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corporation of Cutter Biological, Defendants-Appellees.
Nos. 87-2831, 88-15466 and 89-15658.
Argued and Submitted Oct. 3, 1989.
Michael E. St. George, St. George & Reed, Tempe, Ariz., for plaintiffs-appellants.
June Ava Forescue, Asst. Atty. Gen. and Tibor Nagy, Jr., Snell & Wilmer, Phoenix, Ariz., for defendants-appellees.
Before D.W. NELSON, TROTT and RYMER, Circuit Judges.
Under the contract, the Department assigned prisoners to the plasma center to act as assistants to Cutter's technical staff. All inmates so assigned were approved for that work at the direction and discretion of the Department. The plasma center was required to pay the Department twelve dollars per week for each prisoner who worked at the center. This compensation for services was paid directly to the Inmates' Account Office of the Department. Pursuant to Arizona law, the Department retained control over the disposition of all compensation paid by Cutter to the Inmates' Accounts Office. No oral or written agreement existed between the plasma center and the inmates regarding compensation or conditions of employment.
Cutter did not have the power to hire and fire inmates, although it did request some prisoner assignments and removals over the years covered by the contracts. Nor did Cutter maintain employment records for the inmates. Cutter did have day-to-day supervision of the inmates' work responsibilities. The Department maintained control over the inmate workers to the extent it determined which inmates were eligible to work. It also maintained security over them as it did over all other inmates in its care and custody. State law requires that inmates work and be paid for their labor. Ariz.Rev.Stat.Ann. Sec. 31-251(A) (1989).
Plaintiffs filed a complaint in district court against the state defendants and Cutter, alleging they had been denied minimum wages for their work performed at Cutter, in violation of state and federal law. First, plaintiffs complained they were not granted the minimum wage required by the FLSA, alleging (1) they were "employees" as defined by section 203(e)(1) and (2) defendants were "employers" as defined by section 203(d) of that statute. Second, plaintiffs sought relief under Arizona statutes, Ariz.Rev.Stat.Ann. Secs. 31-254(A) and 41-1624.01 (1989), alleging these and related statutes require that inmates engaged in correctional industries programs pursuant to sections 41-1621 through 41-1629 receive the minimum wage.
Plaintiffs also sought relief under 42 U.S.C. section 1983, alleging that the Department's failure to provide minimum wages mandated by Arizona statutes for inmates working for private parties under contract with the Department resulted in the inmates being deprived of a liberty interest without due process of law.
The district court granted summary judgment against plaintiffs on their FLSA claims, finding that defendants were not employers as contemplated by the FLSA. 694 F.Supp. 651. The court also granted summary judgment in favor of defendants on plaintiffs' state law claims, finding that the Eleventh Amendment acted as a bar to plaintiffs' claims against Arizona for the back-pay relief requested.
The court granted summary judgment to Cutter on plaintiffs' section 1983 claim. With reference to the state defendants, the court granted partial summary judgment in their favor, reasoning that although it lacked subject matter jurisdiction to hear the underlying state law claims, it could retain jurisdiction to hear the section 1983 suit against the state defendants. The court held that if plaintiffs were to prevail on the remaining section 1983 claims, the court could grant prospective relief that would not violate the Eleventh Amendment.
The Notice of Appeal reads: "Come now plaintiffs, as consolidated into this cause and do hereby appeal the judgment of this court...." As appellees note, the Supreme Court has held that "although a court may construe the Rules liberally in determining whether they have been complied with, it may not waive the jurisdictional requirements of Rules 3 and 4, even for 'good cause shown' under Rule 2, if it finds that they have not been met." Torres v. Oakland Scavenger Co., 487 U.S. 312, 317, 108 S.Ct. 2405, 101 L.Ed.2d 285 (1988). The instant case, however, is distinguishable from Torres. In Torres, one party in a multiparty suit was missing from the notice of appeal due to a clerical error. Under that circumstance, there was no reason for opposing counsel to believe the unnamed party would be a party to the appeal. By contrast, appellants in this case accurately listed the parties to the appeal by describing them as all plaintiffs consolidated below. There was no need for appellants to list each party individually, since appellees could have covered their identities by referring to records of the lower court proceedings. The policy behind Rule 3(c) thus was adequately served.
Appellants argue that the FLSA mandates minimum wage for their hours worked in prison industry. To decide this issue, we must first determine if the FLSA pierces all the states' Eleventh Amendment immunity, and second, whether these prisoners enjoyed with the state an "employee-employer" relationship as that relationship is understood by the FLSA.
[W]e have found not a word in the history of the 1966 amendments to indicate a purpose of Congress to make it possible for a citizen of that State or another State to sue the State in federal courts.... It would also be surprising in the present case to infer that Congress deprived Missouri of her constitutional immunity without changing the old Sec. 16(b) under which she could not be sued or indicating in some way by clear language that the constitutional immunity was swept away.
Id. at 285, 93 S.Ct. at 1618. While the employees could not bring an action against the state, however, they were not totally without a remedy as the Secretary of Labor could bring an action against the state for unpaid minimum wages or unpaid overtime violations on their behalf. Id. at 285-86, 93 S.Ct. at 1618-19.
The history of whether state employees fall within the coverage of the FLSA is marked by considerable interplay between various branches of government. In 1974, Congress amended the FLSA, extending its protections to almost all state employees. 29 U.S.C. Sec. 203(d), (x) (1976) (current version in 29 U.S.C. Sec. 203(d) (1988)). Then, in National League of Cities v. Usery, 426 U.S. 833, 852, 96 S.Ct. 2465, 49 L.Ed.2d 245 (1976), the Supreme Court ruled that Congress was without authority to extend FLSA coverage to state employees in "areas of traditional governmental functions." In 1985, however, the Supreme Court reversed field and overruled National League of Cities in Garcia v. San Antonio Metro. Transit Auth., 469 U.S. 528, 105 S.Ct. 1005, 83 L.Ed.2d 1016 (1985), holding that, "[w]e therefore now reject, as unsound in principal and unworkable in practice, a rule of state immunity from federal regulation that turns on a judicial appraisal of whether a particular governmental function is 'integral' or 'traditional.' " 469 U.S. at 546-47, 105 S.Ct. at 1015-1016. The result of Garcia was to bring all employees of the states and their political subdivisions within the full coverage of the FLSA. Ackinclose v. Palm Beach County, 845 F.2d 931, 933 (11th Cir.1988).
In 1985, Congress amended the FLSA to alleviate temporarily the financial burden on states caused by Garcia. The states were given until April 15, 1986 to conform their procedures to the FLSA. Pub.L. No. 99-150, 99 Stat. 787 Sec. 2(c)(1) (1985), 29 U.S.C. Sec. 216 (historical note) (1988). Contrary to appellees' arguments, it is clear that the FLSA's protection now extends to state employees.
Appellants argue that they enjoy an employee-employer relationship with the State of Arizona, and that Cutter Biological and the state were "joint employers." Under the FLSA, an employer "include[s] any person acting directly or indirectly in the interest of an employer in relation to an employee and includes a public agency...." 29 U.S.C. Sec. 203(d) (1988). "In the case of an individual employed by a public agency, such term means ... any individual employed by a State...." 29 U.S.C. Sec. 203(e)(2)(C) (1988).
The Supreme Court, in a non-prisoner case, has articulated an "economic reality test" to be considered in deciding if an employee-employer relationship exists. In Goldberg v. Whitaker House Coop., 366 U.S. 28, 33, 81 S.Ct. 933, 936, 6 L.Ed.2d 100 (1961), the court held that a determination under the FLSA of whether an employment relationship exists should be based on the "economic reality" of the employment situation. The Court did not specify the factors to be weighed in this evaluation.
whether the alleged employer (1) had the power to hire and fire the employees, (2) supervised and controlled employee work schedules or conditions of employment, (3) determined the rate and method of payment, and (4) maintained employment records.
Bonnette v. California Health & Welfare Agency, 704 F.2d 1465, 1470 (9th Cir.1983).2 However, these particular factors are merely guidelines; "they are not etched in stone and will not be blindly applied." Id. "The determination of whether an employer-employee relationship exists does not depend on 'isolated factors but rather upon the circumstances of the whole activity.' " Id. at 1469 (quoting Rutherford Food Corp. v. McComb, 331 U.S. 722, 730, 67 S.Ct. 1473, 1477, 91 L.Ed. 1772 (1947)).
Appellees argue that we should not reach the economic reality issue, claiming the FLSA does not apply to prison inmates as a class. I believe this argument has merit. A review of the FLSA in the light of its evident purpose and legislative history, conducted with an eye guided by common sense and common intelligence, leads me to the inescapable conclusion that it is highly implausible that Congress intended the FLSA's minimum wage protection be extended to felons serving time in prison. This is a category of persons--convicted murderers, rapists, burglars, armed robbers, swindlers, thieves, and the like--whose civil rights are subject to suspension and whose work in prison could be accurately characterized in an economic sense as involuntary servitude, peonage, or indeed slavery--all of which are prohibited by law--were it not for the exceptions carved out by the courts from these prohibitions for persons "duly tried, convicted, sentenced and imprisoned for crime in accordance with law." Draper v. Rhay, 315 F.2d 193, 197 (9th Cir.), cert. denied, 375 U.S. 915, 84 S.Ct. 214, 11 L.Ed.2d 153 (1963) (citing Lindsey v. Leavy, 149 F.2d 899, 901-02 (9th Cir.), cert. denied, 326 U.S. 783, 66 S.Ct. 331, 90 L.Ed. 474 (1946)). Not a word can be found anywhere in the relevant statutes or authorities indicating an intent by Congress to include such a distinctive class of "workers" in the FLSA. It is true as observed by the Second Circuit in Carter v. Dutchess Community College, 735 F.2d 8, 13 (2d Cir.1984), that prisoners are not explicitly excepted in the statutes from FLSA coverage, but I find singularly unconvincing the Second Circuit's argument that the statutory scheme's failure to include "prisoners" on what it terms "an extensive list"3 of workers who are excepted expressly from FLSA coverage provides somehow a rationale to bring them within the statute's mandate. This argument begs the question. It presupposes an affirmative answer to the key underlying question of whether prisoners who work are workers within the meaning of the statutory scheme at issue.4 It is equally plausible, indeed more so, that in view of the manifest purpose of Congress in enacting the FLSA, it did not cross any member's mind--even for a moment--that felons serving hard time in prison and working in the process would be covered by this economic protection. I reject as almost whimsical the notion that Congress could have intended such a radical result as bringing prisoners within the FLSA without expressly so stating. There are obvious policy considerations in such a result that should be openly addressed by Congress, not the courts.
My conclusion is bolstered when I apply to this unique situation the economic realities test. The results of such application reveal why the FLSA itself cannot be said to cover prison labor and why no employer-employee relationship can be found to exist between Arizona and inmates who worked in Cutter's lab.
The proper starting point in such an analysis is the state's complete control over Arizona's inmates. Not only does the state provide the inmates' food, shelter, and clothing, but it is only with the state's permission that prisoners are allowed the privilege of working. The state's absolute power over appellants is a power that is not a characteristic of--and indeed is inconsistent with--the bargained-for exchange of labor which occurs in a true employer-employee relationship. Arizona's prisoners have no economic need for the FLSA, none.
"notwithstanding any other law, no prisoner given a work assignment or required to perform any labor by the department of corrections shall be considered an employee or to be employed by the state or the department of corrections, regardless of whether the prisoner is compensated or not, nor shall an employee-employer relationship exist between the prisoner and the department of corrections or the state for any purpose and none of the rights or privileges otherwise accorded to employees by law shall accrue to such prisoners."ARCOR enterprises was established in 1969. It currently provides for "industries [and] enterprises" to be "conducted for the employment of prisoners in the manufacture, or production of such articles, or products as may be needed for the construction, operation, maintenance or use of any office, department, institution or agency supported in whole or in part by a state or its political subdivisions or for sale to the public." Ariz.Rev.Stat.Ann. Sec. 41-1622 (1989).
"1. Make available within the state correctional institution opportunities for employment of inmates in jobs which combat idleness or develop good working habits.
2. Provide training and work experience that will assist inmates in eventually securing and holding gainful employment outside the correctional institution.
3. Reduce the cost to society of maintaining an inmate through the sale of inmate products and services and by requiring and enabling inmates to pay some portion of their room and board costs.
4. Require and enable inmates to make restitution to the victims of their offenses, so as to assist the inmates in accepting responsibility for the consequences of their acts.
5. Require and enable inmates to provide assistance to their dependents, thus tending to strengthen family ties.
6. Require and enable the inmate to accumulate savings for his eventual return to the community."
Ariz.Rev.Stat.Ann. Sec. 41-1622 (1989) (historical note) (quoting 1978 Ariz.Sess.Laws, Ch. 164, Sec. 29) (emphasis added).
The relevant law goes on to provide "compensat[ion] [to] prisoners for their services," Ariz.Rev.Stat.Ann. Sec. 41-1624.01(A) (1989), but it does so by specifying that all monies derived from contract services from either private or public sources are to be placed in a "specially designated revolving fund" that is then used in part to compensate prisoners. Ariz.Rev.Stat.Ann. Sec. 41-1624(B) (1989). The law establishing the revolving fund explicitly states: "No state appropriated funds may be utilized for payment of prisoner wages or benefits." Ariz.Rev.Stat.Ann. Sec. 41-1624(A)(2) (1989). Arizona has the right and the power to force prisoners to work. It also has the right to compensate working prisoners for their labor. I suppose also that it could adopt the FLSA, but it has not done so.
Given this arrangement, and given Arizona's Criminal Code's stated public policy of imposing "just and deserved punishment" on those convicted of crime, Ariz.Rev.Stat.Ann. Sec. 13-101 (1989), it thus comes as no surprise that Arizona law explicitly rejects the idea that prisoners are employees of the state.
In summary, when the economic reality of the relationship in this case together with Arizona's view of prisoners vis-a-vis their prison labor situation are viewed in the light of the express purpose of the FLSA, i.e., to provide for workers "a minimum standard of living necessary for health, efficiency and [their] general well-being ..." 29 U.S.C. Sec. 202 (1988), the conclusion that the FLSA does not apply to the prisoners in this case becomes readily apparent. I now come to Cutter Biological's relationship with these prisoners. Considering the factors listed in Bonnette, appellants did not raise a triable issue of fact here either. Under its contract with the Department of Corrections, Cutter did not have the power to hire or fire the inmate workers. Although it supervised the inmates in their daily activities, the state held the ultimate supervisory authority. The contract provided that the Department of Corrections had the authority to approve inmate assignments, and the responsibility to determine the rate and method of payment. Finally, appellants did not controvert the appellees' affidavits showing that Cutter Biological did not keep employment records for the inmates. The economic reality, therefore, is that Cutter Biological was not appellants' employer.
Thus, appellants have not raised a triable issue of fact under the economic reality test as to the existence of an employment relationship with either Cutter Biological or the State of Arizona, or for that matter with both of them if viewed in this venture as operating jointly.
A. Each prisoner who is engaged in productive work in any state prison or institution under the jurisdiction of the department of corrections as a part of the prison industries program shall receive for his work such compensation as the director of the department of corrections shall determine. Such compensation shall be in accordance with a graduated schedule based on quantity and quality of work performed and skill required for its performance, but in no event shall such compensation exceed fifty cents per hour unless the prisoner is employed in an ARCOR enterprise pursuant to title 41, chapter 11, article 3. If the director enters into a contract pursuant to Sec. 41-1624.01 with a private person, firm, corporation or association the compensation shall be as prescribed by the person, firm, corporation or association but shall not be below the minimum wage.
Pennhurst State School & Hosp. v. Halderman, 465 U.S. 89, 104 S.Ct. 900, 79 L.Ed.2d 67 (1984), held that the Eleventh Amendment deprives federal courts jurisdiction to order state actors to comply with state law. As the Court stated, "[i]t is difficult to think of a greater intrusion on state sovereignty than when a federal court instructs state officials on how to conform their conduct to state law." 465 U.S. at 106, 104 S.Ct. at 911. Thus, the district court correctly dismissed the state law claims.
To survive summary judgment in their section 1983 claim, appellants must have a property right to wages from their work at the plasma center and the parties sued must not be protected by the Eleventh Amendment and must qualify as persons under section 1983.
Appellants argue that they have a property right to wages because they meet the requirement of Arizona law for receiving minimum wages. In Piatt v. MacDougall, 773 F.2d 1032 (9th Cir.1985), this circuit recognized this property interest. The court held that if a prisoner meets the requirements of an Arizona statute mandating wages for prisoners who perform work for private parties, then the state cannot deprive the prisoner of this property interest without due process of law. Id. at 1036.
Along with a property interest, appellants must show that section 1983 provides a federal forum against the named defendants. Appellant's section 1983 action was filed against state officials, the Department of Corrections and the state of Arizona. The district court correctly dismissed the section 1983 action against the state of Arizona because a state is not a "person" for purposes of section 1983. Will v. Department of State Police, 491 U.S. 58, 71, 109 S.Ct. 2304, 2308, 105 L.Ed.2d 45 (1989). Likewise "arms of the State" such as the Arizona Department of Corrections are not "persons" under section 1983. Id. at 70, 109 S.Ct. at 2311; Mt. Healthy City School Dist. Bd. of Educ. v. Doyle, 429 U.S. 274, 280, 97 S.Ct. 568, 572, 50 L.Ed.2d 471 (1977).
We also affirm the district court's decision that it had jurisdiction to award prospective relief under section 1983 against the state officials in their official capacities. See Quern v. Jordan, 440 U.S. 332, 337, 99 S.Ct. 1139, 1143, 59 L.Ed.2d 358 (1979); Edelman v. Jordan, 415 U.S. 651, 668, 94 S.Ct. 1347, 1358, 39 L.Ed.2d 662 (1974).
I concur in all but Part II-B of Judge Trott's opinion, and I agree that the district court correctly granted summary judgment because on the record in this case, neither Cutter Biological nor the Arizona Department of Corrections is an employer for purposes of the Fair Labor Standards Act, 29 U.S.C. Sec. 201 et seq. I write separately to state my reasons for concluding that the inmate assistants are not covered by the FLSA.
The material facts are undisputed. Inmates at the Arizona State Prison at Florence, Arizona worked in various capacities at a Plasma Center located at the institution and operated by Cutter pursuant to contracts between Cutter and the Director of the Department of Corrections. Under these contracts the Department of Corrections assigned prisoners to Cutter as assistants to Cutter staff. Approval and assignment of workers was at the Department's discretion. The Plasma Center paid the Department of Corrections twelve dollars per week for each prisoner who worked there. All compensation for prisoner services at the Center was paid directly to the Inmates Account Office, which in turn used the funds to pay the inmate laborers. There were no agreements between the Plasma Center and any prisoner regarding compensation or conditions of employment. Routine, day-to-day supervision of the inmate assistants at the Center was by Cutter. While Cutter from time to time made work assignments and suggested removals, there is no evidence that it could trump prison authorities in terms of hiring or firing, rate of pay, or time of work. Cutter maintained no employment records other than a list of names of prisoner assistants.
The parties dispute only whether these facts make Cutter or the Department an "employer" within the meaning of the FLSA. That question is a legal issue. Bonnette v. California Health and Welfare Agency, 704 F.2d 1465, 1469 (9th Cir.1983); see Goldberg v. Whitaker House Cooperative, Inc., 366 U.S. 28, 81 S.Ct. 933, 6 L.Ed.2d 100 (1961).
In resolving it, we are obliged to apply the "economic realities" test.1 Bonnette, 704 F.2d at 1470. That test requires that we consider the totality of the circumstances, including whether the alleged employer had the power to hire and fire employees, supervised and controlled employee work schedules or conditions of employment, determined the rate and method of payment and maintained employment records. Id.
Bonnette is the seminal opinion in this circuit. A county social worker determined a recipient's financial eligibility and need for chore worker services, the tasks to be performed and the hours per week required to perform the task; the recipient "bought" the chore worker services with money provided by the county and was responsible for hiring, firing and supervising. Under those circumstances we held that the fact that the county delegated various responsibilities to recipients did not alter the county's complete economic control and the "economic reality" that the county employed chore workers to perform social services for the benefit of recipients; rather, it made them joint employers. Put another way, an "employer" under the FLSA may not shield itself from responsibility under the Act on the ground that another person or entity exercises some control over the employee. Yet neither Bonnette nor any case following it is authority for finding that two entities, neither of whom is an "employer" under the Act, may nevertheless jointly be an "employer" because together they have sufficient control over the nature and structure of the employment relationship.
The statutory scheme is consistent with this interpretation because it assumes that at least one of the allegedly joint employers is an "employer" under the Act. Section 203(d) provides that an " '[e]mployer' includes any person acting directly or indirectly in the interest of an employer in relation to an employee...." 29 U.S.C. Sec. 203(d), while an " 'employee' means any individual employed by an employer." 29 U.S.C. Sec. 203(e)(1). Further, under the regulations, all of the employee's work for all of the joint employers is considered as one employment and all joint employers are responsible, both individually and jointly, for compliance. 29 C.F.R. Sec. 791.2(a) (1990). Thus, while there may be more than one "employer" of an "employee" covered by the Act, Falk v. Brennan, 414 U.S. 190, 195, 94 S.Ct. 427, 431, 38 L.Ed.2d 406 (1973); Bonnette, 704 F.2d at 1469, either the Department of Corrections or Cutter or both must meet the statutory definition.
Prison officials paid inmate laborers, controlled how much they were paid and how payments were made, determined which inmates could work in the lab (albeit sometimes in consultation with Cutter) and for how long, and had responsibility for discipline. There is no evidence that the DOC had a pecuniary, rather than penological, interest in inmate labor.
Considering all these facts, the district court did not err in concluding that Cutter was not an employer for purposes of the FLSA. Unlike Carter, where the plaintiff was an inmate in the Fishkill Correctional Facility and was employed outside of the prison as a teaching assistant at Dutchess Community College, and Watson v. Graves, 909 F.2d 1549 (5th Cir.1990), where the plaintiff was on a work release program outside the jail, and the courts found triable issues regarding FLSA coverage, in this case the inmates were assigned to the Cutter lab inside the institution, like other cases which have found no employer-employee relationship. See, e.g., Alexander v. Sara, Inc., 559 F.Supp. 42, 43-44 (M.D.La.), aff'd per curiam, 721 F.2d 149 (5th Cir.1983) (no contractual relationship between inmates and outside company; compensation paid to State, not to inmates; no right on part of outside company to reject inmate assigned to work in plasma program); Sims v. Parke Davis & Co., 334 F.Supp. 774, 783-87 (E.D.Mich.), aff'd per curiam, 453 F.2d 1259 (6th Cir.1971), cert. denied, 405 U.S. 978, 92 S.Ct. 1196, 31 L.Ed.2d 254 (1972) (no contractual relationship between inmates and outside company; outside company relinquished to prison officials normal rights of employer to determine manpower needs, who workers would be and to discharge unsatisfactory workers); Hudgins v. Hart, 323 F.Supp. 898, 899 (E.D.La.1971) (no contractual relationship between outside company and inmates; prison officials assigned inmates to work; money was sent to prison, which decided how much to pay); Huntley v. Gunn Furniture Co., 79 F.Supp. 110, 111-13 (W.D.Mich.1948) (sole control in prison).
Nor did it err in concluding that the Department of Corrections was not an employer. Even though our decision in Baker v. McNeil Island Corrections Center, 859 F.2d 124 (9th Cir.1988) forecloses a holding that as a matter of law a prison may never be an "employer" of an inmate laborer,5 it does not define what constitutes such a relationship and has nothing pertinent to say about the showing required for coverage of a prison inmate under the FLSA. Rather, we must decide the issue case by case.
The facts in this case show that inmate labor belongs to the institution. That being so, there is no need to protect "the standard of living and general well-being of the worker in American industry." Alexander, 721 F.2d at 150. As put by the Fifth Circuit in Watson, "[n]either is there fear of 'upsetting the desired equilibrium in the work place,' because the 'work place' was the prison itself. See Carter, 735 F.2d at 13. From that fact alone it is evident there was no unfair competition among workers in job markets outside the prison." 909 F.2d at 1555. The inmate assistants were not on a work release program, did not work off premises and were not free not to work. The relationship between prison and prisoner was entirely custodial, bearing none of the indicia of a traditional employment relationship such as the exercise of discretion and exchange of wages for labor. No other court has found that an employer-employee relationship exists under these circumstances6 and I believe the district court correctly determined that no such relationship exists in this case.
D.W. NELSON, Circuit Judge, dissenting.
The practical question before us is whether inmates assigned to work at a plasma center operated by a private enterprise are covered by the Federal Labor Standards Act (FLSA). The majority finds that appellants are not in an employer/employee relationship under the FLSA with either the state or Cutter Biological. En route to this conclusion, it overlooks Supreme Court guidance and, I believe, misconstrues Congressional purpose. In my view, this court's decision should reflect the central aims of federal legislation. Because I cannot subscribe to the majority's niggardly interpretation of the FLSA, I must respectfully dissent.
The majority correctly outlines the factors to be considered in examining the "economic reality" of the employment situation for the purposes of the FLSA. This test looks to four factors: whether the alleged employer (1) had the power to hire and fire employees, (2) supervised and controlled employee work schedules or conditions of employment, (3) determined the rate and method of payment, and (4) maintained employment records. Bonnette v. California Health & Welfare Agency, 704 F.2d 1465, 1470 (9th Cir.1983). After discussing the guidelines, however, the majority then fails to apply them correctly to the facts of this case.
Context in this case means the reasons for the FLSA's enactment by Congress. I agree with Judge Trott that the Act's express purpose was to aid the unprotected and lowest paid of the working people. See supra at 1326. Also I understand, though I do not fully share, my colleague's distaste at extending Congress' economic protection to people he labels "convicted murderers, rapists, burglars, armed robbers, swindlers, thieves, and the likes." See supra at 1324. But that is to miss the point. For to conclude that the FLSA applies in this case requires no particular sympathy for prison inmates.
the existence, in industries engaged in commerce or in the production of goods for commerce, of labor conditions detrimental to the maintenance of the minimum standard of living necessary for health, efficiency, and general well-being of workers (1) causes commerce and the channels and instrumentalities of commerce to be used to spread and perpetuate such labor conditions among the workers of the several States; ... [and] (3) constitutes an unfair method of competition in commerce.
[n]o employer in any part of the United States in any industry affecting interstate commerce need fear that he will be required by law to observe wages ... higher than those applicable to his competitors. No employee ... need fear that the fair labor standards maintained by his employer will be jeopardized by oppressive labor standards maintained by those with whom his employer competes.
H.R.Rep. No. 2182, 75th Cong., 3d Sess. 6-7 (1938); see also International Ladies' Garment Workers' Union v. Donovan, 722 F.2d 795, 808 (D.C.Cir.1983).
The FLSA, in other words, is comprehensive legislation. It certainly is designed to directly assist exploited employees requesting its enforcement in a specific instance. But its sword is double-edged. It also purports to come to the indirect aid of compliant employers and their employees who might suffer from the ill effects of nonobservance. See Watson v. Graves, 909 F.2d 1549, 1554 (5th Cir.1990) ("The Act was drafted ... to eliminate unfair competition among employers competing for business in the market and among workers looking for jobs") (citing Carter v. Dutchess Comm. College, 735 F.2d 8, 14 (2d Cir.1984)); International Ladies' Garment Union, 722 F.2d at 808-09; see also Lerwill v. Inflight Services, Inc., 379 F.Supp. 690, 696 (N.D.Cal.1974) (enforcement of the Act "is also intended to protect the employers who comply with its terms"), aff'd sub nom. Lerwill v. Inflight Motion Pictures, Inc., 582 F.2d 507 (9th Cir.1978).
Neither one of my colleagues addresses the unfair competition issue. Indeed, Judge Rymer dismisses it in a footnote, on the ground that no relevant evidence has been presented. See supra at n. 4 (Rymer, J., concurring). It is true that appellants in this case are not Cutter's competitors; their interest is in receiving a minimum wage, not in purifying the stream of commerce. But I remain convinced that Congress' overall intent must determine the Act's applicability to a specific case. See, e.g., Carter, 735 F.2d at 14.
In most cases, both concerns overlap: the persons seeking application of the FLSA are precisely those Congress wished to assist, and, in so doing, Congress protects compliant employers and their employees as well. Here, however, we have a slightly different scenario: Congress, arguably, is indifferent to the economic well-being of prisoners. But it remains concerned, and so, by implication, must we, with the effect of their working conditions on other employers and their employees. In such cases, I believe, the principles underlying the FLSA must guide our determination regarding the Act's coverage.
With this in mind, I now turn to the second question, namely whether, and in what circumstances, the FLSA extends to prison labor.
Second, this position is hard to square with what we have said on this issue up to now. In Baker v. McNeil Island Corrections Center, 859 F.2d 124 (9th Cir.1988), a prison inmate brought a Title VII suit against the prison. The district court, finding that there was no employment relationship between a prison and its prisoners, dismissed the suit for failure to state a claim. We reversed, rejecting the claim that as a matter of law prisoners cannot be employees of the state.4 The Second Circuit, in Carter v. Dutchess Community College, 735 F.2d 8, 13-14 (2d Cir.1984), and the Fifth Circuit, in Watson v. Graves, 909 F.2d 1549, 1554 (5th Cir.1990) (agreeing "with the Carter court that status as an inmate does not foreclose inquiry into FLSA coverage"), reached the same conclusion.
I suspect that Judge Trott's result derives in large part from his fragmentary interpretation of the FLSA's purpose. By focusing exclusively on the fact that the FLSA was enacted to improve workers' living conditions, he can then easily conclude that prisoners were not meant to fall within the statute's protective reach. But in his haste to deny economic benefits to inmates, he has lost sight of the second major rationale behind the FLSA's minimum wage provisions. As I discussed earlier, Congress intended the FLSA to have the widest possible impact in the national economy because one of its purposes was the establishment of minimum standards in the workplace in order to eliminate unfair competition among private companies and among workers looking for jobs. See Mitchell v. Robert De Mario Jewelry Inc., 361 U.S. 288, 292, 80 S.Ct. 332, 335, 4 L.Ed.2d 323 (1960); Carter 735 F.2d at 13. This national purpose is subverted when a court permits one company within an industry to avoid the strictures of the Act. By exempting appellants from FLSA coverage, the majority, without even discussing this issue, has given Cutter Biological an unfair cost advantage over its competitors, who are required to pay minimum wage. Quite simply, Cutter, with the state's assistance, is making use of a cheap labor pool, bypassing the Act's constraints, and thwarting its overriding purpose.
I cannot believe that Congress intended to create a loophole of such proportions, permitting employers to hire labor at substandard pay and then sending the output into the flow of commerce. Indeed there are, as Judge Trott remarks, "obvious policy considerations" to this issue, supra at 1324--but they are triggered by nonenforcement rather than by enforcement of the Act.
As an aside, it also is worth reminding that, under Ariz.Rev.Stat.Ann. Sec. 41-1624, the Department can use part of the prisoners' wages for purposes other than compensation. Possible uses might conceivably include payment for room and board, support for prisoners' families, or various operating expenses. In short, the issue is not one of unjustified reward to a state prisoner, but of unwarranted benefit to a private enterprise.
Having concluded that, under the specific circumstances of this case, Arizona's inmates fall under the FLSA's umbrella, we arrive at the final hurdle: Are appellants employees of Cutter and the state?
The minimum wage provisions apply only if appellees are "employers" of the inmates within the meaning of the FLSA. As the majority explains, the status is commonly determined by the Bonnette test, described above. See supra at 1328 (Rymer, J., concurring). At the outset, however, it bears repeating that mere technical adherence to the test cannot suffice. For it is the economic realities of the situation we are interested in, and they must be analyzed "in light of the policies behind the FLSA." Watson, 909 F.2d at 1555. My colleagues may well have scrupulously embarked on the four-part test, but they have left its substance behind.
Most disturbing to the majority, apparently, is the state's degree of control. Specifically, its complete control over the prisoners would preclude it from being an employer because this control was not part of the "bargained for exchange of labor" that occurs in traditional employer/employee relationships. This analysis contradicts Ninth Circuit and Supreme Court case law.
In Baker, the court found that the most important factor in determining whether an employment relationship exists is "the extent of the employer's right to control the means and manner of the worker's performance." Id. at 128. Contrary to the majority's analysis, the court in Baker held that the prison's complete control of its inmates made more certain the inmates' status as employees of the institution. Id. The analysis in Baker precludes the majority from deciding that these prisoners cannot be employees of the state based on the state's control.
Neither can the court depend on traditional common law notions of "bargained for exchange" to determine what is an employer/employee relationship for FLSA purposes. "The definition of 'employer' under the FLSA is not limited by the common law concept of 'employer,' and is to be given an expansive interpretation in order to effectuate the FLSA's broad remedial purposes." Bonnette, 704 F.2d at 1469; accord Rutherford, 331 U.S. at 729, 67 S.Ct. at 1476; Real v. Driscoll Strawberry Assoc., 603 F.2d 748, 754 (9th Cir.1979). The majority is required to determine whether an employment relationship exists based on the guidelines and analysis outlined in FLSA precedent; it errs in relying on a narrow traditional notion of the concept of employer that completely misinterprets the import of control in an employer/employee relationship.
In reality, there is nothing inconsistent in the coexistence of prisoner and employee status under the FLSA. If inmates are selected to work for private contractors participating in the market at large, they are in that capacity and given the FLSA's purpose, "employees" of the state within the conception of the Act.
In considering this relationship, the majority disregards facts and does not view the evidence in the light most favorable to appellants, as is required when reviewing a motion for summary judgment. See Tzung v. State Farm Fire & Casualty Co., 873 F.2d 1338, 1339-40 (9th Cir.1989). A close examination of the facts reveals that the inmates' employment with Cutter Biological satisfies the Bonnette factors. I will outline briefly the facts that apply to each factor.
(i) The power to hire and fire employees.
As the majority states, it is undisputed that the DOC determined whether a prisoner was eligible to work and could remove him from the job. However, the record indicates that an inmate had to be interviewed and selected by Cutter Biological and could be removed if Cutter Biological did not approve of the prisoner's work. The number and qualifications of the workers also were decided by Cutter Biological, and once a prisoner had been hired, Cutter Biological could promote or demote him on the basis of his performance. Cutter Biological has never alleged that it was required to employ a prisoner it did not desire. It is true that prisoners discontinued their employment when Cutter Biological did not wish them to leave, but even private employers involuntarily lose personnel.
In sum, although Cutter Biological was limited to employing only those selected by the DOC, once an inmate was eligible, Cutter Biological had the power to hire and fire. It would "run counter to the breadth of the statute and to the Congressional intent to impose a qualification which permits an employer who exercises substantial control over work, but whose hiring decisions occasionally may be subjected to a third party's veto, to escape compliance with the Act." Carter, 735 F.2d at 12.
(ii) Supervision and control of employee work schedules and conditions.
Cutter Biological had nearly the same supervision and control over employee work schedules and conditions as a private employer. The prisoners were only available to work during certain hours and sometimes due to prison business they missed a day of work; this also is true of private employment situations. The details of the prisoners' work assignments were jointly specified by Cutter Biological and the DOC. Cutter Biological completely determined the working conditions of the prisoners--what tasks each prisoner performed, how much the prisoner was paid within the DOC range (depending on which job he held), and whether the prisoner was promoted. As Judge Trott admitted, Cutter Biological "supervised the inmates in their daily activities." This supervision qualifies Cutter Biological as an employer under the second Bonnette factor.
(iii) Rate and method of payment.
It appears that the pay scale was determined by the DOC. However, within that range Cutter Biological determined which prisoners were paid which rate. Prisoners were paid more if they had more responsibility and Cutter Biological had complete discretion over which prisoners held the more lucrative jobs. The method of payment was determined by contract between Cutter Biological and the DOC and by state law. Cutter Biological, then, had some control over the rate and method of payment through its contract negotiations with the DOC.
The majority claims that Cutter Biological kept no employment records. It is unclear what they mean by employment records. The record contains Cutter Biological's contemporaneous reports on how much each inmate worked and how much each was paid. I would consider those to be employment records.
In short, and after examining the "circumstance of the whole activity," it is clear that the relationship between Cutter Biological and the prisoners could be nothing else but employer/employee. The inmates were not independent contractors; Cutter Biological had no rehabilitative or custodial relationship with them. It is undisputed that the prisoners performed precisely the same job that civilian employees performed for Cutter Biological. The prisoners worked for Cutter Biological and Cutter Biological permitted them to work because it profited from doing so. We are required to interpret the definition of employer expansively; under that mandate Cutter Biological must be an employer.
The majority's error, in sum, is in finding that because Cutter Biological shared control over the worker it could not be the employer. In reality, the fact that Cutter Biological's control was qualified does not place its employment relationship beyond the scope of the FLSA; it makes Cutter Biological a joint employer.
A useful analogy is provided by the independent contractor situation. In such cases, typically, a company will contract with someone who is responsible for finding workers and then supervising them. Although the company might not exercise control over basic components of its relationship with the workers, courts have not hesitated to find employment status. See, e.g., Castillo v. Givens, 704 F.2d 181, 190 (5th Cir.1983) (finding that such status could exist "even though the defendant-employer had no control over ... the right to set hours, hire and fire, or determine wages"); Usery v. Pilgrim Equipment Co., Inc., 527 F.2d 1308, 1312 (5th Cir.), cert. denied, 429 U.S. 826, 97 S.Ct. 82, 50 L.Ed.2d 89 (1976). Where, as here, the party sharing control also is an employer, they become joint employers. Cf. Castillo, 704 F.2d at 188.
The crux of this case is simply this: Given the purposes of the FLSA, were appellants in an employer/employee relationship with the state and Cutter Biological? The majority starts off on the wrong foot by failing to discuss these purposes in full. It then errs by focusing on "isolated factors" rather than "upon the circumstances of the whole activity." Rutherford, 331 U.S. at 730, 67 S.Ct. at 1477. In my view, however, this is the type of situation that the legislation was intended to govern, and these prisoners could be nothing else but employees.
The "economic reality" of the situation is that the inmates in this case were employed by a private company to produce a product for interstate commerce. The reality is that inmates "are not self-employed; nor are they independent, selling their products on the market for whatever price they can command. They are regimented under one organization, manufacturing what the organization desires, and receiving the compensation the organization dictates." Goldberg, 366 U.S. at 32, 81 S.Ct. at 936 (footnote omitted). Likewise, there is no doubt that together the state and Cutter Biological have the power to hire and fire, supervise and control work schedules and conditions, determine the rate and method of payment and maintain employment records. The critical question is one that the majority neither asks nor answers: if this is not an employment relationship, what is it?
The majority's cramped analysis under the FLSA allows a few select private companies within an industry to gain an unfair competitive advantage by circumventing minimum wage laws. Because I believe this was not Congress' intention, I respectfully dissent.
To the extent the dissent assumes that characteristics of the prison should be aggregated with characteristics of Cutter so that together, or separately, they constitute an "employer," I disagree. In this case, no one argues that the prison and Cutter, together, form a single legal entity. If the relationship between Cutter and the prison gave rise to some cognizable legal entity, such as a partnership or joint venture, then the characteristics of each could be aggregated to show that that single entity was an "employer." See NLRB v. Browning-Ferris Indus., 691 F.2d 1117, 1122 (3d Cir.1982) (NLRB case). The question of whether the prison and Cutter form some sort of new entity is not before us, however. Unless either the prison, alone, or Cutter, alone, is an "employer," then the inmate assistants are not covered by the FLSA.
A broader or more comprehensive coverage of employees ... would be difficult to frame. The use of the words "each" and "any" to modify "employee," which in turn is defined to include "any" employed individual, leaves no doubt as to the Congressional intention to include all employees within the scope of the Act unless specifically excluded.
323 U.S. at 362-63, 65 S.Ct. at 296-97. Finally, in Walling, the Court explained that the "Act contains its own definitions, comprehensive enough to require its application to many persons and working relationships which, prior to the Act, were not deemed to fall within an employer-employee category." 330 U.S. at 150-51, 67 S.Ct. at 640-41.
In Baker, as here, we were faced with the argument that the prison's "relationship with [the inmate is one] of prison/prisoner only, because the work positions are part of an inmate's correctional programing." Baker, 859 F.2d at 126; see also supra at 1325-1326. The district court in Baker, like Judge Trott in this case, invoked the irresistible authority of "common sense" to defeat a differing point of view. Baker at 128 (noting that the district court had found "common sense differences ... between inmate work assignments and ordinary employment relationships"); supra at 1324 (reaching its conclusion "with an eye guided by common sense and common intelligence"). Common sense notwithstanding, it is very difficult, in my view, to read Baker without concluding that, in certain circumstances at least, an employment relationship can exist between a prison and its prisoners.
there is no need to "protect the standard of living and general well-being of the worker in American industry." ... Neither is there fear of "upsetting the desired equilibrium in the work place," because the "work place" was the prison itself.
Id. at 1555 (citations omitted).
I confess that the court's logic escapes me. If the concern is with the impact of cheap labor on the economy, see id. at 1554-55, the pertinent distinction is between work performed, say, for prison maintenance and work performed for outside commerce. Whether the private company moves to the prison or the inmates migrate to the outside world is, from this perspective, irrelevant.

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The Internal Revenue Service (“IRS”) is getting serious about resolving resource-intensive examination issues with taxpayers in specific industries through its Industry Issue Resolution Program (IIR Program) described in Revenue Procedure 2003-36. Over the last several years, the IRS has utilized the IIR Program to resolve a number of industry-specific issues with taxpayers. Recent IIR resolutions have included repair and capitalization issues in the power generation and transmission and wireless telecommunications industries, and inventory issues in retail industries. One of the latest successful IIRs disposes of a significant insurance industry issue. On July 30, 2012, the Large Business and International (“LB&I”) Division of the IRS published a Commissioner’s Directive memorandum to LB&I examiners outlining a safe harbor approach under which insurance companies may report bad debt deductions under Internal Revenue Code (“I.R.C.”) § 166 to reflect the partial worthlessness of eligible loan-backed and structured securities that are subject to Statement of Statutory Accounting Principles 43R. This article provides a top-level explanation of the bad debt IIR process and what the safe harbor guidance provides. The authors were part of the team that participated in the IIR process on behalf of the insurance industry.
In 2008 and 2009, insurance companies reported large investment losses as a result of the financial crisis. Many life and property-casualty insurance companies had invested heavily in residential mortgage-backed securities (“RMBS”), commercial mortgage-backed securities (“CMBS”) and direct mortgages. For example, the American Council of Life Insurers (“ACLI”) reported that as of Dec. 31, 2008, life insurance companies held in their general accounts approximately $530 billion in agency and non-agency mortgage-backed securities (“MBS”) and $338 billion more in farm, residential and commercial mortgages. As the crisis unfolded, insur- ance companies suffered significant credit losses as these structured instruments and mortgages became worthless in whole or in part. The National Association of Insurance Commissioners (“NAIC”) has reported that in the years 2008 through 2010, insurance companies reported $26.8 billion in Other-Than-Temporary-Impairments (“OTTIs”) and valuation adjustments in non-agency RMBS alone. Most of these RMBS losses occurred in 2008 ($9.2 billion) and 2009 ($14.7 billion). Additional significant losses occurred in CMBS and mortgages.
The financial crisis resulted in significant tax reporting issues for insurance companies concerning partial worthlessness deductions. Throughout the early to mid-2000s, many insurance companies reported partial worthlessness deductions under I.R.C. § 166 consistent with their statutory OTTIs on RMBS, CMBS, mortgages and other instruments that are eligible for partial worthlessness deductions. To be eligible for a partial worthlessness deduction, the instrument must be a debt and must not be a security as defined in I.R.C. § 165(g)(2) (i.e., the instrument must be a non-security).6 The definition of a security under § 165(g)(2) includes debts with interest coupons or in registered form that are issued by a corporation, government or political subdivision thereof. Under this test, eligible non-security debts include many MBS and direct mortgages. While the treatment of these partial bad debts had been an examination issue in IRS audits of insurance companies for most of the preceding decade, the 2008 financial crisis increased the stakes exponentially. As it unfolded, the most significant tax deductions involved regular interests in Real Estate Mortgage Investment Conduits (“REMIC regular interests”), which encompass both RMBS and CMBS investments. A specific code provision (I.R.C. § 860B) mandates that REMIC regular interests are treated as debts for all federal tax purposes for the holder. Additionally, REMIC regular interests are issued by trusts (not corporations, governments or political subdivisions) and therefore are not securities under I.R.C. § 165(g)(2).
Co-authored with Arthur C. Schneider, Senior Vice President and Chief Tax Officer, Transamerica Corp.


Art21 Educator Don Ball. Photo by Laura Howell. Courtesy of Don Ball.
This week kicks off our new series on Art21 Educators, featuring interviews from a few of the program’s most dedicated members.
Don Ball teaches art to 9th-12th grade students at Cawthra Park Secondary School in Mississauga, Ontario, home to a regional arts program. He participated in Year 4 of Art21 Educators in 2012-2013.
I found the application for the educators program by mistake. I was looking for something on the Art21 website and found a link I’d never seen before. Although the instructions clearly said that the program wasn’t available to Canadians, and that they were interested in cross-disciplinary work, but not including science at the time, I sent a note saying I was a Canadian, my teaching partner was in science and that I’d be thrilled to apply to the program if I could. The whole application process and preparation of a video to explain my interest in art education was a hoot. That process alone was engaging.
I have followed many of the artists profiled in Art21 throughout my career—many before there was an Art21. The resources of the broadcast show were very valuable in my classroom. Attending Art21 Educators in 2012 opened me to so much more—a community of passionate art educators, strategies, resources and opportunities. I have been able to develop my students through looking at contemporary art, with the ideas and strategies of contemporary artists always in the foreground. I came to Art21 Educators five years before my retirement. I figured it was a great time to inject new life into my work, and it would give me a chance to develop my learning and teaching throughout my last years.
Diverse, fluid, meaningful, reflective, challenging, collaborative, integral, and open.
Diversity of art and artists, fluidity of strategies and approaches, meaningful to students and educators, reflective of our times and the people of our times, challenging to thought, integral to classroom and cultural education, and open to big, new ideas.
I thought the sessions in New York would be good at least, and that I would have an opportunity to look at lots of art, and take home great resources. The sessions were so much more than I’d hoped for; it’s the people and the ongoing community of learners online that have made this so rewarding and enriching both for me and my students.
Art21 Educator Don Ball. Courtesy of Don Ball.
I now introduce artists in contrasting dialogues, showing at least a couple of artists who think about and create art in ways that resonate off each other, and hopefully for the students that I’m working with.
I have always encouraged students to make connections, personal connections, with artists of their own choosing. The resources of Art21 Educators add to these strategies. Students are able to richly explore artists that connect with them in some way. It is not at all unusual for me to suggest an artist to a student then to find the next day that they’ve watched segments (and made notes!) on another five artists they thought were equally or more interesting to them. My students are always open to this discovery.
I have become more fluent in online possibilities for my students to develop and share their work, their research, and their ideas; thanks to Art21 Educators, I encourage students to think about ideas that matter, and especially that matter to them.
I am involved in the online community of educators, posting successes and challenges from our own situations. I also attend monthly online meet ups, hearing from others who are developing ideas throughout the year as well. I have continued to attend New York summer institutes, finding the mental stimulation to be the best discussion and development of rich ideas for the following school year.
When I came back from my first summer institute, my partner commented that I haven’t been so excited, so engaged in my work in years. That has continued throughout my four years with the program.
Art21 Educator Don Ball in front of Joseph Beuys’ Nova Scotia College of Art and Design Blackboard, 1976 at the Art Gallery of Ontario. Courtesy of Don Ball.
What are you most excited about for the upcoming year with Art21?
Season 8 brings new possibilities to explore art in different contexts. The artists will bring new ideas and maybe a different sensibility to a wider audience. I look forward to integrating what I already know and practice with the new.
How can we make our students aware of their place in cultural practice? What makes students aware, reflective art makers? How can students be active participants in the culture where they live—locally, and globally?
Want to learn more on the integration of Art21 films in Don’s classroom? Don’s students made the following video as a tribute to him, titled ART111 in honor of the room number of Don’s classroom.


Citation: Alessandro Chechi, Ece Velioglu, Marc-André Renold, “Case 14 Artworks – Malewicz Heirs and City of Amsterdam,” Platform ArThemis (http://unige.ch/art-adr), Art-Law Centre, University of Geneva.
In 2003, 14 works of art by the Russian artist Kazimir Malewicz were exported to the United States by the Stedelijk Museum of Amsterdam to be part of a temporary exhibition at the Guggenheim Museum in New York and the Menil Collection in Houston. Shortly before the end of the loans, the heirs of Malewicz brought an action against the City of Amsterdam seeking to recover the value of the artworks or, in the alternative, the artworks themselves. They asserted that they were wrongfully expropriated from their family 50 years earlier. While the appeal was pending, the heirs and the City of Amsterdam reached a settlement. This settlement not only concerned the works that were the subject of the action, but also all Malewicz art objects in the collection of the Stedelijk Museum.
1927: The Russian artist Kazimir Malewicz brought more than 100 of his artworks to Berlin for exhibition at the Berliner Kunstausstellung. In June of the same year, Malewicz was called back to Leningrad (now Saint Petersburg). Since he expected to soon return to Germany, he entrusted his works of art to several friends in Germany.
September 1927: The exhibition at the Berliner Kunstausstellung closed and the artworks were shipped to Alexander Dorner, one of Malewicz’s friends. At that time it was not possible to return the works to Malewicz in the Soviet Union because Stalinist condemnation of abstract art would have led to their confiscation and destruction. Dorner exhibited some of the artworks at the Landesmuseum in Hannover, of which he was the director.
1935: Kazimir Malewicz passed away.
1937: The Nazis’ attacks against “degenerate art” compelled Dorner to take steps to ensure that the artworks would be kept secure for the benefit of Malewicz’s heirs. First, he concealed the works in the museum’s basement. Then, he sent them to Hugo Häring, another of Malewicz’s friends.
1956: Häring lent the artworks to the Stedelijk Museum of Amsterdam. The loan agreement contained an option to purchase the collection. The City exercised this option in 1958.
1996: A group of 35 heirs of Kazimir Malewicz asked the City of Amsterdam to return the entire collection to them. The City refused.
2003: 14 artworks in the Malewicz collection at the Stedelijk Museum (13 paintings and 1 drawing) were exported to the United States (U.S.) to be part of a temporary exhibition at the Solomon R. Guggenheim Museum in New York (from 22 May 2003 until 7 September 2003) and the Menil Collection in Houston (from 2 October 2003 until 11 January 2004).
January 2004: Two days before the exhibit in Houston closed, the Malewicz heirs filed suit in the District Court for the District of Columbia against the City of Amsterdam to recover the value of the artworks or, in the alternative, the artworks themselves.
30 April 2004: The City filed a motion to dismiss the complaint.
30 March 2005: The District Court denied the City’s motion to dismiss. Shortly afterwards, the City renewed its motion to dismiss by submitting additional evidence.
27 June 2007: The District Court denied the City’s renewed motion. The City of Amsterdam then filed an appeal with the Court of Appeals for the District of Columbia.
April 2008: While the appeal was pending, the parties settled with an agreement that the City of Amsterdam would give five of the disputed paintings to the Malewicz heirs. In return, the heirs agreed to end the lawsuit.
It took several years after the end of the Cold War and the fall of the Iron Curtain for all of Malewicz heirs to contact each other and begin the process of locating and recovering the family’s property. In 1996, they found out that the artworks left in Germany by Kazimir Malewicz were at the Stedelijk Museum in Amsterdam and demanded restitution. This request was turned down by the City of Amsterdam in 2001 with a formal response.
The City’s authorities stated that the City had become the owner of the requested artworks in 1958, when it had bought them from Häring. Furthermore, they added that – even if the 1958 acquisition were found to be invalid – the City nevertheless had become the owner on 1 January 1993, through acquisitive prescription under Article 3:105 of the Dutch Civil Code.
The Malewicz heirs contested all these arguments. In particular, the heirs contended that the City purchased the collection in the face of its awareness that Häring had no authority to convey title. They further alleged that the City and the Stedelijk Museum concealed the nature of the acquisition of the collection in its annual report for 1958, in catalogues, and through a lack of customary publicity for this kind of acquisition.
These seemingly irreconcilable positions – as well as the fact that litigation in the Netherlands could not be envisaged because of the norms on acquisitive prescription – explain why the heirs brought lawsuits in the U.S. to recover the value of the artworks or, in the alternative, the artworks themselves.
By the same token, the amicable settlement of 2008 came as a complete surprise. This demonstrates that litigants and their counsels can negotiate at all times with a view to achieving a faster, cheaper, and mutually beneficial deal, regardless of the beginning of legal proceedings. In this respect, it can be argued that the City remained disposed to negotiate the dispute, first, because of the District Court’s decisions of 2005 and 2007 and, second, because U.S. jurisprudence in matters of looted art supported the heirs’ claim.
The Malewicz case raised interesting questions that revolved around two U.S. pieces of legislation, the Immunity From Seizure Act and the Foreign Sovereign Immunity Act.
The Immunity From Seizure Act (IFSA) was enacted in 1965 to ensure the protection from judicial seizure of artworks loaned from abroad to museums and similar institutions located in the U.S. Pursuant to this statute, any not-for profit museum or other exhibitor could apply to the Department of State for a determination that art objects to be loaned from abroad for exhibition were culturally significant and that the exhibition was in the national interest. If application was granted, the art was immunized from judicial seizure by the federal government.
The Foreign Sovereign Immunity Act (FSIA) was enacted in 1976 to codify the passage to the theory of restrictive State immunity. The FSIA provided that a foreign State and its agencies and instrumentalities were immune from jurisdiction in U.S. courts unless certain exceptions apply.
These exceptions included any case “in which the action is based upon a commercial activity carried on in the United States by the foreign state; or upon an act performed in the United States in connection with a commercial activity of the foreign state elsewhere; or upon an act outside the territory of the United States in connection with a commercial activity of the foreign state elsewhere and that act causes a direct effect in the United States” (28 U.S.C. §1605(a)(2)); and any case “in which rights in property taken in violation of international law are in issue and that property or any property exchanged for such property is present in the United States in connection with a commercial activity carried on in the United States by the foreign state” (28 U.S.C. §1605(a)(3)).
Prior to the exhibition of the Malewicz collection, the Department of State had made the necessary certifications pursuant to the IFSA. Therefore, the “artworks were immune from seizure and other forms of judicial process that might have had the purpose or effect of depriving the Guggenheim or the Menil Collection (or any carrier) of custody or control of the artworks while in this country”. However, the major question in the case did not concern the IFSA, but whether the heirs of Malewicz could sue the City of Amsterdam – an instrumentality of the Kingdom of the Netherlands – under one of the exceptions to the FSIA.
The Malewicz heirs’ suit was brought under the FSIA’s “taking” exception (§1605(a)(3)).
They argued that: (i) the City of Amsterdam, through the Stedelijk Museum, took the Malewicz artworks “in violation of international law”, that is, without paying compensation to their true owners, none of whom was then or thereafter a citizen of the Netherlands; (ii) at the time when the action was commenced in January 2004, the 14 artworks at issue were on exhibit at the Menil Museum in Houston, and were therefore “present in the United States”; and (iii) because the loan of the 14 artworks to U.S. museums was an act that could be engaged in by a private party, it constituted a “commercial activity” under the FSIA.
The City of Amsterdam moved to dismiss the Malewicz heirs’ complaint by arguing that: (i) they had not exhausted the judicial remedies available in the Netherlands; (ii) the works of art were not “present in the United States” as a matter of law during the course of the exhibitions because they had been immunized from seizure pursuant to the IFSA; and (iii) the loan of the Malewicz artworks to the Guggenheim and Menil museums was not a “commercial activity carried on in the United States” as required by the FSIA.
On 30 March 2005, the District Court for the District of Columbia denied the City’s motion to dismiss.
First, the District Court found that the City’s arguments concerning exhaustion of domestic remedies were not a basis for dismissing the suit because the Court could “not require Plaintiffs to take their case to a Dutch court unless the City of Amsterdam waiv[ed] its statute of limitations defense and the Dutch court accept[ed] that waiver. […] [I]f the statute of limitations in the Netherlands would preclude this suit, the Court must not require the Malewicz Heirs to file there”.
Second, the Court held that “plaintiffs’ filing of the complaint while the artworks were physically present in this country was sufficient to meet the ‘present in the United States’ factor of FSIA”, even if the objects actually left the U.S. before the City was served with the complaint. According to the District Court, the U.S. Congress enacted the FSIA in order to override the requirement that “a plaintiff obtain in rem jurisdiction over property before suit could be filed against a foreign sovereign”. Moreover, although the IFSA precluded the seizure of objects, it did not prevent the foreign lender from being sued. Indeed, the heirs did not seek judicial seizure of the artworks.
Third, as to the nature of the loan, the District Court noted that it was “clear that the City of Amsterdam engaged in ‘commercial activities’ when it loaned the 14 Malewicz works to museums in the United States” because there is “nothing ‘sovereign’ about the act of lending art pieces, even though the pieces themselves might belong to a sovereign”. By citing the language of the FSIA, the Court also stated: “[t]he commercial character of an activity shall be determined by reference to the nature of the course of conduct or particular transaction or act, rather than by reference to its purpose”. Nevertheless, in the end the Court “declined to decide whether the City had carried on commercial activity in the United States in connection with the loan of the artwork because the record was insufficient to determine whether the City’s contact with the United States was substantial”. On this point, the District Court adopted a different decision in 2007: despite the additional evidence submitted by the City in support to the position that it was immune from suit under the FSIA, the Court held that “the record contains sufficient contacts to establish jurisdiction under the FSIA’s expropriation exception”.
Pursuant to the settlement of April 2008, the Malewicz heirs received five paintings from the collection of the City of Amsterdam. In exchange, the heirs dropped claims to the other artworks and ended the legal action against the City.
In other words, the City acknowledged that the heirs had ownership title to the five paintings being transferred to them, while the heirs acknowledged that the City had title to all other Malewicz art objects in the City’s collection.
In reaching this settlement, the City and the heirs “strived for a resolution that honors the selection by Malewicz himself of the artworks, preserves the collection as his remaining legacy, acknowledges the historical developments and circumstances that prevented Malewicz from returning to Berlin and to his artworks … and respects and acknowledges the legacy of the heirs”. The mayor of Amsterdam, Job Cohen, said of the settlement: “The Museum works remaining with the City will continue to be open to the general public and available for research as an ensemble through its presence in the Stedelijk Museum Amsterdam. The role of Malewicz as a pioneer of modern and contemporary art is optimally visible in the context of the collection of modern art of the Stedelijk Museum Amsterdam. Therefore, as of December 2009, the artworks of Malewicz will be given a place of honour in the reopened Stedelijk Museum Amsterdam”.
The Malewicz case raised interesting questions on how to reconcile the conflict between the FSIA and the IFSA. More importantly, this case unveiled the complex problems concerning the loan of artworks when it is claimed that these objects were stolen in the distant past. As it is often the case, the parties resolved the ownership question by resorting to negotiation, the most common mechanism of dispute settlement alternative to litigation.
In order to resolve the above issues, in March 2012 Senate Bill 2212 (“Foreign Cultural Exchange Jurisdictional Immunity Clarification Act”) was passed in the House of the U.S. Congress (with a parallel bill in the Senate) to amend the FSIA, so that the presence of artworks in the U.S. with immunity from seizure would not constitute “commercial activity” under the FSIA. Thus, if enacted as law, this amendment would have overturned the judicial result in Malewicz. Yet, although it had attracted no publicly-known opposition, the bill never received consideration from the Judiciary Committee of the U.S. Senate, let alone a vote, before expiring at the end of the last Congressional term. Therefore, the FSIA remains unaltered for now. This means that the very act of lending a work of art to the U.S. – even if that work is immune from seizure – can provide the “commercial activity nexus” sufficient to satisfy the FSIA and the basis for suing a foreign government. According to some commentators, this situation may discourage international loans or encourage litigation, or both.
Fishman, Joseph P. “Locating the International Interest in Intranational Cultural Property Disputes.” Yale Journal of International Law (2010): 347–404.
Gerstenblith, Patty. Art, Cultural Heritage, and the Law. 3rd edition. Durham, North Carolina: Carolina Academic Press, 2012.
Malewicz v. City of Amsterdam, 517 F.Supp. 2d 322 (D.D.C. 2007).
Malewicz v. City of Amsterdam, 362 F.Supp. 2d 298 (D.D.C. 2005).
Republic of Austria v. Altmann, 541 U.S. 677, 124 S.Ct. 2240, 2253, 159 L.Ed.2d 1 (2004).
Foreign Sovereign Immunity Act (FSIA), 28 U.S.C. §1602 (1976).
Immunity from Seizure Act (IFSA), 22 U.S.C. §2459 (1965).
Anne Laure Bandle, Alessandro Chechi, Marc-André Renold, “Case Landscape with Smokestacks – Friedrich Gutmann Heirs and Daniel Searle,” Platform ArThemis (http://unige.ch/art-adr), Art-Law Centre, University of Geneva.
Raphael Contel, Giulia Soldan, Alessandro Chechi, “Case Portrait of Wally – United States and Estate of Lea Bondi and Leopold Museum,” Platform ArThemis (http://unige.ch/art-adr), Art-Law Centre, University of Geneva.
O’Donnell, Nicholas. “Senate Bill 2212, the Foreign Cultural Exchange Jurisdictional Immunity Clarification Act, Unexpectedly Dies in Committee.” Art Law Report, January 9, 2013. Accessed November 15, 2013. http://www.artlawreport.com/2013/01/09/senate-bill-2212-the-foreign-cultural-exchange-jurisdictional-immunity-clarification-act-unexpectedly-dies-in-committee.
Lufkin, Martha. “Stedelijk Returns Five Malevich Works to Artist’s Heirs.” The Art Newspaper, June 1, 2008. Accessed October 30, 2013. http://www.theartnewspaper.com/articles/Stedelijk-returns-five-Malevich-works-to-artists-heirs-/8562.
Herrick, Feinstein LLP, Press release. “The City of Amsterdam and the Heirs of Kazimir Malevich Reach an Amicable Settlement regarding the Malevich Collection in Amsterdam,” April 24, 2008. Accessed November 15, 2013. http://www.herrick.com/sitecontent.cfm?pageID=26&itemID=8894.
 Malewicz v. City of Amsterdam, 362 F.Supp.2d 298, at 302-304 (D.D.C. 2005).
 The City of Amsterdam was the owner of the Stedelijk Museum and of its collection.
 However, the artworks were allowed to return to Amsterdam as established in the loan agreement.
 Malewicz v. City of Amsterdam, 362 F.Supp.2d 298 (D.D.C. 2005).
 Herrick, Feinstein LLP, Press release, “The City of Amsterdam and the Heirs of Kazimir Malevich Reach an Amicable Settlement regarding the Malevich Collection in Amsterdam,” April 24, 2008, accessed November 15, 2013, http://www.herrick.com/sitecontent.cfm?pageID=26&itemID=8894. See also Martha Lufkin, “Stedelijk Returns Five Malevich Works to Artist’s Heirs,” The Art Newspaper, June 1, 2008, accessed October 30, 2013, http://www.theartnewspaper.com/articles/Stedelijk-returns-five-Malevich-works-to-artists-heirs-/8562.
 Malewicz v. City of Amsterdam, 362 F.Supp.2d, at 301-303.
 In 1956, Dr. Sandberg, the then-director of the Stedelijk Museum, convinced Häring to lend the collection to the Museum for restoration and exhibition. Häring had initially refused to do so by affirming that “he was only a custodian of the works, responsible for their safekeeping, and that he had no right to convey ownership of them to anyone”. Sandberg prepared a proposal stating the terms of the loan. In his response, Häring suggested that he could even sell the collection. The City of Amsterdam entered into a loan contract with Häring. As stated, this contained an option to purchase the collection, which was exercised by the City in 1958. The heirs alleged that the documents on which the loan and the sale were based were frauds and were known by Sandberg to be frauds because of his prior correspondence with Häring. Moreover, the letter of June 1956, where Häring suggested for the first time that he could sell the collection, was signed “on behalf of” Häring, but not by him. Ibid., at 301-304.
 In order to obtain a determination that the loan is in the national interest, the applicant must certify that he has undertaken professional inquiry, including independent, multi-source research into the provenance of the objects being loaned. The applicant must also certify that he does not know, or have reason to know, of any circumstances with respect to any of the objects that would indicate the potential for competing claims of ownership, or, for objects for which such circumstances do exist, the applicant must describe those circumstances as well as the likelihood as to whether any such claim would succeed. See U.S. Department of State, Immunity from Judicial Seizure – Cultural Objects, Checklist for Applicants, http://www.state.gov/s/l/c3432.htm, accessed October 31, 2013.
 28 U.S.C. §1602. FSIA is the “sole basis for obtaining jurisdiction over a foreign state in our courts”. Republic of Austria v. Altmann, 541 U.S. 677, 124 S.Ct. 2240, 2253, 159 L.Ed.2d 1 (2004).
 Traditionally, the U.S. followed the “absolute theory” of sovereign immunity, which embodied the principle that a foreign State could not be subjected to process in a court of law without its consent. Thus, U.S. law granted complete immunity from suit to foreign sovereigns. In 1952, the U.S. Department of State switched to the “restrictive theory” of State immunity. Under this theory, a State is immune from the jurisdiction of foreign courts in respect of claims arising out of governmental activities (acta jure imperii); it is not immune, however, in respect of claims arising out of activities of a kind carried on by private persons (acta jure gestionis). Malewicz v. City of Amsterdam, 362 F.Supp.2d, at 309-310.
 Ibid., at 303. Notably, the State Department granted immunity to the artworks in spite of an objection filed by the heirs. Ibid.
 To recap, four elements must be present in order for the FSIA’s “taking” exception to apply: (1) “rights in property” are at issue; (2) the property was “taken in violation of international law”; (3) the “property is present in the United States”; and (4) the property is present in the United States “in connection with a commercial activity carried on in the United States by the foreign state”. Malewicz v. City of Amsterdam, 517 F.Supp. 2d 322, 328-329 (D.D.C. 2007).
 Pursuant to the “act of State doctrine”, domestic courts consider the expropriation of property ordered by a foreign government against its own citizens and located within its own territory as immune from judicial scrutiny. While States remain internationally responsible for injuries involving property belonging to foreigners, the decisions regarding their own nationals’ property remain essentially internal affairs. See Malewicz v. City of Amsterdam, 517 F.Supp. 2d 322, 336-340. For the relevant jurisprudence on the “act of State doctrine” see Joseph P. Fishman, “Locating the International Interest in Intranational Cultural Property Disputes,” Yale Journal of International Law (2010): 347–404.
 Malewicz v. City of Amsterdam, 362 F.Supp.2d, at 306.
 Ibid., 306-311. The City maintained that the loan of artwork is an educational and cultural activity.
 Malewicz v. City of Amsterdam, 517 F.Supp. 2d 322, 328-329.
 Ibid., 340. With the 2007 decision, the District Court also dismissed the City’s other arguments that the complaint of the plaintiffs had to be dismissed based on the statute of limitations defense, the “act of state” doctrine, and the forum non conveniens argument. Ibid., 340.
 These five paintings were: Desk and Room (1913); Suprematism (Painterly Realism of a Football Player) (1915); Suprematism, 18th Construction (1915); Suprematist Composition (Blue Rectangle over Purple Beam) (1916); and Mystic Suprematism (Black Cross on Red Oval) (1920-1922). Suprematist Composition was sold by the heirs in November 2008 at Sotheby’s in New York for US$ 60 million. Souren Melikian, “Connoisseurs Take Back Control of Art Market,” The New York Times, January 9, 2009, accessed November 15, 2013, http://www.nytimes.com/2009/01/10/arts/10iht-melik10.1.19217720.html?pagewanted=all&_r=0.
 Herrick, Feinstein LLP, Press release, “The City of Amsterdam and the Heirs of Kazimir Malevich Reach an Amicable Settlement regarding the Malevich Collection in Amsterdam”.
 See, e.g.: Raphael Contel, Giulia Soldan, Alessandro Chechi, “Case Portrait of Wally – United States and Estate of Lea Bondi and Leopold Museum,” Platform ArThemis (http://unige.ch/art-adr), Art-Law Centre, University of Geneva; and Anne Laure Bandle, Alessandro Chechi, Marc-André Renold, “Case Landscape with Smokestacks – Friedrich Gutmann Heirs and Daniel Searle,” Platform ArThemis (http://unige.ch/art-adr), Art-Law Centre, University of Geneva.
 Patty Gerstenblith, Art, Cultural Heritage, and the Law, 3rd edition, Durham, North Carolina: Carolina Academic Press (2012), 753.
 Nicholas O’Donnell, “Senate Bill 2212, the Foreign Cultural Exchange Jurisdictional Immunity Clarification Act, Unexpectedly Dies in Committee,” Art Law Report, January 9, 2013, accessed November 15, 2013, http://www.artlawreport.com/2013/01/09/senate-bill-2212-the-foreign-cultural-exchange-jurisdictional-immunity-clarification-act-unexpectedly-dies-in-committee/.


Always keep in mind that the object of a suit over violations of open meetings or records is primarily intended to allow you access to the meeting or record, and to obtain information for use in gathering and reporting news, rather than simply to win a victory in a lawsuit or otherwise. As a result, you should keep in mind your goal of getting the information, and constantly be aware of other sources of obtaining that, formal or informal, while you or your lawyers pursue lawsuits or other similar remedies.
Although the Bagley-Keene Act does not require making a written demand on the state body before filing an action in court, one way to resolve an alleged violation may be to initiate correspondence with the state body, urging them to correct the alleged violation. Section 11130.3 states, "Nothing in this section shall be construed to prevent a state body from curing or correcting an action challenged pursuant to this section." Cal. Gov't Code § 11130.3.
See discussion below. Meetings Outline at IV.C.
Informal measures at resolution are not barred by the pendency of a court action.
Settlement conferences or alternative dispute resolution are available options.
A party may appeal the decision of the Attorney General by bringing a judicial action within 30 days of the Attorney General's opinion. Ky. Rev. Stat. 61.846(4)(a). However, a party may not simultaneously seek the Attorney General's review of a complaint while pursuing an action in Circuit Court. See 93-OMD-81 ("a person cannot seek relief from this office under Ky. Rev. Stat. 61.846 when the same and additional questions are currently pending before a circuit court").
Any person may file a complaint with the state Attorney General or the district attorney, each of whom must institute enforcement proceedings unless written reasons are given as to why the suit should not be filed. La. Rev. Stat. Ann. § 42:25.
Generally, the Act’s enforcement provisions do not “affect or prevent the use of any other available remedies.” § 3-401(a)(4). Injunctive, declaratory relief, and any other appropriate relief are available from the courts. § 3-401(d). Moreover, a petitioner is not required to file a complaint with the OMCB before filing suit. § 3-401(e).
No statutory authority. Ultimate subsequent measure is filing suit in district court.
A violation of the Open Meetings Act may be corrected by holding a prompt public meeting, publicly voting on ratifying the violation. Kleinberg v. Bd. Of Educ., 1988-NMCA-014, 751 P.2d 722.
Beyond negotiation with the public body, the only redress for an Open Meetings Law violation is the filing of a lawsuit.
Any action that is a product of a violation of N.D.C.C. §§ 44-04-19, 44-04-20, or 44-04-21 is voidable by a court in a civil action. N.D.C.C. § 44-04-21.2(2).
The best subsequent measure available is to sue in mandamus for the creation of minutes of meetings that were unlawfully closed. State ex rel. Cincinnati Post v. City of Cincinnati, 76 Ohio St. 3d 540, 668 N.E.2d 903 (1996); State ex rel. The Fairfield Leader v. Ricketts, 56 Ohio St. 3d 97, 564 N.E.2d 486 (1990).
If possible to do in advance, it is always advisable to request access to a meeting to which one has reason to believe he will be excluded. Once denial is given, then the person can proceed to district court.
Aggrieved persons may concurrently or subsequently file a complaint in the Superior Court.
There is nothing to prohibit duplicity, but separate legal actions should not be taken.


The agent must register with the State Board of Equalization, pay a biennial fee of $200, and qualify on the basis of the following criteria: (1) four years of experience in real property appraisal and/or assessment valuation; (2) successful completion of at least 120 classroom hours of academic instruction in subjects related to property appraisal or assessment of property from a college or university, or from a nationally recognized appraisal or assessment organization approved by the board; and (3) passed the examination for Tennessee certified assessor as administered by the board. No person will be required to meet the additional registration qualifications required by T.C.A. § 67-5-1514 if the person registered or applied for registration prior to June 30, 2002. The board may, in lieu of the evidence required in T.C.A. § 67-5-1514(c)(2), recognize and accept certain professional designations which are awarded by appraisal and/or assessment organizations on the basis of qualifications at least equal to those set forth in the statute.3Additional registration requirements are set forth in T.C.A. § 67-5-1514(k). Agent disciplinary rules, renewal procedures and advertising disclaimers are set forth in T.C.A. §§ 67-5-1514(f) and (g).
1T.C.A. § 67-5-1514(a) and (b). See T.C.A. § 67-5-1514(e) for list of persons who are permitted to represent the assessor of property before the State Board of Equalization.
3T.C.A. § 67-5-1514(c)(2) and (3).
5T.C.A. § 67-5-1514(i) and (j).


text:
JOHN BEARD MEMORIAL FOUNDATION (a Nonprofit Corporation), Appellant, v. ERNEST T. KREBS, JR., et al., Respondents.
George B. White for Appellant.
John G. Reisner for Respondents.
Plaintiff sued to enjoin defendants from using the name John Beard Memorial Foundation in connection with defendants' laboratory work devoted to cancer research. Defendants answered and cross-complained alleging prior adoption and use of the name and asked that plaintiff be prohibited from using it. The court first granted judgment for plaintiff but on motion for new trial the findings were amended to read that the parties were the joint and several owners of the name and entitled to the joint and several use thereof and judgment followed accordingly. Defendants did not appeal on their cross-complaint, but plaintiff foundation appeals from the amended judgment.
The appellant foundation, a nonprofit corporation, was incorporated in 1944 under the name "University Research Foundation" and from late in 1944 or early in 1945 until the end of 1946 Dr. Gurchot, representing the foundation, worked without charge to himself in the laboratory belonging to defendant Dr. E. T. Krebs, and in collaboration with the two defendants. During 1944 the name of John Beard had been discussed between Dr. Gurchot and the defendants because their experiments had been inspired by a book by the scientist John Beard. The name "John Beard Memorial Foundation" was in use during 1946, particularly in articles published by Dr. Gurchot and E. T. Krebs, Jr., with the collaboration and approval of Dr. E. T. Krebs. The laboratory earned no income and there was no attempt to organize in any formal manner nor was there any specific agreement or filing of certificate of doing business under a fictitious name. Rather there was but a loose working arrangement which suited the convenience and purposes of the parties at the time.
As a result of personal differences early in 1947, Dr. Gurchot terminated the collaboration and his use of the laboratory and on January 20, 1947, the corporate name of University Research Foundation was changed to John Beard Memorial Foundation without the knowledge or consent of the defendants. Dr. Gurchot severed all connections with defendants by June, 1947. Thereafter both plaintiff and defendants continued [96 Cal. App. 2d 599] the use of the name John Beard Memorial Foundation in connection with the work which was thenceforth carried on by each independently of the other.
It is unquestioned that while Dr. Gurchot and the two defendants were working together in Dr. Krebs' laboratory they commenced to use the fictitious name John Beard Memorial Foundation in connection with the laboratory and the scientific work there carried on together and the primary question presented is whether the corporation which Dr. Gurchot represented in that association could gain exclusive right to the use of that name against the association by secretly adopting the name without the knowledge or consent of a majority of the associates.
 A voluntary, nonbusiness association may by user acquire the right to a fictitious name. (Law v. Crist, 41 Cal. App. 2d 862 [107 P.2d 953]; Purcell v. Summers, 145 F.2d 979; Kline v. Knights of the Golden Eagle, 113 N.J.Eq. 513 [167 A. 758]; Faisan v. Adair, 144 Ga. 797 [87 S.E. 1080, Ann.Cas. 1918A 243]; Talbot v. Independent Order of Owls, 220 F. 660 [136 C.C.A. 268]; 7 C.J.S. 37.)  Appellant asserts however that there was no evidence to support a finding of such public user of the name by the associates as to establish a right thereto. Dr. Gurchot and the younger Krebs published in a scientific journal a letter signed by them jointly as representing the John Beard Memorial Foundation. This publication sufficiently excited the interest of a former pupil of John Beard that he wrote from Scotland to inquire about the foundation. Dr. Gurchot, while associated with the defendants, published an article under his signature using the name John Beard Memorial Foundation and the address of Dr. Krebs' laboratory. Dr. Gurchot's article appeared in a January, 1947 issue of Science and since the change of name of the corporation was not adopted until January 20, 1947 it is a fair inference that the use by him of the name John Beard Memorial Foundation in that article must have referred to the association and not to the corporation, bearing in mind the lapse of time to be expected between submission of the articles and publication. Stationery was ordered bearing the name John Beard Memorial Foundation and giving the address of Dr. Krebs' laboratory and this was used in correspondence concerning the affairs of the laboratory and the experiments there carried on; and, while the articles were not produced, the younger Krebs testified on cross-examination [96 Cal. App. 2d 600] that before Dr. Gurchot withdrew from the association the younger Krebs had sent articles and letters to scientific publications using the name John Beard Memorial Foundation.
Bearing in mind that the burden was on appellant to establish its prior right to the exclusive use of the fictitious name we are satisfied that there was substantial evidence to support the trial court's conclusion that this burden had not been met.
Nourse, P. J., and Goodell, J., concurred.

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