U.S. 1, 93 S.Ct. 1278, 36 L.Ed.2d 16, we had a case where Texas created a scheme by which school districts with a low property tax base, from which they could raise only meager funds, offered a lower quality of education to their students than the wealthier districts. That system was upheld against the charge that the state system violated the Equal Protection Clause. It was a closely divided Court and I was in dissent. I suppose that if a State can fence in the poor in educational programs, it can do so in medical programs. But to allow Arizona freedom to carry forward its medical program we must go one step beyond the San Antonio case. In the latter there was no legal barrier to movement into a better district. Here a one-year barrier to medical care, save for 'emergency' care, is erected around the areas that have medical facilities for the poor.
Congress has struggled with the problem. In the Kerr-Mills Act of 1960, 74 Stat. 987, 42 U.S.C. § 302(b)(2), it added provisions to the Social Security Act requiring the Secretary of Health, Education, and Welfare to disapprove any state plan for medical assistance to the aged (Medicaid) that excludes 'any individual who resides in the state,' thus eliminating durational residence requirements.
Maricopa County does argue that it is not financially feasible to provide free nonemergency medical care to new residents. Even so, the federal regulatory framework does not leave the County uncontrolled in determining which indigents will receive the benefit of the resources which are available. It is clear, for example, that the County could not limit such service to whites out of a professed inability to service indigents of all races because 42 CFR § 53.112(c) prohibits such discrimination in the operation of Hill-Burton facilities. It does not allow racial discrimination even against transients.
Moreover, Hill-Burton Act donees are guided by 42 CFR § 53.111(g), which sets out in some detail the criteria which must be used in identifying persons unable to pay for such services. The criteria include the patient's health and medical insurance coverage, personal and family income, financial obligations and resources, and 'similar factors.' Maricopa County, pursuant to the state law here challenged, employs length of county residence as an additional criterion in identifying indigent recipients of uncompensated nonemergency medical care. The federal regulations, however, do not seem to recognize that as an acceptable criterion.
And, as we held in Thorpe v. Housing Authority, 393 U.S. 268, 89 S.Ct. 518, 21 L.Ed.2d 474; Mourning v. Family Publications Service, 411 U.S. 356, 93 S.Ct. 1652, 36 L.Ed.2d 318, these federal conditions attached to federal grants are valid when 'reasonably related to the purposes of the enabling legislation.' 393 U.S., at 280—281, 89 S.Ct., at 525.
It is difficult to impute to Congress approval of the durational residence requirement, for the implications of such a decision would involve weighty equal protection considerations by which the Federal Government, Bolling v. Sharpe, 347 U.S. 497, 74 S.Ct. 693, 98 L.Ed. 884, as well as the States, are bound.
The political processes4 rather than equal protection litigation are the ultimate solution of the present problem. But in the setting of this case the invidious discrimination against the poor, Harper v. Virginia Board of Elections, 383 U.S. 663, 86 S.Ct. 1079, 16 L.Ed.2d 169, not the right to travel interstate, is in my view the critical issue.
The people of Gourmand loved good food. They ate in good restaurants, donated money for cooking research, and instructed their government to safeguard all matters having to do with food. Long ago, the food industry had been in total chaos. There were many restaurants, some very small. Anyone could call himself a chef or open a restaurant. In choosing a restaurant, one could never be sure that the meal would be good. A commission of distinguished chefs studied the situation and recommended that no one be allowed to touch food except for qualified chefs. 'Food is too important to be left to amateurs,' they said. Qualified chefs were licensed by the state with severe penalties for anyone else who engaged in cooking. Certain exceptions were made for food preparation in the home, but a person could serve only his own family. Furthermore, to become a qualified chef, a man had to complete at least twenty-one years of training (including four years of college, four years of cooking school, and one year of apprenticeship). All cooking schools had to be first class.
These reforms did succeed in raising the quality of cooking. But a restaurant meal became substantially more expensive. A second commission observed that not everyone could afford to eat out. 'No one,' they said, 'should be denied a good meal because of his income.' Furthermore, they argued that chefs should work toward the goal of giving everyone 'complete physical and psychological satisfaction.' For those people who could not afford to eat out, the government declared that they should be allowed to do so as often as they liked and the government would pay. For others, it was recommended that they organize themselves in groups an pay part of their income into a pool that would undertake to pay the costs incurred by members in dining out. To insure the greatest satisfaction, the groups were set up so that a member could eat out anywhere and as often as he liked, could have as elaborate a meal as he desired, and would have to pay nothing or only a small percentage of the cost. The cost of joining such prepaid dining clubs rose sharply.
Long ago, most restaurants would have one chef to prepare the food. A few restaurants were more elaborate, with chefs specializing in roasting, fish, salads, sauces, and many other things. People rarely went to these elaborate restaurants since they were so expensive. With the establishment of prepaid dining clubs, everyone wanted to eat at these fancy restaurants. At the same time, young chefs in school disdained going to cook in a small restaurant where they would have to cook everything. The pay was higher and it was much more prestigious to specialize and cook at a really fancy restaurant. Soon there were not enough chefs to keep the small restaurants open.
The commission agreed that weighty problems faced the nation. They recommended that a national prepayment group be established which everyone must join. They recommended that chefs continue to be paid on the basis of the number of dishes they prepared. They recommended that every Gourmandese be given the right to eat anywhere he chose and as elaborately as he chose and pay nothing.
Appellant Evaro moved from New Mexico to Arizona in June 1971, suffering from a 'chronic asthmatic and bronchial illness.' In July 1971 he experienced a respiratory attack, and obtained treatment at the facilities of appellant Memorial Hospital, a privately operated institution. The hospital sought to recover its expenses from appellee Maricopa County under the provisions of Ariz.Rev.Stat.Ann. § 11—297A (Supp. 1973—1974), asserting that Evaro was entitled to receive county care. Since he did not satisfy the eligibility requirements discussed above,2 appellee declined to assume responsibility for his care, and this suit was then instituted in the State Superior Court.
Unlike many traditional government services, such as police or fire protection, the provision of health care has commonly been undertaken by private facilities and personnel. But as strains on private services become greater, and the costs of obtaining care increase, federal, state, and local governments have been pressed to assume a larger role. Reasonably enough, it seems to me, those governments which now find themselves in the hospital business seek to operate that business primarily for those persons dependent on the financing locality both by association and by need.
Appellants in this case nevertheless argue that the State's efforts, admirable though they may be, are simply not impressive enough. But others excluded by eligibility requirements certainly could make similar protests. Maricopa County residents of many years, paying taxes to both construct and support public hospital facilities, may be ineligible for care because their incomes are slightly above the marginal level for inclusion. These people have been excluded by the State, not because their claim on limited public resources is without merit, but because it has been deemed less meritorious than the claims of those in even greater need. Given a finite amount of resources, Arizona after today's decision may well conclude that its indigency threshold should be elevated since its counties must provide for out-of-state migrants as well as for residents of longer standing. These more stringent need requirements would then deny care to additional persons who until now would have qualified for aid.
The Court holds, however, that the State was barred from making the choice it made because of the burden its choice placed upon Evaro's 'right to travel.' Although the Court's definition of this 'right' is hardly precise, the Court does state: '(T)he right of interstate travel must be seen as insuring new residents the same right to vital government benefits and privileges in the States to which they migrate as are enjoyed by other residents.' This rationale merits further attention.
'But if the government has these rights on her own account, the citizen also has correlative rights. He has the right to come to the seat of government to assert any claim he may have upon that government, or to transact any business he may have with it. To seek its protection, to share its offices, to engage in administering its functions. He has a right to free access to its sea-ports, through which all the operations of foreign trade and commerce are conducted, to the sub-treasuries, the land offices, the revenue offices, and the courts of justice in the several States, and this right is in its nature independent of the will of any State over whose soil he must pass in the exercise of it.' Id., at 44.
'Undoubtedly the right of locomotion, the right to remove from one place to another according to inclination, is an attribute of personal liberty, and the right, ordinarily, of free transit from or through the territory of any state is a right secured by the 14th Amendment and by other provisions of the Constitution.' Id., at 274, 21 S.Ct., at 129.
Regardless of the right's precise source and definition, it is clear that the statute invalidated in Edwards was specifically designed to, and would, deter indigent persons from entering the State of California. The imposition of criminal penalties on all persons assisting the entry of an indigent served to block ingress as surely as if the State had posted guards at the border to turn indigents away. It made no difference to the operation of the statute that the indigent, once inside the State, would be supported by federal payments.8 Furthermore, the statute did not require that the indigent intend to take up continuous residence within the State. The statute was not therefore an incidental or remote barrier to migration, but was in fact an effective and purposeful attempt to insulate the State from indigents.
The statute in the present case raises no comparable barrier. Admittedly, some indigent persons desiring to reside in Arizona may choose to weigh the possible detriment of providing their own nonemergency health care during the first year of their residence against the total benefits to be gained from continuing location within the State, but their mere entry into the State does not invoke criminal penalties. To the contrary, indigents are free to live within the State, to receive welfare benefits necessary for food and shelter,9 and to receive free emergency medical care if needed. Furthermore, once the indigent has settled within a county for a year, he becomes eligible for full medical care at county expense. To say, therefore, that Arizona's treatment of indigents compares with California's treatment during the 1930's would border on the frivolous.
Since the Court concedes that 'some 'waiting-period(s) . . . may not be penalties," (ante, at 258—259) one would expect to learn from the opinion how to distinguish a waiting period which is a penalty from one which is not. Any expense imposed on citizens crossing state lines but not imposed on those staying put could theoretically be deemed a penalty on travel; the toll exacted from persons crossing from Delaware to New Jersey by the Delaware Memorial Bridge is a 'penalty' on interstate travel in the most literal sense of all. But such charges,11 as well as other fees for use of transportation facilities such as taxes on airport users,12 have been upheld by this Court against attacks based upon the right to travel. It seems to me that the line to be derived from our prior cases is that some financial impositions on interstate travelers have such indirect or inconsequential impact on travel that they simply do not constitute the type of direct purposeful barriers struck down in Edwards and Shapiro. Where the impact is that remote, a State can reasonably require that the citizen bear some proportion of the State's cost in its facilities. I would think that this standard is not only supported by this Court's decisions, but would be eminently sensible and workable. But the Court not only rejects this approach, it leaves us entirely without guidance as to the proper standard to be applied.
However clear this conclusion may be to the majority, it is certainly not clear to me. The solicitude which the Court has shown in cases involving the right to vote,13 and the virtual denial of entry inherent in denial of welfare benefits—'the very means by which to live,' Goldberg v. Kelly, 397 U.S. 254, 264, 90 S.Ct. 1011, 1018, 25 L.Ed.2d 287 (1970)—ought not be so casually extended to the alleged deprivation here. Rather, the Court should examine, as it has done in the past, whether the challenged requirement erects a real and purposeful barrier to movement, or the threat of such a barrier, or whether the effects on travel, viewed realistically, are merely incidental and remote. As the above discussion has shown, the barrier here is hardly a counterpart to the barriers condemned in earlier cases. That being so, the Court should observe its traditional respect for the State's allocation of its limited financial resources rather than unjustifiably imposing its own preferences.
Other interests advanced by the State to support its statutory eligibility criteria are also rejected virtually out of hand by the Court. The protection of the county economies is dismissed with the statement that '(t)he conservation of the taxpayers' purse is simply not a sufficient state interest . . ..'16 The Court points out that the cost of care, if not borne by the Government, may be borne by private hospitals such as appellant Memorial Hospital. While this observation is doubtless true in large part, and is bound to present a problem to any private hospital, it does not seem to me that it thus becomes a constitutional determinant. The Court also observes that the State may in fact save money by providing nonemergency medical care rather than waiting for deterioration of an illness. However valuable a qualified cost analysis might be to legislators drafting eligibility requirements, and however little this speculation may bear on Evaro's condition (which the record does not indicate to have been a deteriorating illness), this sort of judgment has traditionally been confided to legislatures, rather than to courts charged with determining constitutional questions.
The Court likewise rejects all arguments based on administrative objectives. Refusing to accept the assertion that a one-year waiting period is a 'convenient rule of thumb to determine bona fide residence,' the majority simply suggests its own alternatives. Similar analysis is applied in rejecting the appellees' argument based on the potential for fraud. The Court's declaration that an indigent applicant 'intent on committing fraud, could as easily swear to having been a resident of the county for the preceding year as to being one currently' ignores the obvious fact that fabricating presence in the State for a year is surely more difficult than fabricating only a present intention to remain.
The legal question in this case is simply whether the State of Arizona has acted arbitrarily in determining that access to local hospital facilities for nonemergency medical care should be denied to persons until they have established residence for one year. The impediment which this quite rational determination has placed on appellant Evaro's 'right to travel' is so remote as to be negligible: so far as the record indicates Evaro moved from New Mexico to Arizona three years ago and has remained ever since. The eligibility requirement has not the slightest resemblance to the actual barriers to the right of free ingress and egress protected by the Constitution, and struck down in cases such as Crandall and Edwards. And, unlike Shapiro, it does not involve an urgent need for the necessities of life or a benefit funded from current revenues to which the claimant may well have contributed. It is a substantial broadening of, and departure from, all of these holdings, all the more remarkable for the lack of explanation which accompanies the result. Since I can subscribe neither to the method nor the result, I dissent.
An Arizona one-year durational residence requirement for care at state mental health facilities was declared unconstitutional in Vaughan v. Bower, 313 F.Supp. 37 (D.C.Ariz.), aff'd, 400 U.S. 884, 91 S.Ct. 139, 27 L.Ed.2d 129 (1970). See n. 11, infra.
A Florida one-year durational residence requirement for medical care at public expense was found unconstitutional in Arnold v. Halifax Hospital Dist., 314 F.Supp. 277 (M.D.Fla.1970), and Crapps v. Duval County Hospital Auth., 314 F.Supp. 181 (M.D.Fla.1970).
E.g., Weber v. Aetna Cas. & Surety Co., 406 U.S. 164, 173, 92 S.Ct. 1400, 1405, 31 L.Ed.2d 768 (1972); Dunn v. Blumstein, 405 U.S. 330, 335, 92 S.Ct. 995, 999, 31 L.Ed.2d 274 (1972).
394 U.S., at 634, 89 S.Ct., at 1331. See also id., at 642 644, 89 S.Ct., at 1335—1337 (Stewart, J., concurring).
Dunn v. Blumstein, supra; Shapiro v. Thompson, 394 U.S. 618, 89 S.Ct. 1322, 22 L.Ed.2d 600 (1969); see Wyman v. Lopez, 404 U.S. 1055, 92 S.Ct. 736, 30 L.Ed.2d 743 (1972); Oregon v. Mitchell, 400 U.S. 112, 237, 91 S.Ct. 260, 321, 27 L.Ed.2d 272 (1970) (separate opinion of Brennan, White, and Marshall, JJ.), 285—286, 91 S.Ct. 345 (Stewart, J., concurring and dissenting, with whom Burger, C.J., and Blackmun, J., joined); Wyman v. Bowens, 397 U.S. 49, 90 S.Ct. 813, 25 L.Ed.2d 38 (1970); United States v. Guest, 383 U.S. 745, 757—759, 86 S.Ct. 1170, 1177—1179, 16 L.Ed.2d 239 (1966); cf. Griffin v. Breckenridge, 403 U.S. 88, 105—106, 91 S.Ct. 1790, 1799—1800, 29 L.Ed.2d 338 (1971); Demiragh v. DeVos, 476 F.2d 403 (CA2 1973). See generally Z. Chafee, Three Human Rights in the Constitution of 1787, pp. 171—181, 187 et seq. (1956).
See King v. New Rochelle Municipal Housing Auth., 442 F.2d 646, 648 n. 5 (CA2 1971); Cole v. Housing Authority of City of Newport, 435 F.2d 807, 811 (CA1 1970); Wellford v. Battaglia, 343 F.Supp. 143, 147 (D.C.Del.1972); cf. Truax v. Raich, 239 U.S. 33, 39, 36 S.Ct. 7, 9, 60 L.Ed. 131 (1915); Note, Shapiro v. Thompson: Travel, Welfare and the Constitution, 44 N.Y.U.L.Rev. 989, 1012 (1969).
Appellees argue that the County should be able to apply a durational residence requirement to preserve the quality of services provided its longtime residents because of their ties to the community and the previous contributions they have made, particularly through past payment of taxes. It would seem inconsistent to argue that the residence requirement should be construed to bar long-time Arizona residents, even if unconstitutional as applied to persons migrating into Maricopa County from outside the State. Surely, longtime residents of neighboring counties have more ties with Maricopa County and equity in its public programs, as through past payment of state taxes, than do migrants from distant States. This 'contributory' rationale is discussed, infra, at 266.
In Vaughan v. Bower, 313 F.Supp. 37 (D.C.Ariz.), aff'd, 400 U.S. 884, 91 S.Ct. 139, 27 L.Ed.2d 129 (1970), a federal court struck down an Arizona law permitting the director of a state mental hospital to return to the State of his prior residence, any indigent patient who had not been a resident of Arizona for the year preceding his civil commitment. It is doubtful that the challenged law could have had any deterrent effect on migration, since few people consider being committed to a mental hospital when they decide to take up residence in a new State. See also Affeldt v. Whitcomb, 319 F.Supp. 69 (N.D.Ind.1970), aff'd, 405 U.S. 1034, 92 S.Ct. 1304, 31 L.Ed.2d 576 (1972).
See Vlandis v. Kline, 412 U.S. 441, 452—453, n. 9, 93 S.Ct. 2230, 2236—2237, 37 L.Ed.2d 63 (1973).
For example, the Shapiro Court cautioned that it meant to 'imply no view of the validity of waiting-period or residence requirements determining eligibility (inter alia) to obtain a license to practice a profession, to hunt, or fish, and so forth.' 394 U.S., at 638, n. 21, 89 S.Ct., at 1333.
Dept. of Health, Education, and Welfare (HEW), Report on Medical Resources Available to Meet the Needs of Public Assistance Recipients, House Committee on Ways and Means, 86th Cong., 2d Sess., 74 (Comm. Print 1961). Similarly, President Nixon has observed: "It is health which is real wealth,' said Ghandi, 'and not pieces of gold and silver." Health, Message from the President, 92d Cong., 1st Sess., H.R.Doc. No. 92—49, p. 18 (1971). See also materials cited at n. 4, supra.
"While we fully recognize the value of higher education, we cannot equate its attainment with food, clothing and shelter. Shapiro involved the immediate and pressing need for preservation of life and health of persons unable to live without public assistance, and their dependent children. Thus, the residence requirement in Shapiro could cause great suffering and even loss of life. The durational residence requirement for attendance at publicly financed institutions of higher learning (does) not involve similar risks. Nor was petitioner . . . precluded from the benefit of obtaining higher education. Charging higher tuition fees to nonresident students cannot be equated with granting of basic subsistence to one class of needy residents while denying it to an equally needy class of residents."
See also Note, The Constitutionality of Nonresident Tuition, 55 Minn.L.Rev. 1139, 1149—1158 (1971). Moreover, in Vlandis, supra, the Court observed that 'special problems (are) involved in determining the bona fide residence of college students who come from out of State to attend (a) public university . . .,' since those students are characteristically transient, 412 U.S., at 452, 93 S.Ct., at 2236. There is no such ambiguity about whether appellant Evaro is a bona fide resident of Maricopa County.
See Valenciano v. Bateman, 323 F.Supp. 600, 603 (D.C.Ariz.1971). See generally HEW Report on Medical Resources, supra, n. 14, at 73—74; Dept. of HEW, Human Investment Programs: Delivery of Health Services for the Poor (1967).
See Dept. of HEW, Hill-Burton Project Register, July 1, 1947—June 30, 1967. HEW Publication No. (HSM) 72—4011, p. 37. Maricopa County has received over $2 million in Hill-Burton (42 U.S.C. § 291 et seq.) funds since 1947.
Medicaid, the primary federal program for providing medical care to indigents at public expense, does not permit participating States to apply a durational residence requirement as a condition to eligibility, 42 U.S.C. § 1396a(b)(3), and 'this conclusion of a coequal branch of Government is not without significance.' Frontiero v. Richardson, 411 U.S. 677, 687—688, 93 S.Ct. 1764, 1771, 36 L.Ed.2d 583 (1973). The State of Arizona does not participate in the Medicaid program.
Cf. Ely, Legislative and Administrative Motivation in Constitutional Law, 79 Yale L.J. 1205, 1223—1224 (1970); Note, Developments in the Law—Equal Protection, 82 Harv.L.Rev. 1065, 1076—1077 (1969).
The Arizona Supreme Court observed that because this case involves a governmental benefit akin to welfare, the 'reasonable basis' test of Dandridge v. Williams, 397 U.S. 471, 90 S.Ct. 1153, 25 L.Ed.2d 491 (1970), should apply. In upholding a state regulation placing an absolute limit on the amount of welfare assistance to be paid a dependent family regardless of size or actual need, the Court in Dandridge found it 'enough that the State's action be rationally based and free from invidious discrimination.' Id., at 487, 90 S.Ct., at 1162. The Court later distinguished Dandridge in Graham v. Richardson, 403 U.S. 365, 376, 91 S.Ct. 1848, 1854, 29 L.Ed.2d 534 (1971), where Mr. Justice Blackmun, writing for the Court, observed that '(a)ppellants' attempted reliance on Dandridge . . . is also misplaced, since the classification involved in that case (did not impinge) upon a fundamental constitutional right . . ..' Strict scrutiny is required here because the challenged classification impinges on the right of interstate travel. Compare Dandridge, supra, 397 U.S., at 484 n. 16, 90 S.Ct., at 1161, with Shapiro v. Thompson, supra.
Shapiro v. Thompson, 394 U.S., at 629, 89 S.Ct., at 1328.
See Cantor, The Law and Poor People's Access to Health Care, 35 Law & Contemp. Prob. 901, 909—914 (1970); cf. Catholic Medical Center v. Rockefeller, 305 F.Supp. 1256 (EDNY 1969), vacated and remanded, 397 U.S. 820, 90 S.Ct. 1517, 25 L.Ed.2d 806, aff'd on remand, 430 F.2d 1297, appeal dismissed, 400 U.S. 931, 91 S.Ct. 246, 27 L.Ed.2d 262 (1970).
HEW Report on Medical Resources, supra, n. 14, at 74. See generally Health, Message from the President, supra, n. 14; E. Kennedy, In Critical Condition: The Crises in America's Health Care (1973); Hearings on The Health Care Crisis in America before the Subcommittee on Health of the Senate Committee on Labor and Public Welfare, 92d Cong., 1st Sess. (1971).
Cantor, supra, n. 23; see E. Kennedy, supra, n. 24, at 78 94; Note, Working Rules for Assuring Nondiscrimination in Hospital Administration, 74 Yale L.J. 151, 156 n. 32 (1964); cf., e.g., Stanturf v. Sipes, 447 S.W.2d 558 (Mo.1969) (hospital refused treatment to frostbite victim who was unable to pay $25 deposit). See generally HEW Report on Medical Resources, supra, n. 14, at 74; Hearings on The Health Care Crisis in America, supra, n. 24.
'(L)ack of timely hospitalization and medical care for those unable to pay has been considered an economic liability to the patient, the hospital, and to the community in which these citizens might otherwise be self-supporting . . ..' HEW Report on Medical Resources, supra, n. 14, at 73; Comment, Indigents, Hospital Admissions and Equal Protection, 5 U.Mich.J.L. Reform 502, 515—516 (1972); cf. Battistella & Southby, Crisis in American Medicine, The Lancet 581, 582 (Mar. 16, 1968).
See Green v. Dept. of Public Welfare of Delaware, 270 F.Supp. 173, 177—178 (D.C.Del.1967).
In addition, Pima County, Arizona, did not apply the durational residence requirement between August 1969, when the requirement was found unconstitutional by the Arizona Court of Appeals, Board of Supervisors, Pima County v. Robinson, 10 Ariz.App. 238, 457 P.2d 951, and September 1970, when that judgment was vacated as moot by the Arizona Supreme Court, 105 Ariz. 280, 463 P.2d 536.
See appendix to this opinion, post, p. 274.
For the impact of 'free' indigent care on private hospitals and their paying patients see Dept. of Health, Education and Welfare (HEW) Report on Medical Resources Available to Meet the Needs of Public Assistance Recipients, House Committee on Ways and Means, 86th Cong., 2d Sess. (Comm.Print 1961).
The parties stipulated that Mr. Evaro was 'an indigent who recently changed his residence from New Mexico to Arizona and who has resided in the state of Arizona for less than twelve months.' App. 10. Therefore Mr. Evaro failed to meet only the third requirement discussed in the text.
This Court has noted that citizens have no constitutional right to welfare benefits. See, e.g., Dandridge v. Williams, 397 U.S. 471, 90 S.Ct. 1153, 25 L.Ed.2d 491 (1970); San Antonio Independent School Dist. v. Rodriguez, 411 U.S. 1, 33, 93 S.Ct. 1278, 1296, 36 L.Ed.2d 16 (1973).
The tax levied by the State of Nevada was upon every person leaving the State. As this Court has since noted, the tax was a direct tax on travel and was not intended to be a charge for the use of state facilities. See Evansville-Vanderburgh Airport Authority District v. Delta Airlines, Inc., 405 U.S. 707, 92 S.Ct. 1349, 31 L.Ed.2d 620 (1972).
The Court also rejected an equal protection argument, concluding: 'We are unable to say that such a discrimination, if it existed, did not rest on reasonable grounds, and was not within the discretion of the state legislature.' 179 U.S., at 276, 21 S.Ct., at 130.
See the concurring opinions of Mr. Justice Douglas (with whom Mr. Justice Black and Mr. Justice Murphy joined), 314 U.S., at 177, 62 S.Ct., at 168, and Mr. Justice Jackson, id., at 181, 62 S.Ct., at 170.
The Court in Edwards observed: 'After arriving in California (the indigent) was aided by the Farm Security Administration, which . . . is wholly financed by the Federal government.' 314 U.S., at 175, 62 S.Ct., at 168. The Court did not express a view at that time as to whether a different result would have been reached if the State bore the financial burden. But cf. Shapiro v. Thompson, 394 U.S. 618, 89 S.Ct. 1322, 22 L.Ed.2d 600 (1969).
See Starns v. Malkerson, 326 F.Supp. 234 (D.C.Minn.1970), aff'd, 401 U.S. 985, 91 S.Ct. 1231, 28 L.Ed.2d 527 (1971); Vlandis v. Kline, 412 U.S. 441, 93 S.Ct. 2230, 37 L.Ed.2d 63 (1973).
See, e.g., Interstate Busses Corp. v. Blodgett, 276 U.S. 245, 48 S.Ct. 230, 72 L.Ed. 551 (1928); Hendrick v. Maryland, 235 U.S. 610, 35 S.Ct. 140, 59 L.Ed. 385 (1915).
See Evansville-Vanderburgh Airport Authority District v. Delta Airlines, 405 U.S. 707, 92 S.Ct. 1349, 31 L.Ed.2d 620 (1972).
See, e.g., Evans v. Cornman, 398 U.S. 419, 90 S.Ct. 1752, 26 L.Ed.2d 370 (1970); Cipriano v. City of Houma, 395 U.S. 701, 89 S.Ct. 1897, 23 L.Ed.2d 647 (1969).
In Vlandis, while striking down a Connecticut statute that in effect prevented a new state resident from obtaining lower tuition rates for the full period of enrollment, we stated that the decision should not 'be construed to deny a State the right to impose on a student, as one element in demonstrating bona fide residence, a reasonable durational residency requirement, which can be met while in student status.' 412 U.S., at 452, 93 S.Ct., at 2236. Starns was cited as support for this position.
This distinction may be particularly important in a State such as Arizona where the Constitution provides for limitations on state and county debt. See Ariz.Const., Art. 9, § 5 (State); Art. 9, § 8 (County). See generally Comment, Dulling the Edge of Husbandry: The Special Fund Doctrine in Arizona, 1971 L. & Soc.O. (Ariz.St.L.J.) 555.
The appellees in this case filed an affidavit indicating that acceptance of appellants' position would impose an added burden on property taxpayers in Maricopa County of over.$2.5 million in the first year alone. App. 12—17.


text:
Figs B1.14; B13.7, 9, 11, 37–39, 61, 72; C88.1–13.
Species recognition. About 50% of workers and males and nearly all queens possess a pair of yellow to obscure brown spots enclosed within the black fascia of sternum 2 (absent in other Vespula species except rarely in males of V. austriaca, a very rarely collected social parasite). Further differences between V. acadica and similar species of the V. rufa-group (V. vidua, V. austriaca) are discussed under these species.
Variation. Fore wing length 8.5–10.0 mm (workers), 12.0–13.0 mm (♀♀, n = 7), ca. 11.0–13.0 mm (♂♂, n = 9). Black clypeal mark of female extending to dorsal margin of clypeus, in worker rarely to ventral margin of clypeus, in males clypeal mark usually free or extending to both dorsal and ventral margins. Yellow stripe along inner orbit ending near apex of ocular sinus, in males often extending far along upper margin of sinus. Female with lower gena black, often enclosing a small to medium-sized yellow spot ventrally; male with a yellow postocular band that is sometimes interrupted near middle. Metanotum with or without a pair of yellow spots in female, absent in male (always?). Propodeum in worker rarely with a pair of evanescent yellow spots. Pair of enclosed yellow spots near summit of tergum 1 almost always present (absent in one aberrant male from ON, Bruce Co., Inverhuron Prov. Pk., DEBU). Enclosed yellow spots present in about half of workers and males, and almost all queens; the spots sometimes more or less suffused with brown and evanescent. Queen generally with enclosed yellow spots on terga 3–5 as well; in xanthic specimens sometimes narrowly connected to apical fascia. One aberrant worker (ON, Bruce Co., Dorcas Bay, DEBU; Fig. 88.12) shows brownish suffusions to tergum 2 of similar extent as in V. rufa (which is marked with ivory instead of yellow).
Distribution. Canada: all provinces and territories except NU. Northern U.S. including AK, south to NC, TN, WV, MI, WI, MN, NE, NM, AZ and CA (Carpenter and Kojima 1997).
Biology. Nests are usually built in rotten logs, under logs or in the soil; aerial nests are uncommon. Females prey on live arthropods only. Due to its silvicolous habitat preferences and primarily boreo-montane distribution V. acadica rarely comes into contact with man and is therefore not a nuisance species (Akre et al. 1981).

matches: V. V. V. V. V. V.


text:
The Complainants are Materis Corporate Services and Parexgroup and Parexlanko of Issy les Moulineaux, France.
The Respondents are Bahadir Diker - Molekul Yapi Kimyasallari A.Ş. and Mustafa Erer and Timur Artun - Materis Web Tasarim Hizmetleri of Istanbul, Turkey.
The disputed domain names <lanko.org>, <materis.org> and <parexlanko.org> are registered with FBS Inc.
- on December 12, 2011, the WhoIs record indicated Timur Artun of Materis Web Tasarim Hizmetleri of Istanbul, Turkey as the registrant of <materis.org> and Bahadir Diker of Molekul Yapi Kimyasallari A.Ş. of Istanbul, Turkey as the registrant of the remaining two disputed domain names, namely, <lanko.org> and <parexlanko.org>.
The Center further reminded FBS Inc. that under paragraph 8 of the Policy, during a pending UDRP proceeding, a registrant may not transfer the domain name registration to another domain name holder (registrant) or registrar for a period of fifteen business days after such proceeding is concluded. The Center further noted that contrary to paragraph 8 of the Policy, it appears a transfer of the disputed domain name <materis.org> to another registrant has been made after the filing of the Complaint on December 2, 2011 requesting FBS Inc. a) explanation if such assumption was accurate and to confirm that the current registrant and contact details for the domain name <materis.org> have been restored, b) to provide the full registrant and contact details to the extent possible for all three disputed domain names and c) to confirm that all three disputed domain names are under registrar lock. On December 15, 2011, FBS Inc. transmitted by e-mail to the Center its response disclosing Mustafa Erer as the registrant for the disputed domain names. On December 22, 2011, the Center transmitted by e-mail to FBS Inc. confirmation of receipt of their e-mails dated December 5, 15 and 20, 2011 and noted that the WhoIs records continued to indicate discrepancies as detailed in the Center’s e-mail communication dated December 5, 2011. On the same day the Center sent e-mail communication to the Complainants advising that the registrant of the disputed domain names has been identified by the concerned Registrar, FBS Inc., as being different to the entity named in the Complaint as Respondent, providing the registrant and contact information disclosed by the Registrar, thereby, inviting the Complainants to file an amendment to the Complaint by December 27, 2011. The Complainants filed an amended Complaint on December 26, 2011.
On December 12, 2011 the Respondent, Timur Artun, sent two e-mail communications to the Center and the Complainants. The first e-mail communication stated that the disputed domain name <materis.org> was for his newly established company Materis Web Design and Programming Consulting Services which does not operate in the same sector as the Complainants. The e-mail further disclosed that the disputed domain name had been transferred to him as a gift for his newly established company. Later the same day Timur Artun sent a second e-mail indicating that the disputed domain name was used by his company Materis Web Design and Programming Consulting Services as a criticism site of businesses. The same Respondent sent an e-mail on December 23, 2011 but the e-mail did not contain any information material to the issues in these proceedings. A further e-mail communication was sent in Turkish by the same Respondent on January 24, 2012 stating that e-mail communications sent by him are registered with a Notary Public and threatened to initiate legal action if they are not considered.
On December 22, 2011, the Center informed the parties, in Turkish and English, that Turkish is the language of the registration agreement and that, pursuant to paragraph 11 of the Rules, the language of the proceeding shall be the language of the registration agreement, subject to the authority of the Panel to determine otherwise. Due to the fact that the Complaint was submitted in English, the Complainants were requested to i) provide evidence of an agreement between the Complainants and Respondents that the proceeding should be in English or, ii) submit the Complaint translated into Turkish or, iii) submit a request with supporting arguments for English to be the language of the administrative proceedings.
The Complainants replied to the notification the following day requesting that the language of the proceedings remain English and contending that the Respondents are familiar with the English language and are definitively able to understand and use it. The Respondents did not reply to the notification.
In accordance with the Rules, paragraphs 2(a) and 4(a), the Center formally notified the Respondents of the Complaint, and the proceedings commenced on January 3, 2012. In accordance with the Rules, paragraph 5(a), the due date for Response was January 23, 2012. On December 12 and 23, 2011, the Center received e-mail communications from the Respondent Timur Artun as mentioned above; however, the Respondents did not submit any formal response. Accordingly, the Center notified the Respondents’ default on January 24, 2012.
The Center appointed Gökhan Gökçe as the sole panelist in this matter on February 2, 2012. The Panel finds that it was properly constituted. The Panel has submitted the Statement of Acceptance and Declaration of Impartiality and Independence, as required by the Center to ensure compliance with the Rules, paragraph 7.
Although acting as three separate entities, the Complainants are part of the same corporate MATERIS CORPORATE SERVICES group. MATERIS CORPORATE SERVICES is a holding company consisting of four businesses, admixtures (CHRYSO), aluminates (KERNEOS), mortars (PAREXGROUP) and paints (MATERIS PAINTS).
The disputed domain names were registered on June 27, 2011 as evidenced in Annex 8 of the Complaint. The Respondent, Bahadir Diker, is a former employee of the Complainants as evidenced in Annex 18 of the Complaint. The Respondent, Mustafa Erer is an individual and the Respondent Timur Artun purports to be the owner of Materis Web Tasarim Hizmetleri of Istanbul, Turkey.
In accordance with paragraph 4(b)(i) of the Policy, the Complainants request that the disputed domain names <materis.org>, <parexlanko.org> and <lanko.org> be transferred to the Complainants. The Complainants submit the grounds for these proceedings are listed in paragraph 4(a) of the Policy.
The Complainants submit the disputed domain name <materis.org> is confusingly similar to their trademark MATERIS which was registered on March 8, 2001 in France and by the OHIM on November 2, 2005, as evidenced in Annex 13 of the Complaint. The Complainants also registered the domain names <materisgroup.com> and <materisgroup.eu> on October 3, 2006 as evidenced in Annex 13 of the Complaint and both domain names are redirected to <materis.com>.
The Complainants contend the disputed domain name <lanko.org> is confusingly similar to their trademark LANKO which has several international trademark registrations, including International Trademark registration with Madrid system on May 4, 1987 as evidenced in Annex 14 of the Complaint. The Complainants also registered the domain names <lanko.eu> and <lanko.asia> on April 10, 2006 and May 29, 2008 respectively, as evidenced in Annex 14 of the Complaint.
The Complainants argue the disputed domain name <parexlanko.org> is confusingly similar to their trademark PAREXLANKO which has several international trademark registrations including registration in France on April 20, 2005 and an International Trademark registration with Madrid system on February 29, 2008, as evidenced in Annex 15 of the Complaint. The Complainants also registered the domain names <lparexanko.com> and <parexlanko.asia> on February 7, 2003 and January 22, 2008 respectively, as evidenced in Annex 15 of the Complaint.
The Complainants therefore contend that the disputed domain names are identical or confusingly similar to trademarks or service marks in which the Complainants have rights.
The Complainants assert that the Respondents have no rights or legitimate interests in the disputed domain names. The Respondents do not have any registered trademarks or trade names corresponding to the disputed domain names and the Respondents are not known by the disputed domain names. The Complainants submit that they have not licensed, or otherwise permitted the Respondents to use their trademarks or to apply for or use any domain names incorporating them. The Complainants note that at least the Respondents Bahadir Diker and Mustafa Erer knew of the Complainants as they were previously involved in a Chryso v. Mustafa Erer / Bahadir Diker, WIPO Case No. D2011-1080 with Crhyso, a subsidiary of Materis Corporate Services.
The Complainants note that <parexlanko.org> and <lanko.org> are redirected to an error page, they further note that until December 2, 2011 <materis.org> also redirected to an error page but currently redirects to a page that states “Materis Web Design and Programming Consulting Services” as evidenced in Annex 20 of the Complaint. The Complainants contend that the Respondents are not using the disputed domain names for a legitimate noncommercial or fair use without intent for commercial gain or to misleadingly divert consumers or to tarnish the trademarks or service marks at issue, as when the site <materis.org> was active it provided information regarding the trade activities of the Complainants which would lead to confusion as evidenced in Annex 11 of the Complaint. Furthermore, even if used only for informative purposes a domain name that does not infringe the Complainants rights or risk confusing consumers could be used.
The Complainants submit that the Respondent Bahadir Diker was a former employee of Chryso Turkish subsidiary until January 3, 2011 as evidenced in Annex 18 of the Complaint. Therefore, the Respondent Bahadir Diker was clearly aware of the Complainants extensive goodwill and reputation of their trademarks MATERIS, LANKO and PAREXLANKO when it registered the disputed domain names on June 27, 2011. Similarly, the Respondent Mustafa Erer was familiar with the Complainants due to the prior UDRP proceedings. The Complainants further contend the fact Bahadir Diker is a former employee is not sufficient to establish rights or legitimate interests in the disputed domain names.
The Complainants contend that there is no bona fide use of the disputed domain names and that they were registered in bad faith as the Respondents knew they would lose the prior WIPO case.
The Complainants contend that the Respondent Bahadir Diker a former employee was aware of the Complainants’ rights in it trademarks, MATERIS, LANKO, PAREXLANKO when he registered the disputed domain names. It is alleged that Mustafa Erer acts on behalf of Bahadir Diker as established in the prior UDRP proceeding and he is also aware of the Complainants rights for the same reasons. The Complainants contend that the Respondent Bahadir Diker registered the disputed domain names to harm and damage the Complainants. The Complainants submit documentary evidence in Annex 11 of the Complaint of content from the disputed domain name <materis.org> prior to the Complaint and note the webpage contains negative statements about the Complainants and invites others to boycott Chryso, subsidiary of the Complainants.
The Complainants note that the disputed domain names <parexlanko.org> and <lanko.org> do not resolve to an active website and contend that the Respondents registered the disputed domain names in order to prevent the Complainants as the owner of the trademark or service mark from reflecting the mark in a corresponding domain name.
The Respondents did not reply to the Complainants contentions. Pursuant to paragraph 5(e) of the Rules, if a respondent does not submit a response, in the absence of exceptional circumstances, the panel shall decide the dispute based upon the complaint.
However, respondent’s failure to respond proceeding does not constitute an admission of any pleaded matter. Therefore, the Panel will proceed to evaluate the Complainants’ evidence and conduct his own examination of the Respondents’ websites in light of the requirements of paragraph 4(a) of the Policy, Stanworth Development Limited v. E Net Marketing Ltd., WIPO Case No. D2007-1228.
Although a formal response was not submitted, on December 12, 2011, the Respondent Timur Artun sent an e-mail to the Center stating that the disputed domain name <materis.org> had been transferred to him as a gift. Later the same day, Timur Artun sent a second e-mail indicating that the disputed domain name was used by his company Materis Web Design and Programming Consulting Services as a criticism site of businesses. The same Respondent sent an e-mail on December 23, 2011 but the e-mail did not contain any information material to the issues in these proceedings. The last communication from the same Respondent is of January 24, 2012, in Turkish, where it threatened to initiate legal action in the event his e-mail communications were not considered.
There are procedural matters which should be disposed of as a preliminary matter. The first procedural matter relates to the Respondent Timur Artun’s unsolicited Supplemental Filings on December 12, 2011, December 23, 2011 and January 24, 2012, the second matter relates to the identity of the Respondents and discrepancies in registrant details, the last matter relates to language of the proceedings.
The Rules make no explicit provision for supplementary filings and they are admissible at the Panel’s discretion, having regard to paragraphs 10(a) and 10(b) of the Rules to conduct the proceedings in a manner it considers appropriate under the Policy and Rules, subject to the requirements that the parties are treated with equality. The Panel has, therefore, decided to accept the supplemental filings and to take them into consideration when rendering its decision.
The Complaint was initially brought against Bahadir Diker. In accordance with the WhoIs records available on December 2, 2011, the date the Complaint was filed, the disputed domain names were registered on June 27, 2011 and the registrant was Bahadir Diker. Since service of the Complaint, presumably on December 5, 2011, the date of the last update to registrant details, registration of <materis.org> changed to Timur Artun, Materis Web Tasarim Hizmetleri of Istanbul, Turkey. Despite the WhoIs records the registrar FBS Inc. identified Mustafa Erer of Istanbul, Turkey as the registrant of all three disputed domain names.
Having established the history of the disputed domain name registration, whereby Bahadir Diker was the registrant at the time of submission of the Complaint, the registrar FBS Inc. identified Mustafa Erer and WhoIs listed Timur Artun as the registrant of <materis.org>. The Complainants allege that Mustafa Erer is the “front man” for Bahadir Diker as established in a previous dispute, Chryso v. Mustafa Erer / Bahadir Diker, WIPO Case No. D2011-1080. Furthermore, the Complainants state that Bahadir Diker, the original registrant, is behind all three registrations and the transfer to Timur Artun constitutes cyber flight in breach of paragraph 8 of the Policy.
Paragraph 8 of the Policy prohibits, inter alia, transfer of the domain name registration to another holder during a pending administrative proceeding. Although the meaning of “pending proceeding” is not explicitly stated, prior cases have found that process starts from the filing of the complaint, PREPADOM v. Domain Drop S.A. (PREPADOM-COM-DOM), WIPO Case No. D2006-0917, Imperial Chemical Industries, PCL. v. Oxford University, WIPO Case No. D2001-0292.
Although the exact date of transfer has not been provided, on the balance of probabilities the Panel infer the disputed domain name <materis.org> was transferred after receipt of the Complaint in an attempt to circumvent proceedings. Therefore the Panel finds such transfer was in breach of paragraph 8(a) of the Policy and constitutes cyber flight, Humana Inc. v. CDN Properties Incorporated, WIPO Case No. D2008-1688.
In accordance with paragraph 14(b) of the Rules, the Panel is permitted to draw such inferences as it considers appropriate from a party’s failure to comply with a provision of, or requirement under the Rules. As stated above, the Panel finds breach of paragraph 8(a) and the Panel draws an inference, in absence of any Response the Respondents do not dispute the allegations in the Complaint of the relationship between the Respondents. Furthermore, the Respondent Timur Artun accepts that the domain name was transferred to him as a gift which suggests that it was to avoid proceedings and constitutes cyber flight. Furthermore, The relationship between Bahadir Diker and Timur Artun is established by admission. Therefore, in the absence of any information or evidence offered by the Respondents to the contrary, the Panel infers that all three Respondents are connected and as a change of registrant in these circumstances can not affect the proceedings, Unilever PLC v. ABC Corp., WIPO Case No. D2003-0164, the Panel shall go on to consider the Complaint against all three Respondents.
The Registrar of the disputed domain names has informed the Center that the language of the relevant registration agreement is Turkish. On December 22, 2011, the Center sent a notification to the Parties stating that, according to information provided from the concerned registrar, the language of the registration agreement is Turkish.
The Complainants submit that English should be the language of the proceedings as the Respondents clearly understand English. The Complainants rely on the fact that prior UDRP proceeding initiated against the Respondents Bahadir Diker and Mustafa Erer was conducted in English without any difficulty on the part of the Respondents. The Respondents did not make any representations with regards to the language of the proceedings.
The Center sent notification of the Complaint and invited the Respondents to make submission regarding the language of the proceedings in both English and Turkish. The Panel is therefore satisfied that the Respondents had notice of the proceedings and an opportunity to request that it proceed in Turkish; however, the Respondents failed to submit any response at all.
The Panel is satisfied that all parties can understand and communicate in English. The Panel considered that the Respondents, Bahadir Diker and Mustafa Erer have previously been subject to UDRP proceedings held in English and that Timur Artun sent e-mail communications, after receipt of notification regarding the language of the proceedings, in English suggesting not only that he understands and can communicate in English, but that he chose to communicate in English.
In reaching its decision regarding the language of the proceeding the Panel has considered paragraph 11 of the Rules, the fact that the Center sent all the communications in both languages, Turkish and English, and as such, the Panel is satisfied that the Respondents had fair notice of the dispute. Further, based on the lack of any response, in the Panel’s view, the Respondents will not be prejudiced by a decision being rendered in English.
For all the above reasons, the Panel determines, according to paragraph 11(a) of the Rules, that the language of these proceedings be English.
The Panel turns to the merits of the case. In accordance with paragraph 4 of the Policy, the Complainants request that the disputed domain names be transferred to the Complainants. The Complainants submit the grounds for these proceedings are listed in paragraph 4(a) of the Policy.
Registration of a trademark satisfies the threshold requirement of having trademark rights. The Panel is satisfied that the Complainants are registered owners for trademarks MATERIS, LANKO, PAREXLANKO as evidenced by trademark certificates in Annexes 13,14 and 15 of the Complaint and such registrations predate the registration of the disputed domain names.
While not dispositive under the first element, the Panel notes the Complainants have registered a number of domain names incorporating their trademarks. It is clear that the only difference between the disputed domain names <materis.org>, <parexlanko.org> and <lanko.org> and the Complainants registered domain names is the gTLD “.org”. The Panel finds the addition of a gTLD suffix is irrelevant when determining whether a disputed domain name is confusingly similar to the complainant’s trademark, PRL USA Holdings, Inc. v. Spiral Matrix, WIPO Case No. D2009-0009. It has been stated in several decisions by other UDRP panels that the incorporation of a trademark in its entirety into a domain name may be sufficient to establish that the domain name is identical or confusingly similar to a registered trademark, Bayerische Motoren Werke AG, Sauber Motorsport AG v. Petaluma Auto Works, WIPO Case No. D2005-0941.
Following Oki Data Americas Inc. v. ASD Inc., WIPO Case No. D2001-0903, a domain name that reproduces the trademark in its entirety is confusingly similar to the mark. It has been stated in several decisions by other UDRP administrative panels that incorporating a trademark in its entirety into a domain name can be sufficient to establish that the domain name is identical or confusingly similar to a registered trademark. The panel recognises the Complainants’ rights and concludes that the disputed domain names are identical or confusingly similar with the Complainants’ trademarks.
The Panel finds that the requirements of paragraph 4(a)(i) of the Policy are fulfilled, consequently, the Panel finds for the Complainants on the first element of the Policy.
In accordance with paragraph 4(a)(ii) of the Policy, the Complainants must prove that the Respondents have no rights or legitimate interests in respect of the disputed domain names. Although the Policy states that the Complainants must prove each of the elements in paragraph 4(a), it is often observed that it is difficult for a complainant to prove a negative and therefore it has been generally accepted under the Policy that, once a complainant has presented a prima facie case of a respondent’s lack of rights or legitimate interests in a domain name, the burden shifts to the respondent.
The Complainants contend that the Respondents have no rights or legitimate interests in the disputed domain names; there is no supporting trademark registration, neither association to the Complainants, nor a connection to the disputed domain names and the Respondents are not commonly known by the disputed domain names. This has not been contested by the Respondents and the Panel finds no evidence to suggest the Respondents are commonly known by the disputed domain names or that there are other grounds to establish a legitimate interest to justify choosing the disputed domain names which incorporate the Complainants’ trademarks.
The Complainants note that <parexlanko.org> and <lanko.org> are redirected to an error page, they further note that until December 2, 2011 <materis.org> also redirected to an error page but currently redirects to a page that states “Materis Web Design and Programming Consulting Services” as evidenced in Annex 20 of the Complaint. The Panel visited the disputed domain names and notes that although still under construction the content of the webpage of <materis.org> has changed when compared to the screenshot submitted in Annex 20 of the Complaint. The Complainants also submit evidence in Annex 11 of the Complaint that the website <materis.org> prior to the Complaint was an active website containing information about Chryso cement and also stating that the website “chryso.org” had been unfairly taken from the owners and that the company should be boycotted. The Panel therefore adduces that the recent transfer of <materis.org> to Timur Artun was a cyber flight and although the Respondent claims that the domain name <materis.org> is a gift for his business “Materis Web Design and Programming Consulting Services”, there is no evidence of such entity, its activities or preparations to use the disputed domain name for legitimate purposes. The Respondent Timur Artun claims that it is developing a website for the disputed domain name <materis.org> and intends to use the website as a criticism site. However it has failed to provide any evidence of “demonstrable preparations” which suggests there is no such intention, Helen Fielding v. Anthony Corbert aka Anthony Corbett, WIPO Case No. D2000-1000. Aside from the Respondent Timur Artun’s statement, there is no evidence of such intended use and the Panel does not accept that this alone provides sufficient evidence to draw the conclusion that the disputed domain name <materis.org> will in fact be used for a bona fide offering of goods or services as the Respondent claims.
On the balance of probabilities, the Panel is of the opinion that Timur Artun was aware of the Complainants marks and “his friend’s” intention in giving him the disputed domain name as a “gift”. The Panel further finds that the Respondent Mustafa Erer was familiar with the Complainants due to the prior UDRP proceedings and the Respondent Bahadir Diker obviously was aware of the Complainants and their rights due to his former employment by the Complainants.
The disputed domain names do not currently resolve to a website and therefore there are no grounds to suggest that the Respondents have rights or legitimate interests in using the disputed domain names identical to the Complainants trademarks. Furthermore, the Respondents are not making use of the disputed domain names or a name corresponding to the domain names in connection with a bona fide offering of goods or services and the domain names resolve to inactive websites.
In the absence of a response, the Respondents were unable to demonstrate rights or legitimate interests in the disputed domain names and there is no evidence to suggest that the Respondents, or any business operated by them, are commonly known by the disputed domain names. The Panel is of the opinion that the Respondents’ use of the disputed domain names cannot be considered a bona fide or fair or noncommercial use.
Paragraph 4(a)(ii) of the Policy requires the Complainants to prove that the Respondents have no rights or legitimate interests in the disputed domain names. The Complainants have established a prima facie case and therefore the Panel concludes that the Respondents have not satisfied paragraph 4(c) of the Policy and concludes that the Respondents have no rights or legitimate interests in all three disputed domain names.
The Panel finds that the requirements of paragraph 4(a)(ii) of the Policy are fulfilled and consequently finds in favour of the Complainants on the second element of the Policy.
According to paragraph 4(a)(iii) of the Policy, the Complainants must prove that the disputed domain names have been registered and are being used in bad faith.
As detailed above, the Panel is convinced that the Respondents knew or should have known of the Complainants rights in their trademarks. The Complainants’ trademarks were registered long before the Respondents registered the disputed domain names and the Panel finds in all likelihood that the Respondents were aware of both the Complainants and their trademarks at the time of registering the disputed domain names. It is clear that the Respondents Bahadir Diker and Mustafa Erer knew of the Complainants due to the previous UDRP proceeding between the parties and the Panel finds on a balance of probabilities that at the date of transfer of the disputed domain name <materis.org> Timur Artun knew of the Complainants rights, hence, accepting transfer and attempting to legitimise such transfer through his alleged company “Materis Web Design and Programming Consulting Services”. It is therefore clear to the Panel that the Respondents, at the time of registration of the disputed domain names, must have been aware that any use of the said domain names would result in a violation of the Complainants’ trademark rights, suggesting that there was never an intention of good faith use from the part of the Respondents, Parfums Christian Dior v. Javier Garcia Quintas and Christiandior.net, WIPO Case No. D2000-0226.
The Panel also finds the Respondent Bahadir Diker has acted in bad faith by changing the registration details of <materis.org> after receiving the Complaint. This is a clear example of cyber flight and is in violation of paragraph 8 of the Policy. In previous UDRP cases the Panel has found cyber flight to be indicative of bad faith, British Sky Broadcasting Group plc v. Mr. Pablo Merino and Skyservices S.A., WIPO Case No. D2004-0131. Furthermore, the Respondents have attempted to mislead the Panel into believing that the Respondent Timur Artun has good reason to register the disputed domain name <materis.org> which again indicates bad faith. Additionally, the Panel finds that the lack of a response from the part of the Respondents is further suggestive of bad faith, Awesome Kids LLC and/or Awesome Kids L.L.C. v. Selavy Communications, WIPO Case No. D2001-0210.
The Panel turns to the use of the disputed domain names and notes that none of the disputed domain names resolve to an active website and that there is no evidence to suggest that there is any intention to make use of the disputed domain names for any purpose or legitimate activity consistent with good faith use. Previous UDRP panels have found that passive holding of a domain name is in violation of the Policy and may constitute bad faith, as found in several UDRP decisions, Banco Bilbao Vizcaya Argentaria, S.A. v. Victor Edet Okon, WIPO Case No. D2004-0245, DCI S.A. v. Link Commercial Corporation, WIPO Case No. D2000-1232, CareerBuilder LLC, v. Finity Development Group, WIPO Case No. D2006-0615.
As in Telstra Corporation Limited v. Nuclear Marshmallows, WIPO Case No. D2000-0003 and Ladbroke Group Plc v. Sonnoma International LDC, WIPO Case No. D2002-0131 after examining all circumstances surrounding the registration and use of the disputed domain names, the Panel finds that the Respondents registered and are using the disputed domain name in bad faith. Accordingly the Panel finds in favour of the Complainants on the third element of the Policy.
For the foregoing reasons, in accordance with paragraphs 4(i) of the Policy and 15 of the Rules, the Panel orders that the domain names <lanko.org>, <materis.org> and <parexlanko.org> be transferred to the Complainants.

matches: v. v. v. v. v. v. v. v. v. v. v. v. v. v. v. v. v. v. v.


text:
Proportionality was one of the major changes to the costs regime introduced by the CPR. However, the old test of proportionality, based on Court of Appeal guidance in Lownds v Home Office  EWCA Civ 365, was viewed by many as ineffective and as such its application was revisited within the 2013 Jackson reforms. Since then there has been a raft of decisions which touch on the application of proportionality.
It would appear that clarity is slowly being obtained, not least in the recent case of May & May v Wavell Group PLC & Bizarri  EWHC B16 (Costs). In the first instance a bill of £208,000.00 was reduced to £35,000.00 plus VAT, applying the test on a global basis. The decision was appealed. On appeal the assessed costs were increased to £75,000.00 plus VAT. Whilst of interest, the value of the award is not the important part of the judgment. Having considered the various strands of CPR 44.3(5), in particular looking at the generality of proceedings, HHJ Dight determined that the Costs Judge had misinterpreted and misapplied the new proportionality test. In particular, HHJ Dight was doubtful that a proper interpretation of the rules required or indeed entitled a Costs Judge to impose substantial overall reductions at the end of an assessment without regard for the component parts. In other words any application of the new test needs to be on an item by item basis. Whilst the decision represents a partial victory for the Mays, the precise application of the new proportionality test remains uncertain and the wait goes on for conclusive guidance.
The ambiguity over how proportionality applies to additional liabilities is also reaching its denouement. The appeal in BNM v MGN Ltd  EWCA Civ 1767 determined that pre April 2013 additional liabilities do not form part of the proportionality test.
“In any event, I do not consider that ATE insurance premiums fall within the natural meaning of "expenses" of litigation. They have nothing to do with the cost of issuing and progressing the litigation, any more than the premiums on a householder's or car owner's insurance which contains litigation cover. Both before the event insurance and after the event insurance offset the risk of a person's financial exposure as a result of litigation but they are not expenses of the litigation itself”.
When considering issues concerning the recoverability of additional liabilities more generally, regard should also be given to the decision in Peterborough & Stamford Hospitals NHS Trust v McMenemy & Ors  EWCA Civ 1941. Here, the Court confirmed the principle in Callery v Gray  EWCA Civ 1117, specifically, that it is reasonable to conduct litigation by entering into a block-rated ATE policy when entering into a CFA. The Judge did, however, state that it may be possible for a Defendant to argue that it was unreasonable or disproportionate to take out a specific ATE policy over another.
We still await the definitive judgment on premium recovery, but until it is received the decision of Mr Justice Martin Spencer in Percy v Anderson-Young  EWHC 2712 (QB), is certainly worth consideration. Here the High Court allowed recovery of an After the Event insurance premium of £533,017.13, overturning the previous decision of the District Judge to reduce it to just £82,513.07.
On appeal, the High Court distinguished cases where the level of cover was too high from those where the judge found the underwriting decision to be flawed. Spencer J found that in a situation where a party has over-insured, the Court can reduce the premium on a broad brush basis, as in Rogers. However, the DJ in this case should not have considered himself better placed than the underwriter to identify the financial risk which the insurer faced and it was wrong to reduce the premium to such an extent without hearing expert evidence.
The concept of controlling costs midway through the litigation is not a new one. When the Civil Procedures Rules were first enacted costs estimates had to be served with the Allocation and Listing Questionnaires. However, the practice direction which accompanied the Rules did not effectively allow for costs control. As a result Jackson LJ implemented costs budgeting regime, via CPR3E. Whilst it was initially met with some disapproval there is now a real judicial appetite for budgeting. The law in this area is constantly evolving and recent decisions have centred on what constitutes a “good reason” to depart (upwards or downwards) from an approved budget. CPR Part 3.18 (b) states that an approved budget can be departed from at detailed assessment only if there is a good reason for doing so. The decisions in Merrix v Heart of England NHS Foundation Trust  EWHC 346 (QB) and Harrison v University Hospitals Coventry & Warwickshire NHS Trust  EWCA Civ 791 have provided guidance on how to apply the test set out in the CPR in practice. There is now no doubt that if the future costs in a bill come within the budget then these will usually be recoverable in full.
What constitutes good reason is less clear and unfortunately these decisions offer little in the way of general guidance. Deputy Master Campbell offered his opinion on what constitutes such a reason in the case of RNB v London Borough of Newham  EWHC B15 (Costs). Here, he applied hourly rates that he deemed appropriate to the incurred costs, only to then apply them to the budgeted costs deeming that to be a good reason. Given the wording of CPR 3 PD 7.3 and 7.10 it would appear that the decision seems to be circular reasoning and may not stand up to closer scrutiny. In fact the unreported decision of Bains v Royal Wolverhampton NHS Trust (DJ Lumb) and other unreported decisions in the SCCO go against the decision of the Deputy Master.
The benefits of getting your budget right are apparent for all to see, but as was seen by the decision in Mitchell v News Group Newspapers Limited  EWCA Civ 1537 failure to comply with the strict time limit as set out within CPR3 can have a draconian effect - in this case a budget of £506,425.00 was reduced to Court fees only.
The case of Denton v White  EWCA Civ 906 set out the rules surrounding a relief from sanctions application should a breach occur. Relief can be required for a number of reasons, such as failing to provide a Notice of Funding (Tim Yeo v Times Newspapers  EWHC 2853 (QB)) to failing to advise a Claimant of a CFA entered into (Jackson v Thompsons Solicitors & Ors  EWHC 549 (QB)). The rules are clear and relief is never guaranteed.
Last year saw two further decisions which dealt with failure to serve a budget, Lakhani v Mahmud  EWHC 1713 (Ch) and Intellimedia Systems Ltd v Richards & Ors . In both cases relief was sought, due to the late filing of Costs Budgets, with the applications yielding different results. In Lakhani the defendant filed their budget one day late. They maintained that it was correctly served and failed to make their application for relief until the eleventh hour. Despite the parties discussing costs, and exchanging Precedent R reports, relief was not granted in the first instance. In particular the Judge commented that the impact of late service had created an environment which was not conducive to agreement and was more conducive to the defendant’s presenting the costs as highly contentious. On appeal the decision, described to be on the tougher end of the spectrum as to substance and on the leaner end of the spectrum as to analysis, was upheld. Mr Alexander QC confirmed that the Claimants had not used the rules as a tripwire. They had correctly and promptly pointed out the Defendants’ error and that without an application for relief the consequences of 3.14 would follow. He made it clear that they were not obliged to consent, in advance, to an application for relief which was neither made nor provided to them until the day before the hearing.
By contrast in Intellimedia the budget was served late due to sickness of the conducting solicitor. Having been alerted to the breach the Partner promptly applied for relief from sanctions. Despite finding the breach to be not trivial the Court allowed relief on the basis the sanction was not proportionate, although in doing so they did penalise the Claimant for being inefficient by ordering the costs of the instant hearing be paid on the indemnity basis.
The decisions in these matters are fact specific, however, closer inspection confirms the need for adopting a collaborative approach to litigation, making any applications for relief in a timely manner, but more importantly that the Denton test is still good law.
The 92nd Amendment to the CPR confirmed that as of 6 April 2018 multi-track bills for work undertaken after this date must be in an electronic format. Lord Jackson stated that the intention behind this is to create a more streamlined process which in theory would increase the transparency of a bill, provide a more user friendly synopsis and make a bill more inexpensive to produce.
The requirements of the new bill make it essential that time is claimed in tasks, phases, activities and that routine items are individually identified. All of the costs claimed in the bill will now appear in a fully chronological summary. While this introduces an extra layer of complexity into the drafting process, the new format bill will allow the Costs Judge to more fully understand how and where the highest volume of expenditure occurs.
Although the new format bill will represent a significant change in how claims for costs are presented (and potentially, disputed), the need for bills of costs to be drafted efficiently and expeditiously has not changed. Whilst technological advances must be embraced, they offer an incomplete solution without the expertise of an experienced costs consultant to assist in transitioning to the new format.
The law of costs remains an arcane area and the costs management and detailed assessment processes, in particular, are fraught with risks; costs practitioners are best equipped to ensure all work undertaken is compliant and every possible step is taken to achieve the desired outcome.
Considering that the fees associated with instructing a costs professional are usually recoverable from the other side, there is little downside to taking this approach.
If you would like to discuss this issue in more detail, or any other Costs matters, contact our Head of Costs Anil Virji on 0207 842 5950 or email us.

matches: EWCA EWCA EWCA EWCA EWCA EWCA EWCA