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524278-3519

BEER, District Judge. Alken-Ziegler, Incorporated, (Company) appeals from the district court’s grant of summary judgment affirming an arbitration award in favor of the International Union, United Automobile, Aerospace and Agricultural Implement Workers of America, and Local Union 985 (Union). For the following reasons, we find that, even in light of our deferential review, the arbitrator disregarded the provisions of the labor contract. Therefore, we reverse the district court’s decision and vacate the arbitration award. I The Company and the Union were parties to a labor contract effective December 15, 1999. In March, 2001, the Company notified the Union that it would be closing its Novi plant and that it would be necessary to terminate all of the employees at the facility. As a result of the plant closing on October 17, 2001, all but one employee was terminated during the calendar year, 2001. The Company refused to pay vacationpay benefits to employees who did not work for the Company on January 1, 2002. The Union filed a grievance. Article 16 (61) of the labor agreement sets forth the eligibility requirement for payment of vacation benefits: (a) Employees shall be eligible for vacations, time off and vacation pay as set forth below. (b) For purposes of eligibility, the vacation year will be considered the calendar year period from January 1st to December 31. (c) An employee covered by the agreement who is actually working on January 1st of any year and who has at least six (6) months seniority and has' worked at least eight hundred (800) hours from and after January 1st of the previous year shall be paid the equivalent of two-and-one half (2-1/2) days vacation pay. ijs ifc tjc % (f) Employees with twelve (12) months or more of seniority who have worked more than eight hundred (800) hours, but less than sixteen hundred (1600) hours, during the vacation year, shall receive a pro-rated vacation pay on the basis of the ratio of their actual hours to sixteen hundred (1600) hours, but not to exceed the full vacation pay to which they were entitled by reason of their seniority and hours worked as set forth above. (g) Vacation pay will be computed on a straight time forty (40) hour basis including applicable shift premium. The employee’s hour basis including applicable shift premium. The employee’s hourly rate in effect when vacation is taken will be used to compute vacation pay. If an employee is laid off after six (6) months service, their vacation pay will be pro-rated same as above. Pursuant to Article 5 of the labor contract, the parties arbitrated the grievance. At the arbitration the Union asserted that because it was not the employees’ fault that they were unable to work the full year, the employees were entitled to their vacation pay. The arbitrator granted the grievance, allowing all plaintiffs, who, but for being laid off, would have been able to continue employment and thereby qualify for vacation benefits. The arbitrator reasoned that “[i]t would be unreasonable to cause such forfeitures particularly where an employee has no control over the situation.” The Company filed a complaint in the district court asserting that the arbitrator’s award contradicted the clear, mandatory commands of the labor contract, which required that an employee be “actually working” for the Company as of January 1, 2002, to receive vacation pay. The district court granted the Union’s motion for summary judgment and upheld the arbitrator’s award. The Company appealed. II

3088069-19872

Affirmed by published opinion. Judge WILKINSON wrote the opinion, in which Judge TRAXLER and Senior Judge WILLIAMS joined. OPINION WILKINSON, Circuit Judge: The plaintiff in this case alleges that defendant fiduciaries breached their duty to him by failing to implement the investment strategy he had selected for his em ployee retirement account. Relying on two separate provisions of the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. §§ 1132(a)(2) and 1132(a)(3) (2000), he seeks recovery of the amount by which his account would have appreciated had defendants followed his instructions. The district court concluded that his complaint did not request a form of relief available under ERISA, and it therefore granted defendants’ motion for judgment on the pleadings. We affirm. Section 1132(a)(2) provides remedies only for entire plans, not for individuals. And while § 1132(a)(3) does in some cases furnish individualized remedies, the Supreme Court’s decisions in Mertens v. Hewitt Associates, 508 U.S. 248, 113 S.Ct. 2063, 124 L.Ed.2d 161 (1993), and Great-West Life & Annuity Insurance Co. v. Knudson, 534 U.S. 204, 122 S.Ct. 708, 151 L.Ed.2d 635 (2002), compel the conclusion that it does not supply one here. Plaintiff has alleged no unjust enrichment, unlawful possession, or self-dealing on the part of defendants, and the remedy he seeks falls outside the scope of the “equitable relief’ that § 1132(a)(3) authorizes. I. DeWolff, Boberg & Associates, Inc. is a nationwide management consulting firm organized under the laws of South Carolina. It administers, and is thus a fiduciary of, an ERISA-regulated 401(k) retirement savings plan in which its current and former employees participate. The plan permits participants who so desire to manage their own accounts by selecting from a menu of various investment options. Plaintiff James LaRue has participated in this 401(k) plan since 1993. He alleges that in 2001 and 2002, he directed DeWolff to make certain changes to the investments in his plan account, but that these directions were never carried out. In 2004, he brought suit against DeWolff and the plan, claiming that this omission amounted to a breach of fiduciary duty. According to the complaint, his “interest in the plan ha[d] been depleted approximately $150,000.00” as a result of defendants’ failure to follow his instructions. To recover for this loss, the complaint sought “appropriate ‘make whole’ or other equitable relief pursuant to [29 U.S.C. § 1132(a)(3)].” Defendants subsequently filed a Rule 12(c) motion for judgment on the pleadings, contending that plaintiffs requested remedy was not available under § 1132(a)(3). The district court agreed, and thereafter dismissed the case with prejudice. Plaintiff appeals. We review de novo a district court’s decision to grant judgment on the pleadings. See Burbach Broad. Co. of Del. v. Elkins Radio Corp., 278 F.3d 401, 405-06 (4th Cir.2002). II. In enacting ERISA, Congress sought to uniformly regulate the wide universe of employee benefit plans. See Aetna Health Inc. v. Davila, 542 U.S. 200, 208, 124 S.Ct. 2488, 159 L.Ed.2d 312 (2004). A salient feature of this effort was the careful delineation of civil remedies available to litigants seeking to enforce their rights under such plans. See id. at 208-09, 124 S.Ct. 2488. Congress broadly preempted previously available state-law causes of action, see 29 U.S.C. § 1144(a), and set forth in a single section of ERISA the exclusive list of civil actions available to parties aggrieved by a statutory violation, see id. § 1132(a); see also Ingersoll-Rand Co. v. McClendon, 498 U.S. 133, 144, 111 S.Ct. 478, 112 L.Ed.2d 474 (1990). Section 1132(a) stops short of providing ERISA complainants with a full arsenal of relief. ERISA is “an enormously complex and detailed statute that resolve[s] innumerable disputes between powerful competing interests&emdash;not all in favor of potential plaintiffs.” Mertens v. Hewitt Assocs., 508 U.S. 248, 262, 113 S.Ct. 2063, 124 L.Ed.2d 161 (1993). Its civil enforcement provision in particular attempts to settle “a tension between the primary ERISA goal of benefiting employees and the subsidiary goal of containing pension costs.” Id. at 262-63, 113 S.Ct. 2063 (internal quotation marks and alterations omitted). Congress has consequently made various “policy choices” resulting in “the inclusion of certain remedies and the exclusion of others.” Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 54, 107 S.Ct. 1549, 95 L.Ed.2d 39 (1987). Interpretation of § 1132(a) is therefore no easy task. As the Supreme Court’s ERISA decisions have repeatedly cautioned, “vague notions of a statute’s ‘basic purpose’ are ... inadequate to overcome the words of its text regarding the specific issue under consideration.” Great-West Life & Annuity Ins. Co. v. Knudson, 534 U.S. 204, 220, 122 S.Ct. 708, 151 L.Ed.2d 635 (2002) (internal quotation marks omitted); Mertens, 508 U.S. at 261, 113 S.Ct. 2063 (same). Section 1132(a) represents an “interlocking, interrelated, and interdependent remedial scheme” that “provide [s] strong evidence that Congress did not intend to authorize other remedies that it simply forgot to incorporate expressly.” Mass. Mut. Life Ins. Co. v. Russell, 473 U.S. 134, 146, 105 S.Ct. 3085, 87 L.Ed.2d 96 (1985). With these constraints in mind, we consider whether the statute’s text provides the particular relief at issue here. III. Plaintiff first suggests that remuneration of his plan account finds express authorization in the text of 29 U.S.C. § 1132(a)(2). That subsection allows for a civil action “by a participant, beneficiary or fiduciary for appropriate relief under section 1109 of this title.” Section 1109, in turn, provides that [a]ny person who is a fiduciary with respect to a plan who breaches any of the responsibilities, obligations, or duties imposed upon fiduciaries by this sub-chapter shall be personally liable to make good to such plan any losses to the plan resulting from each such breach, and to restore to such plan any profits of such fiduciary which have been made through use of assets of the plan by the fiduciary, and shall be subject to such other equitable or remedial relief as the court may deem appropriate.... 29 U.S.C. § 1109(a). Plaintiffs argument regarding the applicability of § 1132(a)(2) is made for the first time on appeal. Even if the argument were not therefore waived, see, e.g., Jones v. Liberty Mut. Ins. Co. (In re Wallace & Gale Co.), 385 F.3d 820, 835 (4th Cir.2004), he could not succeed on the merits. Recovery under this subsection must “inure[ ] to the benefit of the plan as a whole,” not to particular persons with rights under the plan. Russell, 473 U.S. at 140, 105 S.Ct. 3085 (emphasis added); see also Coyne & Delany Co. v. Blue Cross & Blue Shield of Va., Inc., 102 F.3d 712, 714 (4th Cir.1996). “A fair contextual reading of the statute makes it abundantly clear that its draftsmen were primarily concerned with the possible misuse of plan assets, and with remedies that would protect the entire plan, rather than with the rights of an individual beneficiary.” Russell, 473 U.S. at 142, 105 S.Ct. 3085 (footnote omitted). It is difficult to characterize the remedy plaintiff seeks as anything other than personal. He desires recovery to be paid into his plan account, an instrument that exists specifically for his benefit. The measure of that recovery is a loss suffered by him alone. And that loss itself allegedly arose as the result of defendants’ failure to follow plaintiffs own particular instructions, thereby breaching a duty owed solely to him. We are therefore skeptical that plaintiffs individual remedial interest can serve as a legitimate proxy for the plan in its entirety, as § 1132(a)(2) requires. To be sure, the recovery plaintiff seeks could be seen as accruing tp the plan in the narrow sense that it would be paid into plaintiffs personal plan account, which is part of the plan. But such a view finds no license in the statutory text, and threatens to undermine the careful limitations Congress has placed on the scope of ERISA relief. This case is much different from a § 1132(a)(2) action in which an individual plaintiff sues on behalf of the plan itself or on behalf of a class of similarly situated participants. See Smith v. Sydnor, 184 F.3d 356, 363 (4th Cir.1999); see also In re Schering-Plough Corp. ERISA Litig., 420 F.3d 231, 233, 235 (3d Cir.2005); Kuper v. Iovenko, 66 F.3d 1447, 1452-53 (6th Cir.1995). In such a case, the “remedy will undoubtedly benefit [the plaintiff] and other participants in the [p]lan,” but “it does not solely benefit the individual participants.” Smith, 184 F.3d at 363 (emphasis added); see also Roth v. Sawyer-Cleator Lumber Co., 61 F.3d 599, 605 (8th Cir.1995) (permitting recovery for losses to the plan but not losses to the individual plaintiff beneficiaries for defendants’ alleged breach of fiduciary duty). Here, by contrast, plaintiff seeks to particularize the recovery to himself. Section 1132(a)(2) is not a proper avenue for him to obtain such relief. rv. We thus turn to plaintiffs second theory of relief, which relies on a different ERISA remedial provision, 29 U.S.C. § 1132(a)(3). That section authorizes a civil action by a participant, beneficiary, or fiduciary (A) to enjoin any act or practice which violates any provision of this subchapter or the terms of the plan, or (B) to obtain other appropriate equitable relief (i) to redress such violations or (ii) to enforce any provisions of this subchapter or the terms of the plan. Plaintiff contends that the “make whole” relief he seeks constitutes one of the forms of “other appropriate equitable relief’ that the provision authorizes. A. In construing the scope of § 1132(a)(3), the Supreme Court has stressed that the term “equitable” is one of limitation. In Mertens v. Hewitt Associates, the Court held that the phrase “equitable relief’ refers only to “those categories of relief that were typically available in equity” in the days of the divided bench. 508 U.S. at 256, 113 S.Ct. 2063; see also Sereboff v. Mid Atl. Med. Servs., Inc., — U.S.-,-, 126 S.Ct. 1869, 1873, 164 L.Ed.2d 612,- (2006). The Court reasoned that other sections of ERISA expressly refer to “equitable or remedial relief,” 29 U.S.C. § 1109(a), and “legal or equitable relief,” e.g., id. § 1132(g)(2)(E), thereby demonstrating that “equitable relief’ connotes only a subset of the full palliative spectrum. See Mertens, 508 U.S. at 258, 113 S.Ct. 2063. The Court refused to “read the statute to render the modifier superfluous,” id., a construction that would undermine Congress’s exclusive remedial scheme by opening a back door through which uninvited remedies might enter, id. at 257, 113 S.Ct. 2063. The particular definition of “equitable” that the Court has adopted finds support in a well-known principle of statutory construction. “The maxim noscitur a sociis, that a word is known by the company it keeps, while not an inescapable rule, is often wisely applied where a word is capable of many meanings in order to avoid the giving of unintended breadth to the Acts of Congress.” Jarecki v. G.D. Searle & Co., 367 U.S. 303, 307, 81 S.Ct. 1579, 6 L.Ed.2d 859 (1961). Section 1132(a)(3) expressly mentions the right to “enjoin” certain acts or practices “or ... to obtain other appropriate equitable relief’ (emphasis added). The understanding of what “equitable” means in this context is necessarily informed by its association with injunctive relief, the quintessential exemplar of a remedy that equity alone would typically provide. Determining the applicability of § 1132(a)(3) therefore requires a court to examine whether the form of relief a plaintiff seeks is, like an injunction, historically one that a court of equity rather than a court of law would have granted. See Sereboff, 126 S.Ct. at 1874. The Supreme Court has, in addition to injunctions, listed mandamus and restitution as examples of traditional equitable remedies. See Mertens, 508 U.S. at 256, 113 S.Ct. 2063. Subsequent decisions of both the Supreme Court and this court have been wary of expanding the list beyond these archetypes and them closely related kin. See, e.g. Varity Corp. v. Howe, 516 U.S. 489, 495, 515, 116 S.Ct. 1065, 134 L.Ed.2d 130 (1996) (reinstatement to a plan); Griggs v. E.I. Dupont de Nemours & Co., 385 F.3d 440, 449 (4th Cir.2004) (rescission); Denny’s, Inc. v. Cake, 364 F.3d 521, 526 n. 6 (4th Cir.2004) (declaratory relief incident to an injunction). B. Mertens and its progeny compel the conclusion that the remedy plaintiff desires falls outside the scope of § 1132(a)(3). As in Mertens, although he “often dance[s] around the word,” what plaintiff “in fact seek[s] is nothing other than compensatory damages — monetary relief for all losses ... sustained as a result of the alleged breach of fiduciary duties.” 508 U.S. at 255, 113 S.Ct. 2063. “Money damages are, of course, the classic form of legal relief,” id., and have therefore remained conspicuously absent from the list of traditional equitable remedies available under § 1132(a)(3), id. at 256. While that list does include “restitution,” id., this form of recovery is not so broad as to include the compensatory relief that plaintiff seeks. As the Supreme Court explained in Great-West Life & Annuity Insurance Co. v. Knudson, “not all relief falling under the rubric of restitution is available in equity.” 534 U.S. at 212, 122 S.Ct. 708. In particular, “for restitution to lie in equity,” as opposed to at law, “the action generally must seek not to impose personal liability on the defendant, but to restore to the plaintiff particular funds or property in the defendant’s possession.” Id. at 214, 122 S.Ct. 708; see also id. at 214, 122 S.Ct. 708 n. 2 (noting a single “limited exception” applicable to “an accounting of profits”). The Supreme Court’s most recent § 1132(a)(3) decisions demonstrate how the absence of unjust possession is fatal to an equitable restitution claim. In Knudson, the Court denied a restitutionary remedy under § 1132(a)(3) where “ ‘the funds to which petitioners claimed an entitlement’ were not in Knudson’s possession, but had instead been placed in a ‘Special Needs Trust’ under California law.” Sereboff, 126 S.Ct. at 1874 (quoting Knudson, 534 U.S. at 207, 214, 122 S.Ct. 708) (internal alterations omitted). More recently in Sereboff v. Mid Atlantic Medical Services, Inc., the Court allowed a claim for equita ble restitution to proceed where “Mid Atlantic sought specifically identifiable funds that were within the possession and control of the Sereboffs.” Id. (internal quotation marks omitted). The Court in Sere-boff reaffirmed the possession requirement it had announced in Knudson, but found that the “impediment to characterizing the relief in Knudson as equitable [was] not present” in the Sereboffs’ case. Id. The impediment is, however, present in this case, and it precludes plaintiff from recovering under an equitable restitution theory. Plaintiff does not allege that funds owed to him are in defendants’ possession, but instead that these funds never materialized at all. He therefore gauges his recovery not by the value of defendants’ nonexistent gain, but by the value of his own loss — a measure that is traditionally legal, not equitable. See, e.g., Kerr v. Charles F. Vatterott & Co., 184 F.3d 938, 944 (8th Cir.1999); see also Sereboff, 126 S.Ct. at 1874 (claim may be characterized as legal if plaintiff does not “seek to recover a particular fund from the defendant”). Thus, at core, he seeks “to obtain a judgment imposing a merely personal liability upon the defendants] to pay a sum of money.” Knudson, 534 U.S. at 213, 122 S.Ct. 708 (internal quotation marks omitted). As Knudson explained, historically “[s]uch claims were viewed essentially as actions at law,” and they are therefore unavailable under § 1132(a)(3). Id. C. Plaintiff attempts to avoid this conclusion by arguing that his requested “make whole” relief represents something entirely different from the types of remedies that we or the Supreme Court have hereto-fore considered in the context of § 1132(a)(3). In particular, he emphasizes that this case involves a situation where a participant or beneficiary is suing a fiduciary for a breach of fiduciary duty. In his view, the scope of “equitable” remedies available in such a case is broader than when a fiduciary sues a beneficiary (as was the case in Knudson and Sereboff) or when a beneficiary sues a non-fiduciary (as was the case in Mertens). Unlike either of those scenarios, the argument goes, this case can be analogized to a common law breach-of-trust action by a beneficiary seeking to recover lost trust profits, a remedy that trust treatises have labeled “equitable.” See Restatement (Second) of Trusts §§ 197, 205(c) (1959); see also George Gleason Bogert & George Taylor Bogert, The Law of Trusts & Trustees § 861 (rev.2d ed.1995). The governing precedent, however, does not point as plaintiff suggests. In fact, Mertens squarely “rejected the claim that the special equity-court powers applicable to trusts define the reach of [§ 1132(a)(3) ].” Knudson, 534 U.S. at 219, 122 S.Ct. 708; see Mertens, 508 U.S. at 256-57, 113 S.Ct. 2063. While the generally exclusive jurisdiction of equity courts over breach-of-trust suits renders all remedies in such cases “equitable” in the sense that a court of equity has power to grant them, “equitable” in the context of § 1132(a)(3) has a narrower meaning. Mertens, 508 U.S. at 256, 113 S.Ct. 2063. Under Mertens, “the relevant question is ... whether a given type of relief was available in equity courts as a general rule,” Rego v. Westvaco Corp., 319 F.3d 140, 145 (4th Cir.2003) (emphasis added), rather than merely in the context of “the particular case at issue,” Mertens, 508 U.S. at 256, 113 S.Ct. 2063. “Equitable relief’ therefore does not encompass the “many situations — not limited to those involving enforcement of a trust — in which an equity court could,” by virtue of its jurisdiction over the claim at issue, “grant legal remedies which would otherwise be beyond the scope of its authority.” Id. (internal quotation marks omitted). That plaintiff can analogize this suit to a common law breach of trust action therefore proves of no avail in characterizing the relief he seeks as equitable. Plaintiff admits that he lacks support for the notion that “make whole” relief was available in equity outside the context of trusts. It is therefore impossible for us to conclude that such relief “was available in equity courts as a general rule,” Rego, 319 F.3d at 145. The Sixth Circuit has reached a similar conclusion in a case presenting facts nearly identical to those .before us here. In Helfrich v. PNC Bank, Kentucky, Inc., 267 F.3d 477 (6th Cir.2001), a beneficiary of an employee 401(k) plan sued a plan fiduciary for failing to comply with written directions to roll over his assets into a specific set of mutual funds. Id. at 479-80. The plaintiff asserted an entitlement to the difference between the “amount he would have earned” had the fiduciary followed his instructions and “the amount he in fact earned” as a result of the fiduciary’s alleged breach of duty. Id. at 480. The court concluded that his requested remedy was unavailable under § 1132(a)(3). Id. at 481-83. It found that the plaintiff could not style his relief as “restitution” when he was measuring recovery by his own losses rather than the defendant’s gains, id. at 482-83, and it rejected a strict congruence between § 1132(a)(3) and the common law of trusts, id. at 482 (citing Mertens, 508 U.S. at 256, 113 S.Ct. 2063). It therefore dismissed the suit because “ERISA does not permit plan beneficiaries to claim money damages from plan fiduciaries.” Id. at 482.

3601688-11825

PER CURIAM: The uncommon crime of looting is at the nub of this appeal. We affirm. Operation Just Cause Airman First Class Manginell was a security policeman at Norton Air Force Base, California. He was selected for temporary duty during Operation Just Cause, a military expedition in Panama against hostile forces loyal to General Manuel Noriega. Manginell was assigned to guard the captured Tocumen International Airport in Panama City. General Noriega’s troops in the area continued to resist. While serving as a night guard to secure a warehouse at Tocumen airport, Manginell appropriated a camera and four watches. At trial, Manginell pleaded guilty to two specifications of looting under Article 103, UCMJ, 10 USC § 903. The prosecution prepared a detailed brief supporting the providence of Manginell’s guilty pleas to looting. After completing his inquiry, the military judge found Manginell guilty in accordance with his pleas . Before us, Manginell argues that looting requires a taking accompanied by force or violence. Since that requirement was missing here, he insists that his conviction must fall. Historical Analysis Looting is a military offense rooted deeply in both the law of chivalry and the law of war. Winthrop calls particular attention to a clearcut prohibition of looting in Article of War XXV of King James II in 1688. His famous treatise also notes American milestones: (1) Brigadier General Wayne’s 1779 capture of Stoney Point—Congress approved the division of captured military stores among “the gallant troops;” (2) 1864 Civil War rewards to militiamen dispersing “bushwhackers”—watches and arms were viewed as trophies; and (3) a long history of prize payments in the United States Navy. See Winthrop, Military Law and Precedents (1920 ed.) 557; see also Dudley, Military Law and the Procedure of Courts-Martial (1915) 333-334. In the 1921 and 1928 Manuals for-Courts-Martial, looting and similar conduct was punishable under Articles of War 79 and 80. Research reveals few cases under those articles. Among them is an opinion crucial to our analysis, United States v. Ruppel, 61 Bd.Rev. 291, 306 (1946). The Board of Review assessed misconduct of an officer in post-war Austria. Reasoning in part from the laws of war, the Board commented that neither force nor violence was necessary to convict of looting. Good arguments can be made that the Ruppel analysis is dicta. Such arguments are academic in light of what occurred next. In the 1951 Manual for Courts-Martial, looting was prohibited by Article 103, a hybrid of old Articles of War 79 and 80. Ruppel is specifically cited in the legislative history for the proposition that looting need not necessarily be accompanied by force or violence. See Legal and Legislative Basis, Manual for Courts-Martial 1951, 262. Despite that language, a 1950’s Air Force benchbook listed “force or violence” as a necessary predicate to prove looting. See Court-Martial Instruction Drafting Guide, Department of the Air Force, Article 103.7 By 1971, however, “force or violence” was neither listed as an element nor defined. See Air Force Manual 111-2, Court-Martial Instructions Guide, Instruction 3-59 (16 October 1971). In contrast, the Army apparently continued to find force or violence an indispensable requirement. See, e.g., DA Pam 27-9, Military Judges’ Guide, Instruction 4-59 (May 1969). That situation remains virtually unchanged in the current Army iteration. See DA Pam 27-9, Military Judges’ Benchbook, Instruction 3-59 (May 1982). The Army Benchbook “may be used as a procedure guide” for Air Force courts-martial. Air Force Regulation 111-1, Military Justice Guide, para. 12-3 (30 September 1988). The 1984 Manual for Courts-Martial fails to mention “force or violence” as either an element or part of the definition of looting. Since 1951, a handful of modern courts-martial have included looting as an incidental offense among others but there has been no solid analysis of that crime. The Manual lists three elements for the sort of looting alleged here: (a) that the accused engaged in the act by unlawfully seizing or appropriating certain property, public or private; (b) that it was located in enemy or occupied territory; and (c) that it was left behind or owned by the enemy, an occupied state, an inhabitant of the occupied state, or the like. See MCM, Part IV, para. 27b(4) (1984). Holding We hold that the appellant was properly convicted of looting. The current Manual for Courts-Martial lists three elements for this crime. They are found here. The definition of “looting,” to mean unlawfully seizing property by force or violence as contained in the Military Judges’ Bench-book, need not be followed; the Benchbook is not mandatory for Air Force trials. Freed of that consideration, we may accept the analysis offered in Ruppel and adopted by those who created the new Article 108. See Legal and Legislative Basis, Manual for Courts-Martial 1951, 262. In addition, the term “looting” is clearly defined at MCM, Part IV para. 27c(4) as “unlawfully seizing or appropriating property.” It was further defined for purposes of this case in the trial counsel’s brief written to show the propriety of accepting the guilty plea: “to carry off as loot or booty.” We thus view this appellant’s guilty plea to looting as intelligent and knowing. He had no quarrel with the Government’s definition of the crime, which we find correct. The approved sentence is a bad conduct discharge, six months confinement, forfeiture of $400.00 per month for six months, and reduction to airman basic. In addition to taking the camera and watches, Manginell was also found guilty (in accord with his pleas) of larceny of a California vehicle registration sticker and a minor dereliction of duty. We think the sentence entirely appropriate ... perhaps even generous. The findings of guilty and the sentence are correct in law and fact and, upon the basis of the entire record, are AFFIRMED. Senior Judge KASTL (dubitante): While we affirm, I am not particularly pacific about the ultimate fairness of the result. Yes, Manginell is technically guilty; but I hold considerable reservations about the situation: I say the “wide-open” Air Force definition of looting fails to distinguish between: (a) minor misconduct such as taking a watch or an enemy handgun as a war trophy; and (b) serious crime, such as an unprincipled use of force or violence so outrageous that it merits a possible maximum sentence of life imprisonment. The decision to prosecute this case as looting fails to rest on a rational standard which separates the serious from the everyday offense. The prosecution convinced the military judge to depart from the Air Force’s usual reliance on DA Pam 27-9, Military Judges’ Benchbook. Instead, the prosecutor turned to the Manual for Courts-Martial discussion. That omits the requirement for “force and violence.” To my mind, such an approach offers the convening authority unlimited discretion to charge larceny or looting. Without articulable standards, it thus leaves to caprice whether one particular accused will face five years and another a life sentence. One might respond that several areas of the law give the Government an election— e.g., assault and aggravated assault; or various degrees of homicide. But such examples are grounded in objective degrees of culpability, measured by relatively clear-cut standards. In contrast, the difference between larceny and looting—if the prosecution argument is correct—is quixotic. In sum, I think the prosecution’s theory sets too low a standard for the Air Force— virtually every appropriation where one can postulate an “enemy” lurking somewhere in the vicinity creates the opportunity to charge looting, with its possible lifetime sentence. Here is a shapeless legal concept which fails to distinguish between the truly egregious and the routine. I would make three further points: 1. We have decided at least three other cases in recent months concerning security policemen who stole while acting as guards during Operation Just Cause. Specific citations are unnecessary; the point is that all the others passed muster as simple larce nies of private property. I see nothing to distinguish today’s case as factually more serious. What logical reason is there to treat similar accuseds in a dissimilar fashion? 2. At the end of the day, a court-martial order should reflect precisely what an accused did, not distort the record. See United States v. Blucker, 30 M.J. 690, 691 (A.C.M.R.1990). Here, others involved with larceny during Operation Just Cause will receive a court-martial order showing they were thieves. Manginell will have an order to inform potential employers that he was guilty of something akin to a war crime. His conduct differs little from the other airmen ... but his record now is facially far more reprehensible. 3. While Manginell’s conduct adds up to “looting” in the Air Force, the definition is chameleonic. In the next contested case, what should a careful military judge do if the accused pleads not guilty and requires the Government to define “looting?” Is the Manual definition all encompassing? Why is the standard different between the Army and the Air Force? The Bouvier, Ballentine, and Black legal dictionaries contain no definition of “looting.” Neither is there useful analysis in American Jurisprudence or Corpus Juris Secundum. We have used the word as a noun, to mean “ill-gotten gains.” See United States v. Weems, 13 M.J. 609, 610 (A.F.C.M.R.1982). Civilian courts often use the word “looting” as a synonym for “larceny.” See Miller v. Alabama, 405 So.2d 41 (1981); Arizona v. Gunter, 100 Ariz. 356, 414 P.2d 734 (1966). Sometimes, it envisions “civil disorder” or vandalism, as in Shankles v. Costa Armatori, 722 F.2d 861, 863 (1st Cir.1983). Still other times, “looting” is taken to mean action occurring during a tumult or riot. See YMCA v. United States, 395 U.S. 85, 89 S.Ct. 1511, 23 L.Ed.2d 117 (1969) (rioting and looting during a prior United States expedition in Panama); Annot., 39 A.L.R. 4th 1170 (1985). Finally, the word sometimes suggests a completely different concept—“insider” skimming of a corporation. See United States v. Feldman, 853 F.2d 648 (9th Cir.1988). To repeat for emphasis, it seems irrational that Army and Air Force warriors engaging together in combat operations should be judged by different standards for the same wrongdoing. I suggest that the Code Committee established under Article 67(g), UCMJ, 10 USC § 867(g) reexamine Article 103 and the Manual with an eye to refining for all the definition of “looting.” The legislative history is thin. Ruppel is scant authority, and I surmise there has been little modern thought to this subject. Judge KASTL participated prior to his retirement. . The Government had charged the same actions alternatively as larceny under Article 121, UCMJ, 10 USC § 921. During the court-martial, the prosecutor stated that he had no authority to withdraw the two specifications but that the Government elected to offer no evidence on them. The military judge found the appellant not guilty of these alternative larceny offenses. . The Guide lists no year of publication. Major General Reginald C. Harmon is listed as The Judge Advocate General. Since the Guide was intended for use with the 1951 Manual, its publication probably is between 1951 and General Harmon’s retirement in March 1960. . See, e.g., United States v. Wolfe, 37 C.M.R. 571 (A.B.R.1966) (deployment of 82d Airborne Division to Dominican Republic; looting incidental to other issues). See also Philos, Handbook of Court-Martial Law (1951) 410. . We have no particular concern with the concept of "time of war" vis-a-vis the Panamanian expedition. See MCM, App. 21, Rule 103, A21-5 to 21-6 (1984).

8928789-13581

SELYA, Circuit Judge. Defendant-appellant José Guzmán asserts that the Supreme Court’s decision in United States v. Booker, — U.S. -, 125 S.Ct. 738, 160 L.Ed.2d 621 (2005), entitles him to resentencing under non-mandatory sentencing guidelines. Employing the plain error analysis applicable to unpreserved claims of Booker error, we conclude that the appellant suffered no cognizable prejudice resulting from the application of a mandatory guidelines system. Accordingly, we affirm his sentence. I. Background On November 10, 1994, a federal grand jury handed up a multi-count indictment charging the appellant with one count of conspiracy to possess cocaine base with intent to distribute, seven counts of possessing with intent to distribute, distributing, and aiding and abetting the distribution of cocaine base, and one count of conspiracy to acquire firearms in exchange for illegal drugs. See 21 U.S.C. §§ 841(a)(1), 846; 18 U.S.C. §§ 2, 371. These charges stemmed from the appellant’s alleged participation, with four code-fendants, in the sale of crack cocaine to undercover officers on eleven separate occasions and the coconspirators’ plan to acquire weapons from those officers in exchange for drugs. After negotiating a plea agreement, the appellant pleaded guilty to all counts. The district court convened a disposition hearing on February 9, 1996, and sentenced the appellant to a 240-month incarcerative term (a term that was within the applicable guideline sentencing range of 210 to 262 months). The appellant challenged that sentence but, after some procedural skirmishing (not relevant here), a panel of this court affirmed it. United States v. Guzman, 132 F.3d 31 (1st Cir.1997) (unpublished table decision). On October 7, 1998, the appellant filed a habeas petition, see 28 U.S.C. § 2255, in which he claimed, among other things, that his sentence had been illegally imposed. The district court wisely appointed counsel, who filed an amended section 2255 petition. On June 4, 2002, the court granted the amended petition; it found that defense counsel’s failure at sentencing to present humanizing evidence and to argue for a sentence at the low end of the guideline sentencing range constituted ineffective assistance. See Guzmán v. United States, No. 98-12086, slip op. at 1 (D.Mass. June 4, 2004) (unpublished). Accordingly, the court vacated the appellant’s sentence. The district court convened a new sentencing hearing on June 18, 2004. This time, the court imposed a 210-month in-carcerative term. That term was at the nadir of the guideline sentencing range. This timely appeal followed. II. Analysis In this venue, the appellant challenges his 210-month sentence. This challenge devolves from Booker, in which the Supreme Court held that a defendant’s Sixth Amendment right to trial by jury is violated when his sentence is imposed under a mandatory guidelines system that gives decretory significance to judge-found facts. 125 S.Ct. at 756. The appellant argues that because he was resentenced prior to the Booker decision and under the mandatory guidelines system then in effect, his sentence is unconstitutional. The appellant did not make anything resembling a Sixth Amendment objection at the time of his resentencing, so his claim of error is unpreserved. The appellant concedes that point, but he mounts an aggressive attack on this court’s standard of review for unpreserved claims of Booker error. In the course of that attack, he maintains both that the articulation of the plain error test, as set forth in United States v. Antonakopoulos, 399 F.3d 68, 75 (1st Cir.2005), and its progeny, should not apply to him and that, in all events, the application of that test violates due process. In his view, we ought to abandon Antonakopoulos and instead adopt one of two alternate approaches. We first repulse the appellant’s assault on Antonako-poulos and then, applying our wonted standard of review, determine whether he is entitled to the relief that he seeks. A. Standard of Review Where, as here, a claim of Booker error has not been preserved, it is deemed forfeited and we must apply the plain error standard, as articulated in United States v. Olano, 507 U.S. 725, 732, 113 S.Ct. 1770, 123 L.Ed.2d 508 (1993). See Booker, 125 S.Ct. at 745; United States v. Heldeman, 402 F.3d 220, 223-24 (1st Cir.2005). In order to establish entitlement to relief under that stringent test, an appellant must show “(1) that an error occurred (2) which was clear or obvious and which not only (3) affected [his] substantial rights, but also (4) seriously impaired the fairness, integrity, or public reputation of judicial proceedings.” United States v. Duarte, 246 F.3d 56, 60 (1st Cir.2001). In Antonakopoulos, this court addressed the application of the plain error test in the context of unpreserved claims of Booker error. 399 F.3d at 75. We explained that a Booker error occurs not when the judge finds facts necessary to the sentencing determination but, rather, when the defendant is sentenced under a mandatory guidelines system that gives decretory significance to judge-found facts. Id. Thus, in the hindsight provided by Booker, the first two prongs of the plain error test are met when the defendant shows that the sentencing court treated the guidelines as mandatory rather than advisory. Id. With respect to the third plain error prong, the defendant bears the burden of showing that, had the error not occurred, there is a “reasonable probability” that he would have received a lesser sentence. Id. Under that standard, “the probability of a different result is sufficient to undermine confidence in the outcome of the proceeding.” Id. at 78 (quoting United States v. Dominguez Benitez, 542 U.S. 74, 124 S.Ct. 2333, 2340, 159 L.Ed.2d 157 (2004)). This means that the defendant must persuade the court that were it not for the then-mandatory nature of the sentencing guidelines, it is reasonably likely that the district court would have imposed a more lenient sentence. The appellant makes a twofold rejoinder to this format. First, even though he did not preserve his claim of Booker error, he nonetheless asseverates that the Duarte plain error test, adopted in Antonakopou-los, should not apply to his case because he could not reasonably have anticipated the “dramatic transformation in sentencing law” wrought by Booker. Requiring such “clairvoyance,” the appellant says, violates his due process rights under the Fifth Amendment. We reject these importunings. As a general rule, “a criminal defendant must seasonably advance an objection to a potential constitutional infirmity in order to preserve the point.” Derman v. United States, 298 F.3d 34, 44 (1st Cir.2002). While a narrow exception to this principle applies where “objections or defenses ... were not known to be available at the time they could first have been made,” Bennett v. City of Holyoke, 362 F.3d 1, 7 (1st Cir.2004) (internal quotation marks omitted), that exception is pertinent only if “(i) at the time of the procedural default, a prior authoritative decision indicated that the defense was unavailable, and (ii) the defense became available thereafter by way of supervening authority.” Id. Alternatively stated, the exception applies only when the futility of raising an objection or defense was unequivocally apparent at the time in question. That is clearly not the case here. At the time of the appellant’s resentencing, the constitutionality of the sentencing guidelines was a hot-button issue in criminal law circles. The Supreme Court’s decision in Apprendi v. New Jersey, 530 U.S. 466, 490, 120 S.Ct. 2348, 147 L.Ed.2d 435 (2000), had paved the way for a Sixth Amendment challenge to the federal sentencing guidelines. Moreover, a closely related issue, involving state sentencing guidelines, was pending before the Supreme Court — an issue that the Court resolved, favorably to the defendant, in Blakely v. Washington, 542 U.S. 296, 124 S.Ct. 2531, 159 L.Ed.2d 403 (2004). The bottom line is that, at the time the district court resentenced the appellant, the constitutionality of the guidelines was very much in play. Under these circumstances, there is no principled basis for excusing the appellant’s procedural default. See United States v. Del Rosario, 388 F.3d 1, 13-14 & n. 8 (1st Cir.2004) (rebuffing a similar argument). The second facet of the appellant’s rejoinder is equally unavailing. He entreats us to modify our approach to forfeited errors in the Booker context and adopt either the presumption-of-prejudice approach, see United States v. Barnett, 398 F.3d 516, 526-28 (6th Cir.2005), or the automatic-remand approach, see United States v. Crosby, 397 F.3d 103, 117-18 (2d Cir.2005). We decline this invitation. We recognize that the courts of appeals have taken a variety of approaches to the treatment of unpreserved claims of Booker error. In a multi-panel circuit, however, newly constituted panels ordinarily are constrained by prior panel decisions directly (or even closely) on point. See Eulitt v. Me. Dep’t of Educ., 386 F.3d 344, 349-50 (1st Cir.2004) (discussing the law-of-the circuit doctrine); United States v. Rodriguez, 311 F.3d 435, 438-39 (1st Cir.2002) (similar). So it is here: we are firmly bound by this court’s prior panel opinions, such as Heldeman and Antonakopoulos. To be sure, there are two narrow exceptions to this iteration of the law-of-the-circuit principle. Under the first of these exceptions, “[a]n existing panel decision may be undermined by controlling authority, subsequently announced, such as an opinion of the Supreme Court, an en banc opinion of the circuit court, or a statutory overruling.” Williams v. Ashland Eng’g Co., 45 F.3d 588, 592 (1st Cir.1995). Under the second exception, which operates in instances that fairly may be described as hen’s-teeth rare, authority that postdates the original decision, although not directly controlling, may nevertheless offer a compelling reason for believing that the former panel, in light of new developments, would change its collective mind. See id. Neither of these exceptions is apposite here. See United States v. Villafane-Jimenez, 410 F.3d 74, 85 (1st Cir.2005) (per curiam) (rejecting a similar entreaty to revisit Antonakopoulos ); United States v. Bailey, 405 F.3d 102, 114 (1st Cir.2005) (same). Thus, there is no justification for this panel to reconsider the recent decisions in the Heldemarr-Antonakopoulos line of cases. B. The Merits. Because a forfeited Booker error engenders review for plain error, the four-part Duarte test applies. See United States v. González-Mercado, 402 F.3d 294, 302 (1st Cir.2005); Antonakopoulos, 399 F.3d at 75. The Booker error that transpired here constitutes a clear and obvious sentencing error; thus, the first two prongs of the plain error test are satisfied. See United States v. Martins, 413 F.3d 139, 153 (1st Cir.2005); Antonakopoulos, 399 F.3d at 75. Turning to the third prong, we must inquire whether the appellant has pointed to circumstances creating a reasonable probability that the district court would have levied a more lenient sentence had it not been constrained by the then-mandatory guidelines system. We have said that we will not be overly stringent in assessing a defendant’s attempt to make that showing. See Heldeman, 402 F.3d at 224. Still, the defendant must point to something concrete, whether or not in the sentencing record itself, that provides a plausible basis for such a finding. The appellant essays two arguments in support of a finding of prejudice. He first notes that a district court, post -Booker, is required to account for all the factors enumerated in 18 U.S.C. § 3553(a). See Booker, 125 S.Ct. at 764-67. Building on this foundation, he posits that his sentence “would have looked quite different” had this been done. This argument misapprehends a defendant’s burden on plain error review. It is not enough for a defendant to show that he was not given the benefit of a sentence fashioned under advisory guidelines; rather, he must offer some reasonable indication that the sentencing court, freed of the shackles forged by mandatory guidelines, would have fashioned a more favorable sentence. See Heldeman, 402 F.3d at 224; Antonakopoulos, 399 F.3d at 75. Therefore, the inherent uncertainty about how the sentencing court would have exercised its newfound discretion when weighing the section 3553(a) factors under an advisory guidelines system is not enough to enable a defendant to carry his burden. That reality disposes of the appellant’s argument. While he describes at some length the vistas that the district court is now permitted to explore, he points to no specific circumstances signaling that the court’s deliberations with respect to the section 3553(a) factors would likely have yielded a lower sentence. Thus, his argument falls short of passing the third prong of the plain error test. The appellant next contends that had the district court sentenced him under an advisory guidelines system, it probably would have given him a lower sentence based on the poverty and the difficulties with cultural assimilation that he faced as a child, his current family circumstances, and the likelihood that he will be deported upon the completion of his sentence. In support of this contention, the appellant cites the fact that the district court sentenced him at the bottom of the applicable guideline range and argues that the court might have granted a further reduction had it not been constrained by a mandatory guidelines system.

4062190-28220

ORDER AND JUDGMENT TERRENCE L. O’BRIEN, Circuit Judge. Dale Ilgen pled guilty to possession of child pornography in violation of 18 U.S.C. § 2252A(a)(5)(B). He was sentenced to 78 months imprisonment, the bottom of the guideline range. He appeals from that sentence, claiming it is substantively unreasonable. We affirm. I. FACTUAL BACKGROUND On July 31, 2007, a federal agent, using a computer program called Limewire, discovered a file available for download containing the text “shx kid” (which is text known to be associated with child pornography) on a computer assigned the Internet Protocol (IP) address of 75.166.30.3. Upon further investigation, he learned the computer had 489 files with filenames describing child pornography available for download. He downloaded eleven of these files; ten of them contained child pornography. He eventually traced the IP address to Ilgen and his residence in Parker, Colorado. On December 19, 2007, agents executed a search warrant at Ilgen’s residence. They seized a computer containing 1,627 images and twenty-three videos of child pornography. Some of the images show prepubescent children being sexually penetrated (orally, anally and vaginally) by adults; other images depict a nude prepubescent female tied and bound. The images and videos were sent to the National Center for Missing and Exploited Children, which identified 324 images and four videos as being from a “known” series, ie., child pornography in which the victim has been identified. Agents interviewed Ilgen on the day they executed the search warrant. In his plea agreement, he admitted he made the following statements to the agents: (1) he owned the computer; (2) he lived alone and was the only one who had access to the computer; (3) he had made files available for sharing and understood others could access these files; (4) he used the Internet, in particular Limewire, to search for, access and download child pornography; and (5) he had approximately 1,000 pictures and ten videos of child pornography on his computer the day it was seized. According to the agents’ notes, Ilgen also told them he had purchased a membership to a child pornography website at $9.99 per month in June or July 2007. He said he downloaded material from that site on to his computer and sometimes placed it on a compact disc (CD). He had also subscribed to another child pornography website in March 2007 at $29.99 per month; he cancelled that membership in June or July 2007. He stated he viewed both male and female pornography but preferred viewing females between the ages of 4 and 25. Ilgen was arrested on June 19, 2008. In his post-arrest interview, he again explained he used Limewire to download child pornography. While he initially used it to download music, he eventually searched for “teenage girls” and child pornography “came up.” (R. Vol. 4 at 18.) He admitted he had about 1,000 images and ten videos of child pornography on his computer when it was seized and he was aware these items were accessible to others using Limewire. He also said the youngest victims in his collection of child pornography were “around 4 to 5 years of age.” (Id. at 19.) He described the period during which he was downloading child pornography as the “deepest darkest hole” he had ever been in and he would “not go back to that hole again.” (Id. at 18.) He said he was not sure why he downloaded such a large amount of child pornography as it was not a fantasy for him. He admitted, however, to masturbating while looking at child pornography. A week later Ilgen was released on bond under the supervision of Pretrial Services. Among other conditions, Ilgen was ordered to (1) participate in a home detention electronic monitoring program, (2) not access or subscribe to the Internet, (3) not possess or view child pornography, and (4) have no unsupervised contact with minors, including his minor daughter. He complied with all conditions. II. PROCEDURAL BACKGROUND A. Indictment and Plea Ilgen was indicted with transporting (Count 1), distributing (Count 2) and possessing (Count 3) child pornography. He entered into a plea agreement with the government, agreeing to plead guilty to Count 3 in exchange for the government’s dismissal of the remaining counts. The district court accepted Ilgen’s guilty plea. During the change of plea hearing, however, Ilgen displayed a noticeable tremor. The court called it to the attention of the attorneys and informed them it wanted a complete understanding of it prior to sentencing. It said it was “not going to send a debilitated individual to the mercies of the Bureau of Prisons” and wanted the parties to look into alternatives to prison. (R. Vol. 2 at 20.) The court referred the parties to its previous decision in United States v. Rausch, wherein the court sentenced the defendant (also charged with possession of child pornography) to home confinement because he needed a kidney transplant and it did not feel he would receive one if imprisoned. 570 F.Supp.2d 1295 (D.Colo.2008). The court also expressed that it would not act as a mere “rubber stamp” of the guidelines: “I don’t frankly give a goddamn what the Guidelines say because they treat — all cats are black as far as they’re concerned. There aren’t any gray ones.... [They have] turned human judgment into a mechanical judgment.... I won’t do it.” (R. Vol. 2 at 22-23.) B. Ilgen’s Mental Evaluations Ilgen began therapy with Craig David Lounsbrough, a licensed professional counselor, in July 2008. Lounsbrough diagnosed Ilgen with anxiety and depression. He opined: [F]rom a clinical perspective!,] incarceration would clearly not appear in the patient’s best interest and would likely not provide [him] the appropriate resources that he appears to require in order to deal with the above listed diagnostic issues. Additionally, such a course of action would likely not serve society and the larger public as the testing data indicates that the patient does not present as a threat nor do his diagnostic issues suggest the likelihood of any future threat. Finally, given the severity of the patient’s diagnostic issues, incarceration will likely result in exacerbation of the patient’s depression and anxiety, potentially creating major mental health issues for the patient. (R. Vol. 1 at 76.) In May 2009, Ilgen underwent a psychiatric evaluation conducted by Dr. Karen Fukutaki. Ilgen told Fukutaki he began using Limewire to download music but typed “adult pom” into the search engine because he was “just curious.” (R. Vol. I at 65.) He said that led to him downloading child and adult pornography but “[i]t was [a] game to see if I could download more than someone else....” (Id.) When asked whether he viewed the child pornography, he said he saw only one or two images. He said the images disturbed him and he was outraged that anyone could have produced such material. He denied being sexually stimulated by the child pornography and knowing it was illegal to download and share child pornography. Noting that these statements conflicted with his previous statements to the agents, Fukutaki reported: “[I]t ... appears he minimized his behavior in his report to me.” (Id. at 71.) In the end, Fukutaki diagnosed Ilgen with depression which, combined with Ilgen’s low self-esteem and social isolation, “probably contributed to his making a poor choice to download child pornography.” (Id.) She said he would benefit from treatment. While Lounsbrough had opined that Ilgen was not a threat to the public or predisposed to harming children, the government was concerned with this opinion because Lounsbrough was not an evaluator approved by the Colorado Sex Offender Management Board (SOMB) and had not utilized testing designed to evaluate sexual deviancy. Therefore, the government filed a motion requesting Ilgen be ordered to undergo a sex offense-specific evaluation by an SOMB-approved evaluator. The court granted the motion. Ilgen underwent that evaluation -with John Davis, who heard a similar story as that told to Fukutaki. When asked to explain the contradictory statements he made to the agents, Ilgen claimed he had told them he had viewed and subscribed to adult pornography websites. He also denied ever masturbating while viewing child pornography. Nevertheless, he was sorry for downloading child pornography and making it available to others. He did not believe he needed treatment in relation to his offense and claimed he would never do it again. After performing a number of tests, Davis determined Ilgen’s risk of sexual reoffense was “low to low moderate.” (R. Vol. 5 at 116.) But the risk assessment was made “without objective verification of self-reported sexual history information. ...” (Id. at 114.) C. Ilgen’s Physical Condition Ilgen has a history of a tremor. In July 2008, he began seeing Dr. John Willard for anxiety, depression and an increase in his tremor. Willard opined Ilgen would “have an extremely difficult time” in prison and prison would detrimentally affect Ilgen’s physical and mental well-being. (R. Vol. I at 117.) Willard referred Ilgen to Dr. Jeff Tam Sing, a neurologist, concerning the tremor. Because Sing found no medical reason for the tremor, he diagnosed Ilgen with conversion disorder, a kind of hysterical neurosis in which emotional conflicts are repressed and converted into symptoms of illness. D. Presentence Report A Presentence Report (PSR) was prepared. The probation officer determined the base offense level was 18. See USSG § 2G2.2(a)(l). She recommended the base offense level be enhanced by (1) two levels because the offense involved images of prepubescent minors who had not attained the age of 12, see USSG § 2G2.2(b)(2); (2) four levels because the offense involved material portraying sadistic or masochistic conduct or other depictions of violence, see USSG § 2G2.2(b)(4); (3) two levels because the offense involved the use of a computer, see USSG § 2G2.2(b)(6) and (4) five levels because the offense involved 600 or more images, see USSG § 2G2.2(b)(7)(D). These enhancements resulted in an adjusted offense level of 31. After applying a three-level downward adjustment for acceptance of responsibility, the total offense level was 28. Because Ilgen had no criminal history, his Criminal History Category was I. Based on a total offense level of 28 and a Criminal History Category of I, the probation officer determined the advisory guideline range was 78 to 97 months imprisonment. Attached to the PSR were (1) letters of support from Ilgen’s parents, his sister and two uncles, several members of his church, and a personal friend, as well as Ilgen’s own statement; (2) Victim Impact Statements (VIS) from several of the victims portrayed in the pornography found in Ilgen’s possession and their families; and (3) reports from Lounsbrough, Fukutaki, Davis, Willard and Sing outlining their findings and opinions. E. Ilgen’s Objections to the PSR and Motion for Downward Variance Ilgen objected to the PSR. Relevant here, he denied telling the arresting agents that he had purchased memberships to child pornography websites; he claimed he told them he had subscribed to adult pornography websites. He also denied telling them he had masturbated while viewing child pornography. Ilgen also filed a motion for a downward variance to probation under 18 U.S.C. § 3553(a). He said a variance from the advisory guideline range was warranted because that range resulted from USSG § 2G2.2, which Ilgen argued was not entitled to deference because it was not the product of empirical study and expert analysis by the United States Sentencing Commission but rather “Congressional hysteria.” (R. Vol. 1 at 49.) He also maintained a downward variance to probation was appropriate under the § 3353(a) factors. With regard to the nature and circumstances of the offense, Ilgen said: For at least one year and possibly longer, [Ilgen], in the privacy of his small condominium, used a single computer to download! ] child pornography. He never chatted with anyone on the internet regarding the images he possessed, never used the material to entice a child, nor did he produce, distribute, or trade any of the images. Mr. Ilgen has never had inappropriate contact with a child. (R. Vol. I at 54-55.) As to the history and characteristics of the defendant, he emphasized he was a doting father, had worked for thirty years at the same company (until he lost his job due to his arrest) and had no criminal history. He also pointed to the fact he suffers from a tremor that worsens with stress and Dr. Willard’s con cern that incarceration would negatively affect his health and well-being. Finally, Ilgen argued a sentence of probation would satisfy the need for the sentence imposed to reflect the seriousness of the offense, promote respect for the law and to provide just punishment, afford adequate deterrence and protect the public. He emphasized that “[p]robation is not a free ride;” probationers are required to follow special conditions, conditions he is already required to follow and to which he has complied. (R. Vol. I at 57.) He also pointed to his strong support network which included his family, his therapists and the members of his church. Ilgen further claimed he was not a threat to the public as there was no evidence he is psychologically predisposed to harming a child. F. Government’s Response to Ilgen’s Motion for Downward Variance The government opposed Ilgen’s motion for a variance and requested a sentence within the guideline range. It said Congress conducted extensive research and involved the Sentencing Commission when it fashioned § 2G2.2. The government also argued the § 3553(a) factors did not warrant a variance. Ilgen’s offense involved a large number of photographs and videos which depicted prepubescent children being sexually penetrated by adults and tied and bound; he also made these items available to others. And despite Ilgen’s attempts to characterize his offense as “victimless,” it was far from it. (R. Vol. 1 at 138.) Indeed, he had 324 images and four videos with known victims. The VIS demonstrate the horror of the victims’ abuse and the pain they and their families continue to suffer due in large part to the fact the abuse continues to be viewed by individuals, like Ilgen, for their own personal gratification. As to the history and characteristics of the defendant, the government argued there was no medical cause for Ilgen’s tremor and therefore no apparent treatment for it. While Ilgen claims to have suffered from the tremor prior to his arrest, he never sought treatment for it and it did not appear to have impacted his ability to work or to perform daily tasks. And there was no evidence the tremor had become debilitating or otherwise affected his ability to function; its worsening was obviously due to stress from this case. The government also claimed Ilgen’s depression and anxiety should not preclude a sentence of imprisonment. These conditions did not arise until after execution of the search warrant at his residence. Therefore, they did not appear to be chronic but rather rationally related to his arrest and conviction. According to the government, a sentence of probation would undermine the seriousness of the offense, especially given Ilgen’s failure to accept full responsibility for his actions or the impact they have had on others; indeed, he had retracted the confession he made to the agents. This lack of insight places the community at risk and requires incarceration. Moreover, a sentence of probation would not act as a deterrent — the lighter the punishment for possessing child pornography, the greater the customer demand for it, which in turn leads to more being produced. G. Sentencing The district court overruled Ilgen’s objections to the PSR. It then turned to the PSR’s guideline calculations. It said the child pornography guidelines “are in a deplorable state.” (R. Vol. 3 at 115.) It also criticized the guidelines in general for failing to consider each defendant separately and turning the sentencing process into a “mechanistic exercise” of trying “to pound square pegs into round holes.” (Id. at 116.) Nevertheless, the court determined the guideline range, which had been properly calculated in the PSR, provided for a just sentence in this case. Therefore, the court denied Ilgen’s motion for a downward variance. The court then analyzed the § 3553(a) factors. It determined the nature and circumstances of the offense required a severe sentence: “[Tjhis is a horrible crime, many, many victims, most of whom are never going to appear in court but are going to carry with them the dehumanization that this kind of perversion has inflicted upon them.” (R. Vol. 3 at 117.) As to the history and characteristics of the defendant, the court said Ilgen needed treatment for a significant period of time and that treatment could be provided by the prison. The court also determined a severe sentence was necessary in order for the sentence to reflect the seriousness of the offense. It pointed to the fact the offense conduct (1) had continued over a period time and (2) involved participation and distribution, not just voyeurism or passivity. While the court was not persuaded that punishment had any deterrent effect on others, it did believe it had a deterrent effect on the defendant being sentenced — at least for the period of time they are in prison. In the end, the court sentenced Ilgen to 78 months imprisonment, the bottom of the guideline range. In closing, it made the following remarks: Mr. Ilgen has stated in a letter to me that he now recognizes the wrongs he has done and that he has learned a valuable lesson, that he has already been deprived of opportunities to share basic and fundamental human experiences with his family and that he will never again commit the crime for which he has been convicted because he values those experiences so highly and ... does not want to continue losing them. I accept this representation. And I hope that Mr. Ilgen never again engages in this despicable behavior. I am up to a point willing to grant that under more favorable circumstances, it is highly unlikely that he would ever have come before a court as a convicted criminal. I am willing to a point to grant that he is not a hard-core criminal who is usually indifferent to the plights and sufferings of others. For the sake of argument, I will assume that it was nothing more than misfortune that made him a willing participant in the moral muck of child pornography. There still remains the unalterable fact that he carried out and actively supported an illegal industry that treats children like so much garbage, and it is not a nursery that our society is willing to accept. Just as Mr. Ilgen supported and carried out the policy and practice of victimizing children for perverted satisfaction, I will support and carry out society’s strong determination that he does not deserve to be free to live among us without paying the price for his criminal conduct. This is the ... determinative reason ... why I am sentencing Mr. Ilgen to prison. (R. Vol. 3 at 124-25.) III. STANDARD OF REVIEW We review sentences for reasonableness. United States v. Alapizco-Valenzuela, 546 F.3d 1208, 1214 (10th Cir.2008). Reasonableness review consists of both a procedural and a substantive component. Id. “The procedural component focuses on the manner in which the sentence was calculated, and the substantive component concerns the length of the sentence actually imposed.” United States v. Masek, 588 F.3d 1283, 1290 (10th Cir.2009) (quotations omitted). Ilgen does not dispute the procedural reasonableness of his sentence; his claim is limited to substantive reasonableness. “We review sentences for substantive reasonableness under an abuse-of-discretion standard.” United States v. Middagh, 594 F.3d 1291, 1294 (10th Cir.2010). “A district court abuses its discretion when it renders a judgment that is arbitrary, capricious, whimsical, or manifestly unreasonable.” United States v. Muñoz-Nava, 524 F.3d 1137, 1146 (10th Cir.2008) (quotations omitted). We must determine “whether the length of the sentence is reasonable given all the circumstances of the case in light of the factors set forth in 18 U.S.C. § 3553(a).” Alapizco-Valenzuela, 546 F.3d at 1215 (quotations omitted). In doing so, “[w]e may not examine the weight a district court assigns to various § 3553(a) factors, and its ultimate assessment of the balance between them, as a legal conclusion to be reviewed de novo. Instead, we must give due deference to the district court’s decision that the § 3553(a) factors, on a whole, justify the [sentence imposed].” United States v. Smart, 518 F.3d 800, 808 (10th Cir.2008) (quotations omitted). IV. DISCUSSION Ilgen complains his sentence is substantively unreasonable for several reasons. First, he says the court’s determinative reason for the sentence — society’s determination that child pornography crimes require severe punishment — would apply equally to any person convicted of a child pornography offense. Therefore, the sentence does not reflect an individualized sentencing process as required by § 3553(a) and precedent. See Gall v. United States, 552 U.S. 38, 50, 128 S.Ct. 586, 169 L.Ed.2d 445 (2007) (stating sentencing courts may not presume the guideline range is reasonable but rather “must make an individualized assessment based on the facts presented”). Moreover, the question is not whether society has determined punishment is necessary but rather tvhat punishment is appropriate. He contends a lower prison sentence or probation would have severely punished him for his first and only offense. This argument is belied by the record, which clearly shows the court imposed a sentence that it believed was appropriate under the circumstances of this case. The court ensured it had a full understanding of Ilgen’s tremor. It was also well aware of his psychological problems and his representation that he would not reoffend. It further acknowledged it had read the numerous letters in support of Ilgen, as well as the reports from his doctors and evalu ators. But individualized sentencing does not mean looking only to mitigating factors; it also requires consideration of aggravating factors, including the offense conduct. Here, the court did so and reasonably emphasized its very serious nature. Ilgen had a large number of images and videos of child pornography downloaded on his computer; some of these images and videos depicted horrid sexual abuse of very young children. He also made these images and videos available to others. The court noted the long-term damage of Ilgen’s conduct to the victims. As one victim said in her VIS: “When I was told how many people had viewed these images and videos, I thought my pulse would stop. Thinking about all those sick perverts viewing my body being ravished and hurt like that makes me feel like I was raped by each and every one of them.” (R. Vol. 5 at 48.) Ilgen also objects to the court’s treatment of the guidelines. At the change of plea hearing and at sentencing, the court criticized the guidelines, in particular, § 2G2.2. Yet, the court sentenced Ilgen within the guideline range. He says “[t]he court’s simultaneous disdain for and adherence to ... § 2G2.2 does not provide a reasonable basis for [the] sentence imposed by the court.” (Appellant’s Opening Br. at 36.) We disagree. The court’s criticisms of the guidelines demonstrate its recognition that it was not bound to follow them. That being so, the fact it nevertheless sentenced Ilgen within the guideline range reflects its belief that the sentence resulting from the guidelines was appropriate under the circumstances of the case. In fact, as the court informed the parties, it had previously rejected the guideline range in two child pornography cases. But it also distinguished those cases, saying it varied in those cases “primarily because of the [need for the defendant to receive] constant medical care.” (R. Vol. 3 at 115.) Specifically, as to Rausch, the court said it involved “exigent circumstances” and neither party “should draw any conclusion from it that ... the same sentence would be imposed in other cases.” (Id. at 116.) Obviously, the court did not find exigent circumstances here, especially given there was no medical cause or treatment for Ilgen’s tremor. Ilgen also says his sentence is unreasonable because the district court may have erroneously limited its sentencing discretion to choosing between a guideline sentence and probation (the sentence he requested in the district court). While the court said a below guideline sentence was not appropriate, Ilgen says it is unclear (given other comments by the court) whether it was referring to all below-guideline sentences or merely probation. We see no error. As Ilgen acknowledges, the court said a “below the Guideline statutory sentence [was] not appropriate” in this case. (R. Vol. 3 at 116.) That obviously means all below-guideline sentences, not just probation, and we decline to infer a more limited meaning. While the court made certain comments regarding why a prison sentence was appropriate, they were obviously made in response to Ilgen’s argument for a sentence of probation. Finally, Ilgen claims the district court did not reasonably balance the § 3553(a) factors. While it determined he needed treatment and could receive that treatment in prison, it also acknowledged Ilgen had made progress in treatment while on home detention. As to the deterrent effect, Ilgen says he was not in need of deterrence — he was 53-years-old at the time of sentencing, had no criminal record and the court accepted his statement that he would not reoffend. But, in any event, deterrence certainly did not support the lengthy sentence imposed. Ilgen also claims his 78-month sentence creates an unwarranted disparity, as the trend in Colorado, as well as nationally, is for a below-guideline sentence in child pornography cases. Indeed, according to Ilgen, there are a growing number of cases where probation is being imposed. He says this trend demonstrates that the guideline ranges in child pornography cases often result in a sentence greater than necessary under § 3553(a). Ilgen has a tough row to hoe. Because he was sentenced within the advisory guideline range, the sentence is entitled to a presumption of reasonableness. See United States v. Lewis, 594 F.3d 1270, 1277 (10th Cir.), cert. denied, — U.S. -, 130 S.Ct. 3441, 177 L.Ed.2d 347 (2010). Little need be said. While Ilgen can rebut that presumption by showing his sentence is unreasonable in light of the § 3553(a) factors, id., he has failed to do so. The district court’s consideration of the § 3553(a) factors primarily focused on the serious nature of the crime. “But a reasonable sentencing judge need not give equal weight to all factors. The heinous nature of the offense in itself can justify a harsh sentence.” Id. In any event, the court also considered the other factors, including the history and characteristics of the defendant and the need for the sentence imposed to afford adequate deterrence. Ilgen criticizes the court’s balancing of these factors but we see no abuse of discretion. The fact Ilgen made progress while on home detention does not necessarily justify a lower prison sentence, especially when the court has determined he can continue to receive treatment while in prison. Ilgen’s claim he is not in need of deterrence has some support in the record, in particular his lack of criminal record and Davis’ opinion that Ilgen’s risk of sexual reoffense is “low to low moderate.” (R. Vol. 5 at 116.) On the other hand, it also appears Ilgen’s criminal behavior was not new as he had been possessing child pornography since 2003, four years before he got caught. See supra n. 6. Moreover, Davis’ risk assessment is suspect because it was based in part on Ilgen’s self-report, which included his statements that he had not subscribed to child pornography websites and had not masturbated to child pornography. These statements are in direct conflict with his earlier statements to the agents.

1537726-12834

DIANE P. WOOD, Circuit Judge. After bouncing between psychiatric diagnoses that found him alternately competent and incompetent to stand trial, Seth Bonsu was eventually found competent and tried and convicted by a jury of one count of conspiring to distribute heroin in violation of 21 U.S.C. § 846, and seven counts of distributing heroin in violation of 21 U.S.C. § 841. He now insists that the government coerced him to testify falsely before the grand jury. In addition, he argues that there was insufficient evidence to sustain his conspiracy conviction and that he was improperly denied a reduction in his sentence pursuant to the “safety valve” provisions of 18 U.S.C. § 3553(f) and U.S. Sentencing Guidelines (U.S.S.G.) § 5C.1. Finally, he asserts that he is entitled to a downward departure from the Sentencing Guidelines because his mental illness, which was eventually diagnosed as brief Psychotic Disorder, an Axis I diagnosis listed in the American Psychiatric Association’s Diagnostic and Statistical Manual of Mental Disorders (DSM-IV), 302 (4th ed.1994), was what caused him to cease cooperating with the authorities and thus his case falls outside the “heartland” of cases that the Guidelines contemplate. Finding no merit to any of these contentions, we affirm Bonsu’s sentence and conviction. I The son of prominent members of the Ghanian community in Chicago, Seth Bon-su strayed from course and chose to engage in the illegal drug business, despite the fact that he came close to completing a bachelor’s degree in aeronautics at St. Louis University in Missouri. The government discovered him when it retained a paid informant to ensnare some Nigerian heroin traffickers. With the help of the informant, Bonsu sold or delivered small quantities of heroin on at least five occasions, not realizing that his customers were aligned with the government. His career ended on January 14,1998, when he attempted to close a major sale of heroin. Just after he handed over two samples of a promised four— to six-kilogram batch of heroin, FBI agents closed in and arrested him. Four to six kilograms was a large amount for Bonsu, and he had been compelled to piece together his supplies from a variety of middlemen, none of whom was willing to furnish the entire amount on his own. The government relied on the group sale aspect of the deal to support its charge that Bonsu and the others were involved in a drug conspiracy. Bonsu’s cooperation with the government began the moment he was arrested. As FBI agents listened, he placed a phone call to a co-conspirator from the Mc-Donalds where he had been arrested. The agents also learned valuable information from Bonsu’s pager and his address book, both of which they had seized at the time of the arrest. Bonsu continued to cooperate after his arrest by meeting four or five times with the government to proffer information and to place additional phone calls to individuals who soon became co-defendants. All of this preceded Bonsu’s grand jury testimony. Before the grand jury, Bonsu read a prepared statement spelling out the details of his drug dealing. His testimony proceeded without incident, and the government and Bonsu then hammered out the details of a plea agreement that put him in the ballpark for a sentence that would have been half of the mandatory minimum ten-year term provided by the statute. That benefit, however, was contingent upon his continued cooperation. Bonsu was set to testify against his co-conspirators at their trial when things began to unravel. First, Bonsu indicated that he was dissatisfied with the private lawyer whom his family had retained after he fired his public defender (a step he took right before the plea agreement was signed). Then, on the eve of his co-conspirators’ trial, Bonsu’s privately retained lawyer (Lawyer 2) asked the court to con duct a competency evaluation because of Bonsu’s increasingly hostile and irrational behavior. Around this time Bonsu signaled that he was no longer willing to cooperate with the government. Eventually, he filed a pro se motion to withdraw his guilty plea, insisting that the government had coerced him into giving untruthful grand jury testimony. The government responded with its own motion to rescind the plea agreement, in light of Bonsu’s refusal to continue to cooperate. Bonsu then fired his private lawyer and a new public defender (Lawyer 3) was appointed. This arrangement was short-lived, as Bonsu did not believe that a defense lawyer who was paid by the government could represent his interests. A second private lawyer (Lawyer 4) was hired by his family, but he too was later replaced by Bonsu’s current, court-appointed lawyer (Lawyer 5). From the time that Lawyer 2 came onto the scene, Bonsu’s competency became a central issue. The court responded by ordering a series of competency evaluations that followed a distinct pattern. First, a forensic psychiatrist evaluated Bonsu and concluded that Bonsu suffered from certain personality traits or disorders that made it difficult to work with him, but that he was not incompetent to stand trial. Next, Bonsu’s attorney provided information to the evaluating doctor about the quality of the lawyer’s relationship with Bonsu, including specific details on the difficulties of discussing his case with him. The examining doctor then reconsidered his initial diagnosis. The first time this happened, a new doctor, Dr. Eric Woodward of the Isaac Ray Center for Psychiatry and the Law, found that Bonsu suffered from “a delusional disorder, persecutory type” and that he was incompetent to stand trial. The court then held an evidentiary hearing during which conflicting evidence was presented on Bonsu’s competency to stand trial. As a result of this hearing, the court ordered Dr. Bernard Rubin, a third doctor, to conduct another competency evaluation. This evaluation initially resulted in Dr. Rubin’s diagnosis of an Axis II, personality disorder, which in the doctor’s opinion did not meet the legal definition of incompetence to stand trial. Upon receiving further information from Bonsu’s lawyer and the Assistant United States Attorney (AUSA) who was prosecuting the case, Dr. Rubin reassessed his initial diagnosis and concluded that Bonsu suffered from brief psychotic disorder, an Axis I diagnosis, which, when aggravated, diminished Bon-su’s contact with reality and made it impossible for him to cooperate meaningfully with his lawyer and participate in his own defense. As a result, the court found Bon-su incompetent at that time to stand trial. On June 21, 2000, Bonsu was ordered transferred to the Federal Bureau of Prisons, Federal Medical Center in North Carolina, where he remained for treatment and assessment until the Mental Health Division of the Center in November 2000, submitted to the district court a Certificate of Restoration of Competency to Stand Trial. The psychiatrist and psychologist who prepared the supporting report concluded that Bonsu “is not now and likely never was severely mentally ill.” During the period in which the court had taken Bonsu’s competency to stand trial under advisement, Bonsu himself, his various lawyers, and the government all filed a series of motions to undo the cooperative efforts that had previously led to Bonsu’s grand jury testimony and guilty plea. The court ultimately granted Bon-su’s motion to withdraw his guilty plea and allowed the government to rescind the plea agreement. As soon as Bonsu was restored to competency and returned from North Carolina, a trial date was set and the case proceeded to trial. The government’s case included testimony from Bon-su’s former girlfriend, who played a minor role in his heroin dealing, various FBI agents who participated in the events leading up to and including Bonsu’s arrest, and extensive testimony from the government’s paid informant, who walked the jury through twenty-six tape-recorded conversations with Bonsu. The tapes, which reflected both telephone calls and face-to-face meetings, included many discussions about Bonsu’s efforts to orchestrate the interrupted four— to six-kilogram sale. II Bonsu begins with his argument that the district court committed reversible error when it rejected his motion for a reduced sentence pursuant to U.S.S.G. § 5C1.2, and so shall we. The safety valve provision authorizes the district court to depart from a statutory mandatory minimum sentence for certain offenders who also meet the criteria set forth in 18 U.S.C. § 3553(f)(l)-(5): they must be first time offenders, not in a leadership position, who committed crimes that did not involve violence or threats of violence, or result in death, and they must truthfully have provided the government with all relevant information and evidence that they had concerning their offense. Our review of the district court’s denial of Bonsu’s motion for a reduced sentence under § 5C1.2 is for clear error. United States v. Williams, 202 F.3d 959, 964 (7th Cir.2000). Bonsu’s argument on appeal begins with the factual proposition that he cooperated fully with the government while he was of sound mind, and ceased his cooperation only when his mental condition deteriorated. Under those circumstances, he continues, it was improper to deny him the benefits of the safety valve provision. As stated in his brief, Bonsu’s “belief that he was coerced into reading the affidavit prepared by the government in front of the grand jury would reflect a delusional belief that there was a conspiracy against him.” Nevertheless, even if we were to accept the fact that there was a period of time during which his mental condition made it impossible for him to cooperate, this still does not answer the question why he did not resume cooperating once he was restored to competency — and indeed, why he is still continuing to take positions inconsistent with cooperation, such as his argument that his grand jury testimony was false. The district court noted that after Bonsu was restored to competence, he could have acknowledged that his grand jury testimony was correct and accepted the consequences of his conduct. Instead, “[h]e chose as a competent man to continue to deny his criminal involvement in this case and to put the government to its proof.” Accordingly, the district judge concluded that it would be wrong to allow Bonsu to benefit from the safety valve, because he did not cooperate in good faith from the time his competency was restored. Importantly, the district court in no way assumed that a defendant has a duty to cooperate during the time period when he or she is actually incompetent. Bonsu insists that because the Guidelines say that the safety valve is appropriate where cooperation is forthcoming “not later than the time of the sentencing hearing,” U.S.S.G. § 501.2(a)(5), he is nonetheless entitled to its benefit. He reasons that because he cooperated fully with the government until he became too ill to continue, and because he eventually offered to resume cooperation, his sentence should have been reduced. Although it is true that Bonsu did offer to resume cooperation after he was restored to competency and before his sentencing hearing, the district court committed no clear error when it found that Bonsu was not entitled to a reduced sentence. It quite reasonably decided to focus on Bon-su’s cooperation during the entire time period after he was restored to competency and found fit to stand trial. During this period Bonsu insisted that his grand jury testimony was coerced and untruthful. Bonsu also put the government to its burden at trial after he was restored to competency. These post-restoration facts are not outweighed by Bonsu’s belated offer to resume cooperation with the government. If upon restoration to competency Bonsu had decided to reverse course once again and resume cooperation with the government, the district court signaled that it would have given serious consideration to his safety valve arguments. But that is not what he did, and we can find no error in the district court’s decision to deny him the benefits of the safety valve guideline. See, e.g., United States v. Thompson, 106 F.3d 794, 801 (7th Cir.1997). Bonsu also contends that he was improperly denied a downward departure under U.S.S.G. § 5K2.0, which authorizes a district court to depart from a mandatory minimum sentence under the Sentencing Guidelines where there are “aggravating or mitigating circumstances of a kind or degree not adequately taken into consideration by the Commission.” Koon v. United States, 518 U.S. 81, 94, 116 S.Ct. 2035, 135 L.Ed.2d 392 (1996); U.S.S.G. § 5K2.0; 18 U.S.C. § 3553(b). This provision acknowledges that the Guidelines focus on the “heartland,” or typical cases, but leave room for departure (upward or downward) in atypical cases.

6487333-11922

OPINION DONALD R. SHARP, Bankruptcy Judge. This matter came on for trial pursuant to regular setting. When all parties were present in Court, evidence was adduced and the matter was taken under advisement. The following opinion constitutes the Court’s findings of fact and conclusions of law in accordance with Bankruptcy Rule 7052 and to the extent that any finding of fact is a conclusion of law or conclusion of law is finding of fact they shall be so construed. The following opinion disposes of all issues presented to the Court in this adversary proceeding. FACTUAL BACKGROUND The matter before the Court is a claim by Team Bank and FDIC that certain debts of the Debtors, Kenneth R. Barron and Clara W. Barron, should be excepted from discharge pursuant to the provisions of 11 U.S.C. § 523(a)(2)(B). There is no serious disagreement about the fact that Debtors owed Team Bank and FDIC $73,599.46 as of June 19, 1990. The debt results from promissory notes dated February 26, 1987, in the original amount of $31,700.00, dated February 4, 1986, in the original amount of $25,000.00 and one dated January 20, 1987, in the original amount of $14,720.72. The note dated February 26, 1987 in the original amount of $31,700.00 was a renewal of a promissory note dated May 7,1986, in the original amount of $30,000.00. Therefore, only $1700.00 of additional money was advanced on February 26, 1987. At issue in this case, is the question of the accuracy of financial statements dated November 1, 1985, and a subsequent financial statement dated December 1, 1986. Plaintiff contends that the financial statements were materially false and that it has demonstrated the necessary elements contained in 11 U.S.C. § 523(a)(2)(B) so as to except from discharge the debt described above. At the heart of the controversy is the omission by Debtor on both of the financial statements of any mention of a promissory note in the amount of $570,000.00 that he, along with other partners in a partnership known as Data-pro executed. Plaintiffs contention is that the addition of the liability on this note to the list of liabilities on the two financial statements would have demonstrated that the Debtors were hopelessly insolvent and that no loan would have been made had the bank known of the liability. Debtor admits the $570,000.00 obligation and it is clear that it is not shown on the financial statement. Debtor’s position is, first, that the obligation was secured by a deed-of-trust on real estate and a building which had a value greater than the note and that if both the asset and liability had been shown on his financial statement it would have enhanced his financial condition rather than demonstrating an additional deficit. Second, he argues that he and the bank officer, Robert Stone, had an agreement to exclude both the asset and liability from the financial statement. The Court finds that there was no evidence of any agreement between the Debtor and the bank officer to exclude the Data-pro transaction from the financial statements. DISCUSSION OF LAW In all cases in which a creditor is attempting to except a debt from discharge the creditor is charged with carrying the burden of proof. Matter of Benich, 811 F.2d 943, 945 (5th Cir.1987). Additionally, while there has been some dispute between various courts as to the appropriate standard of proof (preponderance of evidence versus clear and convincing evidence) that issue has been finally laid to rest by the Supreme Court’s recent decision in Grogan v. Garner,-U.S.-, 111 S.Ct. 654, 112 L.Ed.2d 755 (1991) which categorically holds that the preponderance of the evidence standard is appropriate in all 11 U.S.C. § 523 dischargeability matters. As a consequence, this Court’s opinion shall examine Creditor’s 11 U.S.C. § 523(a)(2)(B) complaint using the preponderance of the evidence standard of proof. The controversy in this case essentially boils down to whether or not the financial statements were materially false; whether or not the bank reasonably relied upon the financial statements in advancing credit; and whether the Debtor submitted the financial statements with intent to deceive. 11 U.S.C. § 523(a)(2)(B)(i, iii & iv). The Court observes that the financial statements at issue concern the Debtor’s financial condition. 11 U.S.C. § 523(a)(2)(B)(ii). Looking first at the question of the falsity of the statements this Court can make no other finding but that the statements were materially false. In In re Carter, 101 B.R. 702, 704 (Bkrtcy.E.D.Okl.1989) the court held that “A materially false financial statement is one in which there is an ‘omission, concealment, or understatement of any of the debtor’s material liabilities.’ ” quoting In re Harmer, 61 B.R. 1, 5 (Bkrtcy.D.Utah 1984). Case law is replete with holdings to the effect that omissions from financial statements constitute a material falsity. In re Finley, 89 B.R. 938, 939 (Bkrtcy.M.D.Fla.1988) (failure to list additional mortgage obligations constitutes a material falsity); In re Kroh, 87 B.R. 1004, 1008 (Bkrtcy.W.D.Mo.1988) (finding of material falsity in a debtor’s financial statement can be based on an omission of information about the debtor’s financial condition); In re Mitchell, 74 B.R. 457 (Bkrtcy.D.N.H. 1987). In the instant case, the total liabilities shown on the financial statement dated November 1, 1985, was $419,532.07 and the total liabilities shown on the financial statement dated December 1, 1986, was $441,-750.00. The addition of the $570,000.00 liability in connection with the Data-pro transaction would have more than doubled the liabilities on both of the financial statements. Clearly, the omission of such a liability is a material falsity. The Debtor’s argument that he would have also had the right to show the property securing the debt in the asset portion of the financial statement does not cure the falsity of the financial statements. It is clear that he was an owner of an undivided interest in the real estate at the time the obligation was incurred and his argument that he would have been entitled to become the owner of one hundred percent (100%) if he had been called on to pay off the debt does not cure the problem of a false financial statement. That position is open to interpretation and he may or may not be right, but the essence of the financial statement is that those facts should have been revealed so that the lender could then make an informed decision about the extension of the credit. Therefore, this Court finds that the omission of the debt in connection with the Data-pro transaction renders both financial statements materially false. In considerable dispute is whether or not the Creditor reasonably relied upon the financial statements in the extension of the credit. (11 U.S.C. § 523(a)(2)(B)(iii)). Exactly what constitutes “reasonable reliance” in compliance with 11 U.S.C. § 523(a)(2)(B)(iii) is not statutorily defined by the Code. Case law, however, reveals that reasonable reliance is to be objectively determined by the fact finder given the totality of the circumstances. • In re Figge, 94 B.R. 654, 665 (Bkrtcy.C.D.Cal.1988). Reliance will be found to be reasonable if it is demonstrated by the creditor that had the false representation or omission been known, the credit would not have been extended. In re Carr, 49 B.R. 208, 210 (Bkrtcy.W.D.Ky.1985). In cases of lending institutions this standard is expanded to compare the creditors’ actual conduct with debtor; the industry-wide practice; and the surrounding circumstances of the case. In re Compton, 97 B.R. 970, 979 (Bkrtcy.N.D.Ind.1989); In re Pascucci, 90 B.R. 438, 446-447 (Bkrtcy.C.D.Cal.1988). In this case the financial statements found to be materially false were dated November 1, 1985, and December 1, 1986. All parties agreed that they were delivered to the bank within a matter of a few days after their dates. The debts with which we are dealing were incurred on May 7, 1986, or some seven months after the financial statement of November 1, 1985, was delivered. That debt was renewed on February 26, 1987, or three months after the December 1, 1986, financial statement was delivered. Another debt was incurred on February 4, 1986, which is three months after the November 1, 1985, financial statement was delivered and the other debt was incurred on January 20, 1987, or two months after the December 1, 1986, financial statement was delivered. Clearly, none of the financial statements were delivered to the bank contemporaneously with the incurring of the debt. The financial statements were annual statements delivered to the bank on a more or less annual basis and placed in the files for the ostensible purpose of maintaining a current financial picture of the bank’s customer. The bank was not able to demonstrate a direct connection between the submission of the financial statement and the incurring of the debt. Although it is not necessary that the financial statement be submitted contemporaneously with the request for credit, that is certainly some indication that the financial statement was an integral part of the lending institution’s consideration of the granting of the credit. In this case that factor is absent. The bank officer testified that he relied on the financial statement along with his perception of the Debtor’s ability to earn money, the long past history of a successful banking relationship and the Debtor’s reputation and standing in the community. There is no requirement in the law that the false financial statement be the only thing on which the creditor relied. Regency Nat. Bank v. Blatz, 67 B.R. 88, 92 (E.D.Wis.1986). It is clear that partial reliance on a materially false financial statement is sufficient to deny the debtor a discharge from that particular debt. In re Hall, 109 B.R. 149, 154 (Bkrtcy.W.D.Pa.1990); In re Wing, 96 B.R. 369, 373 (Bkrtcy.M.D.Fla.1989); In re Nance, 70 B.R. 318, 323 (Bkrtcy.N.D.Tex.1987). The testimony of the bank official was convincing that he did consider and rely on the financial statements. These financial statements were not so remote in time from the incurring of the debt that such reliance was unreasonable. Supporting the bank officer’s testimony, of his reliance on the financial statements, is an entry on the commercial loan memorandum dated May 7, 1986, indicating that the net worth on the November 1985 financial statement had been considered. Also introduced into evidence was a document styled Loan Application dated February 25, 1987, which served the same purpose as a loan memo, and which was accepted into evidence as such, that also contains the notation of the net worth shown on the December 1986 financial statement. These documents coupled with the testimony of the bank official convinces this Court that the financial statements were relied on in part in connection with the advance of funds. The Defendant attempted to counter this evidence with a showing of the long relationship between the Defendant and the bank official. Although this long relationship is conceded, it does not rebut the direct evidence by the bank official that the financial statement was relied on. Additionally, the Defendant attempted to show that the bank official was conversant with the Debtor’s financial condition to the extent that the bank official knew of the Data-pro transaction from its inception through the date of filing bankruptcy. The Defendant’s evidence simply falls short on this score. Although Defendant alleged and attempted to elicit testimony from the bank official that he was familiar with the transaction, the bank official was clear in his testimony that he withdrew from active participation in the Data-pro business enterprise in the late ’70s and had no further contact with it. Defendant was not able to offer any evidence in rebuttal of this position other than his own unsubstantiated assertions.

12512251-22322

KEVIN R. ANDERSON, U.S. Bankruptcy Judge I. Introduction Over twenty years ago, Theodore William White, Jr. (the "Debtor") was accused, arrested, and incarcerated for a crime he did not commit. Approximately seven years after his initial arrest, and after multiple proceedings, trials, and appeals, the Debtor was exonerated on all charges and released from prison. Shortly thereafter, the Debtor commenced legal proceedings against those who had wrongfully accused him. On August 28, 2008, the Debtor obtained a $15 million judgment against his accusers. On September 29, 2008, the Debtor and his wife executed a promissory note directing that upon collection of the judgment, $1 million of its proceeds would be paid to six family members, including his parents who are the Defendants in this proceeding. The stated consideration for the $1 million note was the emotional and financial support provided to the Debtor by his family during his incarceration and legal proceedings. In July of 2011, after three more years of legal proceedings, the Debtor received a payment of $15.5 million in satisfaction of the judgment. At the same time, and pursuant to the note, the Debtor directed that $1 million of the judgment proceeds be transferred to the Defendants. Almost three years later on May 30, 2014, the Debtor and his spouse, Porscha Shiroma, filed a voluntary Chapter 7 bankruptcy petition. J. Kevin Bird was appointed as the Chapter 7 Trustee ("Trustee"). Two years later, on May 30, 2016, the Trustee filed this adversary proceeding against Ryan B. White, in his representative capacity as personal representative of the estate of Theodore W. White, Sr., deceased, and Myrna Y. White (the "Defendants"). The Complaint seeks to avoid and recover the Debtor's transfers of $1 million and $1,500 to the Defendants under 11 U.S.C. §§ 544, 547, 550, and Utah's Uniform Fraudulent Transfer Act (the "UFTA"). The matter before the Court is the Defendants' Motion for Summary Judgment ("MFSJ"), which argues that the $1 million transfer is not avoidable because the Debtors received reasonably equivalent value. The Court held a hearing on Defendants' MFSJ on August 1, 2018. The Court has reviewed the parties' papers and has conducted independent research of applicable law. For the reasons set forth in this memorandum decision, the Court grants the Defendants' MFSJ. II. Jurisdiction and Venue The Court has jurisdiction over this contested matter pursuant to 28 U.S.C. §§ 1334(a) & (b) and 157(b). Defendants' MFSJ is a core proceeding under 28 U.S.C. § 157(b)(2)(H). Venue is appropriate in this District under 28 U.S.C. §§ 1408 and 1409, and notice of the hearing was proper. III. Undisputed Facts Defendants' MFSJ centers on whether the Debtors received "reasonably equivalent value in exchange" for the transfer of $1 million to Defendants. The following undisputed facts are material to the Court's decision and are derived from Defendants' MFSJ, the Trustee's Memorandum and Supporting Document in Opposition, and Defendants' Response: 1. On August 28, 2008, Debtor Theodore White obtained a judgment for $15 million arising from his wrongful arrest, prosecution, and incarceration (the "Judgment"). 2. On September 29, 2008, Debtors executed a promissory note in Lawrence County, Missouri ("Note"). 3. The Note names six payees consisting of the Defendants Theodore W. White, Sr., and Myrna White (the Debtor's parents); Ryan and Tiffany White (the Debtor's brother and sister-in-law); and Tiffany and Michael Means (the Debtor's sister and brother-in-law) (collectively the "Payees"). 4. The Debtors promised under the Note to pay the six Payees a total of $1 million "share and share alike," but "contingent upon full payment of ... [the Judgment] from any source." 5. The stated consideration for the Note was "the love, support and advancement of the necessary defense funds to Theodore W. White, Jr. [the Debtor] during the time that he was charged, prosecuted and unfairly imprisoned from 1998 to 2005." 6. None of the Payees assigned their interests in the Note to the Defendants. 7. On July 21, 2011, the Debtor received $15.5 million in settlement of the Judgment. 8. On July 22, 2011, the Debtor caused $1 million of the Judgment proceeds to be transferred to the Defendants (the "$1 Million Transfer"). 9. All Payees agree that the Debtor's $1 Million Transfer to the Defendants was in full satisfaction of the Note. 10. On May 30, 2014, the Debtors filed a voluntary petition for relief under Chapter 7 of the Bankruptcy Code. 11. On May 30, 2016, the Trustee filed a complaint against the Defendants to recover the $1 Million Transfer as a constructively fraudulent transfer under the UFTA. IV. Summary Judgment Standard Under Fed. R. Civ. P. 56(a), as incorporated into bankruptcy proceedings by Fed. R. Bankr. P. 7056, the Court is required to "grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Substantive law determines which facts are material and which are not. "Only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment." Whether a dispute is "genuine" turns on whether "the evidence is such that a reasonable [fact finder] could return a verdict for the nonmoving party." In sum, the Court's function at the summary judgment stage is to "determine whether there is a genuine issue for trial." The moving party bears the burden to show that it is entitled to summary judgment, including the burden to properly support its summary judgment motion as required by Rule 56(c). If the moving party has failed to meet its burden, "summary judgment must be denied," and the nonmoving party need not respond because "no defense to an insufficient showing is required." Once the moving party meets its initial burden, "the burden shifts to the nonmoving party to demonstrate a genuine issue for trial on a material matter." The nonmoving party may not rely solely on allegations in the pleadings, but must instead designate "specific facts showing that there is a genuine issue for trial." When considering a motion for summary judgment, the Court views the record in the light most favorable to the non-moving party, but the Court does not weigh the evidence or make credibility determinations. V. Summary of the Issues The Trustee's complaint seeks to recover the $1 Million Transfer from Defendants based on the allegation that the Debtors did not receive reasonably equivalent value in exchange for such transfer. Defendants counter that the $1 Million Transfer is not avoidable because it fully satisfied the legally-enforceable Note for $1 million. The Trustee now alleges that the Note was not enforceable for want of consideration. The Trustee also alleges that the Defendants were overpaid because the Note's "share-and-share alike" provision gave each Payee a one-sixth interest in the $1 Million Transfer. Therefore, the core issues are whether the Note constituted a legally-enforceable, antecedent debt of the Debtors, and whether the $1 Million Transfer was in full satisfaction of the Note. VI. Analysis The Trustee's Complaint alleges that the Debtors "did not receive equivalent value in exchange for the" $1 Million Transfer. The UFTA provides that "[v]alue is given for a transfer or an obligation if, in exchange for the transfer or obligation, property is transferred or an antecedent debt is secured or satisfied." A transfer that results in a dollar-for-dollar reduction of a valid, antecedent debt is not constructively fraudulent because it has no impact on a debtor's net worth and thus results in no prejudice to other creditors. A. Was the Note a Valid and Legally-Enforceable Obligation of the Debtors? A dispositive issue in this case is whether the Note was valid and enforceable at the time of the $1 Million Transfer. While not alleged in his Complaint, the Trustee has now asserted that the "Note was not enforceable for lack of consideration." In essence, the Trustee is arguing that the Note can be avoided because the Debtors did not receive reasonably equivalent value at the time they signed the Note. However, this separate cause of action is not in the Complaint, and the statute of limitations for challenging the Note under § 544 and the UFTA has long passed - even for the Trustee. Specifically, the Trustee is proceeding under § 544, which means he steps "into the shoes of an actual creditor who has standing to avoid the transfer under the applicable state law." This includes any defenses that could be asserted against such creditor. In this case, the Note was signed on September 9, 2008. The statute of limitations for the recovery of a constructively fraudulent transfer under UTAH CODE ANN. § 25-6-5(1)(b) or 25-6-6(1) is four years. So the time to avoid the Note ran on Monday, September 10, 2012. The Debtors filed their bankruptcy petition on May 30, 2014, and the Trustee filed this Complaint on May 30, 2016. Consequently, the Trustee is time-barred from seeking to avoid the Note under the UFTA. In the similar case of Cox v. Nostaw, Inc. , the trustee sought to recover $900,000 in note payments as constructively fraudulent transfers. The trustee argued that because the note was invalid for lack of consideration, the payments on the note were without value to the debtor. The bankruptcy court rejected the trustee's argument because his complaint did not include a cause of action to avoid the note, and the time for filing such an action had expired. On a motion for reconsideration, the bankruptcy court augmented its ruling by noting that because the statute of limitations to avoid the note had expired, the trustee's only authority to attack the note for lack of consideration was to step into the debtor's shoes under § 541 (as opposed to stepping into a creditor's shoes under § 544 ). However, the court noted under § 541 that the trustee takes no greater rights than the debtor held, and thus the trustee was subject to the same defenses and limitations as would apply to the debtor. The court then ruled that because lack of consideration is an affirmative defense, it is waived when the obligor pays the note. Further, a "trustee in bankruptcy is bound by any waiver of a defense made by a debtor before the filing of the petition." Therefore, because the debtor could not attack the note for lack of consideration, neither could the trustee. On appeal, the district court agreed that under such facts, the avoidance of the note was essential to the trustee's cause of action to recover the $900,000 in payments as constructively fraudulent transfers: It is widely recognized by courts that where a debtor makes prepetition payments on a contractual debt, in order for those payments to be avoidable as constructively fraudulent, it is necessary for the trustee to first avoid the underlying contract as a fraudulently incurred obligation. Absent avoidance of the underlying contract, the payments discharge the obligation and are, by definition, for reasonably equivalent value. In other words, if payments result in a commensurate, dollar-for-dollar satisfaction of a note, the note itself must either be avoided or found to be legally unenforceable before a trustee in bankruptcy can avoid such payments as constructively fraudulent transfers. And as the trustee in Cent. Ill. Energy Coop. , the Trustee in this case cannot seek to avoid the Note because the statute of limitations for an action under UFTA expired some years before the bankruptcy filing. Even though not specifically pleaded or alleged, the Trustee's only basis to avoid the Note for lack of consideration would be to "stand in the debtor's shoes" under § 541. However, because the Debtors have already accepted the consideration under the Note and paid it in full, the Debtors have waived any challenge to the Note, and the Trustee is bound by that waiver. For these reasons, the Court finds that the Note cannot be avoided by the Trustee, and that it was otherwise a valid and legally-enforceable obligation of the Debtors at the time of the $1 Million Transfer. B. The Note is Supported by Adequate Consideration Under Missouri Law. Even if the Trustee was not barred from challenging the Note's adequacy of consideration, the Debtors received legally-sufficient consideration for the Note to be valid under Missouri law. The Note asserts three forms of consideration: "love, support, and advancement of the necessary defense funds to Theodore W. White Jr. [the Debtor] during the time that he was charged, prosecuted, and unfairly imprisoned from 1998 to 2005." The last phrase alone is dispositive as to the issue of adequate consideration. Under Missouri law, consideration on a note "may consist of some benefit to one party or some detriment to the other." The "discharge, release or forbearance of a right or claim against a third person, at the instance or request of the obligor, is sufficient consideration to support the latter's undertaking on a note." A promissory note specifically imports consideration. In Hammons v. Ehney , the Missouri Supreme Court stated: A recitation of the consideration on which an agreement is based is prima facie evidence that sufficient consideration existed. Furthermore, all written promises to pay another a specific sum of money, signed by the promisor, import a consideration. Under both theories, a presumption is created that consideration exists, which must be overcome by evidence to the contrary. This import of consideration occurs regardless of whether the Note was negotiable or non-negotiable. Finally, if multiple considerations are stated for a promise, only one form of consideration need be legally sufficient to render the promise enforceable. The Trustee argues that "[l]ove, affection, and moral support will not suffice as consideration for a contractual promise," citing to the Missouri case of Rose v. Howard . This is indeed the law, but the Trustee cannot overcome the other stated consideration in the Note regarding "the advancement of the necessary defense funds" to the Debtor. A note to repay funds previously advanced for the benefit of the note's obligor is unquestionably sufficient consideration under Missouri law. Further, the Note contains an implicit forbearance agreement by stating that "payment pursuant to the terms of this note is contingent upon full payment of ... the judgment of $14,000,000." And this is exactly what happened. Almost three years later, on July 21, 2011, the Debtor received $15.5 million under the Judgment, and the next day he transferred $1 million to the Defendants. Thus, the Payees' agreement to await collection on the Judgment before receiving payment on the Note constituted additional consideration. The Trustee makes other arguments under pre-UCC Missouri law because the Note is non-negotiable. However, the Trustee has not demonstrated why pre-UCC Missouri law should apply. In contrast, the Missouri Legislature has specifically indicated that applying the UCC by way of analogy to non-negotiable instruments may be appropriate. MO. ANN. STAT. § 400.3-303(a)(3), provides that, "[a]n instrument is issued or transferred for value if: ... (3) the instrument is issued or transferred as payment of, or as security for, an antecedent claim against any person, whether or not the claim is due." Under this clear and straightforward test, there was consideration on the part of the Defendants and other payees for the Note based on the antecedent debt, without any need for a showing of extinguishment. The Trustee makes other arguments on this point, but he has stretched his lack-of-consideration fight far beyond its reasonable application. None of these arguments were alleged in the Complaint, and the Court has already found that the Trustee is barred from seeking to avoid the Note for lack of consideration. The Court has nonetheless addressed this issue and has found that the Note was based on good and valuable consideration under Missouri law. The Court therefore finds that at the time of the $1 Million Transfer, the Note was a valid and legally-enforceable obligation of the Debtors in favor of the Payees. C. Did the Debtors Receive Equivalent Value in Exchange for the $1 Million Transfer? The next issue is whether the Debtors received equivalent value in exchange for the $1 Million Transfer. The Trustee argues under Missouri law that with the Note's "share-and-share-alike" provision, each of the six Payees was entitled to one-sixth of the $1 Million Transfer. Therefore, because the Defendants received the entirety of the $1 Million Transfer, the other four Payees collectively still hold a claim for $666,666.67 based on their remaining one-sixth interests. Thus, the Debtors only received a value of $333,333.67 in exchange for the $1 Million Transfer. This argument might be relevant if the other Payees were still making a claim under the Note - but they are not. They have all definitively stated by declaration that they deemed the $1 Million Transfer to the Defendants to be in full satisfaction of Note. The Trustee cannot overcome the effect of these declarations. For these reasons, the Court finds that there is no issue of fact that the $1 Million Transfer was in full satisfaction of the Note. Thus, the Debtors received dollar-for-dollar consideration in exchange for the $1 Million Transfer - and that is all that is required for Defendants to prevail on their MFSJ. VII. Conclusion The Court finds that the Trustee's authority to challenge the Note for lack of consideration under § 544 and the UFTA is time-barred. Moreover, the Court finds that the Trustee would likewise be barred from any challenge to the Note under § 541 due to the Debtors' pre-petition waiver of any defenses when he paid it. Even if the Trustee could contest the Note's adequacy of consideration, the Court has found under Missouri law that it is supported by adequate consideration arising from the Defendants' advance of monies to fund the Debtor's legal defense and prosecution for his wrongful incarceration. The Court finds further consideration from the Payees' three-year forbearance in collecting on the Note until the Debtor recovered on the Judgment. Thus, the Court finds no genuine issue of material fact that at the time of the $1 Million Transfer, the Note was a valid and legally-enforceable obligation of the Debtors. The Court further finds that all Payees deemed the $1 Million Transfer to be in full satisfaction of the Note, and thus the Debtor's payment of $1 million to the Defendants represented a dollar-for-dollar reduction of the Note. Consequently, the Court finds that the Debtors received reasonably equivalent value in exchange for the $1 Million Transfer. Because reasonably equivalent value is an absolute defense to the Trustee's constructively fraudulent transfer action, the Court grants the Defendants' MFSJ. The Trustee's cause of action to avoid and recover the $1,500 the Debtor transferred to Mrs. White within one year of the bankruptcy filing remains at issue. The Court will enter an Order consistent with the rulings set forth in this Memorandum Decision. Dkt. No. 1. Hereinafter, all references to the docket will be in Case No. 16-02090 unless otherwise specified. Utah Code Ann. §§ 25-6-5(1)(b) and 25-6-6(1)(a) (2016) (In 2017, the Utah Legislature renamed and amended the Uniform Fraudulent Transfer Act to the Uniform Voidable Transfer Act ). Dkt. No. 57. This statement includes facts that the parties may have objected to, but that the Court determines are not in material dispute. Dkt. No. 57. Dkt. No. 65; Dkt. No. 66. Dkt. No. 67; Dkt. No. 68 See Note, Dkt. No. 57, Ex. 1. Id. Id. Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). Id. Id. at 249, 106 S.Ct. 2505. Celotex Corp. v. Catrett , 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). Murray v. City of Tahlequah, Okla. , 312 F.3d 1196, 1200 (10th Cir. 2002). Reed v. Bennett , 312 F.3d 1190, 1195 (10th Cir. 2002) (citation omitted) Concrete Works of Colorado, Inc. v. City & County of Denver , 36 F.3d 1513, 1518 (10th Cir. 1994). Celotex , 477 U.S. at 324, 106 S.Ct. 2548. Schrock v. Wyeth, Inc. , 727 F.3d 1273, 1279 (10th Cir. 2013) (citation omitted). Nat'l Am. Ins. Co. v. Am. Re-Insurance Co. , 358 F.3d 736, 742-43 (10th Cir. 2004) (citing Cone v. Longmont United Hosp. Ass'n , 14 F.3d 526, 533 (10th Cir. 1994) ). Dkt. No. 1 at ¶ 18. Utah Code Ann. § 25-6-4(1) (2016). Klein v. Michelle Tuprin & Assocs., P.C. , No. 2:14-cv-00302-RJS-PMW, 2016 WL 3661226, at *7, 2016 U.S. Dist. LEXIS 86954 (D. Utah July 5, 2016) (if a transfer satisfies a legally-enforceable debt of the payor, then the payor has received reasonably equivalent value for purposes of the UFTA); Klein v. Cornelius , 786 F.3d 1310, 1321 (10th Cir. 2015) ("The primary consideration in analyzing the exchange of value for any transfer is the degree to which the transferor's net worth is preserved.") (citation omitted); Rupp v. Moffo , 358 P.3d 1060, 1064 (Utah 2015) ("In cases where the debtor does receive reasonably equivalent value, the transfer puts one asset beyond the reach of the creditors, but replaces the asset with one of equivalent value, thus avoiding any harm to creditors."). Dkt. No. 65, p. 13. Montoya v. Tobey (In re Ewbank) , 359 B.R. 807, 809-10 (Bankr. D. N.M. 2007) (citation omitted). Id. Utah Code Ann. § 25-6-10. Claim for relief - Time limits. A claim for relief or cause of action regarding a fraudulent transfer or obligation under this chapter is extinguished unless action is brought: ... (2) under Subsection 25-6-5(1)(b) or 25-6-6(1), within four years after the transfer was made or the obligation was incurred. See Montoya v. Tobey (In re Ewbank) , 359 B.R. 807, 809-10 (Bankr. N.M. 2007) (trustee barred from avoiding deeds as fraudulent transfers under § 544 because the four-year statute of limitations of New Mexico's fraudulent transfer act had expired well before the bankruptcy filing). Cox v. Nostaw, Inc. (In re Cent. Ill. Energy Coop.) , 521 B.R. 868 (Bankr. C.D. Ill. 2014). Id. at 874. Id. Id. at 792. Id. Id. at 795 (citation omitted).

4115970-19263

MEMORANDUM OPINION ELIZABETH W. MAGNER, Bankruptcy Judge. The Chapter 7 Trustee, Claude C. Lightfoot, Jr. (“Trustee”), filed this adversary proceeding to avoid and recover three alleged preferential payments made by the debtor, Sea Bridge Marine, Inc., (“Sea Bridge” or “Debtor”) to the defendant, Praxis Energy Agents, LLC, (“Praxis”) totaling $195,000.00. Praxis asserts that the payments fall under the ordinary course of business exception set forth in 11 U.S.C. § 547(c)(2) and the subsequent new value defense of § 547(c)(4). On August 1, 2008, the Court conducted a trial and the parties were given until September 29, 2008, to file post-trial briefs. Jurisdiction This Court has jurisdiction under 28 U.S.C. § 1334, and this is a core proceeding under 28 U.S.C. § 157(b)(2)(F). Facts Debtor was a marine cargo carrier and chartered vessels as a part of its business operations. Praxis is a bunker trader that supplies fuel to shipowners, charterers, and ship managers. The parties began their business relationship in April, 2004, and Praxis sold Debtor twenty-one (21) bunkers from that time until Debtor filed bankruptcy on August 25, 2006. During the span of their business relationship, Sea Bridge made thirty-one (31) payments to Praxis; the last three being the subject of this adversary. The final three payments were: 1) a $100,000.00 wire transfer made on June 24, 2005; 2) a $25,000.00 wire transfer made on July 15, 2005; and 3) a $70,000.00 wire transfer made on August 5, 2005. The parties, in the Joint Pretrial Order, stipulated that the three payments in question satisfy the elements of 11 U.S.C. § 547(b), and barring any applicable defenses, are avoidable as preferential payments. During the preference period, Praxis delivered one bunker of fuel to the M/V African Star in Mobile, Alabama, worth $50,593.75. Discussion Bankruptcy Code Section 547 allows a trustee to recover transfers or payments on an antecedent debt, made by the debtor within the ninety-day period preceding the filing of the bankruptcy petition. The Fifth Circuit explained the policy behind the preference provision: The theory is that when the preferential payments are returned, all creditors can share ratably in the debtors’ assets, and the race to the courthouse, or the race to receive payment from a dwindling prebankruptcy estate, will be averted. Because some creditors, however, receive payments for shipping supplies that enable the debtor to continue doing business, to that extent they act to forestall an ultimate bankruptcy filing. Congress enacted several affirmative defenses against preference recovery in order to balance the competing interests. The only issues before the Court are the applicability of the defenses raised by Praxis. A. Ordinary Course of Business Exception Praxis asserts that the disputed payments were made in the ordinary course of business, and therefore may not be voided and recovered by the Trustee. Under the Bankruptcy Code, an otherwise preferential payment need not be returned to the debtor’s estate if the transfer was: (A) in payment of a debt incurred by the debtor in the ordinary course of business or financial affairs of the debt- or and the transferee; (B) made in the ordinary course of business or financial affairs of the debtor and the transferee; and (C) made according to ordinary business terms. Praxis must prove all three statutory elements by a preponderance of the evidence. The first element is not at issue as Sea Bridge incurred its debts to Praxis in the ordinary course of business; the purchase of fuel to supply its cargo transportation operations. The Trustee does not dispute this finding. The Court, therefore, turns to the remaining two elements. 1. Were the transfers made according to the ordinary business affairs of the parties? The “subjective” prong of the ordinary course of business defense typically requires consideration of: (1) the length of time the parties were engaged in transactions prior to the preference period; (2) whether the amount or form of tender differed from past practices; (3) whether the creditor engaged in any unusual collection or payment activities prior to the transfers; and (4) the circumstances under which the transfers were made. The defense is narrowly eon strued and a critical element in the analysis is whether the transactions between the debtor and the creditor before and during the ninety-day period are consistent. 1. Length of Time. Before the preference period, Sea Bridge and Praxis conducted business between themselves for approximately 13 months. During this time, the parties completed seventeen bunker sales and Sea Bridge made twenty-eight payments on account. This pre-preference history provides the basis for comparison with the parties’ preference period transactions. 2. Payment Amounts and Form of Tender. Daniel Yasosky, General Manager of Praxis, testified that company policy required full payment of any invoice under $100,000.00, within 30 days of delivery. Praxis typically provided payment terms on invoices of $100,000.00 or greater. Praxis charged interest on any invoice not paid within 30 days at the rate of two percent per month. The parties stipulated to the invoice dates, due dates, and delivery dates for twenty-one bunker sales to Sea Bridge. The parties also stipulated as to the amounts and dates of payment made by Sea Bridge to Praxis. Throughout 2004, and the early months of 2005, Sea Bridge purchased twenty bunkers of fuel ranging in price from $12,475.00 to $412,342.50. The bunkers purchased for less than $100,000.00 were invoiced and generally paid within thirty (30) days. Invoices over $100,000.00 were subject to prearranged installment payments on terms generally followed by Sea Bridge. In early 2005, Sea Bridge began extending its time to repay. A February 28, 2005, invoice for $84,282.00 was not paid until May 4, 2005. A second invoice dated March 30, 2005, was not paid until May 19, 2005. Payments made during the prepreference payment period matched the amounts due on specific outstanding invoices. In contrast, during the preference period, Sea Bridge made lump sum payments totaling $195,000.00, which did not match the outstanding invoices. These payments were the only times Sea Bridge forwarded payment to Praxis in amounts that did not correspond to the balance due on a specific invoice. At the time of the payments, multiple invoices were outstanding and Praxis applied the payments at will. This course of conduct varied considerably with the account’s history before the preference period. 3. Unusual Collection Activity. The record contains evidence that the final three payments were made due to collection activities outside of the ordinary course of business. A string of emails admitted into evidence shows that Praxis applied increasing pressure and demanded urgent attention as Sea Bridge’s delinquency grew. In a June 23, 2005, email sent to Joseph Srour, General Manager for Sea Bridge, Daniel Yasosky stated: “[i]f a payment is not received today in the amount initially scheduled we will have no choice but to turn this matter over to our collections team as I (gen/mgr) have been unable to satisfy my board’s guidelines.” Sea Bridge made a $100,000.00 payment to Praxis the following day. On July 29, 2005, Milto Papangelis, an attorney hired by Praxis, sent Sea Bridge a letter demanding payment on its outstanding debt as a “final pre-action warning.” He concluded the letter by threatening that Praxis would take “judicial steps against you/your assets in order to secure and enforce their undisputed and long outstanding claim ...” Mr. Srour testified that towards the end of the first quarter of 2005 Sea Bridge was having cash flow problems. As a result, he became the person within the company to negotiate with vendors for extensions of credit. Cash was so tight that payments were only forwarded to vendors from whom additional services or goods were needed. This was a departure from the company’s previous practices. Bunker suppliers were some of the largest creditors of the company and Praxis was in the top six. Because they were important to operations, bunker suppliers were favored when payments on payables were made. Sea Bridge believed that the greater the size of the payable, the more likely that a bunker supplier would take legal action. When Praxis began making demands for payment on the past due account and threatened to seize the vessels Sea Bridge took the threat seriously and made the payments in question. Praxis’ threat to turn Sea Bridge’s account over to a collection team and the demand letter sent by Mr. Papangelis are evidence that it utilized collection activities to obtain the payment. The Court concludes that payments made in response to these demands were not in the ordinary course of business. 4. Circumstances Under which Payments were Made. As previously discussed, the $100,000.00 payment on June 15, 2005, was made after Praxis threatened collection or legal action. The $25,000.00 payment, made on July 15, 2005, was a part of a payment plan proposed by Sea Bridge and agreed to by Praxis. Under the terms of the repayment plan, Sea Bridge was to pay $25,000.00 per week. Sea Bridge made only one payment before breaching the terms of the agreement. This plan was the first of its kind between the parties. Payments made pursuant to a payment plan do not fall under the ordinary business exception where no such arrangements existed prior to the preference period. The $70,000.00 payment, made on August 5, 2005, was made in exchange for a delivery of additional fuel. Praxis agreed to supply a bunker of fuel, but only if Sea Bridge tendered $70,000.00. Before this transaction, Praxis had never withheld delivery of a bunker for payment. A debt- or who makes payment in response to a cancellation of service cannot be deemed to have made the payment in the ordinary course of business. The three payments made during the preferential period were not made in the ordinary course of business. The amount and application of the final three payments differed from those made before the preference period. The circumstances under which the payments were made were unique to the preference period because they were made under threat of legal action, a repayment plan, or to obtain delivery of additional fuel. Therefore, the Court finds that payments made during the preference period are not consistent with those made prior to the preference period. 2. Were the transfers made according to ordinary business terms? Often described as the objective prong of the ordinary course of business test, the third prong compares the credit arrangements between other similarly situated debtors and creditors in the industry to determine if they are consistent with the payment practices at issue. The Fifth Circuit determined that “the judge must satisfy himself or herself that there exists some basis in the practices of the industry to authenticate the credit arrangement at issue. Otherwise the practice cannot be considered an ‘ordinary’ way of dealing with debtors.” Furthermore, “for an industry standard to be useful as a rough benchmark, the creditor should provide evidence of credit arrangements of other debtors and creditors in a similar market, preferably both geographic and product.” Praxis failed to meet its burden under the third prong of the ordinary course of business exception because it did not produce sufficient objective evidence as to the prevailing credit arrangements between debtors and creditors within the marine fuel market. Praxis’ only expert witness, J.C. Tuthill, a certified public accountant, was retained to determine whether the three payments that occurred during the preference period were made in accordance with industry practices. In preparing her report, Tuthill spoke with a representative of another bunkering company, audited the public financial statements of approximately ten shipping and bunkering companies, and reviewed wholesale trade information produced by Risk Management Associates. Tuthill never worked in the maritime industry, nor did she review the financial statements of Sea Bridge. The Court accepted her as an expert witness in analyzing financial statements, but not in the maritime fuel supply industry. Tuthill’s analysis and expert report focused on the number of days it took Sea Bridge to pay Praxis on each invoice during and prior to the preference period. She then compared the number of days businesses in the maritime industry took to pay or collect receivables. Tuthill testified that other companies averaged between 44 and 135 days in days to pay, and between 29 and 89 days to collect receivables. Tuthill only spoke with a representative of one company, and otherwise relied upon publically published year-end financial information. This information did not give her sufficient detail to determine the “days to pay” parameters for any of the companies in question. She also failed to obtain information on extensions of credit, repayment programs, or collection activities common within the industry. This one-dimensional analysis is not sufficient to establish the industry practice with regard to marine fuel supply credit arrangements. As Praxis failed to establish a benchmark within the industry, the Court finds that Praxis has not met its burden of proof under the third prong of § 547(c)(2)(C). The Court will next consider Praxis’ assertion that a portion of its payments are not preferential because it provided new value to Sea Bridge. B, New Value Exception Praxis argues that it provided subsequent new value to Sea Bridge within the preference period and is entitled to reduce the Trustee’s recovery by the amount of the new value. Under § 547(c)(4), a trustee may not avoid an otherwise preferential payment to or for the benefit of a creditor, to the extent that, after such transfer, the creditor gave new value to the debtor— (A) not secured by an otherwise unavoidable security interest; and (B) on account of which new value the debtor did not make an otherwise unavoidable transfer to or for the benefit of such creditor. New value is defined in § 547(a)(1) of the Bankruptcy Code as: money or money’s worth in goods, services, or new credit, or release by a transferee of property previously transferred to such transferee in a transaction that is neither void nor voidable by the debtor or the trustee under any applicable law, including proceeds of such property, but does not include an obligation substituted for an existing obligation. The purpose of this exception is to “encourage creditors to continue their revolving credit arrangements with financially troubled debtors, potentially helping the debtor avoid bankruptcy altogether.” Transfers that are protected under this section are “not unfair to the other creditors of the bankrupt debtor because the preferential payments are replenished by the preferred creditor’s extensions of new value to the debtor.” The creditor must provide new value after it receives an otherwise preferential payment in order to qualify for the exception. The Fifth Circuit has rejected the “net result” rule that would allow a creditor to offset the total payments against the new value advances given during the preferential period. The transaction at issue revolves around a bunker delivery to the M/V African Star. Praxis agreed to sell Sea Bridge a $50,593.75 bunker for the ship on the condition that Sea Bridge make a $70,000.00 payment toward its outstanding debt. The payment and sale both occurred on August 5, 2005. Daniel Yasosky testified that Sea Bridge wired the payment and Praxis released the bunker after it confirmed receipt of the funds. This transaction falls within the new value exception because the bunker was not secured by an otherwise unavoidable security interest and Sea Bridge did not repay the new value by means of an otherwise unavoidable transfer. The Trustee argues that Praxis should not be entitled to claim the new value exception because the M/V African Star’s charter was cancelled shortly after the bunker was delivered. The Trustee asserts that the new value did not benefit the estate because Sea Bridge was not able to complete the voyage. Whether new value has been given is determined at the time goods are delivered to a debtor. A supplier is not a guarantor of a debtor’s success. In In re Furr’s Supermarkets the debtor returned expired baked goods, considered valueless at the time of return, to its creditor. The goods were worth approximately $90,000.00 when delivered to the debtor. The trustee attempted to reduce the amount of creditor’s new value exception by arguing that the goods did not replenish the estate because the debtor did not sell the goods. The court disagreed and held that the creditor was entitled to a new value exception at their original delivery value. The defense applied because the goods were of value to the debtor when delivered. Since new value is calculated at the time Sea Bridge received the bunker, Praxis is entitled to retain the value of the bunker, or $50,593.75. Conclusion Praxis has failed to demonstrate that the three payments made during the preference period fall within the ordinary course of business. The amount, application, and size of the payments differ from those made by Sea Bridge before the preference period. Additionally, the evidence and testimony show that Sea Bridge made the payments in response to unusual collection activities. Praxis, however, has shown that Sea Bridge made the final $70,000.00 payment before Praxis provided new value in the form of a bunker valued at $50,593.75. Therefore, Praxis is entitled to a $50,593.75 exemption from the Trustee’s preference claims. The Trustee is entitled to recover the remaining $144,406.25 in preferential payments made by Sea Bridge, plus legal interest from August 18, 2007. . "Bunker” is an industry term for marine fuel. Bunkers are where ships used to store coal to be burned as fuel, and the. term was carried over to describe fuel oil after coal became obsolete as a fuel. August 1, 2008, Trial Transcript ("Tr.T.") 20:19-21:3. . The parties have stipulated that the disputed payments were made to Praxis on account of an antecedent debt owed by Sea Bridge before the transfer was made. They also stipulated that the payments were made while Debtor was insolvent, within the ninety days before the petition date, and that the payments enabled Praxis to receive more than it would have if the transfer had not been made and if it were to receive distribution under the provisions of title 11 of the United States Code. . In re SGSM Acquisition Co., LLC, 439 F.3d 233, 238 (5th Cir.2006). . 11 U.S.C. § 527(c)(2). This statute was amended in the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 ("BAPCPA”), however, the prior version of the statute is applicable in this case as Sea Bridge filed its bankruptcy before October 17, 2005; the effective date of BAPCPA. See, In re SGSM Acquisition Co., LLC, 439 F.3d 233, 237 n. 1 (5th Cir.2006). . Id. at 239, citing Gulf City Seafoods, Inc. v. Ludwig Shrimp Co. (In re Gulf City Seafoods), 296 F.3d 363, 367 (5th Cir.2002).

866494-22721

J. JOSEPH SMITH, Circuit Judge: Geraldine Powell, formerly a visiting assistant professor at the Syracuse University School of Architecture, appeals from a judgment of dismissal entered in the United States District Court for the Northern District of New York, Edmund Port, Judge. Judge Port found that, contrary to the appellant’s contentions, the university had legitimate, nondiscriminatory reasons for terminating Ms. Powell’s employment, and was accordingly not in violation of either Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. § 2000e et seq. or 42 U.S.C. § 1981. We find no error in the result reached by the court, and affirm the judgment. I. In December, 1973, Ms. Powell was informed by the Dean of the Architecture School that her contract would not be renewed for the 1974-75 academic year. She subsequently filed a claim of discrimination based on race, color, and sex with the New York State Division of Human Rights. After hearings before an agency examiner, the Division of Human Rights dismissed the appellant’s complaint for failure to prove that she was terminated from her employment, or denied equal terms, conditions, or privileges of employment, because of her race, color, or sex. While the state complaint was pending, appellant filed a similar complaint with the Equal Employment Opportunity Commission (“EEOC”), receiving a right-to-sue letter on September 10,1975. She subsequently commenced this action within the 90-day period required by statute. The case was submitted to the district court upon the transcript of hearings before the New York State Division of Human Rights, stipulated facts and exhibits, and the parties’ briefs. II. The findings of basic fact made by the district court are well supported by the record. Accordingly, we accept them for purposes of this appeal, and summarize them below. Ms. Powell has an extensive academic background. She studied art in high school, but later changed fields, receiving a Registered Nurse’s degree from New York University in 1959. In 1971, she received a Bachelor of Fine Arts degree from Syracuse University, and later was awarded the Master of Fine Arts degree in Environmental Design. Her master’s thesis concerned the relationship of low income housing to black studies in Syracuse. In April, 1972, appellant was interviewed for a teaching position by the Dean of the Syracuse University School of Architecture. Despite the fact that appellant had not yet earned her Master’s degree, did not have any formal training in architecture, and had no teaching experience, she was hired for the academic year 1972-73 at the rank of lecturer (part-time), receiving an annual salary of $3,000. During the fall semester, 1972, appellant taught one section of the basic design course. Prior to 1975, a detailed student manual for this course did not exist, and each section teacher was free to fashion his own course curriculum after reading the course description in the School of Architecture’s annual bulletin, and consulting with the dean and other faculty members teaching the course. Ms. Powell did not receive any criticism from other faculty members during her first semester on the faculty. In December, 1972, appellant again met with the dean, who expressed an interest in promoting her to a full-time position. The following spring, however, the school’s Committee on Appointments, Tenure, and Promotion voted not to promote the appellant, but to permit her to continue teaching part time on the condition that she not teach basic design. Appellant was told that she would not be teaching the design course because of a decrease in enrollment; she was not told about the committee’s vote. The dean, on his own initiative, promoted Ms. Powell to the rank of part-time visiting assistant professor and raised her salary to $5,500 per year. The parties did not enter into a written agreement concerning the 1973-74 school year at that time, and there was subsequently considerable misunderstanding as to appellant’s teaching responsibilities. It was finally determined that she would teach architectural rendering, serve as advisor to minority students, and deliver five guest lectures on non-western architecture. In November, 1973, appellant was advised by the dean that her employment status was to be reviewed by the Tenure Committee. Shortly before the Thanksgiving vacation, she was asked to provide the committee with a summary of her Master’s thesis, and samples of her students’ work. The appellant was under the impression that she had only a couple of days during which to organize her submission, although the dean testified that he told her that the material was not required until December 1, an approximately ten-day period. Appellant submitted those student projects which had been left in the studio during the vacation period, believing that they did not represent the best of her students’ work; she also submitted a hand-written summary of her thesis. She did not, however, request a postponement of the committee meeting. The Tenure Committee met on December 1,1973 to consider the appellant’s continued employment during the 1974-75 school year. The dean, six faculty members, and two students attended the meeting, which focused, in relevant part, on Ms. Powell’s written statement, and on an evaluation of her students’ projects. The minutes of this meeting indicate that there was some discussion of the appellant’s approach to a “black aesthetic,” and that a white, female faculty member was permitted to delay committee consideration of her case. In a secret ballot taken at the meeting, eight individuals voted in opposition to, and one voted in favor of, continuing appellant on the architecture faculty. Those who voted against the appellant testified before the New York State Division of Human Rights that their votes were based on an evaluation of the student work, and on the appellant’s background and relative inexperience. They testified further that their attitudes had hot been influenced by the appellant’s race or sex. The dean transmitted the results of the committee vote to the appellant, indicating that he believed that the committee thought the appellant unduly “nationalistic.” The appellant refused to submit a letter of resignation, appealing the committee’s decision to the university’s Subcommittee on Academic Freedom. The subcommittee did not find any evidence of discrimination, but did believe that there had been procedural irregularities in the disposition of the case. It recommended the reinstatement of the appellant, or alternatively, the payment of compensation, but these suggestions were rejected by the dean. Ms. Powell received a letter of termination in May, 1974. The architecture school later hired a white male with a master’s degree in architecture to teach rendering, and a white female with a Master of Fine Arts degree, to teach basic design. It also hired a white female with a Master’s and Doctoral degree in history to teach architectural history. hi. On this appeal, Ms. Powell asserts that her dismissal was the product of racial and sexual bias, and hence unlawful. She contends that similarly qualified teachers who were white or male received preferred treatment, and that the justification for her dismissal offered by the Tenure Committee was merely pretextual. By contrast, the appellees argue that Ms. Powell failed to prove that her dismissal was motivated by unlawful bias. They assert that the Tenure Committee made a valid qualitative judgment which should, in the absence of a clear showing of discrimination, be respected by reviewing courts. Both the appellees and the trial court place great emphasis on our opinion in Faro v. New York University, 502 F.2d 1229 (2d Cir. 1974), where we wrote: Of all fields, which the federal courts should hesitate to invade and take over, education and faculty appointments at a University level are probably the least suited for federal court supervision. Dr. Faro would remove any subjective judgments by her faculty colleagues in the decision-making process by having the courts examine “the university’s recruitment, compensation, promotion and termination and by analyzing the way these procedures are applied to the claimant personally” (Applt’s Br. p. 26). . Such a procedure, in effect, would require a faculty committee charged with recommending or withholding advancements or tenure appointments to subject itself to a court inquiry at the behest of unsuccessful and disgruntled candidates as to why the unsuccessful was not as well qualified as the successful. [502 F.2d at 1231-32] In recent years, many courts have cited the Faro opinion for the broad proposition that courts should exercise minimal scrutiny of college and university employment practices. Other courts, while not citing Faro, have concurred in its sentiments. This anti-interventionist policy has rendered colleges and universities virtually immune to charges of employment bias, at least when that bias is not expressed overtly. We fear, however, that the commonsense position we took in Faro, namely that courts must be ever-mindful of relative institutional competences, has been pressed beyond all reasonable limits, and may be employed to undercut the explicit legislative intent of the Civil Rights Act of 1964. In affirming here, we do not rely on any such policy of self-abnegation where colleges are concerned. As originally passed, Title VII of the Civil Rights Act exempted all educational institutions with respect to faculty employment practices. 42 U.S.C. § 2000e-l (1970), as amended. This exemption had not been part Qf the original Senate bill, but was proposed in a substitute bill submitted by Senators Dirksen and Mansfield, and adopted first by the Senate and later by the House. There is virtually no legislative history, however, which indicates the rationale for the exemption of educational institutions. The Equal Employment Opportunity Act of 1972, 86 Stat. 103, sec. 3 (1972), amended Title VII to bring educational institutions within the purview of the Act. In the words of the House Report: There is nothing in the legislative background of Title VII, nor does any national policy suggest itself to support the exemption of these educational institution employees — primarily teachers— from Title VII coverage. Discrimination against minorities and women in the field of education is as pervasive as discrimination in any other area of employment. [H.R.Rep.No.238, 92d Cong., 2d Sess. (1971), reprinted in [1972] U.S.Code Cong. & Admin.News pp. 2137, 2155] The pervasive nature of discriminatory university employment practices has been well documented in the literature, and was characterized in the Congressional debates preceding the passage of the 1972 amendments as “truly appalling,” “gross” and “blatant.” It is clear beyond cavil, then, that the Congress has evidenced particular concern for the problem of employment bias in an academic setting. Indeed it might be said that far from taking an anti-interventionist position with respect to the academy, the Congress has instructed us to be particularly sensitive to evidence of academic bias. Accordingly, while we remain mindful of the undesirability of judicial attempts to second-guess the professional judgments of faculty peers, we agree with the First Circuit when it “caution[ed] against permitting judicial deference to result in judicial abdication of a responsibility entrusted to the courts by Congress. That responsibility is simply to provide a forum for the litigation of complaints of . discrimination in institutions of higher learning as readily as for other Title VII suits.” Sweeney v. Board of Trustees of Keene State College, 569 F.2d 169, 176, 177 (1st Cir., 1978). See also Egelston v. State University College at Geneseo, 535 F.2d 752 (2d Cir. 1976). It is our task, then, to steer a careful course between excessive intervention in the affairs of the university and the unwarranted tolerance of unlawful behavior. Faro does not, and was never intended to, indicate that academic freedom embraces the freedom to discriminate. IV. The district court correctly observed that the appropriate starting point for the evaluation of a personal claim of job discrimination brought under Title VII is McDonnell Douglas Corp. v. Green, 411 U.S. 792, 93 S.Ct. 1817, 36 L.Ed.2d 668 (1973). There the Court indicated that: The complainant in a Title VII trial must carry the initial burden under the statute of establishing a prima facie case of racial discrimination. This may be done by showing (i) that he belongs to a racial minority; (ii) that he applied and was qualified for a job for which the employer was seeking applicants; (iii) that, despite his qualifications, he was rejected; and (iv) that, after his rejection, the position remained open and the employer continued to seek applicants from persons of complainant’s qualifications. . . . The burden then must shift to the employer to articulate some legitimate, nondiscriminatory reason for the employee’s rejection. [411 U.S. at 802, 93 S.Ct. at 1824.] If the employer is able to sustain this burden, the burden shifts again to the plaintiff, who must “show that [defendant’s] stated reason for [plaintiff’s] rejection was in fact pretext.” 411 U.S. at 804, 93 S.Ct. at 1825. A. The trial court proceeded to indicate that Ms. Powell failed to make out a prima facie case of discrimination for two reasons. First, the court felt that Powell failed to prove that she was “qualified” to teach on the architecture faculty, given the negative faculty evaluations of her work. Second, the court indicated that Powell failed to demonstrate that other individuals possessing similar qualifications were hired after Powell was fired. We believe that the trial court applied an erroneous legal standard in reaching these conclusions, and that Ms. Powell has made out a prima facie showing of discriminatory treatment. With respect to the first of the court’s findings, we believe that the court’s approach unnecessarily collapses the steps suggested by McDonnell Douglas by shifting considerations which are more appropriate to the employer’s rebuttal phase to the earlier requirement that the employee demonstrate competence to perform the specified work. This is not merely of formal consequence, for it has the practical effect of requiring the employee to prove not merely that he possesses the basic skills necessary for the job, but rather that he is the best-qualified candidate for the job, under the criteria suggested by the employer. As can be seen in the present case, this burden is extremely difficult to meet if the employer’s claim that the employee did not meet some unstated level of performance is sufficient to negate the employee’s offer of proof. In this respect, we agree with the Seventh Circuit’s view that under McDonnell Douglas [t]he plaintiff need not show perfect performance or even average performance to satisfy this element. He need only show that his performance was of sufficient quality to merit continued employment, thereby raising an inference that some other factor was involved in the decision to discharge him. Satisfactory performance is an ordinary prerequisite of continued employment, just as job qualification is an ordinary prerequisite to hiring. [Citation omitted.] However, the plaintiff need not, and indeed cannot, disprove as a cause of his discharge a source of dissatisfaction of which he is unaware. Accordingly, the employer’s acceptance of his work without express reservation is sufficient to show that the plaintiff was performing satisfactorily for the purpose of shifting the burden of proof. [Flowers v. Crouch-Walker Corp., 552 F.2d 1277 at 1283 (7th Cir. 1977)]. Ms. Powell was hired by the School of Architecture after a careful review of her qualifications, training, and past performance. In addition, she was reappointed after her first year of teaching. While some members of the faculty may have expressed dissatisfaction with some aspects of her work, this dissatisfaction was never communicated to Ms. Powell, who was, accordingly, in no position to disprove these alleged inadequacies. We agree with the Seventh Circuit that proof of competence sufficient to make out a prima facie case of discrimination was never intended to encompass proof of superiority or flawless performance. If an employer is dissatisfied with the performance of an employee, he can properly raise the issue in rebuttal of the plaintiff’s showing. In the context of this case, Ms. Powell has demonstrated that she possesses the basic skills necessary for the performance of her job, and has thereby made out a prima facie showing of competence. With respect to the second factor, the School of Architecture’s hiring of a white female with a M.F.A. degree to teach basic design is sufficient to satisfy the McDonnell Douglas requirement that the position remain open and the employer seek applicants from persons of the complainant’s qualifications. The trial court believed that a time gap of over two years between the appellant’s discharge and the other individual’s employment precludes the possibility that the other individual “replaced” appellant. And the trial court may well be correct in the more common case in which hiring is ongoing and employees largely fungible. In the context of university employment, however, a department or school may hire only a small number of individuals each year, and the fact that a position may go unfilled for a time does not indicate that the position has been terminated. It only indicates that the school has not yet located the candidate of its choice. Thus Ms. Powell has, as a matter of law, been able to demonstrate both her competence and the architecture school’s ongoing hiring efforts. This, coupled with undisputed proof of minority status and the termination of her employment contract, is sufficient, under McDonnell Douglas, to make out a prima facie case of discriminatory treatment. B. The more difficult issue before us is whether, on the present state of the record, the School of Architecture can be said to have successfully rebutted Ms. Powell’s showing by articulating a “legitimate, nondiscriminatory reason for the employee’s rejection.” In this regard the trial court found that: [A] contract for the academic year 1974-75 was not offered to [the appellant] for one reason only. The Tenure Committee honestly reached the conclusion that plaintiff’s performance fell short of teaching requirements, after affording her a fair opportunity to demonstrate her teaching ability. This determination was devoid of any racist or sexist base. The plaintiff has not demonstrated the assigned reason to be a pretext for prohibited discriminatory conduct. All of the eight members of the Tenure Committee who voted against plaintiff testified that they voted to terminate plaintiff essentially because of the poor work product of her rendering students, and her inadequate architectural background. These are matters of obvious concern to the architecture faculty and, therefore, are unquestionably legitimate reasons for the vote. [App. at 17-18.] Rule 52(a) of the Federal Rules of Civil Procedure requires that findings of fact made by a trial court shall not be set aside unless clearly erroneous. Where, as here, a case is heard on the basis of a record developed before another judge, a trial judge is necessarily unable to make first-hand assessments of credibility, and the broad deference normally due a trier of fact under the federal rules may be somewhat attenuated. See 5A Moore’s Federal Practice ¶ 52.04 and the cases cited therein. Nevertheless, after a careful review of the record, we cannot say that the trial court’s finding in the instant case is clearly erroneous. The court considered testimony by all eight members of the Tenure Committee, and was unable to discern either overt or covert discrimination on the part of those officials. And our own independent review of the record confirms these findings, which are supported by substantial evidence, and which do not leave us “with the definite and firm conviction that a mistake has been committed.” United States v. United States Gypsum Co., 333 U.S. 364, 394-95, 68 S.Ct. 525, 542, 92 L.Ed. 746 (1948). It would, of course, have been preferable if the School of Architecture had presented the court with a more fully developed description of the appellant’s duties, and the criteria used in assessing her performance. In that way the legitimacy and rationality of the school’s hiring practices would have been more immediately evident. But the law does not require, in the first instance, that employment be rational, wise, or well-considered — only that it be nondiscriminatory. And the record here simply does not support the appellant’s contention that her termination was the result, in whole or in part, of racial or sexual animus. Accordingly, we affirm the judgment of the district court. . The Division of Human Rights also found that appellant failed to prove that the university retaliated against her upon learning that she had filed a claim of discrimination. . This letter was dated August 28, 1975. . The Office of the Clerk of the United States District Court received appellant’s complaint on December 4, 1975. Because of bookkeeping technicalities, the complaint was not formally filed until December 15, 1975. The complaint was treated by the district court as timely filed. See Appendix at 12-14. . The complaint was subsequently amended to include a charge brought pursuant to 42 U.S.C. § 1981. . No formal description of the rendering course was developed until September, 1974. (App. at 129) The school’s faculty disagreed as to whether rendering was best taught by an architect or an artist. . This testimony was discounted by the trial court in view of the dean’s favorable attitude toward the appellant. . At the time that the architecture school refused to renew Ms. Powell’s contract, three male and one female faculty members resigned from the faculty. Subsequently, two men resigned, and the contracts of one man and one woman were not renewed. None of these individuals taught basic design or rendering. . See, e. g., Huang v. College of the Holy Cross, 436 F.Supp. 639, 653 (D.Mass.1977); Johnson v. University of Pittsburgh, 435 F.Supp. 1328, 1353-54 (W.D.Pa.1977); Cussler v. University of Maryland, 430 F.Supp. 602, 605-06 (D.Md. 1977); Peters v. Middlebury College, 409 F.Supp. 857, 868 (D.Vt.1976); Labat v. Board of Education, 401 F.Supp. 753, 757 (S.D.N.Y. 1975); Moore v. Kibbee, 381 F.Supp. 834, 839 (E.D.N.Y.1974).

1503526-10134

R. DORSEY WATKINS, District Judge. This is a suit by the plaintiffs (hereinafter Nelson and Smith) against the defendant, their employer (hereinafter Victory) to recover moneys allegedly due and to become due under the provisions of a collective bargaining agreement entered into on June 25, 1959 between United Brotherhood of Carpenters and Joiners of America (hereinafter Union) and Victory. This agreement provided that Victory would “carry an excess compensation policy on his employees when they are working outside of the District of Columbia which shall give the employees * * * additional compensation in Maryland and Virginia equal to that of the District of Columbia.” The underlying facts have all been stipulated. Nelson and Smith, while employed by Victory and while working for Victory, sustained accidental personal injuries ■arising out of and in the course of their ■employment. Each received an award from the State Industrial Accident Commission, under which (to October 29, 1963): Nelson had received under the Maryland Award: Temporary total disability $ 880.00 Temporary partial disability 200.00 Permanent partial disability 1,875.00 $2,955.00 Under the District of Columbia Compensation Act, his compensation would have been: Temporary total disability $1,188.00 Temporary partial disability 200.00 Permanent partial disability ($15.00 a week from April 25, 1961 to October 29, 1963) 1,965.00 $3,353.00 Plus “excess benefits” payable at $15.00 per week, or $780.00 per year, until a total of $17,280 is paid. Nelson is fifty-■eight years old and has a life expectancy of nineteen years, or $14,280 based on life expectancy. Smith had received under the Maryland award: Temporary total disability $ 640.00 Permanent partial disability 3,125.00 $3,765.00 Under the District of Columbia Compensation Act, his compensation would have been: Temporary total disability $ 864.00 Permanent partial disability ($25.00 per week from November 21,1960 to October 29, 1963) 3,825.00 $4,689.00 Plus “excess benefits” payable at $25.00 per week, or $1,300.00 per year, until a total of $17,280.00 is paid. Smith is forty-six years old and has a life ex-pectaney of twenty-seven years. Jurisdiction is based upon diversity of citizenship, Nelson and Smith being residents and citizens of the District of Columbia, and Victory being a corporation with its principal place of business in Louisiana, but which had been doing business in Maryland. The “contract” allegedly involved related to performance within the State of Maryland. It is alleged that the amount in controversy, as to each of Nelson and Smith, exceeds $10,000, exclusive of interests and costs. Service was purportedly made upon Victory through the State Department of Assessment and Taxation of the State of Maryland. Victory moved to dismiss on the ground that at the time suit was instituted Victory had ceased to do business in the State of Maryland. The motion was denied by Judge Edward S. Northrop, on the basis of Chief Judge Roszel C. Thomsen’s opinion in L’Hereux v. Central American Airways Flying Service, Inc., D.Md.1962, 209 F.Supp. 713, and on the ground of waiver, with both of which opinions this judge is in accord. Victory then answered, raising as defenses that if there were an agreement as alleged, it was contrary to Article 101, section 52 of the Maryland Code of Public General Laws; and that the Union agreement, if executed, was not binding upon it. 1. Section 51 provides in pertinent part as follows: “No employer or employee who is subject to the provisions of this article shall exempt himself from the burden or waive the benefit of this article by any contract, agreement, rule or regulation, and any such contract, agreement, rule or regulation shall be pro tanto void.” The argument in substance is that one of the benefits of Article 101 to the employer is the provision of section 15 that the liability to pay compensation according to the schedules “is exclusive.” However, section 51 would not appear to prevent the employer, by agreement independent of, and outside of the provisions of Article 101 from complementing or supplementing the Compensation Act as to the total sums recoverable or receivable. The dictum, if not the express holding, in Baltimore Transit Company v. Har-roll, 1958, 217 Md. 169, 141 A.2d 912, strongly supports the position of Nelson and Smith. In the Harroll case an employee had sought to recover medical and hospital expenses allegedly payable under the terms of a collective bargaining agreement, and prevailed in the lower court. In reversing, the Court of Appeals held that where plaintiff had first received compensation benefits, then settled his claim against the negligent third party, out of which settlement the insurer of the employer had been repaid the compensation, plus the amount of hospital and doctor’s bills it had paid plaintiff, he could not recover the hospital and doctor’s bills on the theory that such medical care had been furnished under the terms of a collective bargaining agreement. The court said (217 Md. at 177, 141 A.2d at 916): “We cannot read Article 17 as requiring the company to pay over to an employee the hospital and medical expenses it has received from a tortfeasor. If the parties had so intended and had clearly expressed that intent, they could have agreed that any such expenses recouped by the employer and made his by the statute, must be given by him to the injured employee, but the provisions of Article 17 fall far short of such an agreement, as we read them.” However, the court recognized the validity of the supplementation of benefits under the Act, saying (217 Md. at 173-174, 141 A.2d at 914) : “There are significant indications that Article 17 of the agreement was to complement the compensation act and not to supplement or supplant it in any respect. It would be entirely competent for the parties by express contract to supplement the benefits under the Act or to relax its restrictions or requirements in favor of the employees. 2 Larson, Workmen’s Compensation Law, Sec. 97.61; Sharp v. Foley Brothers, Sup., 69 N.Y.S.2d 514.” The Harroll case is construed as follows in 23 M.L.E. Workmen’s Compensation § 181: “Accordingly, as a general rule, an employee may not, by an agreement, waive rights given under the Act, or waive a claim for compensation before the disability takes place. However, it is entirely competent for an employer and an employee by express contract to supplement benefits under the Act or to relax its restrictions or requirements in favor of the employee.” The first defense is accordingly without merit. 2. The Union agreement was signed on behalf of Victory by its Project Manager in charge of Victory’s work at the job site in Maryland. It was stipulated that the Vice President and General Counsel of Victory, if a witness, would testify that the signature of the Union agreement was without the knowledge and consent of the officers and directors of Victory; that no resolution was ever passed by the officers or directors of Victory authorizing or ratifying the agreement; that it was the custom for Victory to subcontract work of the type done by Nelson and Smith; that before the contract in question, Victory had never signed any contracts with any “excess compensation benefits” such as the contract in question; and that Victory had always hired only union employees. It was also stipulated that Victory paid wages to its carpenter-employees (including Nelson and Smith) in accordance with the wage rates in the agreement, which were those prevailing in the District of Columbia and higher than those prevailing at the work site; that Victory made contributions to the Health and Welfare Fund in accordance with Article VII, Section 17 of the Agreement ; and that Victory abided by all other working conditions of the agreement. It was further stipulated that the Project Manager had authority to hire and fire employees at the job site; and that he communicated with officials of the Union for the purpose of employing carpenters on the job and that thereafter Nelson, Smith and other union carpenters were employed on the job. Since the Project Manager had authority to hire and fire, and since he could hire only union carpenters , he would have at least apparent authority to execute the agreement necessary for their employment. Brager v. Levy, 1914, 122 Md. 554, 560, 90 A. 102; 2 Am.Jur. Agency, section 348; 3 Am.Jur.2d, Agency, section 263. Moreover, the payment of wages in accordance with those prescribed in the Union agreement, and the payments into the Union Health and Welfare Fund, in addition to wages, would be waiver, or constitute an estoppel or a ratification (Southern Industries, Inc. v. United States, 9 Cir. 1964, 326 F.2d 221), as to the authority of the Project Manager. The second defense is accordingly without merit. The complaint asked for judgment in favor of Nelson for all accrued payments for temporary total, temporary partial and permanent partial disability, and an order that future payments be made to him at the rate of $15.00 per week during the continuance of his permanent partial disability or until the sum of $17,280.00 be paid; and in favor of Smith for all accrued payments for temporary total and permanent partial disability, and an order that future payments be made at the rate of $25.00 per week during the continuance of his permanent partial disability or until the sum of $17,280.00 be paid. The complaint also asks for such other and further relief as may be necessary. On the question of jurisdiction of the court to entertain a diversity suit where the amounts accrued at the time of bringing the suit, and at the time of trial, were less than the jurisdictional amount, but where the addition of the future weekly sums sought would exceed the $10,000.00 requirement, and on the question of the authority of the court to order the payment of future weekly amounts, Nelson and Smith have filed a memorandum, in which Victory concurs, supporting the jurisdiction of the court, and the authority of the court to order future payments.

4257834-5138

PER CURIAM: Thomas J. Smith, by Tutrix Carolyn Smith, appeals pro se from the district court’s pre-trial dismissal of his claims that Defendants the Department of Health and Hospitals State of Louisiana (“the Department”), South Central Louisiana Human Services Authority, Easter Seals Louisiana, Inc., and Lafourche ARC violated his rights under various federal statutes and constitutional provisions by reducing his weekly hours of in-home care from 168 to 74. For the following reasons, we affirm. I. Smith is a disabled Medicaid recipient and participant in the New Opportunities Waiver (“NOW”) program. The NOW program, which is administered by the Department, allocates resources — including in-home care — to participants based on their level of need. Smith alleges that, in 2012, the Department reduced his in-home care from 24 hours per day to 74 hours per week. Smith appealed this reduction to a state administrative law judge, who affirmed the Department’s decision. In July 2012, Smith filed suit in the Seventeenth Judicial District for the Parish of Lafourche, seeking review of the administrative law judge’s ruling. This suit is still pending. On December 31, 2012, Smith filed a motion for leave to proceed in forma pauperis in the United States District Court for the Eastern District of Louisiana. The court granted the motion, and, on January 9, 2013, Smith filed his pro se complaint. Summons were withheld, however, pending further order of the court. In his complaint, Smith purported to “transfer” his pending state court action to the federal district court. The magistrate judge construed this as Smith’s attempt to remove his own action to federal court and recommended that the action be remanded to the Seventeenth Judicial District for the Parish of Lafourche. Smith objected to the magistrate judge’s recommendation, explaining that he intended to file a separate action in federal court and erroneously believed that he was required to transfer his pending state court action in order to do so. The district court sustained Smith’s objection, rejected the magistrate judge’s recommendation, and granted Smith leave to file an amended complaint that included claims under federal statutory or constitutional law. Smith filed his amended complaint on March 1, 2013. In August 2013, Smith filed a Motion for Emergency Permanent Restraining Order, by which defendants would be immediately enjoined from reducing Smith’s in-home care hours. Finding that the defendants had not been served with Smith’s amended complaint, the district court denied Smith’s motion without prejudice to re-file once the defendants had been served and given an opportunity to file responsive pleadings. After being served, the defendants each filed motions to dismiss Smith’s amended complaint for lack of subject matter jurisdiction and for failure to state a claim upon which relief could be granted. On November 19, 2013, Smith filed identical oppositions to all three motions to dismiss. On December 16, 2013, the district court granted the defendants’ motions to dismiss, holding that Smith had failed to state a claim upon which relief could be granted and that the district court lacked subject matter jurisdiction to hear Smith’s claims. Smith now appeals the judgment of the district court. II. This court reviews de novo a district court’s dismissal under Federal Rule of Civil Procedure 12(b)(1) for lack of subject matter jurisdiction. Spotts v. United States, 613 F.3d 559, 565 (5th Cir.2010). Likewise, this court reviews de novo a district court’s dismissal under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon which relief can be granted, accepting all well-pleaded facts as true and viewing those facts in the light most favorable to the plaintiffs. Doe ex rel. Magee v. Covington Cnty. Sch. Dist. ex rel. Keys, 675 F.3d 849, 854 (5th Cir.2012). “[B]ut conclusory allegations or legal conclusions masquerading as factual conclusions will not suffice to prevent a motion to dismiss.” Beavers v. Metro. Life Ins. Co., 566 F.3d 436, 439 (5th Cir.2009) (internal quotation marks omitted). As an initial matter, to the extent that Smith seeks review in federal court of the Department’s decision to reduce his benefits under the NOW program, his claims do not raise a federal issue and were rightly dismissed for lack of subject matter jurisdiction. See Vinson v. La. Sec’y of Health and Hosps., 2009 WL 1406296, *1-2 (W.D.La. May 19, 2009); Mashburn v. La. Dep’t of Soc. Servs., 1993 WL 192122, *1 (E.D.La. June 1, 1993). Under Louisiana law, a plaintiff aggrieved by a final decision of the Department must seek review “in state, as opposed to federal, court.” Mashburn, 1993 WL 192122 at *1; see also La.Rev.Stat. § 46:107(0 (“[A]n applicant or recipient may obtain judicial review [of an adverse administrative decision] by filing a petition for review of the decision in the Nineteenth Judicial District Court or the district court of the domicile of the applicant or recipient.”). Thus, as the district court correctly noted, Smith must continue to pursue these claims in state court.

3638682-30240

CARNES, Circuit Judge: Spurred on by Congress, the Federal Communications Commission issued an order requiring telecommunications carriers to make payments into a Universal Service Fund for subsidizing services for certain categories of consumers. The carriers’ mandatory payments into the fund were calculated based on their interstate and intrastate revenues. The FCC allowed the carriers to recover the amount of their payments by charging their customers a monthly fee. After the order went into effect and the carriers made payments into the fund and collected fees from their customers, a federal appeals court held that the FCC had exceeded its authority by including intrastate revenues in the calculation of the payments the carriers were required to make. The court did not decide what should be done about the money the carriers had already paid into the fund or about the fees the customers had already paid to the carriers. The FCC, however, issued orders determining that the court decision would not be applied retroactively and that there would be no refunds of the payments that the carriers had made. The question remains what should happen to the intrastate portion of the fees that the customers paid to reimburse the carriers for the payments they made to the fund. Are the customers entitled to a refund of any portion of the fees they paid the carriers even though the FCC has denied the carriers a refund of any portion of the payments the carriers made to the fund? That is the motivating issue in this case, but it is not the specific question presented by this appeal. Instead, the question we have is whether the district court has subject matter jurisdiction to decide that issue. In answering that question, we are reminded of Justice Holmes’ view about the comparative difficulty of deciding cases. He said that “when you walk up to the lion and lay hold the hide comes off and the same old donkey of a question of law is underneath.” In our experience that view is not always accurate, but it is here. The best way for us to get the hide off the lion in this case is to summarize the applicable law, including the relevant FCC orders, before setting out the procedural history and facts. Be forewarned that there is a lot of hide. I. Congress passed the Telecommunications Act of 1996, Pub. L. No. 104-104, 110 Stat. 56, to ensure that all Americans have access to a baseline level of affordable telecommunications services. To help achieve that goal, the Act directs the FCC to create “specific, predictable and sufficient Federal and State mechanisms to preserve and advance universal service.” 47 U.S.C. § 254(b)(5). The Act also lists several “[universal service principles” that the FCC must follow when creating those federal and state mechanisms. Id. § 254(b). One principle is that telecommunications services should be available to consumers “in all regions of the Nation, including low-income consumers and those in rural, insular, and high cost areas.” Id. § 254(b)(3). Another principle is that “schools and classrooms, health care providers, and libraries should have access to advanced telecommunications services,” Id. § 254(b)(6). The Act does not allocate any funds to finance the FCC’s creation and administration of the “universal service support mechanisms.” Id. § 254(a)(1); see also id. § 254(d). Instead, it provides that all interstate telecommunications carriers “shall contribute, on an equitable and nondiscriminatory basis, to the ... mechanisms established by the [FCC] to preserve and advance universal service.” Id. § 254(d). In other words, carriers must fund any universal service support mechanisms that the FCC creates under its § 254(b) authority. The FCC implemented the Act’s universal service requirements by issuing a “Universal Service Order” in May 1997. In re Fed.-State Joint Bd. on Universal Serv., 12 FCC Red. 8776, 1997 WL 236383 (1997) [hereinafter “Universal Service Order”], aff'd in part and rev’d in part by Tex. Office of Pub. Util. Counsel v. FCC, 183 F.3d 393 (5th Cir.1999). That order created “universal service support mechanisms” for four different categories of need: high-cost areas, low-income consumers, rural healthcare providers, and schools and libraries. Id. at 8787, 8792-97. All four categories of support were financed through a Universal Service Fund (“USF”), which was in turn funded by mandatory contributions from interstate telecommunications carriers. Id. at 8797; see also id. at 8780-81. The contributions used to finance the high-cost and the low-income support mechanisms were based solely on the carriers’ interstate revenues. Id. at 9201; see also id. at 9198. The contributions used to support schools, libraries, and rural healthcare providers, however, were based in part on the carriers’ intrastate revenues. Id. at 9203-05; cf. id. at 9192 (“[T]he Commission has jurisdiction to assess contributions for the universal service support mechanisms from intrastate as well as interstate revenues .... ”). The Universal Service Order authorized carriers to recover their mandatory USF contributions from certain customers. Id. at 9198-99. Specifically, the order stated that “carriers will be permitted, but not required, to pass through their contributions to their interstate access and interexchange customers.” Id. at 9199 (emphasis added). It seems odd to describe the carriers as “passing] through their contributions” by requiring customers to pay them, but such is FCC-speak. The Universal Service Order did not specify how the carriers should pass through their USF contributions if they chose to do so (which, of course, they did). The order did provide that any passing through had to be done “in an equitable and nondiscriminatory fashion.” Id. at 9209; see also id. at 9199. Carriers started making their mandatory USF contributions and passing them through to customers on January 1, 1998. Id. at 8813. In later orders, the FCC appointed the Universal Service Administrative Company to administer all universal service program activities. See, e.g., In re Changes to the Bd. of Directors of the Nat’l Exch. Carrier Ass’n Inc., 12 FCC Red. 18400, 18407, 18415, 1997 WL 408266 (1997); see also 47 C.F.R. § 54.701(a). That company is responsible for, among other things, “billing [carriers], collecting contributions to the universal service support mechanisms, and disbursing universal service support funds.” 47 C.F.R. § 54.702(b). After the FCC issued the Universal Service Order, several carriers challenged it by filing petitions for review in various federal courts of appeals. See generally 28 U.S.C. § 2344 (“Any party aggrieved by [a] final order [of the FCC] may, within 60 days after its entry, file a petition to review the order in the court of appeals wherein venue lies.”). The Judicial Panel on Multidistrict Litigation consolidated those challenges in the Fifth Circuit, which resolved all of them in Texas Office of Public Utility Counsel v. FCC, 183 F.3d 393 (5th Cir.1999). The Texas Office decision resolved a number of issues about the legality of different parts of the Universal Service Order, but only one of the rulings is relevant here. The Fifth Circuit decided that the FCC had “exceeded its jurisdictional authority when it assessed contributions ... based on the combined intrastate and interstate revenues of interstate telecommunications providers.” Id. at 409. The Court reasoned that, because the FCC has no jurisdiction to regulate intrastate telecommunications matters, it could not calculate carriers’ USF contributions based on a percentage of their intrastate revenues. See id. at 447-48. For that reason, the Court “reverse[d] that portion of the [Universal Service] Order that includes intrastate revenues in the calculation of universal service contributions.” Id. at 448; see also id. at 449 (“[We] deny the FCC jurisdiction over ... universal service contributions based on intrastate revenues.”). That is what the Fifth Circuit decided in Texas Office, but equally important for our purposes is what the Court did not decide in that case. The Court did not decide the legality of those parts of the Universal Service Order that allowed carriers to pass through their USF contributions to customers. Nor did the Court decide whether the Universal Service Administrative Company must refund the intrastate-revenue-based USF contributions it had already collected from carriers. Neither of those issues was before the Court. The Fifth Circuit released its Texas Office decision on July 30, 1999, with the mandate scheduled to issue on September 20, 1999. See In re Fed.-State Joint Bd. on Universal Serv., 15 FCC Red. 1679, 1685, 1999 WL 809713 (1999) [hereinafter “Fifth Circuit Remand Order”]. Before the mandate issued, the FCC moved for a stay of proceedings, which the Court granted in part by ordering that its mandate would issue on November 1, 1999. Id. Until that date, the FCC, via the Universal Service Administrative Company, continued to collect some of the USF contributions from carriers based on a percentage of their intrastate and interstate revenues. During the period between January 1, 1998 (when the FCC’s Universal Service Order became effective), and November 1, 1999 (when the Texas Office mandate issued), the Universal Service Administrative Company collected from carriers about $1.6 billion in USF contributions that were based on the carriers’ intrastate revenues. See In re Fed.-State Joint Bd. on Universal Serv. Access Charge Reform Universal Serv. Contribution Methodology, 23 FCC Red. 6221, 6227, 2008 WL 1722044 (2008). Many carriers passed through their USF contributions to customers by charging them a monthly USF fee. One of those carriers was AT&T, the defendant in this case, and one of. its customers was Martha Self, the plaintiff. After the Fifth Circuit issued the Texas Office decision but before the mandate issued on November 1, 1999, the FCC released what it has titled a “Fifth Circuit Remand Order.” See 15 FCC Red. 1679. That order acknowledged that the Texas Office decision had held “that the Commission had exceeded its jurisdictional authority by assessing contributions ... based, in part, on the intrastate revenues of universal service contributors.” Id. at 1684. To cure that defect, the FCC’s Fifth Circuit Remand Order “eliminated intrastate revenues from the contribution base[s]” of the schools and libraries support mechanism and also from the rural healthcare providers support mechanism (the only two that were funded using USF contributions based in part on intrastate revenues). Id. at 1685. The FCC replaced those contribution formulas with a new one that calculated the carriers’ USF contributions by using a percentage of their interstate and international revenues. Id. at 1685-86. Most importantly for present purposes, the Fifth Circuit Remand Order specified that the changes to the USF contribution bases would apply prospectively and would become effective on the same day that the mandate issued for the Texas Office decision, November 1, 1999. Id. at 1685; see also id. at 1679. That order did not mention the possibility of any refund. On December 6, 1999, AT&T filed with the FCC a petition for reconsideration and clarification of its Fifth Circuit Remand Order. See In re Fed.-State Joint Bd. on Universal Serv. Access Charge Reform, 20 FCC Red. 13779, 13780, 2005 WL 2007108 (2005) [hereinafter “2005 Bureau Order”]. The petition asked the FCC to “reconsider its decision to implement the Fifth Circuit’s decision on a prospective basis.” Id. at 13780-81. The petition also asked the FCC “to provide retroactive refunds for [AT&T’s] contributions based on intrastate revenues for the period from January 1, 1998 through October 31, 1999.” Id. at 13781. AT&T states in its brief to this Court that it represented to the FCC that any refunds from the USF “would be passed on to its customers.” Appellee Br. 3-4. The FCC did not respond to AT&T’s petition for more than five years. In August 2005, the FCC’s Wireline Competition Bureau issued an order addressing, but not resolving, the petition. This “2005 Bureau Order” “clarified] the Commission’s decision in the [FCC’s 1999] Fifth Circuit Remand Order to apply the Fifth Circuit decision prospectively,” which meant that the changes to the USF contribution formulas “became effective on a prospective basis, beginning November 1, 1999.” 20 FCC Red. at 13783 (2005) (emphasis omitted). The 2005 Bureau Order also reiterated the view that the Texas Office decision did not affect those parts of the Universal Service Order that authorized carriers to pass through their USF contributions to customers. See id. at 13779, 13781. The order did not address AT&T’s request for a refund. A few years later, on April 11, 2008, the FCC finally issued an order denying AT&T’s 1999 petition for reconsideration and a refund. See In re Fed.-State Joint Bd. on Universal Serv. Access Charge Reform Universal Serv. Contribution Methodology, 23 FCC Red. 6221, 2008 WL 1722044 (2008) [hereinafter “2008 Order”]. This 2008 Order again clarified that carriers “may recover their [USF] contributions from customers through rates charged for all services,” id. at 6224, and it confirmed that the Texas Office decision applies only “prospectively,” id. at 6226. Because the court decision does not apply retroactively, the FCC concluded, AT&T is not entitled to a refund of the intrastate-revenue-based USF contributions, which AT&T paid to the Universal Service Administrative Company before the Texas Office mandate issued on November 1, 1999. Id. at 6222. The FCC’s 2008 Order justified its prospective treatment of the Texas Office decision and its denial of a refund to carriers by reasoning that “retroactive application” of that decision “would work a manifest injustice” on current customers and on the universal service support mechanisms. Id. at 6227. According to the FCC, “a decision to compel refunds would require [the Universal Service Administrative Company] to refund to the contributing carriers more than one billion dollars in monies already disbursed to thousands of schools, libraries and rural health care providers.” Id. Recouping that already-distributed money and sending it back to carriers “would be a bit like unscrambling eggs.” Id. at 6228 (quotation marks omitted). The FCC also reasoned that, because it was not feasible to get the money back from schools, libraries, and rural healthcare providers, the Universal Service Administrative Company would have to raise the revenue for a refund by raising the USF assessments on current carriers. Id. at 6227. Those current carriers would, in turn, likely pass through the higher USF assessments to their current customers. Id. at 6227-28. The FCC explained: The net effect of any such refund would be that 2008 consumers subsidize charges that should have been paid by consumers in 1998 and 1999 had the Commission assessed only interstate and international revenue (and excluded intrastate revenue). In our view, such an outcome — higher USF charges to today’s customers — would be fundamentally at odds with our Section 254 mandate to preserve and advance universal service. Today’s consumers would have to shoulder the burden of the refunds while having no responsibility for causing the underlying problem. The harms to today’s end-users and to the universal service system itself would be undeniable should retroactive effect be given to the Fifth Circuit decision. Id. at 6227 (footnotes omitted). On top of all that, the FCC continued, there would be large administrative costs and burdens of issuing a refund. Id. at 6228. Carriers would have to spend an “enormous” amount of time to track down customers from the 1990s just to give them a small refund. Id. The cost of locating those former customers could potentially “overwhelm the amounts available for distribution as refunds.” Id. at 6228-29. For those reasons, the FCC’s 2008 Order refused to apply the Texas Office decision retroactively and denied AT&T’s request for a refund of the intrastate-revenue-based USF contributions, which AT&T had paid to the Universal Service Administrative Company between January 1, 1998 and October 31, 1999. See id. at 6222. II. We now turn to the facts of this case, which are undisputed. In February 1995, before Congress passed the Telecommunications Act of 1996, Martha Self entered into a contract with AT&T for interstate cellular phone service. A few years later, AT&T notified her that, beginning with the January 1998 billing cycle, it was going to start charging her a “per-line Universal Service Support charge.” That charge was AT&T’s pass through of the USF contributions it was required to make under the FCC’s Universal Service Order. Cf. 47 C.F.R. § 69.131 (authorizing telecommunications carriers to recover their USF contributions from customers on a “per-line basis”); In re Telecomms. Relay Serv., N. Am. Numbering Plan, 17 FCC Red. 24952, 24975-76, 2002 WL 31778732 (2002) (explaining that carriers may recover their USF contributions as a “separate universal service line-item charge”). Unhappy about the new charge on her cell phone bill, Self filed a putative class action against AT&T in Alabama state court in September 1998. Her complaint asserted a number of state law claims, including breach of contract and unjust enrichment. AT&T timely removed the case to federal district court. Not much happened in the case for several years after it was removed because AT&T and other telecommunications carriers were busy challenging the FCC’s Universal Service Order in the Fifth Circuit’s Texas Office proceedings. In March 2000, which was four months after the mandate had issued in the Texas Office case, the district court stayed proceedings in this case pending the outcome of AT&T’s petition to the FCC for reconsideration of the 1999 Fifth Circuit Remand Order. The case sat still for four more years. In October 2004, Self filed a fifth amended complaint, which is the relevant one for this appeal, re-alleging her state law claims of breach of contract and unjust enrichment. She also added two federal claims under the Federal Communications Act, 47 U.S.C. § 151 et seq. The first of those FCA claims alleged that AT&T had violated § 201(b), which provides that “[a]ll charges, practices, classifications, and regulations for and in connection with ... communication service, shall be just and reasonable.” Selfs second FCA claim alleged that AT&T had violated § 202(a), which makes it unlawful “for’ any common carrier to make any unjust or unreasonable discrimination in charges, practices, ... or services.” See generally 47 U.S.C. § 206 (authorizing actions against carriers for violations of the FCA). Selfs theory of recovery for the claims in her fifth amended complaint is that between January 1, 1998 and October 31, 1999, AT&T passed through to its customers a USF support charge that was based, in part, on intrastate revenues. Because the Texas Office decision declared that those intrastate-revenue-based USF contributions were unlawfully assessed on carriers, it follows that AT&T had charged Self and customers like her unlawful fees to reimburse itself for contributions that had been unlawfully assessed. Thus AT&T charged Self and other customers unlawfully calculated fees. Charging customers those fees, Self claims, was a breach of the cell phone service contract, an unlawful taking, and an “unjust or unreasonable” charge in violation of 47 U.S.C. § 201(b) and § 202(a). As a remedy for AT&T’s alleged misconduct, Self and her putative class members seek a refund of the intrastate-revenue-based USF fees that AT&T charged its customers between January 1, 1998 and October 31,1999. After Self filed her fifth amended complaint, the district court lifted its stay of proceedings and the case started moving again. Self and AT&T eventually filed cross motions for summary judgment. AT&T’s motion contended that all of Selfs claims should be dismissed for lack of subject matter jurisdiction because they are improper collateral attacks in the district court on final orders of the FCC. Selfs motion asked the district court to declare that it does have jurisdiction over her claims. The district court withheld a ruling on the parties’ cross motions for summary judgment until the FCC released its 2008 Order. Less than two weeks after that FCC order issued, the district court entered its own order resolving the parties’ motions. The court made a number of rulings, but only one of them is at issue in this appeal. The court ruled that it lacks jurisdiction to decide Selfs FCA claims, her state law breach of contract claim, and her state law unjust enrichment claim “to the extent that they seek retroactive application of the Texas Office holding.” III. At first blush, it would seem that the district court has jurisdiction over all of Selfs claims based on a variety of statutes, including those creating federal question jurisdiction, 28 U.S.C. § 1331, diversity jurisdiction, id. § 1332, and supplemental jurisdiction, id. § 1367(a). And beyond those more general grants of jurisdiction, the Federal Communications Act gives district courts jurisdiction over any claims brought under that statute. See 47 U.S.C. § 207 (“Any person claiming to be damaged by any common carrier subject to the provisions of this chapter may ... bring suit for the recovery of the damages for which such common carrier may be liable under the provisions of this chapter, in any district court of the United States of competent jurisdiction.”). But things are not always as they seem. There is another statute in the mix, and it provides that: “The court of appeals (other than the United States Court of Appeals for the Federal Circuit) has exclusive jurisdiction to enjoin, set aside, suspend (in whole or in part), or to determine the validity of ... all final orders of the Federal Communications Commission made reviewable by section 402(a) of title 47....” 28 U.S.C. § 2342 (emphasis added). Section 402(a) states that “[a]ny proceeding to enjoin, set aside, annul, or suspend any order of the Commission under this chapter ... shall be brought as provided by and in the manner prescribed in [28 U.S.C. § 2342].” 47 U.S.C. § 402(a). Because the courts of appeals have exclusive jurisdiction over claims to enjoin, suspend, or invalidate a final order of the FCC, the district courts do not have it. See FCC v. ITT World Commc’ns, Inc., 466 U.S. 463, 468, 104 S.Ct. 1936, 1939, 80 L.Ed.2d 480 (1984) (“Exclusive jurisdiction for review of final FCC orders ... lies in the Court of Appeals.”). That means district courts cannot determine the validity of FCC orders. See Nat’l Ass’n of State Util. Consumer Advocates v. FCC, 457 F.3d 1238, 1247 (11th Cir.2006) (explaining that 28 U.S.C. § 2342 “vests exclusive jurisdiction in the courts of appeals to determine the validity of all final orders of the Commission” (alterations omitted)). The district court reasoned that 28 U.S.C. § 2342 deprived it of jurisdiction to hear Selfs claims for a refund because “in order to adjudicate [her] claims it is necessary to determine, in part, the validity of certain actions of the FCC.” The court acknowledged that the Texas Office decision had held that the FCC could not assess intrastate revenues of service providers in calculating USF contributions. It went on to note that the FCC’s Fifth Circuit Remand Order and its 2008 Order determined that Texas Office did not apply retroactively to events occurring before the mandate for that decision issued on November 1, 1999. Self, however, is seeking a refund of fees that she paid before that date — namely, the USF fees that AT&T charged her between January 1, 1998 and October 31, 1999. According to the district court, in order to rule that those USF fees were unlawfully assessed it would have to decide that the Texas Office decision should be applied retroactively to the fees Self paid before November 1, 1999, which would contradict the prospective-only determinations in the two FCC orders. For that reason, the district court concluded that Selfs claims against AT&T challenged the validity of the two FCC orders, and under 28 U.S.C. § 2342 it lacked jurisdiction to decide such challenges. That is why the court dismissed Selfs claims for lack of jurisdiction. Self disagrees with that reasoning and result. IV. With the hide off, this case does reduce to what Justice Holmes would call a donkey of a question of law: Do Selfs claims necessarily conflict with final orders of the FCC and thereby depend on the district court being able to collaterally review the correctness or validity of those orders? We agree with the district court that the answer is yes. In order to establish that she was unlawfully charged a portion of AT&T’s intrastate-revenue-based USF contributions, Self relies on the Fifth Circuit’s Texas Office decision. That decision does not help her unless it applies to fees that were charged between January 1, 1998 and October 31, 1999, which is the only period during which Self was charged fees based on AT&T’s intrastate revenues. If, as the FCC orders in question determined, the Texas Office decision does not apply to any fees charged before the mandate issued in that case on November 1, 1999, then Self loses. It follows that Selfs claims necessarily depend on her establishing that at least parts of the FCC’s Fifth Circuit Remand Order and its 2008 Order are wrong as a matter of law or are otherwise invalid. She may seek review of the relevant parts of those orders and attempt to establish the invalidity of them in the court of appeals, after seeking reconsideration in the FCC, see 28 U.S.C. § 2344, but she may not seek collateral review of them by filing claims in the district court, see id. § 2342; ITT World Commc’ns, 466 U.S. at 468, 104 S.Ct. at 1939-40. Self tries to disguise the donkey by arguing that her claims do not attack the validity of a final FCC order because “there is no order of the FCC that required [AT&T] to extract USF charges from its customers.” Appellant Br. 45. She insists that because there is no FCC order compelling carriers to pass through their intrastate-revenue-based USF contributions, her position that AT&T wrongfully charged her those fees does not conflict with any FCC order. We are convinced that it does. Although no FCC order compels carriers like AT&T to recover their USF contributions from customers, at least three FCC orders expressly permit carriers to do so. The Universal Service Order states that carriers are “permitted ... to pass through their contributions,” 12 FCC Red. at 9199, the Fifth Circuit Remand Order reiterates that carriers may “recover[] their universal service contributions [through] an end-user charge,” 15 FCC Red. at 1693, and the 2008 Order “reconfirmfs] that [carriers] may recover their universal service contributions through rates charged for all of their services,” 23 FCC Red. at 6222. To prevail on her claims, Self must establish that carriers are not permitted to pass through to their customers the cost of their contributions, which would mean that the FCC orders are wrong or invalid. The district court correctly concluded that it lacks jurisdiction to review those orders. Self also contends the district court erred in ruling that her claims for a refund conflict with the FCC’s 2008 Order, which is the one that denied AT&T’s request for a refund from the Universal Service Administrative Company. She argues that the 2008 Order applies only to “carriers seeking refunds of USF fees that carriers were required to pay,” and points out that she is not a carrier but is instead a customer seeking a refund from a carrier. Appellant Reply Br. 2. She asserts that the order is “silent as to the retroactive application of Texas Office to refund requests by customers,” Appellant Reply Br. 4, and because the 2008 Order does not address whether Texas Office applies retroactively to refund requests by customers, the district court would not have to review and invalidate that order to decide that Texas Office applies retroactively to her claims. We disagree with Self about the scope of the 2008 Order. It did not decide only that carriers are not entitled to a refund. In the petition leading to that order, AT&T sought reconsideration of the Fifth Circuit Remand Order and asked the FCC to do two things: (1) determine that the Texas Office decision applied retroactively, and (2) order that refunds be given to carriers “for contributions based on intrastate revenues for the period from January 1, 1998 through October 31, 1999.” 2005 Bureau Order, 20 FCC Red. at 13780-81. The FCC’s 2008 Order denied both requests, reconfirming the agency’s view that Texas Office applies only prospectively. See 2008 Order, 23 FCC Red. at 6226-27. The FCC denied AT&T a refund in the 2008 Order because the Commission adhered to its earlier decision that Texas Office did not apply retroactively. Id. at 6222. Selfs argument is based on the false premise that the FCC’s 2008 Order did not decide that the Texas Office decision applies prospectively only — from November 1, 1999 forward. It did decide that, and so did the FCC’s earlier Fifth Circuit Remand Order. Finally, Self contends that her claims for a refund do not seek to invalidate any FCC order because the Universal Service Order is “void ab initio ” as a result of the Texas Office decision. Appellant Br. 39. She cites to decisions holding that agency actions that exceed the agency’s jurisdictional authority are “a mere nullity,” Dixon v. United States, 381 U.S. 68, 74, 85 S.Ct. 1301, 1305, 14 L.Ed.2d 223 (1965), and she argues that because the FCC acted beyond its authority in imposing on carriers a USF contribution based on their intrastate revenues, we should treat the Universal Service Order as if it never existed. And if the order never existed, she continues, then there was no FCC order between January 1, 1998 and October 31, 1999 that authorized AT&T to charge its customers intrastate-revenue-based USF fees. If so, then AT&T had no legal authority to charge her those fees.

6051034-13415

WOLLMAN, Circuit Judge. Christopher and Sandra Hintz (Appellants) appeal from the district court’s dismissal of their fourteen-count complaint against JPMorgan Chase Bank (Chase). We conclude that, other than their claim under the Real Estate Settlement Practices Act (RE SPA), the claims set forth in Appellants’ complaint are barred by the doctrine of res judicata. As for the RES-PA claims, Appellants have failed to show how the complaint could be amended to survive a motion to dismiss. We thus affirm the district court’s dismissal of the complaint. I. On July 23, 2007, Appellants refinanced their home on Lake Minnetonka, Minnesota, executing a note and mortgage in favor of Washington Mutual for $6.75 million. On September 25, 2008, the United States government seized the assets of Washington Mutual and placed it into Federal Deposit Insurance Corporation (FDIC) receivership. The FDIC sold Washington Mutual’s assets to Chase that same day. Chase thus became the holder of Appellants’ note and mortgage. According to the Purchase and Assumption Agreement (P & A Agreement) Chase entered into with the FDIC, Chase did not assume any liabilities of Washington Mutual that are “claims for payment of or liability to any borrower for monetary relief, or that provide for any other form of relief to any borrower ... related in any way to any loan or commitment to lend made by Washington Mutual.” D. Ct. Order of Feb. 8, 2011, at 5. After Appellants defaulted, Chase initiated foreclosure proceedings on the property in October 2008. Chase bought the property at a sheriffs sale on January 16, 2009. ■ On July 8, 2009, Appellants sent Chase notice to rescind the mortgage.. On the same day, Christopher Hintz (hereinafter Mr. Hintz) filed a pro se suit against “JP Morgan Chase Bank, National Association, doing business as Washington Mutual” in Hennepin County District Court. The suit sought damages under theories of promissory estoppel and negligence for (1) alleged wrongdoing by Washington Mutual in connection with its handling of Appellants’ loan, and (2) Chase’s actions in foreclosing upon the property. The complaint also alleged a Truth In Lending Act (TILA) violation but did not assert it as a cause of action. Chase moved to dismiss, arguing that the claims based on Washington Mutual’s alleged wrongdoing must be pursued in an administrative hearing with the FDIC and that Mr. Hintz’s complaint otherwise failed to state a claim upon which relief could be granted. On January 4, 2010, the Honorable Janet N. Poston, Hennepin County District Judge, issued a summary order dismissing Mr. Hintz’s claims “with prejudice.” Mr. Hintz did not appeal the state court judgment. Appellants obtained counsel and filed a second suit in Hennepin County District Court on June 10, 2010, against Washington Mutual and Chase, individually and as successor in interest to Washington Mutual. The new complaint alleged causes of action relating to Washington Mutual’s purported misrepresentations and alleged failure to disclose information and Chase’s alleged failure to provide adequate notice of the sheriffs sale, in violation of TILA, and to respond to two Qualified Written Requests (QWRs), in violation of RESPA. Chase removed the suit to federal court and thereafter filed a motion to dismiss. In granting Chase’s motion to dismiss, the district court held: (1) the court lacked jurisdiction over claims against Washington Mutual; (2) liability claims against Chase based on Washington Mutual’s actions were barred by the P & A Agreement; (3) non-RESPA claims against Chase were barred by res judicata; and, (4) the RE SPA claim failed to state a claim upon which relief could be granted. Accordingly, the district court dismissed all claims against Washington Mutual without prejudice and all claims against Chase with prejudice. Appellants now appeal the district court’s determinations that res judicata bars all non-RESPA claims and that Appellants’ claim for rescission under TILA expired when the property was sold. They further argue that the district court erred in denying leave to amend the complaint to re-plead the RESPA claim. II. A. As an initial matter, Chase argues that Appellants forfeited their argument that the state court’s dismissal was not a final judgment on the merits by failing to present it to the federal district court. Appellants respond that their submissions to the district court effectively, if not explicitly, argued that the prior judgment was not a final judgment on the merits. There is a difference between a new argument and a new issue. See Universal Title Ins. Co. v. United States, 942 F.2d 1311, 1314 (8th Cir.1991). Because Chase raised the affirmative defense of res judicata, that defense and its elements were before the district court. The district court analyzed each element in concluding that Chase had met its burden of proof in establishing the defense. Although the arguments before the district court did not focus on whether the state court’s order constituted a ruling on the merits, Appellants’ contention that the order was not on the merits raises only a new argument, not a new issue, and thus is not barred from review. See id. B. Contending that it was not presented to the district court, Chase has moved to strike that portion of Appellants’ appendix that contains the transcript of the hearing before the state court. The state court order dismissing the suit indicates no particular grounds for dismissing the original state court suit; it merely dismissed the complaint “with prejudice.” The transcript therefore helps to identify the possible grounds on which the state district court dismissed the original suit. Moreover, because Mr. Hintz did not file a written response, the transcript provides the only basis for our review of his reply to Chase’s motion to dismiss. The parties do not dispute the validity of the transcript, and both parties referred to the transcript in their federal appellate briefing. We have previously stated “that a party who wishes to avail himself of a prior judgment as res judicata must introduce the whole record of the prior proceeding.” Bryson v. Guarantee Reserve Life Ins. Co., 520 F.2d 563, 566 (8th Cir.1975); see also Dakota Indus., Inc. v. Dakota Sportswear, Inc., 988 F.2d 61, 63 (8th Cir.1993) (“When the interests of justice demand it, an appellate court may order the record of a case enlarged.”). Given the circumstances of this case, we will consider the transcript on appeal, and thus we deny the motion to strike. C. We review de novo the district court’s grant of a motion to dismiss based on res judicata, and we accept the plaintiffs factual allegations as true. Laase v. County of Isanti, 638 F.3d 853, 856 (8th Cir.2011) (citations omitted). “By enacting the Full Faith and Credit Statute, 28 U.S.C. § 1738, ‘Congress has specifically required all federal courts to give preclusive effect to state court judgments whenever the courts of the State from which the judgments emerged would do so.’ ” Id. (quoting Allen v. McCurry, 449 U.S. 90, 96, 101 S.Ct. 411, 66 L.Ed.2d 308 (1980)). Thus, we must determine whether the state court judgment of dismissal is preclusive under Minnesota law. Under Minnesota law, res judicata is an affirmative defense and applies as an absolute bar to a subsequent claim when: (1) the earlier claim involved the same set of factual circumstances; (2) the earlier claim involved the same parties or their privies; (3) there was a final judgment on the merits; and (4) the estopped party had a full and fair opportunity to litigate the matter. Hauschildt v. Beckingham, 686 N.W.2d 829, 840 (Minn.2004). In order for res judicata to apply, Chase must demonstrate that all elements of the defense are met. See Howard v. Green, 555 F.2d 178, 181 (8th Cir.1977) (citations omitted) (stating that the burden of proof for res judicata is on the party asserting it); see also Barth v. Stenwick, 761 N.W.2d 502, 508 (Minn.App.2009) (stating that the burden of proof is on party claiming it for purposes of collateral estoppel). The only question here is whether the state court’s final judgment was on the merits. Chase contends that the state court’s dismissal of Mr. Hintz’s complaint “with prejudice” demonstrates that the dismissal was “on the merits.” According to Chase, Johnson v. Hunter, holds that a dismissal “with prejudice” is a dismissal on the merits. 447 N.W.2d 871, 873 (Minn. 1989). This likely overstates the holding in Johnson. See Charchenko v. City of Stillwater, 47 F.3d 981, 985 (8th Cir.1995). “Johnson simply held that a dismissal with prejudice for lack of prosecution was a dismissal on the merits.” Id. (citing Johnson, 447 N.W.2d at 873). As the Minnesota Court of Appeals has recognized, “a district court’s designation of ‘with prejudice’ or ‘without prejudice’ must be viewed in light of the basis for the dismissal and is not automatically dispositive of whether a second suit is barred.” Unbank Co., LLP v. Merwin Drug Co., Inc., 677 N.W.2d 105, 109 (Minn.App.2004) (citations omitted). Thus, we must look to the basis of the state court’s dismissal of the complaint. Appellants contend that res judicata should not be applied where uncertainty exists as to whether the first lawsuit was a final judgment on the merits. They argue that because multiple grounds existed for the dismissal,' it is uncertain whether the dismissal was on the merits. The record before us shows that the state court could have dismissed the case for Mr. Hintz’s procedural default by failing to submit a written response to Chase’s motion to dismiss, for failure to state a claim, for lack of jurisdiction, or any combination thereof. If the dismissal was based on procedural default or for failing to state a claim, the adjudication was on the merits under Minnesota law. See Minn. R. Civ. P. 41.02(a), (c). If, however, the entire complaint was dismissed for lack of subject matter jurisdiction, the adjudication was not on the merits. The Minnesota Rules of Civil Procedure provide: Unless the court specifies otherwise in its order, a dismissal pursuant to this rule and any dismissal not provided for in this rule or in Rule 41.01, other than a dismissal for lack of jurisdiction, for forum non conveniens, or for failure to join a party indispensable pursuant to Rule 19, operates as an adjudication on the merits. Minn. R. Civ. P. 41.02(c). As indicated above, a procedural default in Minnesota operates as a dismissal on the merits. See Minn. R. Civ. P. 41.02(a), (c). Questions of forum non conveniens and joinder are not at issue in this case. Appellants contend that the complaint, including claims against Chase, was dismissed for lack of subject matter jurisdiction. The record of proceedings in the state court, however, belies this contention. Chase’s only argument regarding lack of subject matter jurisdiction was based on the fact that Washington Mutual is in receivership. Appellant’s App. 0100-01, 0105. The state court had jurisdiction over claims against Chase, and Chase’s counsel made clear to Judge Poston that Chase was not doing business as Washington Mutual. Appellant’s App. 0085, 0098. Although the claims against Washington Mutual may have been dismissed for lack of subject matter jurisdiction, the record reveals that claims against Chase were dismissed either because Mr. Hintz defaulted or his complaint failed to state a claim. Thus, although more than one ground existed for the dismissal, each would have resulted in a dismissal on the merits of the claims against Chase. Accordingly, we conclude that res judicata bars Appellants’ non-RESPA claims. III. Appellants argue that Chase violated RESPA when it failed to respond to two written requests for information. The district court determined that the written requests failed to meet the statutory definition of QWRs, see 12 U.S.C. § 2605(e)(1)(B), and that Appellants failed to allege how they suffered any pecuniary damage for violations of RE SPA. Appellants argue that their RESPA claim should have been dismissed without prejudice because the complaint could have been amended to cure any defects. Appellants failed to attach to the complaint the two letters they purport to be QWRs, and they argue that attaching the letters will cure the defects in their complaint. Even if attaching the letters could cure Appellants’ problem in meeting the statutory definition of QWRs, however, the letters will not cure Appellants’ problem in pleading actual damages. RESPA limits an individual’s damages for violations of QWR requirements to “actual damages” and, “in the case of a pattern or practice of noncompliance,” to $1,000 in statutory damages. 12 U.S.C. § 2605(f)(1). The district court dismissed Appellants’ RESPA claim with prejudice because “even if [Appellants] were to attempt to amend their Complaint ... the amendment would be futile because [Appellants] fail to allege how the alleged RESPA violations caused them pecuniary damage.” D. Ct. Order of February 8, 2011, at 23. The district court explained that damages for a RESPA claim must be pled with particularity, “limiting the cause of action to circumstances in which plaintiff can show that a failure to respond or give notice has caused them actual harm.” Id. (quoting Shepherd v. Am. Home Mortg. Servs., Inc., No. Civ. 2:09-1916, 2009 WL 4505925, at *3 (E.D.Cal. Nov. 20, 2009)).

3570584-14878

OPINION OF THE COURT Before MOUNTS, YAWN and WERNERj Appellate Military Judges. WERNER, Judge: Contrary to his pleas, the appellant was convicted of committing unpremeditated murder; felony murder; attempted sodomy; and indecent, lewd, and lascivious acts with a child, in violation of Articles 118, 80, and 134, Uniform Code of Military Justice, 10 U.S.C. § 918, 880 and 934. His adjudged sentence of a dishonorable discharge, confinement at hard labor for life, and total forfeitures was approved by the convening authority. The appellant contends, inter alia, that the military judge erred by admitting the Article 32, Uniform Code of Military Justice, 10 U.S.C. § 832, testimony of Private Joseph H. Courtney, and that the evidence does not allow us to affirm the findings. We disagree. I. THE FACTS A. The Homicide The victim, Derek K., was a fourteen-year-old military dependent. During the early evening of 5 February 1982, Derek and his twin brother went to the bowling alley at Schofield Barracks, Hawaii. Three or four times that evening the twins and some friends stepped outside to smoke cigarettes and marijuana. At around 2000 hours, Derek, an asthmatic, complained to his friends that he was having trouble breathing. A half hour later he told his brother to meet him outside their home at 2100 hours and left the bowling alley. Derek did not meet his brother at the appointed time. At 2215 hours, a schoolmate of Derek’s saw him enter the bowling alley, drink some water, and leave. Derek’s friends and family did not see him alive again. About 1700 hours the next day, Specialist Four Thomas W. Spindle found Derek’s bruised and semi-nude body at the bottom of a long flight of steps leading into an abandoned bomb shelter on Schofield Barracks. Spindle said he checked for a pulse, but did not otherwise disturb the body. He reported his find to other servicemembers who in turn notified the police. According to the medical examiner, Derek probably died of asphyxiation after a hand or foreign object had been applied to his mouth and nose. The examiner did not, however, completely rule out asthma as the cause of death. B. PFC Courtney Although the authorities had no immediate suspects, attention soon focused on Spindle. Spindle had said that Derek was wearing white athletic socks with colored stripes when he discovered him; when the police collected the body, however, the socks were rolled down to the ankles, preventing anyone from seeing the stripes. When asked who could provide an alibi for him, Spindle named the appellant, PFC Courtney and Private Duane Reynolds. At the trial, Reynolds testified he had seen and chatted briefly with Spindle several times during the night and early morning of 5 and 6 February, respectively. Upon questioning, Courtney gave numerous and different versions of what he and others had done on the night of Derek’s death. At first, he completely denied being with Spindle on the night of the murder. Later, he admitted going to the vicinity of the bomb shelter with both Spindle and the appellant and said he saw them enter the bunker. He said that a dark figure went inside and that he soon heard screams of “someone in [their] puberty years.” Later still, he amended the story by saying he had left Spindle and the appellant when he suspected the two were planning to engage in homosexual activity and claimed to have witnessed a “short shadow” romping with Spindle and the appellant on the grass close to the shelter. He then saw the three of them enter the bunker and from a position near the entrance of the shelter witnessed the “shadow” being severely beaten. He said he ran back to the barracks when one of the assailants realized they were being watched. By the time of the Article 32 investigation, Courtney had changed his story again, admitting he had met young Derek in front of the Enlisted Man’s Club as he walked with Spindle and the appellant to the bomb shelter. He claimed the boy accompanied them to an area near the shelter to get “high.” After the four of them shared a marijuana cigarette, the appellant and Spindle began “horsing around” on the grass with the young boy while Courtney sat by a tree, keeping to himself. Courtney had previously given a similar version of this story in which he said Derek was an unwilling participant in the activities. At the Article 32 hearing, he said Derek appeared to have consented. At some point, however, it is clear the “play” turned serious. In both versions, Courtney claimed the appellant instructed Spindle to pull the boy’s pants down while he pinned him to the ground. The boy was then flipped over to face down. Spindle went around to hold Derek’s shoulders, while the appellant attempted to perform “rectal” intercourse on the young boy. At that time, according to Courtney, Derek “freaked out,” or went into seizure-like convulsions, struggling and screaming. Soon after, he stopped moving completely. Courtney, who had been a passive observer, pushed Spindle and the appellant away from the child with “everything [he] had.” He checked Derek’s pulse and, finding none, told the appellant and Spindle the boy was dead. The three men then took Derek’s dead body to the bunker. Courtney admitted he held a flashlight for the other two while they carried the body partway down the stairs, letting it roll the rest of the way. Courtney then ran back alone to his quarters and locked the door. On 14 June, just two weeks before the appellant’s trial, Courtney failed to report for duty. His company commander notified the military police, the Criminal Investigation Command, and the trial counsel’s office, and ordered searches for him in establishments known to be frequented by servicemen absent without authority. Courtney was nowhere to be found. When his company commander learned that a fellow servicemember had driven Courtney and a companion, PFC Hanson, to the airport, he had the .airlines contacted in an attempt to learn the fugitives’ destination. This effort also met with negative results. Courtney was still missing two days before the appellant’s trial and it was then that the company commander contacted Courtney’s parents at their home in Ohio. They did not know his whereabouts, but did know that Courtney had recently received a speeding ticket in Ventura, California, and had called them requesting that money be wired to him in Ridgecrest, California. This information was teletyped to federal and local authorities in that state. Police in his hometown were also notified that Courtney was wanted to testify at the appellant’s court-martial in Hawaii. Despite these efforts, Courtney was still missing on 30 June when appellant’s trial began. The military judge found Courtney “unavailable” to testify at trial and his Article 32 testimony was admitted into evidence pursuant to Military Rule of Evidence 804(b)(1). II. THE ADMISSIBILITY OF PFC COURTNEY’S ARTICLE 32 TESTIMONY Military Rule of Evidence 804(b)(1) states that the following is not excluded by the hearsay rule if the declarant is unavailable as a witness: Testimony given as a witness at another hearing of the same or different proceeding, or in a deposition taken in compliance with law in the course of the same or another proceeding, if the party against whom the testimony is now offered had an opportunity and similar motive to develop the testimony by direct, cross, or redirect examination. A record of testimony given before courts-martial, courts of inquiry, military commissions, other military tribunals, and before proceedings pursuant to or equivalent to those required by Article 32 is admissible under this subdivision if such record is a verbatim record. The appellant contends PFC Courtney’s Article 32 testimony is inadmissible because Courtney was not unavailable; an Article 32 investigation is not a prior judicial proceeding; and he did not have a motive to develop Courtney’s testimony at the Article 32 investigation similar to the one he would have had at the trial. A. Unavailability Military Rule of Evidence 804(a)(5) provides that a declarant is unavailable if he “is absent from the hearing and the proponent of the declarant’s statement has been unable to procure the declarant’s attendance ... by process or other reasonable means.A determination of unavailability is contingent upon the prosecutorial authorities’ good-faith effort to obtain the declarant’s presence at trial. Barber v. Page, 390 U.S. 719, 88 S.Ct. 1318, 20 L.Ed.2d 255 (1968). “Good-faith” is measured in terms of “reasonableness.” California v. Green, 399 U.S. 149, 90 S.Ct. 1930, 26 L.Ed.2d 489 (1970). “The ultimate question is whether the witness is unavailable despite good-faith efforts undertaken prior to trial to locate and present that witness.” Ohio v. Roberts, 448 U.S. 56, 74, 100 S.Ct. 2531, 2543, 65 L.Ed.2d 597 (1980). Accord Mancusi v. Stubbs, 408 U.S. 204, 92 S.Ct. 2308, 33 L.Ed.2d 293 (1972). Ohio v. Roberts, supra, is dispositive of this issue. Roberts was charged with forgoing a check in the name of Bernard Isaacs and possessing stolen credit cards belonging to Isaacs and his wife. At a preliminary hearing in January 1975, the defense called Isaacs’ daughter, Anita, and unsuccessfully attempted to get her to admit that she had given Roberts the check and credit cards. Shortly thereafter, Anita left Ohio. Between November 1975 and March 1976, five subpoenas were issued to Anita at her parents’ residence; she did not receive any of them. The only other effort the State made to locate Anita was a telephone call to her parents four months before trial, which revealed little more than the fact that they did not know where she was. In March 1976, Roberts was tried and, since Anita was not present to testify, the prosecutor offered a transcript of her testimony at the preliminary hearing into evidence. Anita was determined to be “unavailable,” and the prior testimony was admitted. The Court held that “[gjiven these facts, the prosecution did not breach its duty of good-faith effort.” Id. at 75, 100 S.Ct. at 2544. The Government’s efforts to find Courtney exceed those made by the prosecution in Roberts. Although these endeavors were unsuccessful, that fact does not render them deficient. One may always think of the unexplored alternatives, but hindsight is not the proper standard by which to measure reasonableness of effort. Id. at 75, 100 S.Ct. at 2544; United States v. Thornton, 16 M.J. 1011, 1013 (ACMR 1983). What the Supreme Court said about the sufficiency of the prosecution’s efforts in Roberts is equally applicable here: “[T]he great improbability that [additional] efforts would have resulted in locating the witness, and would have led to her production at trial, neutralizes any intimation that a concept of reasonableness required their execution.” Ohio v. Roberts, 448 U.S. at 76, 100 S.Ct. at 2544. Courtney was a fugitive from justice, and nothing indicated he would soon turn himself in or be captured. See United States v. Douglas, 1 M.J. 354, 355 (C.M.A.1976); United States v. Obligacion, 17 U.S.C.M.A. 36, 37 C.M.R. 300 (1967) (unauthorized absence of declarant established requisite unavailability). Accordingly, we find, as did the military judge, that the Government made a good-faith and reasonable effort to secure the presence of Courtney at the trial, and their failure to find him rendered him an unavailable witness within the meaning of Military Rule of Evidence 804(a)(5). See also United States v. Wheeler, 21 U.S.C.M.A. 468, 45 C.M.R. 242 (1972); United States v. Burrow, 16 U.S.C.M.A. 94, 36 C.M.R. 250 (1966); United States v. Thornton, supra; United States v. Kelly, 15 M.J. 1024 (A.C.M.R.1983); United States v. Chambers, 47 C.M.R. 549 (A.F.C.M.R.1973); United States v. Downs, 46 C.M.R. 1227 (N.C.M.R.1973). B. Article 32 Hearing as a “Judicial Proceeding” The appellant’s assertion that the Article 32 hearing is not a judicial proceeding within the meaning of Military Rule of Evidence 804(b)(1) is without merit. First of all, the rule itself expressly provides for the admission of testimony taken at an Article 32 investigation if it is recorded verbatim. Secondly, precedent long ago established that an Article 32 hearing is “judicial in nature” and its appointed investigating officer is a judicial or quasi-judicial officer. See, e.g., United States v. Samuels, 10 U.S.C.M.A. 206, 212, 27 C.M.R. 280, 286 (1959); United States v. Nichols, 8 U.S.C.M.A. 119, 124, 23 C.M.R. 343, 348 (1957); United States v. Grimm, 6 M.J. 890 (A.C.M.R.), pet. denied, 7 M.J. 135 (C.M.A.1979). Lastly, we note that at the hearing Courtney was under oath; the appellant was represented by counsel; and the proceedings were recorded verbatim. See also Ohio v. Roberts, 448 U.S. at 72-73, 100 S.Ct. at 2542-2543; California v. Green, supra. C. Similar Motive to Develop Courtney’s Testimony The record belies the appellant’s contention that his “motive for cross-examination of Courtney [at the Article 32 hearing] was not for purposes of cross-examination at trial but to merely discover what his testimony was going to be.” The motive of an opponent to the admission of former testimony may be determined by an objective examination of his conduct in light of the circumstances at the time of the former testimony. See generally S. Saltzburg, L. Schinasi & D. Schlueter, Military Rules of Evidence Manual 376-77 (1981); see also United States v. Pizarro, 717 F.2d 336 (7th Cir.1983). At the trial, the appellant would have attempted to discredit Courtney by confronting him with his prior inconsistent statements, use of drugs, and personal involvement in Derek’s death. At the Article 32 hearing, the trial defense counsel conducted a thorough, lengthy and vigorous cross-examination of Courtney which highlighted all these areas. Most noteworthy are the more than forty questions which were directed to Courtney regarding his prior inconsistent statements. Accordingly, we are convinced that counsel’s questioning of Courtney comported with the principal purpose of cross-examination: to challenge “whether the declarant was sincerely telling what he believed to be the truth, whether the declarant accurately perceived and remembered the matter he related, and whether the declarant’s intended meaning is adequately conveyed by the language he employed." Davenport, The Confrontation Clause and the Co-Conspirator Exception in Criminal Prosecutions: A Functional Analysis, 85 Harv.L.Rev. 1378 (1972). Ohio v. Roberts, 448 U.S. at 71,100 S.Ct. at 2541. See also United States v. Kelly, 15 M.J. at 1028 (“[t]he principal guarantee of reliability in cases of prior testimony is that the witness has been cross-examined for a similar purpose”). We hold that Courtney’s testimony at the Article 32 hearing was properly admitted at appellant’s trial. III. SUFFICIENCY OF THE EVIDENCE

1575872-12995

SILER, Senior Circuit Judge. Petitioner Gabriel Cruz, III appeals the district court’s denial of his petition for a writ of habeas corpus. Cruz argues the state trial court improperly instructed the jury and that defense counsel was ineffective for failing to object to the erroneous jury instruction. We AFFIRM. I. BACKGROUND In 1994, Cruz was part of a gang of four men who burglarized two apartments using a baseball bat and a firearm. Tragically, seven-year-old Eve Rojas died of asphyxiation after her mouth and nose were bound with duct tape. Cruz was subsequently convicted of first-degree murder, three counts of burglary with assault on an occupant, armed assault in a dwelling, four counts of stealing by confining or putting in fear, armed robbery, armed assault with intent to commit murder, and four counts of assault and battery by means of a dangerous weapon. See Commonwealth v. Cruz, 430 Mass. 182, 714 N.E.2d 813 (1999). Cruz’s first-degree murder conviction was obtained under a felony-murder rule theory, and he was sentenced to life in prison without parole. His convictions were affirmed on appeal except for his burglary convictions; they were vacated because they merged with his first-degree murder conviction as lesser-included offenses. See id. at 823-24. At trial, the court instructed the jury that [t]he final element of the crime of felony murder, here, that the Commonwealth must prove, is that in the circumstances of this case, the defendant committed or attempted to commit the felony in question with a conscious disregard for the risk to human life. The crime, the felony of burglary with assault on an occupant, is a crime that is defined in our law as inherently dangerous to human life. If you find that the Commonwealth has proved beyond a reasonable doubt, that the defendant, Gabriel Cruz, committed, as a joint venturer, the unlawful killing of Eve Rojas, while in the course of committing the offense of a burglary with an assault on an occupant, you would be warranted in finding, without more, that he acted with a conscious disregard for the risk to human life, because that particular felony is inherently dangerous to human life. Cruz’s counsel did not object to this instruction. In 2000, Cruz petitioned for habeas corpus relief pursuant to 28 U.S.C. § 2254. A United States magistrate judge issued a report and recommendation denying Cruz’s petition. The magistrate judge later issued a supplemental report and recommendation again denying Cruz’s petition. The district court adopted both reports and recommendations, concluding that Massachusetts state law permitted the trial court’s instruction, the United States Court of Appeals for the First Circuit had rejected a similar argument, and Cruz’s counsel was not ineffective because the instruction was consistent with state-law “settled precedent.” Nevertheless, the district court granted Cruz a certificate of appealability (“COA”) on two issues: (1) whether the trial court violated Cruz’s rights to trial by jury and due process of law by instructing the jury that the felony of burglary with assault on an occupant is inherently dangerous to human life; and (2) whether Cruz’s counsel was ineffective in failing to object to that jury instruction. This court denied Cruz’s motion for an expanded COA. We have jurisdiction pursuant to 28 U.S.C. §§ 1291 and 2253(c)(2). II. DISCUSSION Normally, this appeal would be governed by the Antiterrorism and Effective Death Penalty Act of 1996 (“AEDPA”). However, “AEDPA’s strict standard of re view only applies to a ‘claim that was adjudicated on the merits in state court proceedings.’ ” Fortini v. Murphy, 257 F.3d 39, 47 (1st Cir.2001) (quoting 28 U.S.C. § 2254(d)). The Massachusetts Supreme Judicial Court (“SJC”) decided Cruz’s jury instruction claim solely as a matter of state law. See Cruz, 714 N.E.2d at 818-19, 822 n. 6. Therefore, our review is de novo. See Fortini, 257 F.3d at 47. Cruz’s ineffective assistance of counsel claim is also reviewed de novo. See id. 1. The Jury Instruction Cruz argues that the trial court violated his rights to a fair trial and due process because the instruction established a conclusive presumption that relieved the state of proving an essential element of the crime beyond a reasonable doubt — that he acted with a conscious disregard for the risk to human life. The SJC analyzed the issue as follows: 3. Inherently dangerous felony instruction. The defendant asserts that the judge improperly stated that the felony of burglary with assault on an occupant is a crime that is inherently dangerous to human life. The defendant’s argument ignores settled precedent. See Commonwealth v. Selby, [426 Mass. 168, 686 N.E.2d 1316 (1997)] (armed assault in dwelling “by its very nature ... ‘inherently dangerous to human life,’ Commonwealth v. Claudio, 418 Mass. 103, 108, 634 N.E.2d 902 [1994] [armed burglary in dwelling with assault therein, under [Mass. Gen. Laws Ann. ch.] 266, § 14, is inherently dangerous felony and supported conviction for felony-murder”]). Cruz, 714 N.E.2d at 818-19. The Cruz court reiterated that “burglary with assault on an occupant is inherently dangerous to human life, and thus, the conscious disregard for human life requisite for a finding of malice is presumed.” Id. at 822 n. 6. Errors of state law are not a cognizable basis for federal habeas relief, and this court does not re-examine the SJC’s determination of a state-law question. See Lewis v. Jeffers, 497 U.S. 764, 780, 110 S.Ct. 3092, 111 L.Ed.2d 606 (1990). “Federal courts sitting in habeas must accept state court rulings on state law issues. An inquiry into the correctness of a ruling on state law issues ‘is no part of a federal court’s habeas review of a state conviction.’ ” Rodriguez v. Spencer, 412 F.3d 29, 37 (1st Cir.2005) (quoting Estelle v. McGuire, 502 U.S. 62, 67, 112 S.Ct. 475, 116 L.Ed.2d 385 (1991)). The district court concluded that Cruz’s claim “involv[ed] complicated matters of felony murder doctrine under state common law, not federal constitutional law[.]” Cruz’s habeas petition must be denied because Massachusetts law settles the issue. See McMillan v. Pennsylvania, 477 U.S. 79, 85, 106 S.Ct. 2411, 91 L.Ed.2d 67 (1986) (states are left with the authority to prevent and deal with crime). “To make out a case of murder, the prosecutor need only establish that the defendant committed a homicide while engaged in the commission of a felony[.]” Commonwealth v. Gunter, 427 Mass. 259, 692 N.E.2d 515, 525 (1998) (citations omitted). Thereafter, “[t]he effect of the felony-murder rule is to substitute the intent to commit the underlying felony for the malice aforethought required for murder. Thus, the rule is one of ‘constructive malice.’ ” Id. (citations omitted). In Commonwealth v. Selby, 426 Mass. 168, 686 N.E.2d 1316, 1320 (1997), the SJC reapplied the holding of Commonwealth v. Claudio, 418 Mass. 103, 634 N.E.2d 902 (1994), that certain felonies by their very nature are inherently dangerous, including burglary with assault on an occupant and armed assault in a dwelling, so as to justify felony-murder convictions. Here, the SJC conclusively determined that the felony-murder rule was properly applied to Cruz because the felony of burglary with assault on an occupant is inherently dangerous to human life. See Commonwealth v. Scott, 428 Mass. 362, 701 N.E.2d 629, 632 (1998) (“There is no need to show a ‘conscious disregard for human life because the risk is implicit in the intent required for [certain] felon[ies]’ ” and “[it] is not the province of the jury to determine whether a felony is inherently dangerous.”) (citation omitted) (emphasis added). To reiterate, we cannot second-guess this state law decision on habeas review. See Pulley v. Harris, 465 U.S. 37, 41, 104 S.Ct. 871, 79 L.Ed.2d 29 (1983) (“A federal court may not issue the [habeas corpus] writ on the basis of a perceived error of state law.”); Watkins v. Callahan, 124, F.2d 1038, 1043 (1st Cir.1984) (rejecting arguments identical to Cruz’s premised on identical rationale). This is not a case where the trial court directed a guilty verdict due to a conclusive presumption of guilt. Cf. Sandstrom v. Montana, 442 U.S. 510, 522, 99 S.Ct. 2450, 61 L.Ed.2d 39 (1979). Unlike the burglary with assault on an occupant charge, the trial court did not instruct the jury that “stealing by confining or putting in fear” is inherently dangerous. This is correct. See Scott, 701 N.E.2d at 632; Cruz, 714 N.E.2d at 821-22 (“burglary with assault on an occupant” is inherently dangerous, whereas “stealing by confining or putting in fear” was not specifically defined as such). The trial court’s instruction boiled down to an issue of Massachusetts state law and Cruz’s attempt to recast the issue in a constitutional light is unavailing. The prosecution still had to prove all elements of the charged crimes beyond a reasonable doubt. Although “conscious disregard” remains an element of the felony, Massachusetts has resolved to substitute it for malice in certain inherently dangerous felonies. Moreover, this claim is procedurally defaulted. Cruz’s counsel did not object to the complained-of instruction. Therefore, the SJC had to “determine whether the error created a substantial risk of a miscarriage of justice.” See Commonwealth v. Alphas, 430 Mass. 8, 712 N.E.2d 575, 580 (1999) (citations omitted); Commonwealth v. Curtis, 417 Mass. 619, 632 N.E.2d 821, 825 (1994) (“[A]n appellate court considers an issue not properly preserved for appellate review only on the ‘substantial risk of a miscarriage of justice’ standard.... ”); Mass. R.Crim. P. 24(b) (“No party may assign as error the giving or the failure to give an instruction unless he objects thereto before the jury retires to consider its verdict, specifying the matter to which he objects and the grounds of his objection.”). Known as the “contemporaneous objection rule,” see Commonwealth v. Fluker, 377 Mass. 123, 385 N.E.2d 256, 261 (1979) (failure to object to instruction precludes state appellate review), this court has held that [i]n cases where defense counsel fails to make a timely objection, the state does not waive the objection, and the appellate decision rested on that ground, that is “a classic example of a procedural default, and petitioner can succeed in his habeas case only by showing cognizable cause for, and cognizable prejudice from, his procedural default or, alternatively, by demonstrating that the federal court’s failure to address the claim on habeas review will occasion a miscarriage of justice.” Brewer v. Marshall, 119 F.3d 993, 1001-02 (1st Cir.1997) (citations omitted). Massachusetts consistently applies the contemporaneous objection rule and has not waived it here. See Gunter v. Maloney, 291 F.3d 74, 79 (1st Cir.2002) (“The SJC regularly enforces the rule that a claim not raised is waived.”). After considering Cruz’s unpreserved argument and reviewing the instruction, the Cruz court ruled that his claim “ignore[d] settled precedent” and there was no substantial risk of a miscarriage of justice. Cruz, 714 N.E.2d at 818-19. This conclusion, accordingly, is an “independent and adequate state ground” barring review. See Brewer, 119 F.3d at 999. Since Cruz “defaulted his federal claims in state court pursuant to an independent and adequate state procedural rule, federal habeas review of [his] claims is barred unless [he] can demonstrate cause for the default and actual prejudice as a result of the alleged violation of federal law,” or if he can show that “failure to consider the claims will result in a fundamental miscarriage of justice.” See Coleman v. Thompson, 501 U.S. 722, 750, 111 S.Ct. 2546, 115 L.Ed.2d 640 (1991). “To excuse a procedural default, a petitioner’s cause must relate to an objective factor, external to the defense, that thwarted (or at least substantially obstructed) the efforts of the defendant or his counsel to obey the state’s procedural rule.” Burks v. Dubois, 55 F.3d 712, 716-17 (1st Cir.1995). The only potential cause available to Cruz is defense counsel’s failure to object to the instruction. See Gardner v. Ponte, 817 F.2d 183, 186 (1st Cir.1987). As will be demonstrated, however, Cruz cannot establish cause since defense counsel’s failure to object did not constitute ineffective assistance of counsel. See Burks, 55 F.3d at 716-17. Nor can Cruz demonstrate that he was prejudiced: the jury was instructed in accordance with Massachusetts law. See Simpson v. Matesanz, 175 F.3d 200, 210 (1st Cir.1999) (“[T]he SJC’s decision on what is a miscarriage of justice is a determination made under state law[.]”). There was no substantial risk of a miscarriage of justice. Accordingly, we reject Cruz’s claim that the trial court violated his constitutional rights by instructing the jury that the felony of burglary with assault on an occupant is a crime that is inherently dangerous to human life. 2. Ineffective Assistance of Counsel

3676963-7219

SIBLEY, Circuit Judge. P. O’B. Montgomery is a construction engineer residing in Texas. In his income tax return for 1936 he showed income from five construction contracts, the largest being with the State of Texas, for building the State Hall, for the Texas Centennial Exposition. This contract during the course of its execution was on July 1, 1936, assigned to a corporation, P. O’B. Montgomery, Incorporated, which returned as its income profits thereafter arising from the execution of the contract. The Commissioner determined that the entire profit on the contract was taxable to Montgomery, and assessed a deficiency accordingly. The Tax Court held that the contract was not for the personal services of Montgomery, was assignable, and that the profit accruing after the assignment belonged -to the corporation, which was organized legally and in good faith, and whose separate entity could not be ignored. 1 T. C. 1000. We are asked to overrule this decision and to sustain the Commissioner. The contract is one whereby Montgomery, as contractor, agrees to provide all materials and perform all work for the construction of a building as shown by the drawings and specifications of named architects, under whose direction and according to whose decisions the work is to be done. The exterior was to be completed by June 6, 1936, and the whole contract by Aug. 30, 1936, with liquidated damages of $150 per day for delay. A bond was given for performance of the contract. Payments were to be made twice per month on the architects’ certificates of the work done. It is not found what work had been finished by June 30, and what remained to be done,, but the whole was not completed till sometime in September. The profits on the work completed to June 30 were returned by Montgomery at $86,009. The profits on work done afterwards, $80,209, were returned by the corporation. These figures-are not in dispute. The corporation was regularly formed under Texas law by Montgomery, his wife,, and his brother, who were created the directors. Three shares of Class A stock, which had the power of voting in all matters coming before a shareholders’ meeting, were authorized, Montgomery subscribing for two shares and his wife one. Ninety-seven shares of Class B stock were authorized, and one taken by the brother. The remainder was issued thirty-two shares, each to the three children of Montgomery. These shares could vote only on certain extraordinary matters as provided by Texas law. The par value of each was $10,, and Montgomery paid for that issued to the children. The life of the corporation was fifty years. It was authorized to build and repair buildings and to own and prepare materials therefor. It made two or more unsuccessful bids for other contracts, but ceased doing business and was dissolved in October, 1938. Until then it kept books, paid corporation taxes, held corporate meetings and kept corporate records, and functioned in a normal manner. Mont gomery was president and general manager, and his wife secretary, but neither was paid any salary. The profits arising from the assigned State contract were regularly returned as income by the corporation, and dividends were regularly declared to the stockholders and returned for them as their income. Those going to the Montgomery children ultimately went into a trust for their benefit. After the contract was assigned on July 1, the corporation took over the business, including the bookkeeper, several construction engineers, and the workmen, conducting everything as Montgomery had previously done. It is testified he himself did about what he had done before, but it is not stated what that was. He had other construction jobs besides the one assigned. The consideration expressed in the assignment was “$1.00 and the assumption by P. O’B. Montgomery, Inc., of all the losses and liabilities that may hereafter arise in connection with the performance of the contract”. No consent to the assignment by the State appears. We agree with the Tax Court that the contract was assignable. It did not employ Montgomery as an engineer, or require any personal service of him. It was a business contract to furnish labor and material and deliver a finished building. If Montgomery had died his administrator would be bound to perform. The contract indeed expressly binds “the said parties, their heirs, successors, executors, administrators and assigns”, showing that assignment was contemplated. It may be, however, that Montgomery, without the special consent of the State, would not by his assignment be relieved of his personal liability, and hence the assumption by the assignee of all “losses and liabilities” was not meaningless, but a real consideration. The Tax Court has found also that the corporation was legally and regularly organized, for no fraudulent purpose, and with a small but fully paid in capital; that it performed this contract, earned and accounted for the profit made, and attempted to secure other contracts. It lasted over two years before it was abandoned. Must it, as a matter of law, be ignored for income tax purposes? The general rule is that for such purposes the corporate entity is to be recognized, even when wholly owned by persons who would otherwise be taxed. Burnet v. Clark, 287 U.S. 410, 53 S.Ct. 207, 77 L.Ed. 397; Burnet v. Commonwealth Imp. Co., 287 U.S. 415, 53 S.Ct. 198, 77 L.Ed. 399; Planters’ Cotton Oil Co. v. Hopkins, 286 U.S. 332, 52 S.Ct. 509, 76 L.Ed. 1135. Here the corporation is owned principally by stockholders other than Montgomery. It cannot be said that he and it are practically one. If we would attempt to look through the corporation we would mainly see not this taxpayer, but his children. As the Tax Court says, Montgomery and his wife were moved to make a gift to their children in creating the corporation. Whether they gave them merely the $960 which they paid in for the stock, or a more valuable interest in the State Hall contract, might be a question touching gift taxation, but is not the question here. Though the contract seemed profitable on July 1, when assigned, it might have proven otherwise. Fire, storm, strikes, or other causes might have produced a loss. If it had, it would have been the business loss of the corporation, and not available to Montgomery to reduce the profit he had made before July 1. So also the profit, whether the contract be regarded as a gift or a thing sold to the corporation, was not Montgomery’s profit personally. If the income had been pay for Montgomery’s personal services the case would be otherwise, for by no. sort of assignment or prior arrangement, which is not a bona fide hiring or partnership, can one be divorced from his personal earnings as his taxable income. Lucas v. Earle, 281 U.S. 111, 50 S.Ct. 241, 74 L.Ed. 731; Jones v. Page, 5 Cir., 102 F.2d 144; Saenger v. Commissioner, 5 Cir., 69 F.2d 631. Montgomery continued to supervise the business, but how much time he gave to it does not appear. What the State paid was not as compensation for his time and effort, but for the materials and labor and the building that was produced. If anyone owed him for his services it was the corporation for which he acted.

400330-7868

RIVES, Circuit Judge. Appellant was convicted on two counts of an indictment, charging him with violating Section 2113(a) and Section 2113(c) of Title 18 of the United States Code. He was sentenced to imprisonment for fifteen years for the violation of Section 2113(a) and ten years for the violation of Section 2113(c), to be served consecutively. Upon this appeal he insists that the district court erred in three particulars: 1, in admitting in evidence against him two written confessions; 2, in sustaining objection to certain testimony sought to be elicited from a Lieutenant of the Georgia State Patrol; 3, in not according him the kind of fair and impartial trial to which he was entitled. The Bank of Dudley, Laurens County, Georgia, was robbed at about 3:35 P.M. •on February 23, 1955. According to R. L. Hogan, the President of the Bank, the lone robber took from him at the point of a pistol a total of $2,572.00, of which $1,962.00 was recovered within a couple of days. The other $610.00 has not been found. In the bank at the time of the robbery, in addition to Mr. Hogan, there were two women employees, Miss Leontile Baggett and Mrs. Frances J. Rinehardt. Each of them testified that the robber came into the bank twice, inquiring on his first visit whether the bank cashed personal checks; that each had a good look at him, and Mrs. Rinehardt had observed that before entering the bank he got out of a 1949 or 1950 Buiek automobile of a light gray or “greenish” color. Either from the description of the robber or of the car, the Sheriff of the County, Carious Gay, testified that he immediately suspected the appellant, who had become addicted to the use of narcotics in the treatment of an injured eye. By shortly after 7:00 o’clock on the evening of the robbery, the appellant had been arrested and brought to the bank for identification. Mr. Hogan, Miss Baggett and Mrs. Rinehardt were all positive in their identification of him as the man who had robbed the bank. Mr. Gay, the Sheriff, testified that later on that same night the appellant confessed to him that he had robbed the bank; that he used no force or threats and offered him no hope of reward; that he did not reduce the confession to writing until late the next morning, some time before noon; that meanwhile the appellant had not been carried before a magistrate to have a commitment hearing. To the introduction of the written and signed confession, the appellant objected on the sole ground that “A confession cannot be used against a man unless it is obtained after he has been carried before a committing magistrate,” which objection was overruled by the court. Mr. Gay further testified that, the second night after the robbery, appellant carried him to where his shirt, glasses and cap had been thrown out of the car, and showed him where the gun and $1,962.00 of the money “was buried side of a stump in Dodge County on Stewart Rogers’ farm.” James II. Applegate, Special Agent for the Federal Bureau of Investigation, testified that on the day after the robbery he went to the jail, got the Sheriff’s permission and talked to the appellant; that he made no threats or promises; that the appellant appeared normal, talked freely and willingly, and gave him a signed confession almost verbatim the same as that given the Sheriff. Appellant’s counsel stated, “I offer the same objection to that,” which objection was overruled by the court. A third instrument in the nature of a confession over the appellant’s signature addressed “To the People of Laurens County” had been published in the Dublin, Georgia, newspaper. It was written at the suggestion of a lawyer who had represented the appellant upon his prosecution in the Georgia State Court. The appellant had admitted that the signature was his but denied having read the paper. C. E. Tripp, operator of the “Trading Post” of Dublin, Georgia, testified that on the day of the robbery he had sold the appellant a 38 caliber revolver for thirty some odd dollars, of which ten dollars was in cash. The appellant had signed a typed request to the Sheriff dated June 13, 1955, reading, “Mr. Carlos Gay, please let C. E. Tripp have the 38 Postal (sic) which you have of mine. Thanks.” O. D. Cullens, a merchant, and Harvey Hobbs, a clerk in his store, testified to the sale to the appellant on the day of the robbery of five or six “38 special” cartridges. Rufus G. Hester testified that, about a week before the bank was robbed, he had a drink or two with appellant, and appellant said more or less as a joke that “there was a bank that he knew that we could rob right close by, but he didn’t say which bank.” Two witnesses for appellant testified by way of impeachment that Hester had a bad character and that they would not believe him on oath. B. P. McKinnon, a Lieutenant of the Georgia State Patrol, testified on behalf of appellant that about 30 minutes after he heard the broadcast about the robbery, or at about 4:15 P.M. or possibly 5:00 P.M., he stopped appellant in his car at a point 30 or 40 miles from the bank because the car resembled the description broadcast; that appellant cooperated with him in searching the car; that nothing was found; that after searching the car thoroughly he called the radio station at the State Patrol Headquarters and talked to the License Examiner, P. M. Walker; that he recognized Walker’s voice; he was asked to relate his conversation with Mr. Walker. The court sustained the Government’s objection to this conversation as hearsay. Mr. McKinnon further testified that following the conversation he released the appellant. The appellant testified as a witness in his own behalf denying his guilt, stating that the Sheriff had kept him out all night without medication for his injured eye; that he was in pain and in serious •condition; and I didn’t sign any confession that I remember.” He testified that the Sheriff later furnished him whiskey and drugs. He denied buying the pistol or any cartridges and denied having any conversation with Hester. He denied that he had shown the Sheriff where the money and pistol were hid and testified, instead, that the Sheriff had carried him to where they were, and had handed him a pistol and tempted him to shoot it. “I figured that he wanted to shoot me because he was so dirty.” The foregoing was substantially all of the evidence. There was no error in admitting either of the confessions against appellant. The objection upon the ground that each confession was obtained before appellant was carried before a committing magistrate was not well taken for several reasons. According to the Sheriff, appellant had orally confessed within a few hours after his arrest. There was credible testimony that appellant was not mistreated and that the confessions were reduced to writing before noon of the next day. Further, we have held that the McNabb Rule does not apply when an accused is detained by state officers. Brown v. United States, 5 Cir., 228 F.2d 286. If we consider the objection as properly insisting that the confessions were not voluntary, there was ample evidence to authorize their admission, and the court thereafter properly charged the jury that it should consider the evidence tending to show that the confessions were not voluntary in passing on their credibility. Schaffer v. United States, 5 Cir., 221 F.2d 17, 21; Brown v. United States, supra, 228 F.2d at p. 289. The testimony sought to be elicited from Lieutenant McKinnon of the Georgia State Patrol as to his conversation with License Examiner Walker was obviously hearsay. Further, there is no showing by a bill of exceptions or otherwise as to what that testimony would have been or that its exclusion was prejudicial. We have carefully read and examined the entire record and we are satisfied that the appellant was accorded a fair and impartial trial.

4180701-21326

GIBBONS, J., delivered the opinion of the court, in which GILMAN, J., joined, and STRANCH, J., joined in part. STRANCH, J. (pp. 609-11), delivered a separate opinion concurring in part and dissenting in part. OPINION JULIA SMITH GIBBONS, Circuit Judge. Gaylon Hayden, a participant in Martin Marietta Materials, Inc.’s long-term disability plan (“the Plan”), appeals from two adverse judgments in her suit for long-term disability benefits under the Employee Retirement Income Security Act (“ERISA”), 29 U.S.C. § 1001 et seq. In the district court’s first order, it affirmed the plan administrator’s denial of benefits on Hayden’s physical-disability claim but remanded her mental-disability claim be cause the plan administrator failed to consider medical evidence from three doctors. On remand, the plan administrator again rejected Hayden’s claim, and the district court affirmed. For the reasons set forth below, we affirm with respect to Hayden’s physical-disability claim but reverse with respect to her mental-disability claim. We further instruct the district court to award Hayden mental-health benefits consistent with the terms of the Plan. I. Hayden was employed as an office manager at Martin Marietta beginning in 1997. She was covered by Martin Marietta’s long-term disability plan, which was insured and administered by Liberty Life Assurance Company of Boston (“Liberty”). She stopped working as an office manager on January 4, 2010, and applied for benefits under the Plan the next day. A. Martin Marietta employees who provide proof that they are disabled due to injury or sickness are entitled to monthly disability payments under the Plan. The Plan defines “disability” and “disabled”: 1. For persons other than pilots, copilots, and crewmembers of an aircraft: i. if the Covered Person is eligible for the 24 Month Own Occupation benefit, “Disability” or “Disabled” means that during the Elimination Period and the next 24 months of Disability the Covered Person, as a result of Injury or Sickness, is unable to perform the Material and Substantial Duties of his Own Occupation; and ii. thereafter, the Covered Person is unable to perform, with reasonable continuity, the Material and Substantial Duties of Any Occupation. In turn, the Plan defines “Any Occupation,” “Own Occupation,” and “Elimination Period”: “Any Occupation” means any occupation that the Covered Person is or becomes reasonably fitted by training, education, experience, age, physical and mental capacity. “Own Occupation” means the Covered Person’s occupation that he was performing when his Disability or Partial Disability began. For the purposes of determining Disability under this policy, Liberty will consider the Covered Person’s occupation as it is normally performed in the national economy. “Elimination Period” means a period of consecutive days of Disability or Partial Disability for which no benefit is payable. The Elimination Period is shown in the Schedule of Benefits and begins on the first day of Disability. Employees disabled by mental illness are entitled to recover “a combined period of 24 months of Monthly Benefit payments while the Covered person is insured.” “Mental Illness” means a psychiatric or psychological condition classified as such in the most current edition of the Diagnostic and Statistical Manual of Mental Disorders (DSM) regardless of the underlying cause of the Mental Illness. If the DSM is discontinued, Liberty will use the replacement chosen or published by the American Psychiatric Association. An employee is thus entitled to benefits for a period of 24 months if she cannot perform the duties of her own occupation from the first day of claimed disability through the next 180 days (the Elimination Period) and subsequent 24 months, and, thereafter is entitled to benefits if the employee cannot perform the material and substantial duties of any occupation. Hayden claims that she was disabled within the meaning of the Plan by virtue of both physical and mental ailments. B. Hayden suffers from a litany of physical ailments, including, among others: chronic hepatitis C; pancreatitis; fibrocystic breast disease with breast implants; degenerative arthritis; breast carcinoma; hypothyroidism; hypotension; hypertension; and crepitation and decreased range of motion around her shoulders, cervical spine, hips, and knees. Dr. Joseph Bassi is Hayden’s primary treating physician. As early as 2008, Dr. Bassi suggested that Hayden consider applying for disability benefits. In his notes from April of that year, he wrote: “I spoke with the patient regarding her overall situation. She is slowly declining, has lost weight_I think it is time Gaylon consider total permanent disability.” On January 6, 2010, two days after Hayden left Martin Marietta, Dr. Bassi noted: “Her symptoms have been going on for an extended period of time[ ], months; mild to moderate severity, now more severe in the context of advancing generalized medical illness.” Hayden continued to visit Dr. Bassi during the Elimination Period. By September 2010, Dr. Bassi had become concerned that Hayden suffered from syncope or presyncope, and in November 2010, Hayden was hospitalized for presyn-cope. She was eventually sent to Vanderbilt University Medical Center, where a Q~ SWEAT showed abnormal results as to whether Hayden suffered from syncope. In January 2011, Dr. Bassi gave a sworn statement in connection with Hayden’s claim for Social Security disability benefits. ' Dr. Bassi explained that by the time of his consultation in January 2010, “the multiple symptoms from her comorbities had gotten to a point where ... she just couldn’t continue any further.” Dr. Bassi also explained that Hayden suffered from serious dysfunction of her autonomic nervous system and that while she was on a medication called Midodrine, the FDA had discontinued the drug and there was no replacement. Without the Midodrine, Dr. Bassi opined that Hayden would be prevented from performing even basic functions such as standing for moderate periods of time. Hayden was eventually awarded Social Security disability benefits. Dr. Kest also saw Hayden from June 2008 through 2010. In December 2009, he noted that her left vocal cord showed signs of paralysis but believed that her right vocal cord was compensating for the problem. In September 2010, he found an edema of the laryngeal structures which affected her ability to speak. C. Hayden submitted evidence from four doctors detailing her serious psychiatric conditions. She saw Dr. Ronald Kelley from December 2006 to February 2007. Dr. Kelley diagnosed her with general anxiety disorder, major depression, and insomnia. Thereafter, Hayden’s oncologist referred her to Dr. Roger Lyons for treatment of extreme anxiety with consequential depression. She saw Dr. Lyons throughout 2008. Dr. Lyons observed that her “thought content was dysphoric and fear-based (appears to be a manic defense),” that her psychomotor skills “ap peared leaden suggesting malaise,” that she had “annoying preoccupations with fears that produce ritualistic/prophylactie behaviors,” and that her emotional tone was dulled and numb. Hayden did not continue treatment with Dr. Lyons because her insurance company erroneously advised her that she would not be covered. In his January 6, 2010, consultation with Hayden, Dr. Bassi noted that Hayden suffered from anxiety with depression that had become worse with her deteriorating health. He stated that she suffered from “disability, weakness, and inability to care about her day to day life” and that she had significant weight loss because she was “just not eating.” Dr. Bassi explained that she had previously “forced herself to work, but now she just can’t continue on.” In February, he observed in connection with his diagnosis of anxiety and depression that “[h]er life is overwhelmed by symptoms at this time” and that “[i]t is obvious this patient is no longer able to function effectively with ongoing symptoms.” Dr. Bassi’s notes from July 2010 recount that she was “totally disabled, if nothing else, from her nerves, dealing with multiple issues at this time.” In his sworn statement in connection with Hayden’s claim for Social Security disability benefits, Dr. Bassi explained that by January 6, 2010, “she was basically overwhelmed with her day-to-day life chores, activity of daily living, stresses and just plain physical work she was doing” and that she was at “a point where she just couldn’t function from her psychiatric issues.” Dr. Thomas Muehleman examined Hayden on March 25, 2010 in connection with her claim for Social Security disability benefits. Dr. Muehleman concluded that she was moderately impaired in her “ability to understand, retain, or follow instructions; probably markedly impaired in ability to sustain attention to perform simple, repetitive tasks, or relate to others and [eo-]worker[s] and supervisors at this time; and markedly impaired in ability to tolerate stress and pressures associated with day-to-day work activities.” Hayden was treated by Dr. David Meyer in September and November 2010. Although after the Elimination Period, Dr. Meyer also diagnosed her with recurrent major depression and severe anxiety. Dr. Meyer, like Dr. Bassi, concluded that, given Hayden’s mental state, she was barely able to perform the basic activities of daily living and could not do “much beyond her basic self-care.” D. Hayden’s Elimination Period ran from January 4 to July 4, 2010. On July 22, 2010, Liberty conducted an initial file review of the records that Hayden’s treating physicians provided. Liberty’s initial conclusion was that while Hayden had “multiple medical problems ... [,] none of them seem[s] to be significantly impairing at this time.” Liberty assigned the file to Dr. David Peterson for peer-to-peer contact with Dr. Bassi and overall clarification. In his conversation with Dr. Peterson, Dr. Bassi stated that Hayden was totally disabled from anxiety and depression. Dr. Peterson concluded that “[t]he medical records do not support impairment from working at her usual occupation based on any medical diagnosis.” Dr. Peterson, observing that her chronic anxiety disorder was not well controlled, stated that his report did not address her diagnosis of chronic anxiety disorder and recom mended an evaluation by a board-certified psychiatrist. Liberty referred Hayden’s file to Dr. Raymond Chagnon, an internist, and Dr. Gil Lichtshein, a psychiatrist, for an independent panel review. Dr. Chagnon contacted Dr. Bassi, who explained that “[a]s to restrictions and limitations she has difficulty handling daily life, decrease in interpersonal relationships, difficulty engaging in everyday life activities. Her depression and anxiety is her impairment, which are contributed by her medical problems.” Dr. Chagnon concluded “that she has multiple medical problems and the list is very long, but there are no medical problems that are causing her any impairments, restrictions and limitations at this time. There is no specific impairment except for some generalized fatigue and weakness.” Dr. Lichtshein also spoke with Dr. Bassi, who again explained that he believed Hayden was disabled as a result of her anxiety and depression. “He stated that she cannot function in interpersonal relationship and group settings and stated that she cries and bawls in his office.” Dr. Lichtshein concluded: “There was no objective data, reported testing, behavioral description or collateral information to substantiate the presence of any level or degree of cognitive impairment, inability to perform activities of daily living, or any other type of functional impairment.” Finally, he stated that “review of the enclosed records do not support any psychiatric diagnosis at this time.” Liberty denied Hayden’s claim for benefits by letter dated August 26, 2010. Hayden appealed and submitted additional evidence, including Dr. Bassi’s sworn statement in connection with her claim for Social Security disability benefits and records of her hospitalization in November 2010. Dr. Gregg Marella, an internist, reviewed Hayden’s medical records. Dr. Marella concluded that the only restrictions on Hayden would be from November 2010 forward due to her syncopal episodes. As for Hayden’s physical condition during the Elimination Period, Dr. Marel-la concluded that “[n]one of the medical conditions have been documented or fully explained in the office notes as to why they would totally limit or restrict the claimant from working.” Dr. Enrique Olivares, a psychiatrist, reviewed Hayden’s mental-health records. Dr. Olivares agreed that her diagnoses for depression and anxiety disorders were supported, but concluded that “[tjhere was no evidence of cognitive impairment, severe psychiatric symptoms, suicidal ideation, homicidal ideation, hallucinations or cognitive impairment that would have precluded [Hayden] from engaging in a full time job during the” Elimination Period. Liberty upheld its denial of benefits in April 2011. The letter noted that Hayden had been awarded Social Security disability benefits. It explained that Liberty arrived at a different determination because the Social Security Administration and the Plan used different criteria to determine eligibility for benefits. Hayden brought suit under ERISA. The district court upheld Liberty’s denial of her physical-disability claim. The district court found Liberty’s review of Hayden’s mental-health records “faulty.” Dr. Olivares was not provided with either Dr. Kelley’s or Dr. Lyon’s opinions during his review of Hayden’s files. The district court also faulted Dr. Olivares for disregarding entirely Dr. Muehleman’s report. The district court did not believe that the record established Hayden’s entitlement to benefits and remanded the case to Liberty to conduct a full and fair review. On remand, Dr. Olivares reviewed the additional records and reconfirmed his initial conclusions. Liberty again denied Hayden’s claim for benefits, this time relying only on Dr. Olivares’s report. The case returned to district court, and the district court affirmed Liberty’s denial of benefits. II. We review de novo a district court order granting judgment in an ERISA disability action based on an administrative record. See DeLisle v. Sun Life Assurance Co. of Can., 558 F.3d 440, 444 (6th Cir.2009). Where the plan administrator is vested with discretion to determine eligibility for benefits, the plan administrator’s denial of benefits will be overturned only if it is arbitrary and capricious. Id. Although the arbitrary and capricious standard of review is highly deferential, federal courts are not mere “rubber stamps.” McDonald v. W.-S. Life Ins. Co., 347 F.3d 161, 172 (6th Cir.2003). This entails review of the quality and quantity of the evidence, mindful that the plan administrator’s decision should be upheld if it is the result of a deliberate, principled reasoning process and supported by substantial evidence. DeLisle, 558 F.3d at 444. A. As a preliminary matter, we address Hayden’s argument that Liberty and the district court erred in not considering evidence developed after the Elimination Period. We have explained that such evidence is relevant, but only to the extent that it sheds light on a claimant’s condition during the Elimination Period. See Javery v. Lucent Techs., Inc. Long Term, Disability Plan for Mgrnt. or LB A Emps., 741 F.3d 686, 690 n. 1 (6th Cir.2014). “The primary benefit of such evidence” is that it “speaks to the credibility and accurateness of the earlier evaluations and opinions.” Id. Nevertheless, under the terms of the Plan, Hayden can prevail only by establishing that she was unable to perform her own occupation during the Elimination Period. B. Hayden asserts that Liberty and in turn the district court ignored various pieces of record evidence in evaluating her physical-disability claim. But while she purports to identify numerous instances where Liberty and the district court ignored evidence, she does not explain why this evidence shows that she was disabled throughout the entirety of the Elimination Period. Consequently, Hayden cannot demonstrate that Liberty’s “ultimate decision denying benefits was arbitrary and capricious.” Spangler v. Lockheed Martin Energy Sys., Inc., 313 F.3d 356, 362 (6th Cir.2002). Indeed, Liberty’s conclusion to the contrary was the result of a principled reasoning process and supported by substantial evidence. See DeLisle, 558 F.3d at 444. We address Hayden’s five arguments in turn. First, she asserts that Liberty and the district court ignored evidence that Dr. Bassi had diagnosed her with severe degenerative arthritis of her hands in 2005. Although Hayden was diagnosed with a degenerative disease, she was still required to demonstrate that on January 4, 2010, the arthritis prevented her from performing the duties of her occupation. Dr. Bassi’s examination notes from January 6, 2010, do not mention arthritis in Hayden’s hands, although he does mention arthritis in her shoulders, hips, and knees. Dr. Bassi’s October 2010 examination notes again make no mention of arthritis in her hands and indicate that her arthritis in her shoulders, hips, knees, and cervical spine was controlled with the current regimen. Furthermore, Dr. Bassi never asserted to the reviewing physicians that Hayden could not perform the functions of her job because of arthritis in her hands or elsewhere. While Dr. Bassi did testify that Hayden’s degenerative arthritis, peripheral neuropathy, and carpal tunnel would prevent her from using one or both hands in a work setting, this testimony relates only to November 2010, eleven months after Hayden was required to demonstrate that she was physically disabled. Liberty was not arbitrary or capricious in concluding that there was a lack of medical documentation that arthritis, peripheral neuro-pathy, or carpal tunnel prevented Hayden from performing the functions of her job from January 4, 2010, through July 4, 2010. Second, Hayden asserts that Liberty ignored evidence of a 2-D echocardiogram showing diastolic dysfunction and hypertensive heart disease in 2008. But Dr. Marella acknowledged the echocardio-grams in his report, and a handwritten notation on one of the echocardiogram reports stated “minor clinical finding.” Liberty was not arbitrary or capricious in denying her claim for benefits on this basis. Hayden’s third, fourth, and fifth claims of error all relate to her diagnosis of syncope and presyncope. Although the evidence establishes that Hayden was likely disabled from syncope and presyncope by the end of 2010, there is no evidence demonstrating that these conditions were disabling before July 4, 2010. The first mention of syncope in the record occurs on September 9, 2010, where Dr. Bassi noted: “She has not told me this before, but she has had 2-3 syncopal episodes this past year. She had one this past week.” There is no mention of syncope before that and no suggestion that syncope or presyn-cope prevented her from being able to perform the functions of her job in January 2010. Liberty was not arbitrary or capricious in concluding that Hayden was not disabled as a result of syncope or presyncope throughout the Elimination Period. Nor does the remainder of the medical evidence disclose that Liberty was arbitrary or capricious in concluding that Hayden was not physically disabled throughout the Elimination Period. For example, with respect to Hayden’s left vocal cord paralysis, Dr. Kest’s office contacted Liberty and relayed that Dr. Rest never placed Hayden out of work and never placed any restrictions on her. Moreover, Dr. Kest’s notes indicated only that Hayden was to avoid harsh vocal use, yelling, or throat clearing; there is nothing to suggest she could not perform the ordinary communication required of her as an office manager. With respect to her breast cancer, the University of Kentucky Medical Center’s assessment was that she was doing well and remained in clinical remission. With respect to hypothyroidism and gastritis, Dr. Bassi’s notes indicate that these conditions were controlled during the Elimination Period. Her hepatitis C was chronic and there is no suggestion that it was disabling. And while Dr. Bassi noted that Hayden suffered from neuropa-thy, Liberty’s review disclosed that “no workup has been done for it and no documentation that it is causing her any impairments, restrictions or limitations on medical record.” Finally, we disagree with the dissent that, in this particular case, Liberty should have taken a cumulative approach to Hayden’s mental and physical health. What distinguishes this case from Javery, 741 F.3d at 701, and Kalish v. Liberty Mutual/Liberty Life Assurance Co. of Boston, 419 F.3d 501, 510 (6th Cir.2005), is the fact that the Plan at issue here clearly contemplates that mental and physical disabilities will be considered separately. The Plan caps mental-disability payments at 24 months, while physical-disability payments are uncapped. To combine mental and physical disability in this case would contravene this express plan requirement, which we are required to follow. Accordingly, Liberty was not arbitrary or capricious in denying Hayden’s physical-disability claim. C.

3529502-13681

OPINION DITTER, District Judge. This case comes before the Court on a motion for judgment of acquittal or for a new trial. First, the defendant, John Clark, asserts that the denial of counsel of his choice at a lineup resulted in tainted identifications, and secondly, that his reprosecution after an earlier mistrial placed him in double jeopardy. These issues arose from the defendant’s arrest and conviction for participating with at least five other men in a robbery of a branch office of the Southeastern National Bank at Exton, Pennsylvania, in February, 1971. LINEUP The events of the lineup in question were fully explored at a hearing held June 18, 1971, on a motion to suppress identification testimony. Lt. Bernard Margolis, a Philadelphia police officer who conducted the lineup, stated it was first scheduled for March 4, 1971. However, at the request of Nino V. Tinari, Esquire, defendant’s attorney, the lineup was postponed for one week. Counsel was to attend or have someone from his office appear. The day before the new date, Mr. Tinari’s office was reminded of it by a telephone call from Lt. Margolis. On March 11, the date set for the lineup, at about 5:05 P. M., Lt. Margolis talked to Mr. Tinari concerning the standup for that evening. Mr. Tinari was surprised that Clark had not made bail and requested time to verify the incarceration of his client. Having received no return call by about 5:30 P.M., Lt. Margolis telephoned Mr. Tinari, who then promised that he would be present for the 9:00 P.M. lineup. However, when Mr. Tinari had not appeared by 8:30 P.M., Lt. Margolis attempted to call him again. There was no response to the telephone calls to the attorney’s office and the lieutenant was unable to obtain a home number. A Philadelphia assistant district attorney also tried to reach Mr. Tinari, but without success. Finally, at 11:00 P.M., the lineup here being questioned was held. Mr. Tinari had still not appeared, and did not appear thereafter. In view of Mr. Tinari’s unexplained absence, two members of the Public Defender’s Office agreed to represent Clark. At their request, changes were made in the relative positions of the eight men in the lineup. However, once these changes were made, the Defenders made no objection to the police concerning the lineup and neither was called as a witness at the suppression hearing. The defendant, who had to be forcibly brought to the room, did object to participating in a lineup in the absence of his chosen attorney. When the array was finalized, it was photographed in color and the witnesses were admitted. After viewing the lineup each witness was escorted to a separate room and individually interviewed. Three persons from the bank all identified Clark as the robber who wore the “police uniform” during the holdup. At the lineup, all the men wore the same type of prison garb and none were asked to try on a “police uniform” or anything else. Like Clark, all the participants in the array were young Negro males. There was no great disparity in their appearances and nothing to suggest that Clark was the man to be chosen. However, they were not all of the same weight, height, complexion, or facial characteristics. Another important fact must be kept in mind. There were at least six men involved in this holdup, five of whom entered the bank. The identification witnesses were not told which of the men they were to try to identify. Having presided over the trial of three of the other alleged robbers, I know that they differed from Clark and from each other in size, complexion, facial characteristics, and dress. One was referred to as a priest by reason of his garb, another as the man with a Fu Man Chu moustache, a third as having worn a gray coat and Clark as the man in the policeman’s uniform. Thus, the witnesses were not looking for a single individual from among those whom they saw at the lineup, but were looking for five men, or any one of them. They all chose Clark and they all remembered him as having been the one who was wearing the police uniform. Any minor variations in physical characteristics did not prejudice Clark, but presented the witnesses with the possibility of selecting one of the other men and overlooking Clark. At first glance, it might appear that Clark has a valid objection to the lineup procedure since it was a critical stage of the prosecution and one at which an accused is entitled to have his counsel present: United States v. Wade, 388 U.S. 218, 236-237, 87 S.Ct. 1926, 1937-1938, 18 L.Ed.2d 1149 (1967); Gilbert v. State of California, 388 U.S. 263, 87 S.Ct. 1951, 18 L.Ed.2d 1178 (1967). However, Wade contemplates that there may be circumstances when substitute counsel will be required so that the course of justice will not be obstructed. In United States v. Randolph, 143 U.S.App.D.C. 314, 443 F.2d 729 (1970), it was held that substitute counsel satisfied the requirements of Wade, while in United States v. Kirby, 138 U.S.App.D.C. 340, 427 F.2d 610 (1970), it is pointed out that substitute counsel may aid the defense by resolving the difficult problem of a defense attorney’s appearance as a witness. In the instant ease, the police did all that they could to assure the presence of counsel. The lineup was postponed once at Mr. Tinari’s request and he was then called to remind him of the new date. Even when it was impossible to contact Mr. Tinari, the lineup was delayed until 11:00 P.M. to afford him the opportunity to be there. No explanation was given to the police for his failure to attend, and none was given at the suppression hearing. Under the circumstances, one cannot help but speculate that it was a deliberate attempt to prevent the holding of the lineup. In any event, I conclude that counsel’s absence was one which was contemplated by Wade and that substitute counsel which was provided adequately protected Clark’s rights. It should be noted that there is no contention that substitute counsel was derelict or argued that Mr. Tinari could have done any more than the Public Defenders did do. The failure of the defense to call the Public Defenders at the suppression hearing indicates the testimony of Lt. Margolis may be accepted without question. A review of the facts as he related them,' the lineup pictures, and the individual identification photographs of each participant in the lineup shows there was scrupulous fairness in all the procedures and that Clark’s rights were protected by substitute counsel. For these reasons, it was not error to admit the testimony concerning the lineup identification and that of the in-court identification. MISTRIAL In support of the motion for judgment of acquittal, Clark contends that his right not to be placed in jeopardy twice was infringed. Prior to trial, the government had agreed that a de facto Jencks Act procedure would be followed, that is, the prosecutor would furnish to the defense a copy of any written statement made by a witness so that it could be used for purposes of cross-examination. (N.T. June 18, 1971, p. 107; N.T. June 23, 1971, pp. 17-19.) The first two days of the trial had proceeded on this basis. The problem arose when the prosecution discovered at the conclusion of the session on the second day that it had not supplied to defense counsel certain lineup identification sheets prepared by government witnesses. These sheets contained information given by those who attended the lineup to indicate pertinent physical details. Although defense counsel, Mr. Tinari, knew that these statement forms probably existed because of his prior lineup experience (N.T. Feb. 28, 1972', p. 10), there'was no indication that he was trying to create the grounds for a mistrial by not having specifically asked for them (N.T. June 23, 1971, p. 5). It was agreed that the mistake on the part of the attorney for the government was inadvertent. The applicable portions of the Jencks Act, 18 U.S.C. § 3500, provide: (b) After a witness called by the United States has testified on direct examination, the court shall, on motion of the defendant, order the United States to produce any statement of the witness which relates to the subject matter as to which the witness has testified. (d) If the United States elects not to comply with an order of the court under subsection (b) . . .to deliver to the defendant any such statement, . . . the court shall strike from the record the testimony of the witness, and the trial shall proceed unless the court in its discretion shall determine that the interest of justice require that a mistrial be declared. Before trial resumed on the morning of June 23, defense counsel, the government’s attorney, and I discussed the matter in chambers. The statute presented two alternatives: to strike the testimony concerning identification or to declare a mistrial. At that point, witnesses had described an armed holdup, threats of death, and the herding of bank personnel and customers into the bank vault. There had been evidence that the defendant was one of the robbers, both from the eyewitnesses and from a large number of photographs which purported to show Clark’s participation in the crime. Three bank employees had identified Clark and a fourth man, a customer, had indicated that Clark may have been one of the robbers but he was not sure. The cross-examination of these four witnesses had been completed and all had been excused. I felt it would be futile to strike the identification testimony of the bank employees and to instruct the jurors to erase it from their minds. Even if all of the testimony of these three witnesses had been stricken from the record, it would not have entitled the defendant to a judgment of acquittal because there was ample evidence from the customer to establish the corpus delicti and ample evidence from the photographs to establish Clark’s identification. Therefore, neither from the practical point of view nor the technical point of view would an instruction to strike have been significant. The realities of the situation were discussed with defense counsel and he agreed (N.T. June 23, 1971, pp. 6-8). A third possibility presented itself. The three witnesses could be recalled, the sheets made available to counsel, and the witnessses could be cross-examined as to their prior statements. Defense counsel agreed that this would be the best thing to do (N.T. June 23, 1971, p. 8, p. 34). At my request, he discussed the matter with defendant who indicated that he wished the trial to proceed with the testimony being stricken from the record and the jury being told to disregard it. The alternatives were then explained to Clark in open court. Clark continued to request that the testimony be stricken and was quite specific in saying that he did not want the witnesses recalled (N.T. June 23, 1971, pp. 37-40). Under the circumstances, I felt there was no choice and I declared a mistrial. The defendant now argues that his retrial violates the prohibition against double jeopardy, citing United States v. Jorn, 400 U.S. 470, 91 S.Ct. 547, 27 L.Ed.2d 543 (1971). The standard to be used by courts when determining whether reprosecution is barred by a plea of former jeopardy was first set in United States v. Perez, 22 U.S. (9 Wheat.) 579, 6 L.Ed. 165 (1824). Speaking for the court, Mr. Justice Story stated that a jury can be discharged without the rendition of a verdict whenever under all the circumstances the Court exercising sound discretion finds there is a “manifest necessity” or “the ends of public justice would otherwise be defeated.” The trial judge must always temper the decision as to whether or not to abort the trial with a consideration of the importance of submitting the issues to the jury which may be favorably disposed toward the defendant: United States v. Jorn, supra, 400 U.S. at 486, 91 S.Ct. at 558. Jorn also cites examples in which the test of manifest necessity was properly applied: The Perez case has since been applied by this Court as a standard of appellate review for testing the trial judge’s exercise of his discretion in declaring a mistrial without the defendant’s consent. E. g., Simmons v. United States, 142 U.S. 148 [12 S.Ct. 171, 35 L.Ed. 968] (1891) (reprosecution not barred where mistrial declared because letter published in newspaper renders juror’s impartiality doubtful); Logan v. United States, 144 U.S. 263 [12 S.Ct. 617, 36 L.Ed. 429] (1892) (reprosecution not barred where jury discharged after 40 hours of deliberation for inability to reach a verdict); Thompson v. United States, 155 U.S. 271 [15 S.Ct. 73, 39 L.Ed. 146] (1894) (reprosecution not barred where jury discharged because one juror had served on grand jury indicting defendant); Wade v. Hunter, 336 U.S. 684 [69 S.Ct. 834, 93 L.Ed. 974] (1949) (retrial not barred where military court martial discharged due to tactical necessity in the field.) pp. 481-482, 91 S.Ct. 555. The defendant argues that the situation was not one in which there was a manifest necessity for the declaring of a mistrial and that the request to strike should have been granted. However, it was obvious that the government’s failure to supply the statements, although inadvertent, altered the entire conduct of the proceedings. The only real issue was that of identification and the statements in question dealt with the recollections of the identification witnesses prior to the time they were to view the lineup. The use of these statements for cross-examination and the arguments to the jury they might make possible made their importance obvious. As a matter of fact, at Clark’s second trial, there was extensive cross-examination based on these statements.

3783702-21981

MEMORANDUM HAROLD H. GREENE, District Judge. This case involves a dispute over the constitutionality and meaning of Public Law No. 102-29, 105 Stat. 169, which was signed into law by the President on April 18, 1991. Ten railroads have filed suit against the United Transportation Union (UTU) seeking a declaratory judgment that the law is constitutional. UTU, in turn, counter-claimed that the law exceeded the scope of congressional power under the Commerce Clause and constituted a taking within the meaning of the Fifth Amendment. UTU has also sued the United States challenging the constitutionality of the Act. The ten railroads sought to intervene in the action against the United States and this Court consolidated the cases. The representational issue is presented by another counterclaim by UTU against the ten railroad plaintiffs and the Chicago and North Western Transportation Company who were joined as a counterclaim defendant on this issue. In this claim UTU charges that Public Law Number 102-29, which appears to designate another union, the Brotherhood of Locomotive Engineers, as the exclusive representative of locomotive engineers as to claims and grievances, cannot deprive UTU of its representative capacity. For the reasons set forth below, the Court finds that 102-29 is (1) well within the wide scope of the Commerce Clause and (2) does not constitute a taking within the meaning of the Fifth Amendment. As to the representational claim by UTU, the Court finds that the issue is beyond the subject matter jurisdiction of this Court. I The Constitutionality of 102-29 A. Background The development of the railroad industry significantly parallels both the development of this nation, see Leo Sheep Co. v. United States, 440 U.S. 668, 99 S.Ct. 1403, 59 L.Ed.2d 677 (1979), as well as this nation’s labor law. The extensive briefing by the parties in this ease is testimony to this point. Nonetheless, the Court will attempt to reduce the complicated web or events, laws and procedures to the minimum necessary for an analysis of its most recent addition, 102-29. After extended proceedings under the Railway Labor Act failed to produce a new collective bargaining agreement between most of the nation’s railroads and their corresponding unions, eight unions, including UTU, struck on April 17, 1991. That day Congress passed 102-29 in an effort to end the nationwide rail strike. In the early morning hours the next day the President signed the bill into law. The legislation was based on the recommendations of Presidential Emergency Board 219 (hereinafter the Board). The legislation essentially imposed a settlement on the parties and established procedures by which they could resolve remaining difference. The constitutional challenge in this case focuses specifically on that portion of 102-29 referred to as the “crew consist procedures.” Under these procedures the UTU and the relevant railroads must negotiate regarding proposed changes in the number of ground service personnel who must be employed on the trains of the various railroads, that is, the number of personnel making up each ground crew. The procedures establish that if agreement is not reached by October 31, 1991, any party may request binding arbitra tion to resolve any and all remaining crew consist issues. Subsequently, all but one of the railroads requested that UTU negotiate on this matter, specifically regarding reduction in the minimum number of ground service personnel required under their respective collective bargaining agreements with UTU. UTU, in turn, pointed to “moratorium” provisions in the collective bargaining agreements by which the railroads are prohibited from attempting to negotiate or arbitrate any changes regarding crew consist. Because 102-29 creates procedures by which UTU and the railroads must negotiate or arbitrate on the crew consist issue, UTU argues, the law is unconstitutional. To understand the context of this issue, it must be observed that railroad/lábor negotiations have occurred on both the local and national levels. Local negotiations are typically those between a single railroad and one or more unions. On the national level there has been collective bargaining between several railroads and unions. This is referred to in industry parlance as “national handling.” The Railway Labor Act (RLA) regulates heavily the process of collective bargaining. The RLA creates a long, mhlti-stage process in which either party to a collective bargaining agreement may formally propose a change to a term or terms of an existing agreement by serving notice under the provisions of the law. The parties are then required to negotiate and, if no agreement is reached, may seek the mediation services of the National Mediation Board (NMB). If the NMB cannot foster an agreement the parties are afforded the opportunity to submit the dispute to binding arbitration. If arbitration is not pursued and the NMB finds that the lack of an agreement may threaten interstate commerce, the NMB . must so notify the President. The President then may appoint a Presidential Emergency Board to investigate the matter and make its recommendations within 30 days. One potential problem with this process is that it allows • parties to seek revisions to collective bargaining agreements in near perpetuity. To avoid infinite renegotiation and make the agreement more constant, railroads and unions have sometimes included so-called moratorium agreements in their collective bargaining agreements. The moratorium is simply an agreement that neither party will invoke the procedures of the RLA described above to reopen negotiations on a certain portion of the agreement for a fixed period of time. Each of the railroads in this ease have entered into at least one crew consist agreement with UTU that contains a moratorium provision. In July 1988 UTU served notice under the RLA seeking changes in -the collective bargaining agreements to which it was a party. A process of negotiations began. The railroads made proposals for wage cuts for its employees or, in the alternative, reduction in the number of ground-crew personnel. Relying upon the moratoria agreements, the UTU did not consent to negotiate the crew consist issue. In accordance with the procedures described supra, when the negotiations failed to produce an agreement the NMB stepped in to mediate. The railroads, UTU, and other unions agreed to a procedure by which the President would appoint an emergency board to investigate the relevant issues. On May 3, 1990, the President created Presidential Emergency Board 219. The Board conducted hearings in which all the parties participated and in which the crew consist issue was raised. The Board issued several, inter-related recommendations, including that there be no wage reductions but instead a series of wage, increases. In addition, the Board recommended that the crew consist issue should be opened for negotiation despite the moratorium. Following the Board’s report, the parties entered into negotiations. Some of the par ties reached agreements, others did not. Upon expiration of the designated period following the Board’s report, eight unions, including UTU, struck on April 17, 1991. The same day Congress essentially converted the Board’s recommendations into a bill which passed both houses and was signed into law by the President the next day — Public Law Number 102-29. The law also provided procedures by which the parties .could -clarify and modify the application of 102-29 through a special presidential board. The special board was authorized under 102-29 to conduct hearings and then issue a report that would become law ten days later. The President appointed a special board to which UTU appealed on the crew eonsist/moratorium issue. Although the special board made some modifications to 102-29, it left intact the lifting of the crew consist moratoria. Subsequently, the railroads served notice that they wished to negotiate on the matter of crew consist. The railroads, UTU and the United States are now before this Court regarding the issue of whether the crew consist portion of 102-29 exceeds the scope of the Commerce Clause and whether it constitutes a taking under the Fifth Amendment. B. 102-29 as an Exercise of the Commerce Power The Supreme Court has long since established the vast expanse of the Commerce Clause. Gibbons v. Ogden, 22 U.S. (9 Wheat.) 1, 6 L.Ed. 23 (1824). The argument that Congress has exceeded its commerce power has become a long shot at best. See The Lottery Case, 188 U.S. 321, 23 S.Ct. 321, 47 L.Ed. 492 (1903). UTU fares no better today in its challenge to 102-29. The Supreme Court has said that the commerce power may be “exercised to its utmost extent and acknowledges no limitations, other than are prescribed in the Constitution.” Gibbons, supra, 22 U.S. (9 Wheat.) at 196. More specifically, Congress has frequently exercised its commerce power with regard to the rail industry. The Court has upheld the exercise of the federal commerce power to permit union shop agreements, Railway Employes’ Dep’t v. Hanson, 351 U.S. 225, 76 S.Ct. 714, 100 L.Ed. 1112 (1956); and to compel railroads to negotiate with labor organizations for purposes of collective bargaining, Virginian R. Co. v. System Federation, 300 U.S. 515, 57 S.Ct. 592, 81 L.Ed. 789 (1937). The Court has observed that the Commerce Clause grants Congress “plenary authority to regulate labor relations in the railroad industry in general.” United Transp. Union v. Long Island R.R. Co., 455 U.S. 678, 682-83, 102 S.Ct. 1349, 1353, 71 L.Ed.2d 547 (1982). It is not controversial that, regulation of the railroads by the Congress may include the imposition of specific terms. See, e.g., Maine C.R. Co. v. Brotherhood of Maintenance of Way Employees, 835 F.2d 368 (1st Cir.1987); Louisville & N.R. Co. v. Bass, 328 F.Supp. 732 (W.D.Ky.1971); Brotherhood of Locomotive Firemen & Enginemen v. Chicago, B. & O. R. Co., 225 F.Supp. 11 (D.D.C.), aff'd per curiam, 331 F.2d 1020 (D.C.Cir. 1964). Congress has legislated on crew sizes, United Transp. Union v. Consolidated Rail Corp., 535 F.Supp. 697 (Regional Rail Reorg.Ct.1982), and implemented the crew consist recommendations of another presidential emergency board. See Pub.L. No. 100-429, 102 Stat. 1617. Finally it must be noted that the commerce power is not impeded by private contracts. When the subject matter of a private contract is within the province of Congressional action it is subject to the reach of that “dominant constitutional power.” Norman v. Baltimore & O.R. Co., 294 U.S. 240, 55 S.Ct. 407, 79 L.Ed. 885 (1935). The RLA has been held to within the commerce power even where it effects private contracts. In Norfolk & W.R. Co. v. American Train Dispatchers Ass’n, 499 U.S. 117, 111 S.Ct. 1156, 113 L.Ed.2d 95 (1991), the Supreme Court found that Congress had empowered the Interstate Commerce Commission to abrogate rail industry collective bargaining agreements in the course of implementing ICC approved consolidation. No violation of the commerce power was observed. See also Brotherhood of R.R. Shop Crafts Lodge No. 3 v. Lowden, 86 F.2d 458 (10th Cir.1936) (up holding the R.LA despite the fact the law altered an existing collective bargaining agreement). The broad power that Congress has exercised in the rail industry by virtue of the Commerce Clause, applies equally to 102-29 and the issue before this Court. The exercise of federal power must have a rational basis for Congress to have found a relationship between the exercise at issue and interstate commerce. Preseault v. Interstate Commerce Commission, 494 U.S. 1, 17, 110 5. Ct. 914, 924, 108 L.Ed.2d 1 (1990); Heart of Atlanta Motel, Inc. v. United States, 379 U.S. 241, 262, 85 S.Ct. 348, 360, 13 L.Ed.2d 258 (1964). In addition, where the reviewing Court finds such a rational basis to exist it is immaterial whether Congress has made explicit findings relating its enactment to interstate commerce. Katzenbach v. McClung, 379 U.S. 294, 85 S.Ct. 377, 13 L.Ed.2d 290 (1964). Congress enacted 102-29 in order to end a rail strike and to protect interstate transpor-. tation. In addition to the interstate nature of the rail system itself, the'rails carry interstate commerce itself and play an integral role in the central nervous system of our nation’s economy. The commerce power is clearly and rationally related to 102-29 as an effort to end-the rail strike and maintain the operation of the rails thereafter. By implementing the recommendations of the Board as law, Congress attempted to impose a compromise solution to the' rail impasse: increasing wages while opening the door to negotiation on staffing. Congress further rounded the edges of the measure by including procedures for the special board to hear the parties and, where appropriate, modify the provision. As noted above, the fact that Congress imposed, to some extent, a solution and terms- does not place 102-29 beyond the scope of the commerce power. Nor is that power constrained by the private nature of the .moratorium agreements. UTU argues, however, that 102-29 is a “wholly irrational” exercise of the commerce power. UTU asserts that the public purpose of the law was to stabilize and ensure peace in the rail industry but that 102-29, by negating the effect of the crew consist moratoria, will “by definition result in bitter disputes, strikes and eventual disruption of rail service.” UTU’s argument, however, implicitly concedes that 102-29 is rationally related to interstate commerce; the union simply argues that it is wrong. It is not for the courts to second guess the policy choice that Congress has made, rather to ensure that the policy is within the confines of Article I. Commerce Clause jurisprudence does not require that Congress be right, only that it be rational. It is of no relevance therefore that 102-29 may not, in the end, stabilize the railroads. It is reasonable for Congress to have concluded that by imposing terms that drew from the interests of both sides and that was implemented in a procedural framework, the rail strike would end and the rails would run. UTU also argues that the law is illegitimate because 102-29 is based on the Board’s recommendations and that the crew consist issue was beyond the jurisdiction of the Board. The railroads argue that while the crew consist issue was. not, per se, before the Board, it became an issue because the railroads would not accede to a wage increase if they could not decrease ground staffing. It is not necessary,, however, for this Court to resolve this issue because the jurisdiction of the Board in no way constrains the power of the Congress. While UTU makes much of Congress “rubber-stamping” the Board’s recommendations, the Congress must only comply with the bicameralism and presentment requirements of the Constitution; The contents of laws may be written by citizens, presidents and all others. ■ Congress did not vest or delegate its Article I powers to the Board; rather Congress adopted the Board’s recommendations in the manner prescribed by the Constitution. The only question then is whether the law exceeds the constraints on Congressional power in the Constitution, not whether it exceeds limits placed on a presidential advisory board. Public Law Number 102-29 does not violate the Commerce Clause. C. 102-29 As a Taking Under the Fifth Amendment UTU next argues that because the effect of 102-29 was to undo the moratoria agreements on the crew consist issue, the government has taken its property without compensation in violation of the Fifth Amendment. The Court begins by considering the factors fashioned by the Supreme Court in determining whether a government action constitutes a taking. The Court in Penn Central Transp. Co. v. New York City, 438 U.S. 104, 124, 98 S.Ct. 2646, 2659, 57 L.Ed.2d 631 (1978) considered (1) the economic impact of the regulation on the plaintiff; (2) the extent to which the regulations interfered with distinct invest ment-backed expectations; and (3) the character of the governmental action. In considering these factors it should be noted that economic legislation that affects private contracts to which the United States is not a party has not been considered a taking. See e.g., Connolly v. Pension Ben. Guar. Corp., 475 U.S. 211, 222-28,106 S.Ct. 1018, 1024-27, 89 L.Ed.2d 166 (1986); Consolidated Rail Corp. v. Metro-North Commuter R.R., 638 F.Supp. 350, 355-57 (Regional Rail Reorg.Ct. 1986). First. The complex interrelationship of costs and benefits that constitutes 102-29, mitigates its economic impact. In United Transp. Union v. Consolidated Rail Corporation, 535 F.Supp. 697 (Regional Rail Reorg.Ct.1982), the court rejected a takings claim by UTU regarding the terms of the Northeast Rail Service Act of 1981. In that case Judge Friendly found that there was an insubstantial economic impact because the law did not abrogate all of the union’s rights under the crew consist agreements, rather it created an array of benefits such as voluntary furloughs; severance allowances and the transfer of seniority status to other locations. Id. at 707. Similarly, under 102-29 the door is merely opened to decreased staffing, the law does not guarantee any decrease or specify what it might be ultimately. In addition, 102-29 includes wage increases and lump-sum payments as part of a package that included removal of the crew consist moratoria. Thus, the effect of 102-29 is indeterminate in itself because it simply makes negotiation of changes possible and it is not an isolated change but part of a regulátory package. Second. It cannot be said that UTU had a reasonable expectation that the moratoria agreements were beyond the pale of Congressional action. As a general matter, in an area as heavily regulated as the railroads and in which Congress has repeatedly demonstrated its willingness to legislate solutions to labor disputes, any expectancy would seem unreasonable if not naive. UTU argues, however., that - despite the breadth of congressional regulation, the crew consist issue has traditionally been handled at the local, level, making it reasonable to expect that national legislation would not involve the crew consist matter. But this argument is specious. Simply because an issue has traditionally been treated at the local level does not at all imply that Congress will not one day take it up. The law books are filled with such examples. Thus it is difficult to imagine that those involved with this small island of local handling could not have foreseen or anticipated that the sea of federal regulations that surrounds it would never touch its shore. Third. The character of the government action in this case hardly resembles a taking within the meaning of the Fifth Amendment. The nature of the governmental action is critical. Keystone Bituminous Coal Ass’n v. DeBenedictis, 480 U.S. 470, 488, 107 S.Ct. 1232, 1243, 94 L.Ed.2d 472 (1987). UTU attempts to portray 102-29 as the equivalent of a “total, physical, permanent occupation of private land by the government.” UTU Motion for Partial Summary Judgment (September 9, 1991) at 27. In fact, the act may be more accurately described as a regulatory matter that adjusts the benefits and burdens of private parties in the interests of public policy goals. The law cannot be characterized, as UTU portrays it, as a complete appropriation. The government has not physically invaded or permanently appropriated any of the union’s or worker’s assets for its own use. See Connolly, supra, 475 U.S. at 211, 106 S.Ct. at 1018. Congress typically creates burdens for some that benefit others whenever it regulates commercial or human affairs. Id. at 223, 106 S.Ct. at 1025. Price controls, minimum wage laws, any economic regulation invariably requires one party to use its assets in a manner that it was not required to previously. Id. As discussed supra, 102-29 is related to the public policy goal of ending the rail strike and stabilizing the industry. The law opens the crew consist issue to a negotiating process. And again it must be noted that the change as to the crew consist issue is interwoven in a fabric of other changes in wages and benefits. As Judge Friendly found, where Congress readjusts rights and burdens within its broad power under the Commerce Clause, private arrangements will not stand in the way. Conrail, 535 F.Supp. at 708. There is no violation of the Fifth Amendment. II The Representational Issue Count II of UTU’s counterclaim involves whether 102-29 extinguishes UTU’s right to represent its engineer'members in grievance procedures by naming another union, the Brotherhood of Locomotive Engineers (hereinafter BLE) as the exclusive union representative for grievance purposes. The Court finds that it does not have subject matter jurisdiction to entertain this claim. Prior to 102-29 UTU represented engineer members in claims or on the property grievance procedures viz-a-viz many of the railroads in the instant ease even where the UTU engineer members belonged to a craft or class represented by the BLE. This representation was based on collective bargaining agreements between UTU and the respective railroads. One of the Board’s recommendations, adopted as law in 102-29, was to designate the BLE as the exclusive representative for its members, thus appearing to eliminate UTU representation for grievance procedures. UTU’s claim in this ease, by which it seeks to “preserve its historic right to represent” its engineer members, is a representational issue. UTU argues, to the contrary, that this claim is not a representational dispute with the BLE because UTU is simply seeking a judgment as to whether the railroads may refuse to allow UTU to represent its engineer members. However UTU manages that conclusion, it is clear to this Court that the question presented by UTU is whether it or BLE can represent the engineers at issue.

677476-19392

ORDER HAWKINS, District Judge. The above actions, consolidated by order of this court filed July 26, 1978, involve a pond or impoundment artificially created on the marshes of and adjacent to Lower Too-goodoo Creek, Charleston County, South Carolina. At the time of its construction, this pond or impoundment was owned by Trolley Realty Company, Incorporated (hereinafter “Trolley”), with Luther C. Martin, M.D. (deceased), acting on behalf of Trolley. The pond is now owned by Helen S. Martin, widow of Luther C. Martin and Executrix of his estate (hereinafter “Martin”). On December 9, 1976, Civil Action No. 76-2342-1 was commenced by the United States of America (hereinafter “United States”). By order of this court dated December 26,1978, Trolley Realty, Incorporated, Helen S. Martin, Lisa Martin, Bruce Martin, Bradley Richardson & Mrs. Bradley Richardson were added as party-defendants. After the death of Dr. Martin, on May 8, 1980, Helen S. Martin was substituted as a party-defendant for Dr. Martin, and defendants Lisa Martin, Bruce Martin, Bradley Richardson and Mrs. Bradley Richardson were dismissed as parties to this action. In its complaint, the United States alleges violations of the Rivers and Harbors Act of 1899, seeking injunctive and restoration relief and civil penalties pursuant to Title 33, United States Code Sections 403 and 407. A second cause of action pursuant to the Federal Water Pollution Control Act was withdrawn by the United States. On May 8, 1980, Trolley and Martin filed their answer and counterclaim setting forth several defenses, including two counterclaims seeking monetary damages pursuant to Title 28, United States Code Sections 1346(b) and 2674. The United States filed its reply to these counterclaims on May 12, 1980. Civil Action No. 77-1783-1, was commenced by Luther C. Martin, M.D., against the United States on September 6, 1977. Upon Dr. Martin’s death, Helen S. Martin (hereinafter “Martin”), as Executrix of the Estate of Luther C. Martin, M.D., was substituted as party-plaintiff. This action seeks monetary damages pursuant to Title 28, United States Code Section 1346(b). Cross-motions for summary judgment were filed in both actions in May of 1980. The parties stipulated that there were no genuine issues as to any material facts. The motions were supported by affidavits, answers to interrogatories, depositions, testimony and the pleadings. Depositions of the following persons, with attached exhibits, were submitted in support of these motions: (a) George Huey Director and State Conservationist, Soil Conservation Service, April 16,1980 (b) H. Exo Hilton Engineering and Soil Technician, Soil Conservation Service, August 2,1978 (c) Andy Johnson District Conservationist, Soil Conservation Service, April 15,1980 (d) Col. William K. Brown District Engineer, Army Corps of Engineers, March 26,1980 (e) John Romanosky Chief of Operations, Army Corps of Engineers, March 26, 1980 (f) Don Hill Surveying Technician, Army Corps of Engineers, August 8, 1977 (g) Bob Riggs Surveying Technician, Army Corps of Engineers, August 8, 1977 (h) Ben Gould Environmentalist, Army Corps of Engineers, August 8,1977 (i) Luther C. Martin, M.1 Summerville, South Carolina, August 8,1977. Affidavits of the following persons were submitted with regard to the motions for summary judgment: (j) W. T. Pope, dragline operator, who constructed the pond under the supervision and direction of H. Exo Hilton, Engineering and Soil Technician for the Soil Conservation Service; (k) Edward B. Latimer, Esq., former Assistant Attorney General for the State of South Carolina; (7) Robert H. Dunlap, Resource Geographer, South Carolina Wildlife and Marine Resources Department. Testimony was presented before this court by the following expert witnesses pursuant to the direction of this court to submit evidence regarding the practicability and feasibility of any proposed restoration: (m) John L. Gallagher, Ph.D., Associate Professor of Marine Studies, University of Delaware, for the United States; (n) Charles M. Bearden, Biologist and Director of the Office of Conservation, Management and Marketing for the South Carolina State Wildlife and Marine Resources Department, for Martin and Trolley; (o) William W. Neely, retired; United States Department of Agriculture biologist, for Martin and Trolley; (p) Robert Frank, registered land survey- or, for Martin and Trolley. Additional testimony was given by: (q) Helen S. Martin, widow and Executrix of the Estate of Luther C. Martin, M.D. The court made an on-site visit to the pond oh January 30, 1981. The issues for determination in these cases are: (a) Will equitable defenses defeat a civil action by the United States for injunctive and restoration relief and civil penalties pursuant to the Rivers and Harbors Act of 1899? (b) May a corporation or private citizen recover damages in an action against the United States if such damages result from negligent acts or omissions which subject such corporation or private citizen to mental suffering and anxiety, harassment and involvement in legal actions? FINDINGS OF FACT 1. At various times between 1963 and 1979, the Soil Conservation Service of the United States Department of Agriculture (hereinafter “SCS”), through the State Conservationist (hereinafter “Director”), was put on notice, both orally and by letter, by the State Attorney General’s office that no work should be done below the mean high water mark of any navigable waters or tidewaters without first obtaining state and federal permits. 2. At various times between 1970 and 1972, the United States Army Corps of Engineers (hereinafter Corps), through its Chief of Operations, discussed with representatives of the SCS the responsibilities of the Corps with reference to cooperation and enforcement of its functions, including the issuance of permits by the Corps for work to be done below mean high water. The Director of the SCS was told by the Corps that some work being assisted in by the SCS might need permits under the Rivers and Harbors Act. As a result of these conversations, the Director instructed the area soil conservationists to inform the field employees and district conservationists of this possibility and have them instruct tHe landowners to contact the Corps of Engineers. 3. Despite this knowledge, the SCS did not develop a written policy with regard to salt marsh impoundments until June 30, 1977. 4. On or about January 1973, Dr. Luther C. Martin requested assistance for and on behalf of Trolley from SCS with regard to Trolley’s farmland on the Lower Toogoodoo Creek. The specific request was with regard to drainage of the crop fields and salt water intrusion on the farm land from a drainage waterway during “spring” tides. As a result, a SCS technician specializing in engineering and soil conservation met with Dr. Martin and, after discussing the property matter, did a preliminary survey and prepared a plan map for drainage ditches and construction of a pond to stop the erosion. After some discussion between Dr. Martin and the technician, and after reviewing the plan map, Dr. Martin requested a cost estimate for the work. 5. The SCS technician later met at the site with W. T. Pope, a dragline operator with whom the technician had been associated in previous work. After the perimeter stakes were set by the technician and Pope for the pond, a price was arrived at for the pond construction. 6. The costs were approved by Dr, Martin after another review of the plan and assurances that the SCS technician would ■ supervise the work. 7. At or about the time construction commenced, Andy Johnson, the District Conservationist and supervisor of the SCS technician, met with Dr. Martin at the pond site. The conservation plan map prepared by the technician was approved by Johnson, as evidenced by his signature thereon. Sidi Limehouse, a SCS supervisor, also approved the agreement to do the work, and W. W. Neely, a SCS biologist, visited the pond during the proposed construction discussions. 8. Dr. Martin inquired of the SCS technician if any permits were required for the construction of the pond. The SCS technician did not advise Dr. Martin one way or the other. 9. Pond construction commenced in or about January, 1973, and was completed in April, 1973. Construction was by W. T. Pope, pursuant to the SCS Plan and under the supervision of the SCS technician. The technician visited the site approximately eighteen times during the construction period. 10. The United States Army Corps of Engineers, in December, 1974, served a Cease and Desist Order on Dr. Martin, complaining of excavation and fill below the local mean high water mark of six and four-tenths (6.4') feet. 11. In April, 1979, a topographic survey of the pond dike was made by the Corps referencing a National Oceanographic and Atmospheric Administration bench mark of six and seven-tenths (6.7') feet mean high water mark, which evidences that the southern portion of the dike meanders generally along the 1979 mean high water mark. No topographic information relating to mean high water mark is in evidence for the interior of the pond. 12. Testimony from witnesses present at the site prior to construction of the pond is to the effect that the site was generally above the reaches of normal tides and that only upon “spring” or full moon tides did tidal waters flow into a ditch, gutter, or waterway that existed within the interior of the pond site. 13. The pond is presently a habitat for a variety of fishes, birds, shell fish and other forms of marine life, and, with proper management, it is capable of serving as a valuable marine and wildlife estuary. 14. That any attempts at restoration of the site to its natural state would likely fail. The benefits which would accrue to the public by allowing the pond to remain, pursuant to a proper management plan allowing a seasonal migration of pond inhabitants to adjacent waters, would greatly outweigh the benefits of any attempts at restoration. CONCLUSIONS OF LAW This court has jurisdiction of all parties and of the subject matter of these consolidated actions. It is the position of the United States that the creation of the subject pond violated Title 33, United States Code Sections 403 and 407 (The Rivers and Harbors Act of 1899). The United States contends that the construction of the pond altered and modified the course, location, condition and capacity of the navigable waters of the Lower Toogoodoo Creek, and seeks the equitable remedies of injunction and restoration as well as civil penalties. Martin and Trolley contend that the design, location, plans and construction of the pond were directed and supervised by the United States Department of Agriculture, Soil Conservation Service, an agency of the United States, and that any violation of the Rivers and Harbors Act was due to the negligence of the United States. Martin and Trolley raise the defense of equitable estoppel to defeat the action of the United States and, further, seek damages resulting from the alleged negligence pursuant to Title 28, United States Code Sections 1346(b) and 2674. It is undisputed that in January of 1973, the Corps of Engineers had authority pursuant to the Rivers and Harbors Act to regulate excavation and fill below the mean high water mark of tidal, navigable streams. There is also no dispute that the Lower Toogoodoo Creek adjacent to the subject property is a tidal, navigable stream. The actual location of the mean high water mark at the pond site prior to or at the time of construction of the pond is not clear. The Corps’ Cease and Desist Order of December, 1974, cited a mean high water elevation of 6.4 feet; the April, 1979, topographic survey of the Corps established a mean high water elevation of 6.7 feet. The court notes the general duties and responsibilities of the SCS in the prevention of soil erosion to preserve natural resources and to maintain the navigability of rivers and harbors, and further to enhance the protection of land. 16 U.S.C.A. § 590a et seq. Within this framework of authority, the SCS has for many years provided various degrees of advice, supervision and, in some instances, financial assistance, to fulfill these duties and responsibilities. This court is also aware of the great responsibility placed on federal agencies, including the Corps of Engineers, in policing and maintaining the navigational capacity of our waters for the use and benefit of the public. In this regard, the Corps is responsible for the investigation, recommendation, and issuance of permits for fill and excavation of the navigable waters pursuant to the Rivers and Harbors Act. The appropri ate remedy for violation of this Act is in-junctive and restoration relief, as well as civil penalties under the proper circumstances. 33 U.S.C. §§ 403 and 406; United States v. Joseph G. Moretti, Inc., 331 F.Supp. 151 (S.D.Fla.1971), rev’d in part, 526 F.2d 1306 (5th Cir. 1976). Pursuant to its jurisdiction in 1973 the Corps could have required its permit for construction and fill below the mean high water mark which existed at that time. Weiszmann v. Dist. Eng., U. S. Army-Corps of Eng., 526 F.2d 1302 (5th Cir. 1976); United States v. Sextop Cove Estates, Inc., 526 F.2d 1293 (5th Cir. 1976). If the pond was built above the mean high water mark which existed in 1973, however, then the Corps could not have required a permit because it would not have had jurisdiction. See, Moretti, 331 F.Supp. at 158; Sexton Cove, 526 F.2d at 1297. The only evidence in the record relating to the location of mean high water at the time of construction of the pond is from eyewitnesses. No surveys were performed in 1973 or prior to that time. The SCS technician who designed and supervised the construction of the pond testified that the only area he estimated that may have been below mean high water was ' a small waterway which served as a drainage gutter, but that could only be determined by an accurate survey. Dr. Martin’s deposition states that salt water flowed into the drainage ditch only on flood tides. W. T. Pope, the dragline operator, stated by affidavit that, based upon his observation and twenty-five years experience, the areas on which he constructed the dike were above mean high water. William W. Neely, former SCS biologist, testified that when he examined the site in late 1972, he observed a narrow “gut” or slough, about six feet in width, which extended a short way into the area being considered for the pond site. Mr. Neely stated that from observation of the vegetation, he felt that the gut might have some water in it on a normal tide. The burden of proof is upon the United States to show that it had regulatory jurisdiction to maintain this action by evidence that there was excavation and fill below mean high water. One conclusive way to establish mean high water mark on a tidal, navigable stream is by a topographic survey referenced to an accurate tidal bench mark. Additional evidence, such as expert vegetation analysis, observation, soil analysis and photographs may serve to further determine the mean high water mark. United States v. Cameron, 466 F.Supp. 1099 (M.D. Fla.1978). Examination of the Corps’ 1979 topographic survey of the dike, six years after the pond was constructed, reveals that the dike meanders along the mean high water mark established at that time. The determination of the location of the mean high water mark in 1973, based on the testimony, is doubtful. Assuming, but not concluding, that some portion of the dike and/or pond site was below mean high water at the time of construction, the issue arises as to whether Martin and Trolley have equitable defenses to defeat the relief sought by the United States. Dr. Martin’s deposition was to the effect that he knew of no other federal agency interested in the work recommended by the SCS, including the Corps of Engineers. He further testified that he inquired of the SCS technician if any permits were required. The SCS technician testified that he did not advise Dr. Martin one way or the other. This course of action by the SCS technician was contrary to the action recommended by the Director of the SCS to his subordinates to advise landowners to obtain Corps of Engineer permits if such were needed. Although no such advice was given and no permit sought, the SCS took over the mechanics of staking and supervising the construction of the pond, with costs to be paid by Trolley. The pond was completed in or about April, 1973. In December, 1974, approximately 20 months later, the Corps of Engineers served its Cease and Desist Order. The United States Court of Appeals for the Fifth Circuit has dealt with several violations of the Rivers and Harbors Act. Although denying strict estoppel application, that Court has based its decisions on equitable principles involving a balancing of comprehensive evaluations of environmental factors with the practicalities of restoration. See, Sexton Cove, 526 F.2d at 1301; Weiszmann, 526 F.2d at 1304-5; Moretti, 526 F.2d at 1310. This court finds these cases persuasive. The pond was built with the advice, design, and supervision of the United States Department of Agriculture, Soil Conservation Service, a federal agency. Even though several SCS employees were at the site at different times throughout construction, no advice or recommendations were given to stop the project until construction could be coordinated with other regulatory agencies. While the Corps of Engineers has a legitimate concern that the effect of a structure placed below mean high water without pri- or approval may be detrimental to the surrounding waters and marshes, no such detrimental effect has been demonstrated in this case. In fact, the evidence is that the pond is itself an environmental ecosystem that serves as a nursery for many varieties of marine organisms which, under proper management, can be returned to the adjacent waters and marshes. Further, the evidence is that any attempt at restoration by removal of all or a portion of the dike would likely prove unsuccessful since this pond has been in existence for approximately eight years. There is also a possibility that the entire area would become toxic to marine life. As has been pointed out in similar cases, attempts to reverse such effects and restore the environment to its natural state carry with them no guarantees of success. See, Sexton Cove, 526 F.2d at 1301. This court does not condone the actions of persons who excavate and fill areas which are subject to the jurisdiction of federal agencies and for which permits are required in order to insure the public’s welfare. In the instant cases, however, this court cannot find any convincing evidence that the public policy of the United States would be frustrated by allowing the continued existence of the pond. The pond has not been shown to materially. alter or modify the course, location, condition or capacity of Lower Toogoodoo Creek. The requested injunctive and restoration relief sought for the assumed marginal encroachment, if any, of the pond must be tempered with equity. See, Sexton Cove, 526 F.2d at 1301; Lazy FC Ranch, 481 F.2d at 987-989; Sierra Club v. Leslie Salt Co., 412 F.Supp. 1096 (N.D.1976); Bailey, 467 F.Supp. at 929; United States v. Lewis, 355 F.Supp. 1132 (S.D.Ga.1973).

10547350-15179

GOODWIN, Circuit Judge: This case requires us to decide whether section 301 of the Labor Management Relations Act, 29 U.S.C. § 185 (1982), preempts a union’s claim that an employer’s unilaterally implemented drug-testing program violates rights guaranteed by the California Constitution. Utility Workers of America, Local 246, appeals the order dismissing its state constitutional law claims arising out of the implementation of random drug testing of employees by Southern California Edison (SCE) at its San Onofre Nuclear Generating Station. SCE cross-appeals from the district court’s refusal to dismiss Local 246’s breach of the collective bargaining agreement claim and from its decision to enter a preliminary injunction against random drug testing. In September 1984, SCE began annual drug-screen urinalysis for all employees seeking “unescorted access” into the security area encompassing the San Onofre plant’s nuclear reactors. SCE instituted the drug-testing requirement without prior negotiations with Local 246, the collective bargaining agent for employees at the San Onofre facility. Local 246 filed a grievance asserting that institution of the program violated the collective bargaining agreement. Local 246 also filed a charge with the National Labor Relations Board (NLRB) alleging that SCE’s unilateral implementation of the program constituted an unfair labor practice. The NLRB deferred the unfair labor practice charge to arbitration, and Local 246 failed to pursue that matter further. Beginning about December 1, 1986, SCE modified its drug-testing program. Under the new system, plant employees—chosen at random by a computer—would be required to produce urine samples for testing on one day’s notice. SCE implemented the modifications without first bargaining with Local 246. On December 8, 1986, Local 246 filed a grievance asserting that SCE violated the collective bargaining agreement by instituting the random drug-testing program without first bargaining in good faith. Local 246 concedes that this grievance now is proceeding in accordance with the grievance-resolution mechanisms created by the collective bargaining agreement. On December 10, 1986, Local 246 and two plant employees filed an action against SCE in state court, alleging that the drug-testing program violated rights guaranteed under the California Constitution to privacy and freedom from unreasonable searches and seizures. See Cal. Const. art. I, § 1 (right to privacy); id. art. I, § 13 (prohibition of unreasonable searches and seizures). The complaint also alleged that SCE had violated the collective bargaining agreement and sought injunctive and declaratory relief. After the state court issued a temporary restraining order enjoining random drug testing, SCE removed the case to federal district court. On February 11, 1987, the district court issued an order dismissing the state constitutional claims as preempted by section 301 of the Labor Management Relations Act, 29 U.S.C. § 185 (1982). The district court also issued a preliminary injunction against implementation of random drug testing, pending resolution of the grievance. Each party has appealed from the part of the order unfavorable to it. We review de novo the question whether section 301 preempts state law. See Vincent v. Trend Western Technical Corp., 828 F.2d 563, 565 (9th Cir.1987). We begin, as always, with the language of section 301: Suits for violation of contracts between an employer and a labor organization representing employees in an industry affecting commerce ... may be brought in any district court of the United States having jurisdiction of the parties .... 29 U.S.C. § 185(a) (1982). Section 301 “expresses a federal policy that the substantive law to apply in § 301 cases ‘is federal law, which the courts must fashion from the policy of our national labor laws.’ ” Allis-Chalmers Corp. v. Lueck, 471 U.S. 202, 209, 105 S.Ct. 1904, 1910, 85 L.Ed.2d 206 (1985) (quoting Textile Workers v. Lincoln Mills, 353 U.S. 448, 456, 77 S.Ct. 912, 918, 1 L.Ed.2d 972 (1957)). The preemptive force of section 301 “is so ‘extraordinary’ that it ‘converts an ordinary state common-law complaint into one stating a federal claim for purposes of the well-pleaded complaint rule.’ ” Caterpillar Inc. v. Williams, — U.S. -, 107 S.Ct. 2425, 2430, 96 L.Ed.2d 318 (1987) (quoting Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58, 107 S.Ct. 1542, 1547, 95 L.Ed.2d 55 (1987)). Preemption of state-law claims is inappropriate where state causes of action “confer[ ] nonnegotiable state-law rights on ... employees independent of any right established by contract.” Allis-Chalmers, 471 U.S. at 213, 105 S.Ct. at 1912. “[W]hen resolution of a state-law claim is substantially dependent upon analysis of the terms of an agreement made between the parties in a labor contract, that claim must either be treated as a § 301 claim ... or dismissed as pre-empted by federal labor-contract law.” Id. at 220, 105 S.Ct. at 1916. Local 246’s constitutional claims are “substantially dependent” upon the analysis of the collective bargaining agreement and they constitute a properly negotiable subject for purposes of collective bargaining. Resolution of the issue whether Local 246 has bargained away its members’ claimed constitutional rights must rest upon Articles VI and X.N of the collective bargaining agreement, which recognize SCE’s right to manage the plant, to direct the working force, and to implement reasonable safety rules and require their observance. Thus, we find that Local 246’s state-law claims cannot be resolved without reference to the collective bargaining agreement and that they should therefore be dismissed as preempted by section 301. Drug testing does not implicate the sort of “nonnegotiable state-law rights” that preclude preemption under section 301. See Allis-Chalmers, 471 U.S. at 213, 105 S.Ct. at 1912. As Local 246 argued when it filed its charge of unfair labor practices in 1984, an employer’s decision to institute a drug-testing program is a proper subject for collective bargaining. The question of drug testing obviously implicates important personal rights. To the best of our knowledge, however, no court has held that the right to be free from drug testing is one that cannot be negotiated away, and we decline to make such a ruling here. We reject Local 246’s argument that Paige v. Henry J. Kaiser Co., 826 F.2d 857, 862-63 (9th Cir. 1987), cert. denied, — U.S. -, 108 S.Ct. 2819, 100 L.Ed.2d 921 (1988), mandates a finding that its claims are not preempted by section 301. The Paige court, in holding that section 301 did not preempt a tort action based upon California’s OSHA regulations, found that a private right of action was created to enforce this state regulatory scheme, not to regulate the employment relationship. See id. at 863. Thus the court held that this private right of action “exists independent of any contractual right.” Id. Here, however, the constitutional rights claimed by Local 246 pose a “significant threat to the collective bargaining process” and promote no “state interest in protecting the public transcending the employment relationship.” Young v. Anthony’s Fish Grottos, Inc., 830 F.2d 993, 1001-02 (9th Cir.1987) (interpreting Paige). Paige therefore is inapplicable to this case. We also find inapposite our recent decision in Tellez v. Pacific Gas and Elec. Co., 817 F.2d 536, 539-40 (9th Cir.), cert. denied, — U.S. -, 108 S.Ct. 251, 98 L.Ed.2d 209 (1987). Tellez held that section 301 does not preempt claims alleging intentional and negligent infliction of emotional distress where the collective bargaining agreement “is silent on working conditions, and vague on disciplinary formalities” so that “examination or interpretation of the agreement would not help to resolve [plaintiff’s] claim.” Id. at 539. Here, by contrast, we have found it necessary to examine the collective bargaining agree ment to determine whether it has been breached. We reach the same result as the other courts that have considered the question whether section 301 preempts state-law claims brought to seek invalidation of an employer’s drug-testing program, including those founded on state privacy claims. See Kirby v. Allegheny Beverage Corp., 811 F.2d 253, 256 (4th Cir.1987); Strachan v. Union Oil Co., 768 F.2d 703, 704-06 (5th Cir.1985); Association of Western Pulp and Paper Workers v. Boise Cascade Corp., 644 F.Supp. 183, 186-87 (D.Or.1986). Although these cases involved state tort claims rather than state constitutional claims, the Supremacy Clause declares the primacy of federal law over state constitutional provisions as well as over state common and statutory law. See U.S. Const, art. YI, cl. 2. We therefore affirm the district court’s finding that section 301 preempts Local 246’s state-law challenges to SCE’s drug testing program, notwithstanding that its claims are based on rights guaranteed under the California Constitution. This holding makes it unnecessary for us to consider SCE’s claims that Local 246’s state-law claims are preempted because the San Onofre plant is located on a federal enclave or because the Atomic Energy Act of 1954, 42 U.S.C. §§ 2011-2296 (1982 & Supp. Ill 1985), grants exclusive legislative power over the facility to the federal government. The district court held that it had concurrent jurisdiction with the NLRB over Local 246’s claim that SCE breached the collective bargaining agreement by instituting a unilateral change in terms and conditions of employment and by refusing to bargain over such changes. The misconduct alleged by Local 246 also would constitute unfair labor practices in violation of sections 8(a)(1) and 8(a)(5) of the NLRA. See 29 U.S.C. § 158(a)(1) (1982); 29 U.S.C. § 158(a)(5) (1982). Indeed, Local 246’s claim for breach of contract is based upon SCE’s alleged violation of Article I of the collective bargaining agreement, which provided that “[t]he Company agrees to recognize the rights of employees as set forth in Section 7 of the National Labor Relations Act.” “When an activity is arguably subject to § 7 or § 8 of the Act, ... federal courts must defer to the exclusive competence of the National Labor Relations Board.” San Diego Building Trades Council v. Garmon, 359 U.S. 236, 245, 79 S.Ct. 773, 780, 3 L.Ed.2d 775 (1959). However, district courts have concurrent jurisdiction with the Board in cases where an alleged unfair labor practice also violates a collective bargaining agreement. See Smith v. Evening News Ass’n, 371 U.S. 195, 197, 83 S.Ct. 267, 268, 9 L.Ed.2d 246 (1962). We find it unnecessary to determine whether the NLRA preempts Local 246’s claims. “The usual rule in the field of labor law is that where administrative procedures have been instituted for the resolution of disputes between parties to a collectively bargained or other agreement, the courts will generally require the exhaustion of those procedures before exercising the jurisdiction they might otherwise have over disputes subject to resolution through said procedures.” Amato v. Bernard, 618 F.2d 559, 566 (9th Cir.1980). Federal labor policy places great weight upon ensuring the availability of grievance procedures as “a uniform and exclusive method for orderly settlement of employee grievances.” Republic Steel Corp. v. Maddox, 379 U.S. 650, 653, 85 S.Ct. 614, 617, 13 L.Ed.2d 580 (1965). “Arbitration is the means of solving the unforeseeable by molding a system of private law for all the problems which may arise and to provide for their solution in a way which will generally accord with the variant needs and desires of the parties.” United Steelworkers v. Warrior & Gulf Navigation Co., 363 U.S. 574, 581, 80 S.Ct. 1347, 1352, 4 L.Ed.2d 1409 (1960). “A rule that permitted an individual to sidestep available grievance procedures would cause arbitration to lose most of its effectiveness, ... as well as eviscerate a, central tenet of federal labor-contract law under § 301 that it is the arbitrator, not the court, who has the responsibility to interpret the labor contract in the first instance.” Allis-Chalmers, 471 U.S. at 220, 105 S.Ct. at 1916. Because Local 246 has not complied with available grievance procedures, the district court could not hear the union’s claim for breach of the collective bargaining agreement even if it shares jurisdiction with the NLRB. Accordingly, we reverse the part of the district court’s order declining to dismiss Local 246’s claim for breach of contract. We conclude that the district court erred in issuing a preliminary injunction against implementation of the drug-testing program. A preliminary injunction requiring an employer to preserve the status quo pending arbitration is improper absent either an express or implied-in-fact promise by the employer to do so. See Amalgamated Transit Union v. Greyhound Lines, Inc., 550 F.2d 1237, 1238-39 (9th Cir.) cert. denied, 434 U.S. 837, 98 S.Ct. 127, 54 L.Ed.2d 99 (1977). SCE made no promise, either express or implied in fact, that it would preserve the status quo pending arbitration. In Greyhound Lines, we recognized that because an employer’s, altering the status quo generally will not interfere with the arbitral process, an agreement to submit disputes to arbitration “does not imply a duty on the part of the employer to preserve the status quo pending arbitration.” Id. at 1238. Hence, arbitration of the dispute will be unaffected by the implementation of the drug-testing program, see id. at 1238-39, and there therefore is no need for the issuance of an injunction in aid of arbitration. Furthermore, “the situation can be restored substantially to the status quo ante” if the union prevails on its breach of contract claims in arbitration. Id. at 1239. We therefore remand to the district court so that the preliminary injunction may be dissolved. We affirm the part of the district court’s order dismissing Local 246’s claims that SCE’s drug-testing program violates the California Constitution because the state causes of action are preempted by section 301. We reverse the part of the district court’s order finding federal jurisdiction over Local 246’s claims for breach of contract because Local 246 has failed to exhaust available grievance procedures. The Supreme Court’s recent decision in Lingle v. Norge Division of Magic Chef, Inc., — U.S. -, 108 S.Ct. 1877, 100 L.Ed.2d 410 (1988), does not affect our holding. See Laws v. CALMAT, 852 F.2d 430, 434 n. 5 (9th Cir.1988). The case is remanded to the district court with instructions to dissolve the preliminary injunction pending resolution of the dispute through the grievance process. AFFIRMED in part, REVERSED in part, and REMANDED. . Appellants ask us to strike portions of appel-lee’s reply brief on the ground that these portions cover subject matter which is beyond the scope of the final brief in a cross-appeal. Although we recognize that the discussion in these portions has peripheral relevance to those matters properly addressed upon cross-appeal, we grant appellants’ motion to strike because appel-lee had ample opportunity to discuss the claims in its opening brief.

448075-16591

CLARK, Chief Judge. This appeal by a property owner in a condemnation proceeding questions the adequacy of the compensation awarded by the court for land taken by the United States. The central issue concerns the alleged failure of the trial court to evaluate the property for industrial rather than residential use. The property in question consists of an interior tract of 48.8 acres of land without frontage on any major street located adjacent to Mitchel Air Force Base in the Town of Hempstead on Long Island. Originally it was part of the grounds of the Meadow Brook Club, which for many years provided private facilities for golf and polo competition at this location. On October 18, 1954, the United States filed a complaint in condemnation and the district court ordered the immediate delivery of possession to the United States of 70.5 acres of land belonging to Meadow Brook for use in connection with the proposed enlargement of the airfield. Eleven months later, on September 26, 1955, two parcels were eliminated from the proceeding and returned to Meadow Brook. The United States filed a declaration of taking to the remaining 48.8 acres and deposited in the court $417,830 as estimated compensation for the tract. 40 U.S.C. § 258a-e. Prior to 1953, when the Club was in full operation, all its property consisted of some 826 acres. In 1953, however, under threat of condemnation, it sold 160 acres at $6,000 per acre to the Jones Beach State Parkway Authority for a proposed extension to the Meadowbrook State Parkway. This price to some extent reflected the promise of the Authority not to oppose efforts by Meadow Brook to have its remaining property zoned for industrial use. The Board of Directors of Meadow Brook then apparently concluded to move the Club elsewhere and to sell the remaining portions of the old site. Later in that year Meadow Brook sold 42 acres to the Old Country Trotting Association for $650,000, or approximately $15,500 per acre, for eventual use in connection with Roosevelt Raceway. This parcel, located to the north of the land now under consideration across a major street, Stewart Avenue, was especially valuable to the buyer, as it formed a corner of the Roosevelt Raceway property. In the same year Meadow Brook began negotiations for the sale of additional acreage to the Parkway Authority. This culminated in a sale in September 1954, again at $6,000 per acre. The remaining land consisted of some 72 or 73 acres which, for descriptive purposes, can be conveniently divided into three parcels. The largest of these consisted of some 55.8 acres bordered roughly on the west, south, and southwest by Mitchel Field, on the east by Meadowbrook State Parkway, and on the north by the tracks of the Long Island Railroad which are located a good distance south of Stewart Avenue. The major portion of this parcel is involved in this proceeding. The next parcel in size consisted of a rectangular area of some 12.5 acres in size located between the railroad tracks and Stewart Avenue. This parcel, together with 7 acres of the larger parcel which were located south of and fronting on the railroad tracks, was eliminated from the taking; and the court awarded Meadow Brook $13,592 for use and occupancy of this area during the period between the filing of the complaint (and the original order of possession) and the declaration of taking. The third parcel, some 4.5 acres in area which has never been part of the condemned area, was located to the east of Meadowbrook State Parkway and fronted on Merrick Avenue, a well used local road which intersects with Stewart Avenue. It was eventually sold to Granick Company, Inc., some six months after the complaint was filed in this proceeding. Prior to the sale of the 160 acres to the Parkway Authority all of the Club’s property was zoned for residential use. But when it became obvious that the Club would have to move its operations, its Board of Directors decided to petition for a change of the zoning classification of the remaining property (the three parcels described above) to industrial use in order to realize higher prices on sale. Evidence established at the trial showed that an industrial classification was consistent with the surrounding area, which for some years gradually had been becoming an industrial area. To this end Meadow Brook filed a petition with the Town Board of the Town of Hempstead in May 1954, but hearings on the proposed change were adjourned until the following September. When the matter was finally heard on September 14, 1954, the air force, an adjoining landowner, objected to the rezoning and the Board reserved decision urging the parties to adjust the matter if possible. Before any further action was taken by the Board, however, this proceeding was begun. Thus at the time of the taking the property was zoned for residential use only. At the trial Meadow Brook sought to establish the value of the tract as industrial property. Its experts testified on the basis of sales of industrial property in the vicinity and estimated that prior to the taking the entire remaining property, excluding the 4.5 acres fronting on Merrick Avenue, was worth $2,174,-000; that after the taking the 19.5 acres severed from t?ie original area and still in the hands of Meadow Brook were worth $640,000; and that the difference, $1,534,000, represented $70,000 in severance damages (or $10,000 an acre for the severed portion south of the railroad tracks) and $1,464,000 (or $30,000 an acre) as the value of the condemned 48.8 acres. On the other hand, the expert who testified for the United States valued the property as residential and concluded that it was worth $414,800 (or some $8,500 per acre). He relied on a number of sales involving substantial acreage, including the two sales by Meadow Brook to the Parkway Authority at $6,000 per acre and other sales which indicated values between $7,000 and $11,500 per acre. The court, D.C.E.D.N.Y., 149 P.Supp. 749, 753, after considering “the zoning restrictions on use as they existed and the possibility or probability of a change to industrial use in the reasonably near future, in the light of all the testimony presented,” valued the 48.8 acres at $488,000 (or $10,000 per acre). Just compensation compatible with the requirements of the Fifth Amendment is the fair market value of the condemned property just prior to the taking. United States ex rel. Tennessee Valley Authority v. Powelson, 319 U.S. 266, 63 S.Ct. 1047, 87 L.Ed. 1390; United States v. Miller, 317 U.S. 369, 374, 63 S.Ct. 276, 87 L.Ed. 336, 147 A.L.R. 55; MeCandless v. United States, 298 U.S. 342, 56 S.Ct. 764, 80 L.Ed. 1205. This evaluation should reflect not only the purpose for which the property has theretofore been used, but other uses which might render it more profitable. Olson v. United States, 292 U.S. 246, 54 S.Ct. 704, 708, 78 L.Ed. 1236. It would be improper to value the property as if it were actually being used for the more valuable purpose. But the “extent that the prospect of demand for such use affects the market value while the property is privately held” should enter into the calculation. Olson v. United States, supra, 292 U.S. 246, 255, 54 S.Ct. 704, 78 L.Ed. 1236. Obviously the more profitable operation must be one allowed by law to be carried out on the premises. Thus if existing zoning restrictions preclude a more profitable use, ordinarily such use should not be considered in the evaluation. Westchester County Park Commission v. United States, 2 Cir., 143 F.2d 688, certiorari denied 323 U.S. 726, 65 S.Ct 59, 89 L.Ed. 583. On the other hand if there is a reasonable possibility that the zoning classification will be changed, this possibility should be considered in arriving at the proper value. This element, too, must be considered in terms of the extent to which the “possibility” would have affected the price which a willing buyer would have offered for the property just prior to the taking. The court below stated that it applied these principles in arriving at its decision. There is nothing in the record to support Meadow Brook’s intimation that the judge did not carry out in good faith his own expressed intent. Thus we conclude that the court applied the correct legal principles to reach its result. United States v. Certain Parcels of Land in City of Philadelphia, 3 Cir., 215 F.2d 140. Meadow Brook contends that in any event the rules stated above have no application to this situation. It claims that the property should have been valued as if it had already been rezoned for industrial use at the time of the taking because of the alleged imminence of such rezoning. Its theory is that but for the opposition of the air force before the Town Board the property undoubtedly would have been rezoned, thus allowing more profitable use. In support of this argument it points to the many parcels in the surrounding area which have been rezoned, including the tracts sold by it to the Old Country Trotting Association and Granick Company, Inc., its 12.5-acre parcel north of the condemned land, and other areas in the near vicinity. But this argument depends on the motive which led the air force to oppose Meadow Brook’s application before the Board. Clearly the United States, like any adjoining landowner, was a proper party to resist rezoning. Meadow Brook realized this when it took as part consideration for the sale of acreage to the Jones Beach State Parkway Authority the latter’s agreement not to resist the Club’s efforts to rezone the remaining property. If the air force had a proper motive, this well might have precluded rezoning at any time. Thus if the height of proposed factories or the congestion attendant on industrial concentration would have created undue flight hazards for the nearby runways, it is possible — in fact probable — that the property never would have been rezoned had a taking not occurred. Cf. United States v. Delano Park Homes, 2 Cir., 146 F.2d 473. But it is also clear that if the government’s sole motive in resisting the change in zoning was to depress the market value of the property which it then intended to condemn, the court’s estimate of the probability of rezoning (as a factor entering into the ultimate calculation of value) should not have reflected this opposition. In re Inwood Hill Park, 230 App.Div. 41, 243 N.Y.S. 63, affirmed 256 N.Y. 556, 177 N.E. 138. See also Monongahela Navigation Co. v. United States, 148 U.S. 312, 13 S.Ct. 622, 37 L.Ed. 463. The record, however, fails to support Meadow Brook’s charge of bad faith; and the court’s finding that the government’s opposition was based in large part on the fear of flight hazards finds ample support in the evidence. Thus to arrive at the fair market value at the time of the taking the court had to consider the probability that the air force would eventually withdraw its opposition and that the Town Board would otherwise grant Meadow Brook’s petition. On the record we cannot say that the court failed properly to take all of these factors into account. In the light of the court’s proper treatment of the effect of the zoning restrictions on the property, it is apparent that there is substantial evidence in the record to support the court’s valuations. This was an interior plot, with no direct access to nearby roads. It was large and irregular, bounded on three sides by Mitchel Field. Certainly this proximity detracted from its value for residential or industrial purposes, especially in the light of the probable restrictions which would have been imposed because of the increased air activity. Although Meadow Brook through its experts introduced evidence relating to the value of nearby property used for industrial purposes, most of these tracts were not comparable to the one involved here. In addition to being located further from the airfield, most of them were smaller in size and had direct access to adjacent roads. On the other hand, evidence introduced by the United States indicated a value lower than that settled upon by the court. Meadow Brook also raises a number of specific objections relating to the admission and exclusion of certain items of evidence which we shall deal with briefly. The most important one was the exclusion of evidence of the sale by Meadow Brook of its 4.5-acre tract to Granick Company, Inc. This sale occurred in March 1955, some six months after the filing of the complaint, for a price of $85,000. Probably it would have been wiser for the court to have admitted this evidence. Cf., e.g., United States v. 63.04 Acres of Land, 2 Cir., 245 F.2d 140, with its later holding, 2 Cir., 257 F.2d 68. But we find no prejudicial error in its exclusion, for this parcel was substantially unlike the condemned land. First, it was much smaller in size and fronted on Merrick Avenue. Second, its price reflected industrial use, for the sales contract made the transaction contingent on a change in zoning from residential to industrial. Third, the sale occurred well after the crucial date of the government’s taking possession. United States v. Dow, 357 U.S. 17, 78 S.Ct. 1039, 2 L.Ed.2d 1109. Meadow Brook’s next objection is to the admission of evidence concerning the sale by it of adjacent property to the Parkway Authority for $6,000 per acre. It contends that this evidence was irrelevant, because these were forced sales made under threat of eondemna tion. There is nothing in the court’s opinion which indicates that it gave controlling weight to these sales; and we would be hesitant to rule that a court, sitting without a jury, committed any sort of error in admitting and considering such evidence for what it is worth. This is especially true because Meadow Brook’s president testified as to facts which allegedly accounted for the depressed price. Moreover, it is quite ridiculous to contend, as does Meadow Brook, that the government’s appraiser should have ignored such sales in reaching his conclusion as to the worth of the remaining land. Obviously this is a relevant factor which he should have taken into consideration. United States v. Delano Park Homes, supra, 2 Cir., 146 F.2d 473. Next Meadow Brook claims that the court erroneously considered as an admission against interest a letter offered in evidence by the Club which contained a statement that it had been offered up to $1,000,000 for its property. It has been said that offers to buy the condemned tract (unlike offers to sell) are not probative evidence of land value in a condemnation proceeding. Sharp v. United States, 191 U.S. 341, 24 S.Ct. 114, 48 L.Ed. 211. Whatever be the rule here, there is no indication that the court considered this letter as independent evidence of value. In any event the statement certainly was relevant to cheek the credibility of Meadow Brook’s experts, who valued a lesser portion of the property at more than twice the amount stated in the communication. Lastly, Meadow Brook objects to the court’s failure to award severance damages and to the alleged inadequacy of the compensation for use and occupancy of the severed parcels. We find no error in either of the court’s conclusions. Meadow Brook offered nothing persuasive to show that the 7~acre tract was less valuable as a separate parcel than it was as part of the larger area. Neither before nor after the severance did this tract have direct access to nearby roads. And the decrease in size, for all we are told, might have enhanced, rather than decreased, its value. As to compensation for use and occupancy, Meadow Brook takes no exception to the formula applied by the court, but only to the land value to which the formula was applied. But here, as before, the evidence adequately supports the court’s conclusion as to value. Meadow Brook’s final point, that the court’s findings were inadequate, is without merit. The decision adequately sets forth the essential facts upon which its conclusions are based. And unlike the findings in United States v. Bobinski, 2 Cir., 244 F.2d 299, these show without ambiguity the method which the court employed in reaching its valuations. See United States v. Bobin-ski, 2 Cir., 254 F.2d 686. In the simple and uncomplicated federal practice there is no provision for cross-examining a judge upon his decision through the guise of making him pass upon draft findings; suggestions from counsel as to findings are limited to aiding, not harassing, the court. Consequently Meadow Brook’s separate appeal from the order denying its motion for some fifty-one additional findings is particularly fruitless.

6105121-15368

MEMORANDUM OPINION I. Jurisdiction of the Court WESLEY W. STEEN, Bankruptcy Judge. This is a proceeding arising under Title 11 U.S.C. The United States District Court for the Middle District of Louisiana has original jurisdiction pursuant to 28 U.S.C. § 1334(b). By Local Rule 29, under the authority of 28 U.S.C. § 157(a), the United States District Court for the Middle District of Louisiana referred all such cases to the Bankruptcy Judge for the district and ordered the Bankruptcy Judge to exercise all authority permitted by 28 U.S.C. § 157. This is a core proceeding as defined in 28 U.S.C. § 157(b)(2)(A) and (G); pursuant to 28 U.S.C. § 157(b)(1), the Bankruptcy Judge for this district may hear and determine all core proceedings arising in a case under Title 11 referred under 28 U.S.C. § 157(a), and the Bankruptcy Judge may enter appropriate orders and judgments. No party has objected to the exercise of jurisdiction by the Bankruptcy Judge. No party has filed a motion for discretionary abstention pursuant to 28 U.S.C. § 1334(c)(1) or pursuant to 11 U.S.C. § 305. No party filed a timely motion for mandatory abstention under 28 U.S.C. § 1334(e)(2). No party has filed a motion under 28 U.S.C. § 157(d) to withdraw all or part of the case or any proceeding thereunder, and the District Court has not done so on its own motion. II. Facts of the Case The Debtor is a Louisiana corporation engaged in a business known as a “Builder’s Center”; the Debtor conducts its business in premises that it leases, land and buildings, from William and Sylvia Juneau (hereinafter “Juneau”). Juneau also owns 100% of the Debtor’s equity interests. Juneau gave a mortgage on the leased premises to secure Juneau’s note to the First National Bank of Gonzales (hereinafter the “Bank”); the note is in default. Juneau is not a debtor in any case before the bankruptcy court. The Bank began foreclosure proceedings in state court against Juneau subsequent to the date on which the Debt- or’s petition was filed. No written lease between the Debtor and Juneau was alleged nor was one introduced into evidence; there is no allegation or proof that there is a lease with a fixed term. No rent was alleged or proved, either as due or as having been paid. However, the uncontradicted assertion and testimony is that the Debtor leases 4.29 acres from Juneau. Therefore, the Court finds as fact that there is a lease of the premises for an unspecified term at a rental not shown at trial, under which rentals may or may not have been paid and may or may not be due. Testimony at trial established that the Debtor only occupies part of the 4.29 acres. The remainder is occupied by several other retail establishments whose owners also lease their premises from Juneau. Valuation testimony was vague. The property might or might not be worth enough to protect the creditor adequately with an “equity cushion.” For reasons set forth below, the Court need not make a finding of fact at this time with regard to this issue. The Debtor filed this complaint seeking (i) damages for violation of the stay imposed by 11 U.S.C. § 362; and (ii) an injunction under § 105 to prevent further foreclosure proceedings. The Court declined to issue the injunction and denies the prayer for damages. The complaint was dismissed by order entered July 29, 1985. III. No Violation of the Stay The Defendant’s foreclosure action was a proceeding to collect a debt owed by Juneau; its objective was foreclosure on Juneau’s property. Section 362(a) prohibits actions against the debtor, actions against property of the debtor, and actions against property of the estate. Since there was no act or an action against the Debtor, against the property of the Debtor, or against property of the estate, there was no violation of the stay. IV. An Injunction is not Appropriate The stay effected by § 362 is a carefully balanced instrument to protect the Debtor and its creditors. The statutory stay involves institutional and statutory safeguards that govern the administration of the estate. These institutional and statutory safeguards include the stay of all creditors and actions against property of the estate, the requirement of court approval for substantial transactions by the beneficiary of the stay, and the provision of information about the Debtor and creditor participation in the debtor’s financial affairs. The safeguards afford at least minimal protection against harm resulting directly from the stay. Only with great caution should a court grant an injunction under § 105 that effectively extends the stay to actions against third parties because such an extension is necessarily naked of the protections carefully woven into § 362. In addition to the protection concomitant with the § 362 stay, the stay must, in some sense, be “earned” by the beneficiary of the stay submitting to the invasive authority of the bankruptcy court into his private financial life. This requirement assures a comprehensive commitment of the beneficiary’s assets to the satisfaction of his obligations, a fundamental aspect of the debt- or/creditor readjustment process that justifies the extraordinary effect of a stay of creditor pursuit of self-interest. Absent such comprehensive jurisdiction and control over the debtor, the potential for debtor mischief is substantial, too substantial to invoke an injunction absent truly unusual circumstances. There is a contrary line of cases, most of which follow In re Otero Mills, 21 B.R. 777 (Bkrtcy., D.N.M., 1982). The bankruptcy court in that case enjoined a bank from taking a judgment against the debtor’s president and stockholder; the officer’s liability was as guarantor of the debtor’s indebtedness. The court held that § 105 of the Bankruptcy Code allows a bankruptcy court on complaint by the debtor to enjoin creditor actions against third parties when the debtor demonstrates: “(1) Irreparable harm to the bankruptcy estate if the injunction does not issue; “(2) Strong likelihood of success on the merits;” [the court apparently had in mind the successful confirmation and perhaps consummation of a plan of reorganization] and “(3) No harm or minimal harm to the other party or parties.” 21 B.R. 777, 779. These three criteria for issuance of an injunction are the most often cited parts of the case. Often overlooked is the reasoning by which the court concluded that it had authority to issue the injunction. The court recited that § 105 authorizes the bankruptcy court to act as necessary to carry out title 11; that power, reasoned the court, in accord with prior authority, includes the power to enjoin. The court then said that the power to enjoin actions against co-debtors or guarantors is limited: “To so enjoin a creditor’s action against a third party, the court must find that failure to enjoin would affect the bankruptcy estate and would adversely or detrimentally influence and pressure the debt- or through that third party ... This power to enjoin assures that a creditor may not do indirectly that which he is forbidden to do directly.” 21 B.R. 777, 778. Before considering the validity of the reasoning in Otero Mills, it is instructive to classify the cases that have followed its reasoning. The first group of cases (the “secondary liability” cases) involves third parties who are secondarily liable on obligations for which the debtor is primarily liable; in these cases the third parties are guarantors and sureties. The second group of cases (the “derivative liability” cases) is closely related; in this group of cases, the third party has independent liability, but only in legal concept. In financial origin, the third party’s liability derives from the debtor’s financial troubles. The third group of cases (the “related party” cases) involves true independent liability; the third party’s obligation is truly independent of the debtor, but the third party is related to the debtor in such a way that an injunction is sought on the grounds that pursuit of the related third party would somehow affect the estate. Otero Mills is the quintessential example of the secondary liability cases. The theme in this classification is that collection against the third party should be stayed because the principal obligor (the debtor) will pay the obligation through the plan. Not only did the debtor in Otero Mills assert that the indebtedness was to be satisfied under the plan, it also alleged that the plan would call for sale of the third party’s asset and the contribution of the sales proceeds to the estate for payment of creditors; it was this asset on which the bank wanted to foreclose; the injunction would, allegedly, preserve this asset for the benefit of the foreclosing creditor, the other creditors, and the debtor as well as the third party. When there was no proposed contribution of the third party’s property to the estate, an injunction was denied; it is insufficient merely to assert that an injunction is needed to prevent the officer/shareholder/guarantors from spending time defending against personal liability instead of devoting their attention to the debtor’s business. “... the mere status of the non-debtor as a principal of the debtor has been held as insufficient justification for staying litigation against him.” In re Keyco, Inc., 13 BCD 25, 27 (Bkrtcy., E.D.N.Y., 1985). The derivative liability cases differ from the secondary liability cases in that the third party’s liability is separate from the debtor’s obligations; the derivative liability cases differ from the independent liability cases in that the third party’s liability is a result of the debtor’s financial problems. One of these derivative liability situations is the responsible officer penalty for employment taxes. One court has enjoined collection of the penalty, In re the Original Wild West Foods, Inc., 45 B.R. 202 (Bkrtcy., W.D.Tex.,1984). Another court declined the request to do so: In re O.H. Lewis Co., Inc., 40 B.R. 531 (Bkrtcy., D.N.H., 1984). An injunction will not issue to prohibit state court determination and collection of the alleged independent liability of a corporate officer in tort for knowingly issuing a debtor’s worthless check. In re Sondra, 44 B.R. 205 (Bkrtcy., E.D. Pa., 1984). In the third group of cases, the third party is related to the debtor, but the cause of action asserted against the third party is not directly involved with the debtor or the estate. The court, In re Venture Properties, 37 B.R. 175 (Bkrtcy., D.N.H., 1984) declined to issue an injunction to protect a non-debtor partnership’s property merely because the debtor was the general partner. But in Lion Capital Group, 44 B.R. 690 (Bkrtcy., S.D.N.Y., 1984) the court enjoined a fraud action against related parties because failure to stay the litigation would result in irreparable injury to the bankruptcy estate resulting from collateral estopped on cause of action also being litigated by the debtor and because of inability of the debtor to conduct discovery. There would appear to be no common thread running through these cases. The cases that grant an injunction state that they do so to prevent irreparable injury to the estate; Lion Capital and Otero Mills are the best examples. The proof of this irreparable injury has been less than overwhelming. In Otero Mills, the proof consisted merely of a contention that a plan would be filed, that the plan would call for an orderly sale of the third party’s property, that such an orderly sale would produce a greater price than a foreclosure sale, and that the plan yet to be filed would call for the greater price to be contributed by the third party to the debtor to effect a reorganization; since a plan had not yet been filed, no doubt the proof of this claim was slim. Otero’s point of departure is reasonable: an injunction is available only in limited circumstances to protect a third party, and those limited circumstances require a showing that the bankruptcy estate will be adversely affected. But the most important part of Otero’s fundamental assumptions is the concept that to warrant an injunction, the adverse influence must be such to effectively pressure the debtor through a third party to accomplish indirectly what the creditor may not accomplish directly. To get an injunction against a creditor prohibiting an action against a third party, therefore, the debtor must show that the creditor is not pursuing his legitimate right to collect from the third party, but rather is using the action against the third party primarily to pressure the debtor. One can imagine the possibility of frivolous lawsuits, harassing conduct, actions that have no potential for recovery even if successful; no doubt there are other possibilities. Merely to allege that the action against the third party has an adverse effect on the debtor, however, is insufficient. Most likely all actions against related parties impact the debtor adversely. The three so-called tests in Otero Mills (irreparable injury, likelihood of success on the merits, no harm to party enjoined) are also insufficient. They are reasonable tests for the issuance of any injunction. But the question of injunctions under § 105 against third party actions goes to the issue of jurisdiction under the Bankruptcy Code and the breadth to be given that law. That is an issue requiring more analysis than merely whether the court should act. The privilege of a stay against creditor action should carry with it the burden of debtor regulation; one without the other is inappropriate. Because of the grounds for this ruling, this adversary proceeding will be dismissed. . All statutory references later in this opinion are to Title 11, United States Code, unless otherwise indicated. The Debtor alleged that Defendant violated the stay by attempting to foreclose on Juneau’s property after the Debtor’s Chapter 11 petition was filed. The Debtor alleged that such action is a violation of the stay because the Debtor leases the property from Juneau. .Lynch v. Johns-Manville, 710 F.2d 1194 (6th Cir.,1983). Referring to § 362(a), the court said: "... said provision facially stays proceedings 'against the debtor' and fails to intimate, even tangentially, that the stay could be interpreted as including any defendant other than the debtor ...” 710 F.2d 1194, 1196. The court continued: “Nothing in the legislative history counsels that the automatic stay should be invoked in a manner which would advance the interests of some third party ... rather than the debtor or its creditors. This Court concurs with the district court’s conclusion that ‘it would distort congressional (sic) purpose to hold that a third party solvent co-defendant should be shielded against his creditors by a device intended for the protection of the insolvent debtor’ and creditors thereof.” 710 F.2d 1194, 1197. Lynch is easily distinguishable on its facts because the plaintiffs in that case could easily proceed without effect on the debtor; in the case at bar, after foreclosure there might well have been an action to evict. The present issue, however, is whether the foreclosure, per se, was a violation of the stay. The Lynch reasoning is persuasive. Whether a subsequent eviction without relief from the stay would have constituted a violation of the stay is not now before the Court. . See §§ 361, 362(d) and (e).

11753253-23143

OPINION The bankruptcy court, interpreting 11 U.S.C. § 365(d)(3), held that the Debtor’s landlord was entitled to a full month’s rent when the Debtor rejected a nonresidential lease and vacated the property on the second day of the month. We agree and affirm. I.ISSUE ON APPEAL Whether 11 U.S.C. § 365(d)(3) requires a debtor that rejects a nonresidential lease on December 2 to pay in full one month’s rent that became due on December 1. II.JURISDICTION AND STANDARD OF REVIEW The United States District Court for the Northern District of Ohio has authorized appeals to the BAP. The bankruptcy court’s order requiring the Debtor to pay one month’s rent under § 365(d)(3) is a final appealable order. See In re Handy Andy Home Improvement Ctrs., Inc., 144 F.3d 1125 (7th Cir.1998). Interpretation of § 365(d)(3) is a question of law reviewed de novo. Andersson v. Security Fed. Savs. & Loan (In re Andersson), 209 B.R. 76, 77 (6th Cir. BAP 1997). III.FACTS Koenig Sporting Goods, Inc. (“Koenig” or “Debtor”) operated retail sporting good stores in leased spaces in shopping centers. Koenig filed Chapter 11 in August of 1997. It sold many locations during the Chapter 11 case and, after liquidating inventory, rejected leases at its remaining stores. Morse Road Company was the landlord for a rejected lease. Rejection of the Morse Road lease was effective on December 2, 1997. The Debtor vacated the property that day. According to the lease, monthly rent of $8,500 for December 1997 became due on December 1, 1997. This rent was “payable in advance on the first (1st) day of each and every calendar month.” (App. at 8) (Lease Agreement Between Morse Road Co. and Koenig Sporting Goods, Inc. at ¶ 5(a)). Morse Road demanded payment of $8,500 for the month of December, citing 11 U.S.C. § 365(d)(3). The Debtor responded that it was in possession for only two days in December 1997 and the rent should be prorated, producing a recovery of approximately $550. The bankruptcy court thoughtfully analyzed the conflicting case law interpreting § 365(d)(3) and concluded that “section 365(d)(3) was, at the least, intended to assure the landlord payment of ordinary monthly rent payments which become due during the postpetition prerejection period.” In re Koenig Sporting Goods, Inc., 221 B.R. 737, 740-41 (Bankr.N.D.Ohio 1998). The bankruptcy court acknowledged that requiring the Debt- or to pay a full month’s rent for December “would impinge to some extent upon normal bankruptcy principles and priorities,” but concluded that this dissonance was compelled by the choices Congress made when it enacted § 365(d)(3) in 1984 to protect nonresidential landlords from debtors in bankruptcy. Id. at 741. The bankruptcy court reserved the possibility that on other facts § 365(d)(3) might require “some discretion” to avoid “severe[ ] distortion of] fundamental bankruptcy principles.” Id. The Debtor timely appealed. IV. DISCUSSION The plain language of § 365(d)(3) fully supports the bankruptcy court’s conclusion that the Debtor must pay one month’s rent that became due under its lease on December 1, 1997. Section 365(d)(3) provides: The trustee shall timely perform all the obligations of the debtor, except those specified in section 365(b)(2), arising from and after the order for relief under any unexpired lease of nonresidential real property, until such lease is assumed or rejected, notwithstanding section 503(b)(1) of this title. 11 U.S.C. § 365(d)(3). The Morse Road lease is typical in its requirement that the Debtor pay rent in advance on the first day of each month. The requirement to pay one month’s rent on December 1 was an “obligation of the debtor” that arose after the order for relief and (one day) before the lease was rejected. Writing on a clean slate, we would prudently end our analysis with this plain language application of § 365(d)(3). The slate, however, is hardly clean. The bankruptcy court succinctly summarized the many reported decisions interpreting § 365(d)(3): There is a conflict in the cases as to whether section 365(d)(3) compels a debtor to pay all rent and other charges which become due under a lease during the post-petition prerejection period or whether, instead, it requires the debtor to pay only the rent and charges allocable to that period. Compare Santa Ana Best Plaza, Ltd. v. Best Prods. Co. (In re Best Prods. Co.), 206 B.R. 404, 406 (Bankr.E.D.Va.1997), with In re Krystal Co., 194 B.R. 161, 163 (Bankr.E.D.Tenn.1996).... [T]he courts have framed the issue as whether section 365(d)(3) by its terms clearly compels the debtor to pay in full obligations becoming due postpetition but prerejection, even though allocable to another time period, or whether its terms are sufficiently malleable to permit the court to construe them to require payment only of rent and other charges allocable to the postpetition prere-jection period. Koenig Sporting Goods, 221 B.R. at 738. Although the cases do not divide perfectly, the two approaches to § 365(d)(3) can be described as the Accrual (Allocation/Pro-ration) Approach (majority) and the Billing Date Approach (minority). A statement of the Billing Date Approach would be that any amount coming due under a lease in the postpetition, prerejection period must be paid in full by the debtor without regard to whether the payment pertains to a prepetition or postrejection benefit. Decisions that adopt the Billing Date Approach include Inland’s Monthly Income Fund, L.P. v. Duckwall-ALCO Stores, Inc. (In re Duckwall-ALCO Stores, Inc.), 150 B.R. 965 (D.Kan.1993) (holding that § 365(d)(3) is clear and unambiguous in requiring that the debtor comply with all obligations arising under the lease after the petition); In re Krystal Co., 194 B.R. 161, 163 (Bankr.E.D.Tenn.1996) (holding a plain reading of § 365(d)(3) precludes an accrual and pro-ration analysis); In re F & M Distribs., Inc., 197 B.R. 829, 832 (Bankr.E.D.Mich.1995) (“[B]ecause § 365(d)(3) is unambiguous, this Court must follow its plain language without regard to any equitable or policy considerations.”); and In re Appletree Markets Inc., 139 B.R. 417, 420 (Bankr.S.D.Tex.1992) (“[T]he plain meaning of Section 365(d)(3) provides for payment of obligations arising after the petition is filed, not before.”). Under the Accrual Approach, a debtor is required by § 365(d)(3) to pay only those sums coming due under a lease during the postpetition, prerejection period that pertain to benefits realized by the estate during that period. Under the Accrual Approach a debt- or is not required to pay for any benefit conferred before the petition is filed or after rejection occurs regardless of when the payment for that benefit became due under the lease. Decisions adopting some form of the Accrual Approach include Newman v. McCrory Corp. (In re McCrary Corp.), 210 B.R. 934, 940 (S.D.N.Y.1997) (“[T]he debtor-tenant’s obligations under the lease to pay real estate taxes accrues on a daily basis and ..., under § 365(d)(3), postpetition bills must be prorated so that the debtor only pays those charges accruing during the postpetition, prerejection period.” (footnote omitted)); Child World, Inc. v. Campbell/Massachusetts Trust (In re Child World, Inc.), 161 B.R. 571, 576 (S.D.N.Y.1993) (holding § 365(d)(3) only requires timely payment of lease obligations billed during the postpetition, prerejection period, that actually cover the postpetition, prerejection period); In re Victory Markets, Inc., 196 B.R. 6 (Bankr.N.D.N.Y.1996) (adopting Accrual Approach and finding that § 365(d)(3) is ambiguous in context of a lease obligation to reimburse a landlord for real estate taxes); In re Almac’s, Inc., 167 B.R. 4, 8 (Bankr.D.R.I.1994) (addressing “the appropriate formula for determining when a tax obligation arises, for purposes of payment under § 365(d)(3)”); and In re Revco D.S., Inc., 111 B.R. 626, 629 (Bankr.N.D.Ohio 1989) (“Ail percentage rent earned from the beginning of the bankruptcy administration to the end of the Lease year should be paid as .... a postpetition expense of the Debtors’ estate [under § 365(d)(3).]” No portion relating to the prepetition period is allowed under § 365(d)(3).) See also Handy Andy, 144 F.3d at 1128 (adopting neither approach but holding that an “obligation to pay or reimburse the taxes that accrued prepetition is a prerather than post-petition obligation_ There is no indication that Congress meant to go any further than to provide a landlord exception to 503(b)(1), and thus no indication that it meant to give landlords favored treatment for any class of prepetition debts.”). The argument for the Billing Date Approach was ably stated in Krystal Company: The most natural reading of § 365(d)(3) leads to the conclusion that Congress meant to require payment of all the debt- or’s obligations falling due under its lease until such time as the debtor rejects the lease in question. Essentially the statute requires the debtor to “timely perform” its “obligations ... under any unexpired lease .... ” until the lease has been assumed or rejected. That language clearly includes tax reimbursement payments to the landlord if and when called for by the lease. The problem is caused by the additional language of the statute, “arising from and after the order for relief,” which modifies the word “obligations.” Courts adopting the accrual theory believe this language allows them to adhere to the pre-1984 (presection 365(d)(3)) practice of prorating taxes between the prepetition and prere-jection periods because they mistakenly assume that the “arising from” language of the statute means that the obligation must somehow arise from the prerejection period — that is, be an administrative expense — before the obligation is payable. This court disagrees because other language within the statute, “notwithstanding section 503(b)(1) of this title,” directly precludes viewing such obligations as administrative expenses. The “notwithstanding” phrase means that the obligations in question are to be paid “in spite of’ the operation of § 503(b)(1), which would otherwise limit postpetition payments to those necessary for “preserving the estate.” Thus, these prerejection obligations are not to be viewed as administrative expenses, but as obligations to be “timely performfed]” under the lease. Moreover, since the payment of these obligations is not designed to preserve the estate (but rather the vulnerable landlord), the concepts of accrual, pro-ration and allocation — so necessary for distinguishing between prepetition debts and administrative expenses in the context of § 503(b)(1) — are irrelevant and inapplicable under § 365(d)(3). That § 365(d)(3) was designed to protect the landlord rather than the estate by disarming § 503(b)(l)’s practices and procedures may be readily seen in the legislative history of § 365(d)(3).... [Remarks of Sen. Hatch reprinted below.] Senator Hatch’s remarks avoid the confusing “arising from and after” language of § 365(d)(3) and significantly make no mention of the concepts of accrual or proration of charges. There is no mention of “actual or necessary” expenses as might be expected if § 503(b)(1) were still operative. There is only the categorical “timely performance requirement” as an antidote to the problems “caused ... by the administration of the bankruptcy code.” When read in conjunction with the statute as it must be, this “problem” language can only refer to § 503(b)(1), for that is the subsection specifically overridden by the amendment. Section 503(b)(l)’s essential concepts, accrual and proration, cannot be shown to have survived in § 365(d)(3), where they are unnecessary on a plain reading of the statute, and it makes no sense to force them. The legislative solution to a problem need not necessarily be a perfect solution, and there are doubtless cases that can be imagined in which the court’s reading of the statute in question might produce dubious results, as where rent or some other lease obligation is payable in one yearly installment, or perhaps every several years. Actually, these situations are not nearly as serious as they might seem at first blush, and policy arguments based on supposed anomalous results ... overlook remedies already available in the Code. From a reading of the statute and its legislative history, it appears that Congress specifically intended to except a tenant’s lease obligations to his landlord from the workings of the Code’s administrative expense provisions because Congress believed nonresidential landlords and their other solvent tenants were particularly vulnerable creditors under the old procedures. Rather than forcing the landlord to take the initiative, apply for, and wait for an administrative expense allowance, as it was required to do before 1984, Congress intended § 365(d)(3) to shift the burden of indecision to the debtor: the debtor must now continue to perform all the obligations of its lease or make up its mind to reject it before some onerous payment comes due during the prerejection period. That is a sensible adjustment of this particular debt- or-creditor relationship. Krystal Co., 194 B.R. at 163-64 (internal citations omitted). The rationale behind the Accrual Approach is fully stated in MeCrory: While the term “obligation” itself may be unambiguous, the language of § 365(d)(3) simply does not answer the question at hand. The phrase “arising from and after the order for relief under any unexpired lease of nonresidential real property” is far from clear. Nor is it clear whether the phrase “until such lease is assumed or rejected” limits the “obligation” in question to those actually accruing before rejection. Accordingly, I find it useful to turn to the legislative history of § 365(d)(3), as well as the overall operation of the Code, for guidance in construing § 365(d)(3). In recent cases interpreting the Bankruptcy Code, the Supreme Court has tempered its application of the plain meaning rule, particularly when it would effect a major change in practice under the Code as it existed at the time, unless there is support for such a change in the legislative history. As the Second Circuit has explained: When Congress amends the bankruptcy laws, it does not write on a clean slate.... Furthermore, [the Supreme Court] has been reluctant to accept arguments that would interpret the Code, however vague the particular language under consideration might be, to effect a change in pre-Code practice that is not the subject of at least some discussion in the legislative history. In re Klein Sleep Prods., Inc., 78 F.3d 18, 27 (2d Cir.1996) [ (citation omitted) ]; In re R.H. Macy & Co., Inc., 170 B.R. 69, 73 (Bankr.S.D.N.Y.1994) (“even within the fluctuating walls of the ‘plain meaning’ for tress a court should not resolve questions of statutory interpretation so that a particular Bankruptcy Code section conflicts and disturbs the overall purpose and function of the Code”) (citations omitted)[.] Here, neither the language of the statute nor the legislative history reveals a Congressional intent to deviate from the pre-amendment practice of prorating lease obligations pending rejection, other than to require “current payment” for “current services.” Rather, “Congress enacted § 365(d)(3) to ensure that landlords would not be disadvantaged by providing post-petition services to the debtor. Put another way, Congress intended the subsection to put landlords on an equal footing, not to grant them a windfall at the expense of other creditors.” The approach followed by the [Billing Date] courts would drastically alter the priority and distribution scheme under the Bankruptcy Code. Reliance strictly on the billing date would result in a windfall either to the landlord or to the debtor-tenant. A windfall would flow to the landlord here if McCrory were required to pay the 1996 real estate taxes in full, since the landlord would have recovered taxes for the coming year and could then relet the property and recover again fully or partially for those same tax bills. At the same time, McCro-ry would be required to pay a year’s worth of taxes even though it was only in possession for one month before the leases were rejected. On the other hand, a windfall would flow to the debtor-tenant where annual taxes for the coming year fell due one day before the petition is filed, and thus get paid pro-rata along with all other unsecured, pre-petition creditors. Neither scenario can be what Congress had in mind when it acted to ensure that landlords received timely payment for the services they were forced to provide pending assumption or rejection of the lease. ... There is no indication that Congress intended to modify pre-Code practice to eliminate proration under these circumstances, in light of any other remedies that might be available under the Code. In contrast, the [Accrual Approach] appears to serve not only the interests of the debtor but those of the landlord and other creditors as well. The majority reasoning is particularly compelling, and the.shortcomings of the minority’s application of the plain meaning rule are especially evident, on the facts before me in this case. In addition, “[t]he bankruptcy court is essentially a court of equity ... [and it] applies the principles and rules of equity jurisprudence.” McCrory, 210 B.R. at 939-40 (internal citations and footnotes omitted). The historical setting mentioned in these quotes is that § 365(d)(3) did not exist until 1984. Prior to 1984, landlords complained that the Code created a “Neverland” between the filing of a bankruptcy case and a debtor’s decision to assume or reject a lease. During this time of indecision, rents and other obligations under leases were sometimes not performed. The resulting debts were sometimes allowed in full as administrative expenses, sometimes reduced to reflect differing notions of “necessity,” “reasonableness” and “benefit” under § 503(b) and sometimes became (in whole or part) ordinary prepetition claims. In 1984, Congress changed the relationship between debtors and their nonresidential landlords. Senator Orrin Hatch’s oft-quoted explanation of § 365(d)(3) provides ammunition for all sides of the § 365(d)(3) debate: A second and related problem is that during the time the debtor has vacated space but has not yet decided whether to assume or reject the lease, the trustee has stopped making payments due under the lease. These payments include rent due the landlord and common area charges which are paid by all the tenants according to the amount of space they lease. In this situation, the landlord is forced to provide current services — the use of its property, utilities, security, and other services— without current payment. No other creditor is put in this position. In addition, the other tenants often must increase their common area charge payments to compensate for the trustee’s failure to make the required payments for the debtor. This bill would lessen these problems by requiring the trustee to perform all the obligations of the debtor under a lease of nonresidential real property at the time required in the lease. This timely performance requirement will insure that debtor-tenants pay their rent, common area, and other charges on time pending the trustee’s assumption or rejection of the lease. 130 Cong. Rec. S8887, S8894-95 (daily ed. June 29, 1984) (remarks of Senator Hatch). The Sixth Circuit has not taken sides in the § 365(d)(3) debate. But in a bankruptcy context with many important similarities, the Sixth Circuit suggested the outcome reached by the bankruptcy court in this case. In Vause v. Capital Poly Bag, Inc. (In re Vause), 886 F.2d 794 (6th Cir.1989), the debtors filed Chapter 11 four days before a lease required a $36,000 annual rental payment for the use of farm land. Concurrently with the petition, the debtors rejected the lease. The lease in Vause, though typical for farm leases, was unusual in that rent for each year was payable once annually in arrears. The landlord filed a proof of claim that included $36,000 for the 361 days of use of the land through the date of the petition. The debtors objected arguing under § 502(b)(6)(B) that there was no “unpaid rent due under such lease” on the petition date because the lease did not require payment until four days after the petition was filed. The Sixth Circuit found the word “due” in § 502(b)(6)(B) to be ambiguous in the context of a lease that made rent payable in arrears: In this peculiar context, “due” could mean “ ‘the mere state of indebtment ... or ... the fact that the debt has become payable.’ ” Id. at 799 (quoting United States v. State Bank of N.C., 31 U.S. (6 Pet.) 29, 36, 8 L.Ed. 308 (1832)). The court consulted legislative history, other canons of statutory construction and equitable considerations, ultimately concluding that the landlord was entitled to 361 days of “accrued” prepetition rent. But the Sixth Circuit was careful in Vause to state that the ambiguity it found in § 502(b)(6) would not arise if the lease required payments in advance. As stated by the court, “Section 502(b)(6) is not difficult to apply when a lease does not make rent payable in arrears. It limits a lessor’s claim to actual past damages for unpaid rent due under the lease.... The problem arises when lease payments are payable in arrears.” Id. at 798-99 (footnote omitted). The analytical framework in Vause is useful here and supports the bankruptcy court’s conclusion. The meaning of “obligations ... arising ... under any unexpired lease” in § 365(d)(3) is not ambiguous in the narrow context of a lease that required payment of one month’s rent in advance the day before rejection. As the Sixth Circuit counsels in Vause, this interpretation of § 365(d)(3) must be confined to these facts. Left for another day is the question whether ambiguities of interpretation arise under § 365(d)(3) when a nonresidential lease requires substantial payments in arrears or imposes obligations that are fundamentally inconsistent with other provisions of the Bankruptcy Code. Y. CONCLUSION The decision of the bankruptcy court is AFFIRMED. . Appellant argues a second issue for the first time on appeal: that the lease itself limits the landlord’s recovery to two days’ rent. Paragraph 5(b) of the lease provides: (b) If the Lease term shall commence on a day other than the first day of a calendar month or shall end on a day other than the last day of a calendar month, tire minimum rental for such first or last fractional month shall be such proportion of the monthly minimum rental as the number of days in such fractional month bears to the total number of days in such calendar month. Appellate courts ordinarily do not consider issues raised for the first time on appeal. See Zirnhelt v. Madaj (In re Madaj), 149 F.3d 467, 471 n. 4 (6th Cir.1998); Harshbarger v. Pees (In re Harshbarger), 66 F.3d 775, 777 n. 3 (6th Cir.1995). An argument is waived that is not first presented to the bankruptcy court. See Daniel v. AMCI, Inc. (In re Ferncrest Court Partners, Ltd.), 66 F.3d 778, 782 (6th Cir.1995).

9498166-14702

OPINION OF THE COURT RENDELL, Circuit Judge. Carnell Turner seeks our permission to file a second habeas corpus application in the Eastern District of Pennsylvania in an attempt to vacate his 1996 sentence for crack cocaine distribution and conspiracy to distribute crack cocaine. Turner’s proposed habeas corpus application invokes the new rule of constitutional law announced by the Supreme Court in Apprendi v. New Jersey, 530 U.S. 466, 120 S.Ct. 2348, 147 L.Ed.2d 435 (2000). The legal issue presented by this case is whether the new rule found in Apprendi has been “made retroactive to cases on collateral review by the Supreme Court,” such that Turner may file a second habeas corpus application in the District Court. Following the Supreme Court’s recent pronouncements in Tyler v. Cain, — U.S. -, 121 S.Ct. 2478, 150 L.Ed.2d 632 (2001), we hold that Apprendi has not been “made retroactive to cases on collateral review by the Supreme Court,” and accordingly will deny Turner permission to file a second application. I. According to the Antiterrorism and Effective Death Penalty Act of 1996, a second or successive habeas corpus application filed by a federal prisoner like Turner: [M]ust be certified as provided in section 2244 by a panel of the appropriate court of appeals to contain' — • (2) a new rule of constitutional law, made retroactive to cases on collateral review by the Supreme Court, that was previously unavailable. 28 U.S.C. § 2255 ¶8. Section 2244 certification to which this provision refers is described in § 2244(b)(3), which sets forth the procedures and standards for applications in the court of appeals. Under these standards, Turner must make “a prima facie showing that the application satisfies the requirements” of subsection § 2244. Id. § 2244(b)(3)(C). Therefore, reading § 2255 in conjunction with § 2244, Turner must make a “prima facie showing” that his habeas corpus application contains “a new rule of constitutional law, made retroactive to cases on collateral review by the Supreme Court, that was previously unavailable,” in order for us to grant him permission to file his application in the district court. See generally Reyes-Requena v. United States, 243 F.3d 893, 897-99 (5th Cir.2001) (discussing the interplay between § 2255 and § 2244). II. Turner’s application contains an Apprendi claim. In Apprendi, the Supreme Court held, for the first time, that “[ojther than the fact of a prior conviction, any fact that increases the penalty for a crime beyond the prescribed statutory maximum must be submitted to a jury, and proved beyond a reasonable doubt.” Apprendi, 530 U.S. at 490, 120 S.Ct. 2348. For purposes of this opinion, we need not address the intricacies of Apprendi, but suffice it to say that the case has generated quite a stir in the legal community, and has important implications for the conduct of criminal trials and sentencing. See, e.g., id. at 524, 120 S.Ct. 2348 (O’Connor, J., dissenting) (stating that Apprendi “will surely be remembered as a watershed change in constitutional law”); United States v. Mack, 229 F.3d 226, 236 (3d Cir.2000) (Becker, C.J., concurring) (noting that Apprendi’s implications have generated “enormous controversy,” and that Apprendi claims may “reach tidal proportions”). It is not surprising, then, that the parties agree that Apprendi establishes “a new rule of constitutional law.” They also agree that this new rule was “previously unavailable” to Turner, because it was announced more than a year after his first § 2255 motion was decided. Therefore, the only issue we need decide is whether Turner can make a prima facie showing that Apprendi has been “made retroactive to cases on collateral review by the Supreme Court.” Fortuitously, the Supreme Court’s recent decision in Tyler greatly simplifies this inquiry, and dictates our response. In Tyler, which overruled our earlier decision in West v. Vaughn, 204 F.3d 53 (3d Cir.2000), the Court explained that a new rule is not “made retroactive to cases on collateral review” unless the Court itself holds it to be retroactive. Tyler, 121 S.Ct. at 2482. As the Court explained: The Supreme Court does not “make” a rule retroactive when it merely establishes principles of retroactivity and leaves the application of those principles to lower courts. In such an event, any legal conclusion that is derived from the principles is developed by the lower court (or perhaps by a combination of courts), not by the Supreme Court. Id. The government correctly points out that no Supreme Court case specifically holds that Apprendi is retroactive on collateral review, because the Court has yet to consider that precise question. The government concludes that under Tyler, this alone means that we must dismiss Turner’s petition, because only the Supreme Court itself can “make” a ease retroactive on collateral review. The government’s interpretation of Tyler, however, is overly simplistic. Justice O’Connor, who supplied the crucial fifth vote for the majority, wrote a concurring opinion, and her reasoning adds to our understanding of the impact of Tyler. She explains that it is possible for the Court to “make” a case retroactive on collateral review without explicitly so stating, as long as the Court’s holdings “logically permit no other conclusion than that the rule is retroactive.” Id. at 2486 (O’Connor, J., concurring). In other words, contrary to the government’s position, just because the Court has never specifically considered the retroactivity of Apprendi does not foreclose the possibility that the Court has “made” Apprendi retroactive on collateral review. For example, Justice O’Connor explained that: [I]f we hold in Case One that a particular type of rule applies retroactively to cases on collateral review and hold in Case Two that a given rule is of that particular type, then it necessarily follows that the given rule applies retroactively to cases on collateral review. In such circumstances, we can be said to have “made” the given rule retroactive to cases on collateral review. Id. at 2485-86. But Justice O’Connor qualified this approach by explaining that: The relationship between the conclusion that a new rule is retroactive and the holdings that “ma[k]e” this rule retroactive, however, must be strictly logical— i.e., the holdings must dictate the conclusion and not merely provide principles from which one may conclude that the rule applies retroactively. Id. at 2486 (emphasis in original). In sum, under Tyler, it is not enough that the new rule in Apprendi is arguably retroactive; rather, we will grant Turner permission to file a second habeas corpus application in the district court only if Supreme Court holdings dictate the conclusion that the new rule in Apprendi has been made retroactive to cases on collateral review. Turner advances two principal arguments in support of the idea that the Court’s holdings “dictate” that Apprendi applies retroactively on collateral review. First, he argues that the “new rule” announced by Apprendi is a substantive rule (as opposed to a procedural one) and that substantive rules automatically enjoy retroactive effect on collateral review. And second, he argues that Apprendi is an extension of In re Winship, 397 U.S. 358, 90 S.Ct. 1068, 25 L.Ed.2d 368 (1970), which the Supreme Court has held fully retroactive, and therefore by logical necessity, Apprendi must be retroactive on collateral review as well. Neither of these arguments, however, persuades us that the Supreme Court has “made” Apprendi retroactive to cases on collateral review, in the sense that Tyler requires. We agree with Turner that when analyzing a “new rule,” the first question to ask is whether the rule is substantive or procedural in nature, because “the Supreme Court has created separate retroactivity standards for new rules of criminal procedure and new decisions of substantive criminal law.” United States v. Woods, 986 F.2d 669, 676 (3d Cir.1993). Under the substantive retroactivity standard, the appropriate inquiry is whether the claimed legal error was a “ ‘fundamental defect which inherently results in a complete miscarriage of justice,’ and whether ‘it presents exceptional circumstances where the need for the remedy afforded’ by collateral relief is apparent.” Id. (quoting Davis v. United States, 417 U.S. 333, 346, 94 S.Ct. 2298, 41 L.Ed.2d 109 (1974)). In contrast, new rules of criminal procedure are given retroactive effect on collateral review only if they can satisfy one of two narrow exceptions described in Teague v. Lane, 489 U.S. 288, 109 S.Ct. 1060, 103 L.Ed.2d 334 (1989). First, “a court should apply a new criminal procedural rule retroactively if ‘it places certain kinds of primary, private individual conduct beyond the power of the criminal law-making authority to proscribe.’ ” Woods, 986 F.2d at 677 (quoting Teague, 489 U.S. at 306, 109 S.Ct. 1060). And second, “under Teague a court should apply a new procedural rule retroactively if ‘it requires the observance of those proce dures that ... are implicit in the concept of 6 ordered liberty.’ ” Id. (quoting Teague, 489 U.S. at 306, 109 S.Ct. 1060). As is apparent from the above discussion, Turner is incorrect to assert that new substantive rules automatically receive retroactive effect on collateral review. Rather, such rules must meet the standard that we described in Woods. More importantly, the Supreme Court’s holdings certainly do not “dictate” that the new rule in Apprendi is substantive — rather than procedural — in nature. Turner characterizes the new rule in Apprendi as a substantive rule of constitutional law because it forces the government to treat certain facts as the equivalent of substantive offense elements (and thus submit them to a jury and prove them beyond a reasonable doubt), which otherwise would be mere sentencing factors determined by a judge. On the other hand, the government characterizes the new rule as purely procedural in nature, because the rule imposes certain procedural requirements (namely, submission to a jury and proof beyond a reasonable doubt) for the establishment of certain facts. Significantly, the government’s interpretation enjoys the support of the vast majority of courts to consider the issue. E.g., United States v. Hernandez, 137 F.Supp.2d 919, 929 (N.D.Ohio 2001) (noting that “most courts that have addressed the retroactivity of Apprendi have [assumed] ... without discussion that the decision announced a constitutional rule of criminal procedure”); Levan v. United States, 128 F.Supp.2d 270, 276 (E.D.Pa.2001) (stating that “Apprendi constitutes a procedural rule because it dictates what fact-finding procedure must be employed to ensure a fair trial”); Ware v. United States, 124 F.Supp.2d 690, 595 (M.D.Tenn.2000) (same). But see Darity v. United States, 124 F.Supp.2d 355, 361 (W.D.N.C.2000) (characterizing Apprendi as a “substantive change in the law”), overruled by United States v. Sanders, 247 F.3d 139, 146-151 (4th Cir.2001). For the purposes of our analysis, however, we need not choose between these competing interpretations of Apprendi. It is enough for us to note that the new rule in Apprendi is merely arguably substantive — certainly, no Supreme Court holdings “dictate” that Apprendi establishes a substantive rule of law — and therefore, in light of the strict Tyler standard, Turner’s argument must fail. Turner’s second argument is similarly flawed. According to In re Winship, 397 U.S. 358, 90 S.Ct. 1068, 25 L.Ed.2d 368 (1970), a defendant cannot be convicted of a crime “except upon proof beyond a reasonable doubt of every fact necessary to constitute the crime with which he is charged.” Id. at 364, 90 S.Ct. 1068. Turner points out that the Court has subsequently held both Winship and certain extensions of Winship to be fully retroactive. E.g., Hankerson v. North Carolina, 432 U.S. 233, 242-44, 97 S.Ct. 2339, 53 L.Ed.2d 306 (1977); Ivan V. v. City of New York, 407 U.S. 203, 204-05, 92 S.Ct. 1951, 32 L.Ed.2d 659 (1972). Turner describes the new rule in Apprendi as simply an extension and application of the basic Win-ship rule, and therefore concludes that Apprendi, like Winship, must be applied retroactively on collateral review. Even if we assume that Turner is correct to describe the new rule in Apprendi as simply a new extension and application of Winship, this does not mean that Supreme Court holdings “dictate” that Ap-prendi be applied retroactively to cases on collateral review. Instead, Turner finds himself in essentially the same position as the petitioner in Tyler, who argued that the rule contained in Cage v. Louisiana, 498 U.S. 39, 111 S.Ct. 328, 112 L.Ed.2d 339 (1990), had been “made retroactive to cases on collateral review by the Supreme Court.” Tyler, 121 S.Ct. at 2483-85. In Cage, the Court described the issue before it as “whether the reasonable-doubt instruction in this case complied with Win-skip,” and ultimately concluded that “the instruction at issue was contrary to the ‘beyond a reasonable doubt’ requirement articulated in Winship.” Cage, 498 U.S. at 40-41, 111 S.Ct. 328. In other words, Cage was a straightforward extension and application of Winship — -just as Turner characterizes Apprendi — and yet the Tyler Court rejected the petitioner’s argument, observing that “[t]he most he can claim is that ... this Court should make Cage retroactive to cases on collateral review. What is clear, however, is that we have not ‘made’ Cage retroactive to cases on collateral review.” Tyler, 121 S.Ct. at 2484 (emphasis in original). Similarly, the most that Turner can claim is that the Supreme Court should make Apprendi retroactive to cases on collateral review, and not that existing Supreme Court holdings dictate that result. Accordingly, Turner cannot satisfy the Tyler standard. In sum, we will deny Turner’s request for leave to file a second habeas corpus application in the district court because he cannot make a “prima facie showing” that his habeas corpus application contains “a new rule of constitutional law, made retroactive to cases on collateral review by the Supreme Court, that was previously unavailable.” We note, however, that our decision does not address the underlying merits of Turner’s Apprendi claim. Accordingly, we will deny Turner’s motion without prejudice in the event that the Supreme Court subsequently makes Ap-prendi retroactive to cases on collateral review. E.g., Browning v. United States, 241 F.3d 1262, 1267 (10th Cir.2001). In accordance with the foregoing, Car-nell Turner’s motion for leave to file a second habeas corpus application in the district court will be DENIED without prejudice.

3818510-8338

ZATKOFF, District Judge. James Christopher Walker entered a plea of guilty to bank robbery by force and violence on May 27, 2004, in the Eastern District of Tennessee. On March 17, 2005, Walker was sentenced to 208 months incarceration. Walker now appeals his sentence and asserts that it was unreasonable in light of the decision in United States v. Booker, 543 U.S. 220, 125 S.Ct. 738, 160 L.Ed.2d 621 (2005). Because the district court reasonably sentenced Walker, we affirm. I. As set forth in the Rule 11 Plea Agreement in this case, the parties agree that on December 29, 2003, Walker entered the United Community Bank located at 211 Gill Street, Alcoa, Tennessee, wearing a blue “Cowboys” jacket. Walker approached a teller, pointed a handgun (which turned out to be a BB gun) at her and demanded that she give him the money from her teller drawer. The teller complied and handed Walker approximately $1,828.00 in U.S. currency, bait money and a red dye pack. Walker fled the bank in a vehicle. Shortly thereafter, the dye pack exploded resulting in red dye stains on Walker’s hands and clothing, the U.S. currency and the inside of the vehicle. At the time of the offense, the deposits of the United Community Bank were insured by the FDIC. On January 6, 2004, Walker was charged in a one-count indictment with armed bank robbery. On June 14, 2004, Walker pleaded guilty pursuant to the Rule 11 Agreement. A presentence investigation report (“PSR”) was prepared and disclosed to the parties on August 11, 2004. After sentencing was continued pending the U.S. Supreme Court’s resolution of the Booker case, the PSR was revised on March 17, 2005. The PSR documented Walker’s criminal background, including seven aggravated robberies in Blount County, Tennessee, the locale of the offense in this case. In each of those robberies, Walker robbed a business at gun point or acted in such a manner that the employee believed that Walker had a gun. An eighth robbery conviction did not include the use of a gun. At the time of the offense in the instant case, Walker was on parole for one or more of the prior offenses and violated the same by committing this offense. In addition, the prior convictions caused Walker to be considered a career offender under § 4B1.1 of the U.S. Sentencing Guidelines and placed him in criminal history category VI. Walker’s Total Offense Level was 31. Accordingly, the undisputed applicable Guideline range was 188 to 235 months. Neither party filed objections to the PSR. Walker filed a Sentencing Memorandum on March 15, 2005, wherein he argued that the guideline range was “way too high” because he must finish serving his state sentence(s) for violating his parole before commencing his federal sentence. Walker attributed his criminal history to his upbringing, which included a father who regularly beat him, a mother who suffered from severe mental illness, and his own drug and alcohol addictions. Walker stated that he would like to take advantage of drug treatment programs and vocational training opportunities while incarcerated. Walker argued a reasonable sentence would be one below the Guideline range called for in the PSR. At the sentencing hearing, the district court first established that neither party had any objection to the PSR. The government asked for a sentence in the middle of the Guideline range, noting that (1) the victim in the case was pregnant woman who was already experiencing a difficult pregnancy when Walker approached her at gun point, and (2) all of Walker’s prior convictions were for violent offenses. The Government also argued that the decisions to be made by the State of Tennessee with respect to Walker’s parole status were irrelevant to the sentence to be imposed by the federal court for the instant offense. Walker presented an extended statement wherein he reiterated the themes set forth in his Sentencing Memorandum (as described in the immediately preceding paragraph). After hearing the parties’ arguments, the district judge recessed to fully consider the arguments and Walker’s statements. Upon returning to the courtroom, the district judge stated: Mr. Walker, your attorney [Mr. Tollison] certainly argued passionately and well on your behalf and the Court also appreciates the comments and statements you have made and certainly, I think as Mr. Tollison said, no one wants to give up on you, but also given not only the circumstances, the violent circumstances of this crime, but also, you know, the whole Presentence Report its total, obviously your history as [AUSA] Plowell put it, a series of mistakes but mistakes involving violence in most instances or a lot of the instances violent gun crimes. When we look at the factors, not only just the advisory guideline range, which is one of the factors, but the factors in section 3553, quite frankly, they in the Court’s opinion weigh heavily against you in terms of the nature and circumstances of the offense, among other things, just to point out some of them; the need for the sentence imposed to reflect the seriousness of the offense, to promote respect for the law and provide just punishment for the offense, to afford adequate deterrence to criminal conduct, protect the public from further crimes of the defendant, and then the kind of sentences in the sentence range established for this offense[,] i.e., the sentencing guidelines which does give us an advisory guideline range of a lengthy period of time. The Court, you know, believes taking those factors as a whole that it is appropriate to give you a sentence within the advisory guideline range in this instance. I have also reflected upon the request to run, I guess ultimately to run your sentence concurrently in part based on matters you are facing at the state level. I guess the problem we have is[,] I know while Mr. Tollison’s sentencing memorandum talked about a date far in the future as to what might be the effect of your parole violation at the state level, we really don’t know what is going to happen. Somebody can argue otherwise, if they want, but I mean, you could serve the entire length of your state sentence, or the state could decide, or you could go back and argue with your state attorneys and the ultimate outcome would be to parole you to the federal detainer and cut off your state sentence in some fashion. ... I think the bottom line here is the Court[,] after reflecting on that at some lengthy believes that at least it should not interfere with what is going on between you and the state. And you need to, you need to go back and make your case to the state as to what the effect will be of your violation of parole in this case because it is a significant—not only is your instant offense significant, but it is significant, obviously, that it was committed while you were on parole not from the same offense but similar types of violent offenses at the state level. With that in mind, we’ll go forward with sentencing at this time. The Court has considered the nature and circumstances of the offense, the history and characteristics of the defendant and the advisory guidelines range as well as the other factors listed in 18 United States Code § 3553(a). The district court then sentenced Walker to a term of imprisonment of 208 months, which term of imprisonment was to run consecutive to any sentences imposed by any state court(s), five years supervised release and a $100 special assessment. II. This Court must affirm a defendant’s sentence if it is “reasonable.” United States v. Christopher, 415 F.3d 590, 594 (6th Cir.2005). A sentence properly calculated under the United States Sentencing Guidelines is entitled to a rebuttable presumption of reasonableness. United States v. Williams, 436 F.3d 706, 708 (6th Cir.2006) (noting that “[s]uch a presumption comports with the Supreme Court’s remedial decision in” Booker). III. Walker argues that the post-Booker cases have established that reasonableness applies not only to the sentences imposed, but also to the process used by the district judge to arrive at the sentence. United States v. Webb, 403 F.3d 373 (6th Cir.2005). Walker contends that the district judge in this case did not adequately address the non-Guideline factors listed in § 3553(a) because the judge did not “state how each of [those] factors was applied.”

919857-8966

ORDER Bulgarian native Iliya Ivanov applied for asylum, alleging that he faced persecution because he is an ethnic Rom, commonly known as a Gypsy. After the Immigration Judge (“IJ”) denied his petition for asylum, withholding of removal, and relief under the Convention Against Torture, Ivanov appealed and the Board of Immigration Appeals (“BIA”) affirmed. Ivanov now petitions for review of the BIA’s decision. Because we find that the IJ made flawed credibility and corroboration determinations, we grant the petition for review and remand for further proceedings. I. Ivanov, the only witness at his removal hearing, testified that in 1991, he opened his own vegetable stand at an outdoor market in Sofia, Bulgaria. Three years later, neo-Nazi gang members demanded that Ivanov pay them to allow him to do business on their turf. Ivanov could not afford to pay, so he went to the police, who did nothing. The gang members returned, burned Ivanov’s produce, beat him, and threatened to murder him. According to Ivanov, they called him a Gypsy as they attacked him and they attacked only other Gypsies and Turkish minorities. Ivanov returned to his home village of Petrich and remained there for the next four months, until he obtained a visa for the United States to escape his neo-Nazi persecutors. After a three and a half year stay in the United States, Ivanov returned to Bulgaria in 1997 when his wife assured him that life was improving for Gypsies there. Ivanov resumed his old business until 2000, when the same group of assailants from 1994 attacked him again, leaving him unconscious. He went to the police station, but an officer threw him out saying, “Gypsies simply don’t know what they want, they just get drunk and just get into fights, and then they look for police help.” Two weeks after the first assault, the gang members attacked Ivanov again, locking him in the trunk of their car, and driving him to an isolated area where they severely beat him. Ivanov awoke in a hospital emergency room and spent a day and a half there recovering. Afterwards, he hid in his wife’s village until he obtained a visa for Mexico, left Bulgaria and ultimately was caught illegally entering the United States in 2000. Ivanov testified that he fears returning to Bulgaria because the gang members are bodyguards for influential government officials, and they will work together with the police to find and kill him. Apart from his testimony, Ivanov submitted country reports that state that both police and private bodyguards use excessive force against the Roma in Bulgaria. The IJ denied Ivanov’s application for asylum on three grounds. First, Ivanov failed to prove he is a Rom. The IJ asked him: “[i]s there something about you, like for example, there are certain African people who have markings on their face that are like tattoos or scars, tribal marks. Do you have those kinds of marks?” Ivanov informed the IJ that ethnic Gypsies like him live in different neighborhoods, speak a different dialect, and that there are school records that note his Romani ethnicity. Unconvinced, the IJ replied, “[y]ou look Bulgarian to me” and “I can’t even tell if you’re Roma.” The IJ made no explicit credibility finding on Ivanov’s description of the attributes of his ethnicity, but concluded generally that Ivanov “failed to submit persuasive evidence of his Roma or Gypsy ethnicity.” Second, the IJ found that the attackers were motivated by a desire to take Ivanov’s money, not by his ethnicity. Third, the IJ did not credit Ivanov’s testimony that his tormentors were “bodyguards” for “influential government officials.” The IJ concluded that Ivanov was simply “embellishing” to establish government involvement where there was none. The BIA affirmed, agreeing that Ivanov failed to establish persecution on one of the statutorily protected grounds, but offering no additional rationale of its own. II. Ivanov makes two arguments on appeal. First, Ivanov argues that the IJ erred in finding he failed to prove he is a Rom. Second, Ivanov contends that the IJ erred in concluding that only a desire for money motivated Ivanov’s persecutors. In cases where the BIA’s decision merely supplements the IJ’s opinion, the latter opinion as supplemented by the BIA’s decision becomes the basis for review. Brucaj v. Ashcroft, 381 F.3d 602, 606 (7th Cir.2004). We review the BIA’s denial of a petition for asylum under the substantial evidence standard; however, questions of law are reviewed de novo. Capric v. Ashcroft, 355 F.3d 1075, 1086 (7th Cir.2004). Ivanov contends that in finding that he failed to prove he is a Rom, the IJ wrongly defined “membership in a social group” as requiring a proof of a physical characteristic, and improperly required Ivanov to corroborate his testimony that he is a Rom. We have accepted the BIA’s interpretation that “membership in a social group” means persons who share a common, immutable characteristic. Lwin v. INS, 144 F.3d 505, 512 (7th Cir.1998). “Immutable” is not confined to physical traits only, but instead includes anything that is beyond the power of an individual to change or is so fundamental to individual identity or conscience that it ought not be required to be changed. See, e.g., Tapiero de Orejuela v. Gonzales, 423 F.3d 666, 672 (7th Cir.2005) (noting characteristics that define social groups may include education, manner of speech, or profession). The IJ did not explicitly define “membership in a social group” as requiring a physical characteristic, but he appeared to demand physical corroboration of Ivanov’s claim of Romani ethnicity. This brings us to Ivanov’s second contention, that the IJ improperly found that he “failed to submit persuasive evidence of his Roma or Gypsy ethnicity.” If by this the IJ meant that he simply disbelieved Ivanov’s explanation of why he is a Rom, he needed to say so explicitly and provide reasons why. See Soumahoro v. Gonzales, 415 F.3d 732, 736 (7th Cir.2005) (recognizing that “passing expressions of disbelief do not adequately substitute for an adverse credibility finding”). If, as is more likely, the IJ meant Ivanov had not corroborated his claim of Romani ethnicity with physical or other evidence, he improperly called for corroboration. The recently enacted REAL ID Act of 2005, which changes the standards governing credibility determinations, does not affect Ivanov’s case because he filed his application prior to the effective date of that amendment. See Pub.L. No. 109-13, 119 Stat. 231 § 101(h)(2) (providing that the REAL ID Act takes effect on the day of the enactment, which was May 11, 2005); Chen v. Gonzales, 420 F.3d 707, 709 (7th Cir.2005). For Ivanov’s case the law is that an IJ may not require corroboration unless he: (1) makes an explicit credibility finding; (2) explains why it is reasonable to require corroboration; and (3) explains why the applicant’s reasons for not producing that corroboration are inadequate. See Gontcharova v. Ashcroft, 384 F.3d 873, 877 (7th Cir.2004). In not making an independent, explicit credibility assessment of Ivanov’s testimony that he is a Rom before requiring corroboration, the IJ erred. See Iao v. Gonzales, 400 F.3d 530, 534 (7th Cir.2005). Moreover, the IJ did not explain why it would be reasonable to require Ivanov to produce physical corroboration of his ethnicity. Finally, the IJ missed the third step in Goncharova by failing to address the adequacy of Ivanov’s explanation that Bulgaria does not issue certificates of Romani ethnicity. Ivanov also challenges the IJ’s separate ruling that the gang members did not persecute him “on account of’ his Romani ethnicity, but rather because they desired to extort money from his business. The phrase “on account of’ does not mean solely on account of one of the five protected categories; persecutors may have a mixed motive. Mohideen v. Gonzales, 416 F.3d 567, 570-71 (7th Cir.2005); Girma v. INS, 283 F.3d 664, 667 (5th Cir.2002); Singh v. Ilchert, 63 F.3d 1501, 1509-10 (9th Cir. 1995). And, if an applicant presents evidence of a mixed motive, the IJ or BIA must provide a reason for relying on one motive rather than the other. See Mohideen, 416 F.3d at 571. Ivanov presented evidence of a mixed motive. He testified that the gang attacked only Gypsy and Turkish minorities, and in his asylum application he noted that the gang members called him a Gypsy as they attacked him. The country reports that the IJ found plausible with respect to the treatment of the Roma, state that Gypsies are among the poorest in Bulgarian society. This creates the possibility that ethnicity, as much as if not more than money, motivated the attackers. The IJ’s failure to acknowledge the possibility of mixed motives or to explain why he believed one motive over the other deprived Ivanov of a reasoned analysis of the evidence he presented. See Mohideen, 416 F.3d at 571 (remanding for BIA’s failure to apply “mixed motive” doctrine correctly).

5704275-14847

MOLLISON, Judge: In mid-May 1990, the appellant stole two United States Treasury cheeks from the quarterdeck desk of a submarine off-crew office. The checks were issued by a Navy disbursing officer and were made payable to two former shipmates of the appellant. Subsequently, the appellant forged the signatures of the payees as endorsements to the checks and cashed them at two off-base check-cashing facilities. The appellant realized over $5,000 from this enterprise. Eventually he was caught and confessed to an agent of the Naval Investigative Service (NIS). Consistent with his pleas of guilty before a general court, the appellant was found guilty of two specifications of larceny of military property of some value (the two checks), two specifications of larceny of the proceeds of the checks, two specifications of forging the endorsements to the checks, and two specifications of uttering the forged checks in violation of Articles 121 and 123, Uniform Code of Military Justice (UCMJ), 10 U.S.C. §§ 921 and 923. A military judge sitting alone sentenced the appellant to confinement for three years, forfeiture of all pay and allowances, reduction to pay grade E-l, and a bad-conduct discharge. The convening authority approved the adjudged sentence, but suspended confinement in excess of 546 days pursuant to a pretrial agreement. On appeal the appellant asserts two errors were committed in his court-martial. In essence he claims his pleas of guilty to Specifications 1 and 2 of Charge I, alleging the theft of the two checks, were improvident because the checks were not “military property,” as alleged. Whether or not the checks were “military property” is important inasmuch as larceny of “military properly” of a value of $100.00 or less carries a maximum confinement of one year, whereas larceny of non-military property of a value of $100.00 or less carries a maximum confinement of six months. Manual for Courts-Martial (MCM), United States, 1984, II 46e. Appellant also claims that these two offenses should have been treated as multiplicious since the checks were stolen at the same time. The appellant seeks the dismissal of one of the specifications and a rehearing on the sentence. The Government agrees with the second assignment of error, but disputes the first. It urges only reassessment of the sentence. Providence of the Appellant’s Guilty Pleas An accused may not enter inconsistent, improvident or uninformed pleas of guilty. Article 45, UCMJ, 10 U.S.C. § 845. Before the military judge may accept an accused’s plea of guilty, he must personally inform the accused of the nature of the offense to which the plea is offered and must inquire into the factual basis for the plea. Rule for Courts-Martial (R.C.M.) 910(c), (e), Manual for Courts-Martial (MCM), United States, 1984; United States v. Care, 18 C.M.A. 535, 40 C.M.R. 247 (1969). For these purposes, the elements of the offenses should be described to the accused and the accused must admit their truth. R.C.M. 910(c)(1), (e) Discussion. Inconsistencies and apparent defenses must be resolved or the guilty pleas must be rejected by the military judge. United States v. Jemmings, 1 M.J. 414 (C.M.A. 1976); United States v. Jackson, 23 M.J. 650 (N.M.C.M.R.1986), pet. denied, 24 M.J. 405 (C.M.A.1987). The military judge is not required “to embark on a mindless fishing expedition to ferret out or negate all possible defenses or inconsistencies.” Jackson, 23 M.J. at 652. Rather, the military judge is required to deal with potential issues raised in the providence inquiry or during the trial that indicate an inconsistency or a defense. Id. When the accused’s responses reasonably raise the question of a defense, the military judge must make a more searching inquiry. United States v. Timmins, 21 C.M.A. 475, 45 C.M.R. 249 (1972). In short, a provident plea of guilty is one that is knowingly, intelligently, and consciously entered and is accurate and consistent, both factually and legally. United States v. Sanders, 33 M.J. 1026 (N.M.C.M.R.1991). A Court of Military Review may not set aside a finding of guilty or the sentence on the basis of an error unless the error is materially prejudicial to the substantial rights of the appellant. Article 59(a), UCMJ; 10 U.S.C. § 859(a). Claims of error concerning findings based on guilty pleas can generally be articulated as follows: (1) something is omitted in the guilty plea inquiry, such as an advisement or a particular question, and/or (2) the accused sets up matter that is legally or factually inconsistent with the plea of guilty. If the claim of error concerns the former, that is, an advisement or the scope of the questioning, a Court of Military Review will examine the entire record to ascertain whether the accused was adequately advised and his admissions reasonably support the conclusion that the plea is factually accurate. See United States v. Jones, 34 M.J. 270 (C.M.A.1992); United States v. Walker, 34 M.J. 264 (C.M.A.1992); United States v. Crouch, 11 M.J. 128 (C.M.A.1981). As to the latter claim of error, the record must contain some reasonable ground for finding an inconsistency between the plea and the accused’s statements, and reversal will not follow from the mere possibility of a conflict. United States v. Logan, 22 C.M.A. 349, 47 C.M.R. 1 (1973); United States v. Logan, 31 M.J. 910 (A.F.C.M.R.1990); United States v. Tichy, 50 C.M.R. 526 (N.C.M.R.1975). “The bottom line ... is that rejection of the plea requires that the record of trial show a ‘substantial basis’ in law and fact for questioning the guilty plea.” United States v. Prater, 32 M.J. 433, 436 (C.M.A.1991). In this case the appellant was informed of the meaning of the term “military property,” acknowledged his understanding of that term, and admitted the two checks were “military property.” Record at 17, 26. Nonetheless, the appellant asserts something was omitted from the guilty plea inquiry, that is, facts, not legal conclusions, that support the checks were “military property.” More particularly, he asserts the U.S. Treasury checks must be of a “unique military nature” or were “put to a military function,” before they qualify as “military property,” and in the absence of such a showing in the record, the plea to larceny of “military property” is improvident. Appellant’s Brief at 2-3 (citing United States v. Schelin, 15 M.J. 218 (C.M.A.1983), United States v. Spradlin, 33 M.J. 870 (N.M.C.M.R.1991), and United States v. Ford, 30 M.J. 871 (A.F.C.M.R.1990)). We must, therefore, examine the record of trial and the applicable law to determine whether a substantial basis for questioning the appellant’s guilty pleas in this respect exists. At the outset, we observe that this challenge to the providence of the pleas actually concerns two questions: (1) Who was the owner of the checks and (2) were the checks “military property”? Article 121(a), UCMJ, provides in part: Any person subject [to the UCMJ] who wrongfully takes, obtains, or withholds, by any means, from the possession of the owner or of any other person any money, personal property, or article of value of any kind with intent permanently to deprive or defraud another person of the use and benefit of the property or to appropriate it to his own use or the use of any person other than the owner, steals that property and is guilty of larceny. 10 U.S.C. § 921(a) (brackets supplied). It is axiomatic that checks may be the subject of a larceny. E.g., United States v. Windham, 15 C.M.A. 523, 36 C.M.R. 21 (1965). It is also axiomatic that the United States Government may be the “owner” or “any other person,” and thus the victim of larceny within the meaning of Article 121. MCM ¶ 46c(l)(c). See also United States v. Mills, 5 C.M.R. 757 (A.F.B.R.1952). Under Article 121, a wrongful taking must be from the possession of the “owner” or of “any other person.” “Possession” includes care, custody, management, and control. The terms “owner” and “any other person” mean the one having a greater right to possess the property than the accused. MCM H46c(l)(c). The theft of an undelivered U.S. Government check is a theft of property of the United States. Clark v. United States, 268 F. 329 (6th Cir.1920) (construing the predecessor of 18 U.S.C. § 641, the federal civilian substantial equivalent of Article 121). Indeed, whether or not a U.S. Government check has been delivered, its theft is a theft of property of the United States. United States v. Santiago, 729 F.2d 38 (1st Cir.1984); United States v. Forcellati, 610 F.2d 25 (1st Cir.1979), cert. denied, 445 U.S. 944, 100 S.Ct. 1342, 63 L.Ed.2d 778 (1980) (all construing 18 U.S.C. § 641). But see United States v. Fleet-wood, 489 F.Supp. 129 (D.Or.1980) (savings bonds in the hands of private parties was not a theft of property of the United States). A check significantly remains the check of the drawer, for that is what gives it its value in the hands of the payee or in the hands of any third party who gets it and forges the payee’s name on the back well enough to negotiate the check. The written instrument, moreover, is intend ed to be returned to the drawer as evidence of the drawer’s payment of the face amount of the check to the payee. It is issued for an instrumental purpose, and it is retained upon its return as a receipt. For these instrumental and record-keeping purposes the check as a piece of paper never genuinely ceases to be the property of the issuer. Forcellati, 610 F.2d at 31. A government check is intended to be returned to the government. “It is not like a title deed or other muniment of title that is delivered to a transferee for his keeping; rather, it is the government’s physical symbol of its payment of an amount of money; it does not stop being a government check at any time.” Id. at 32. Thus, “[t]he usual check theft case involves three parties: the drawer, the thief, and the person who accepts the forged check for payment. When the drawer is the government, it is the government’s piece of paper and the thief has stolen the property of the government and of the person he has convinced to make payment.” United States v. Collins, 464 F.2d 1163, 1165 (9th Cir.1972). Additionally, when the payee has a right to possess an undelivered check and the thief does not, the check is the property of the payee and there is no error in alleging ownership in the payee. United States v. Buchhorn, 15 C.M.A. 556, 36 C.M.R. 54 (1965) (theft of a check from the mails was a theft from the addressee); United States v. Harris, 21 C.M.R. 600 (C.G.B.R.1956) (theft of a government pay check from the executive officer’s desk was a theft from the payee even though the check had not yet been delivered to the payee). The appellant admitted that the checks belonged to the United States and that he took them from its possession without permission. Record at 24-25, 30, 32. He took them from the quarterdeck desk of the off-crew office of a fleet ballistic missile submarine. Record at 25. Photocopies purporting to be the relevant checks are set out in the charge sheet. The appellant admitted the photocopies were authentic. Record at 25, 27, 31. The checks were United States Treasury checks issued by a Navy disbursing officer. The appellant was not the payee. The appellant had been previously assigned to a fleet ballistic missile submarine. The payees were two of the appellant’s former shipmates. Record at 26; Prosecution Exhibit 2 (appellant’s confession to NIS). The amounts of both checks were substantial, $3,143 and $2,068. As a former submariner aboard a “boomer,” the appellant had made deterrent patrols which lasted several months. Defense Exhibit J. Most likely these checks were awaiting delivery to the payees. In any event, whether the checks were awaiting delivery to the payees or had been placed in the desk for safe-keeping by the payees is immaterial. These U.S. Government checks were being stored in a Government facility. Their storage in such a place is consistent with the exercise of care, custody, management and control by the United States. Hence the record indicates the United States was not only the drawer of the checks, but also possessed them, had a greater right to possession than the appellant, and therefore was the victim of their theft. In sum, when the appellant filched the checks, he was stealing the property of the United States, and his admissions to that effect were legally and factually sufficient. Having concluded the record adequately supports the conclusion the checks were property of the United States, it remains to be determined whether the record is similarly sufficient in respect to their identity as “military property.” We have previously recognized that under the right circumstances currency may be “military property” for purposes of Article 121. Cf. Spradlin. We have also held that the larceny of military pay and allowances was a theft of “military property.” United States v. Dailey, 34 M.J. 1039 (N.M.C.M.R.1992) (funds paid as basic allowance for quarters are “military property”). Logically, United States Treasury checks issued by a military department for the payment of military pay and allowances, or other similar purposes, such as the payment of personnel claims associated with military service, are also “military property.” The appellant’s admission that the checks were “military property” was not a legal oxymoron. It is true the appellant did not state whether the cheeks were issued for the payment of military pay and allowances, but the record admits of virtually no other purpose. For example, they clearly were not issued by the Social Security Administration or the Internal Revenue Service. The checks were issued by the Navy to servicemembers. They were held in a Navy office. In sum, the record adequately supports the conclusion the checks were “military property.” Finding nothing in the record of trial that shows a substantial basis in law or fact for questioning the guilty pleas, we will not reject them. Multiplicity of Offenses The appellant asserts, and the Government concedes, that the two specifications alleging larceny of the two checks were one offense. The record reflects the two checks were taken at the same time and place. Prosecution Exhibit 2. Under the circumstances, the appellant’s acts constituted one larceny and the maximum authorized punishment should have been limited accordingly. MCM 1146c(l)(h)(iii). The military judge addressed multiplicity for sentencing purposes, but did not treat these two offenses as one. Record at 35-38. We will remedy the error by consolidating these two offenses. We do not believe the overstatement of the maximum punishment had any impact on the appellant’s decision to plead guilty. Walker; record at 35-38, 44. We will remedy this error by reassessing the sentence.

6053625-19467

RILEY, Circuit Judge. Nabil Hamadeh Abumayyaleh (Abumayyaleh) was found guilty by a jury of being a felon in possession of a firearm, in violation of 18 U.S.C. § 922(g)(1). The district court sentenced Abumayyaleh to 100 months in prison. Abumayyaleh appeals his conviction and sentence. For the reasons stated below, we affirm Abumayyaleh’s conviction and reverse his sentence. I. BACKGROUND Abumayyaleh became the object of an investigation while managing Crystal Foods, a family owned convenience store. During the initial stages of the investigation in 2004, a government informant told Abumayyaleh the informant had a friend with firearms for sale. In response, Abumayyaleh stated he was not interested in the firearms, but he was interested in buying stolen video game systems. In 2005, an undercover officer began meeting and speaking with Abumayyaleh. During this time, the undercover officer sold purportedly stolen items, such as a plasma TV, video games, video game systems, and computers, to Abumayyaleh. Over the course of the investigation, Abumayyaleh bought over $7,000 of purportedly stolen merchandise from the undercover officer. The topic of weapons eventually came up in the meetings, and Abumayyaleh stated he had weapons all around him. On another occasion, Abumayyaleh stated he was “locked and loaded.” As a result, the government shifted its investigation to determine if Abumayyaleh was interested in purchasing purportedly stolen firearms. To gauge Abumayyaleh’s interest, the government set up a “flash” of firearms on October 12, 2005, in which several guns were shown to Abumayyaleh, but he was informed he was not permitted to purchase them. Abumayyaleh was clearly irritated at his inability to buy the firearms. During one conversation between the undercover officer and Abumayyaleh, the officer stated he was going to Chicago to pick up his “thang” or his “strap,” meaning his firearm. To this, Abumayyaleh replied, “[y]ou never bring me back none.” On November 28, 2005, Abumayyaleh was finally given the opportunity to buy purportedly stolen firearms from the undercover officer. At the sale, Abumayyaleh purchased a Colt .45 and a video game system. Abumayyaleh placed the Colt .45 in the office of the store. Abumayyaleh indicated his interest in an H & K assault rifle offered for sale, but declined to purchase it because he did not have enough money. Abumayyaleh was arrested and the officers executed a search warrant on the convenience store. During the search, four firearms, including the Colt .45 caliber handgun purchased from the officer, were recovered from the same office area, where Abumayyaleh retreated twice during the sale on November 28. The Colt .45 caliber handgun was found in a red bin approximately four to five feet from the desk. A loaded .380 caliber handgun was found in a stack of boxes to the left of the desk. A Smith and Wesson .38 caliber handgun was found in the top left drawer of the desk, and a .22 caliber handgun was found between papers in the left desk drawer. Multiple rounds of ammunition were found throughout the office. In addition, officers found a soft-sided carrying case for a handgun, containing two magazines and ammunition. Some of Abumayyaleh’s personal documents were found in the same desk as the firearms. Other members of Abumayyaleh’s family had access to this office in the store. On July 14, 2006, a jury convicted Abumayyaleh of being a felon in possession of a firearm, identifying all four weapons discovered in the office, in violation of 18 U.S.C. § 922(g)(1). After calculating a base offense level of 20, the district court enhanced Abumayyaleh’s sentence by eight levels, resulting in a guidelines range of 130 to 162 months, with a statutory maximum sentence of 120 months. The district court sentenced Abumayyaleh to 100 months imprisonment. Abumayyaleh appeals (1) the district court’s denial of his motion for judgment as a matter of law, arguing entrapment; (2) the sufficiency of the evidence to sup port his conviction; (3) the denial of his motion to suppress evidence obtained in a search of his place of business; (4) the district court’s admission of prior convictions; and (5) the base offense level calculated by the district court and the application of enhancements. We affirm Abumayyaleh’s conviction and reverse his sentence. II. DISCUSSION A. Motion for Judgment of Acquittal Abumayyaleh appeals the district court’s denial of his motion for judgment of acquittal, claiming he was entrapped as a matter of law. Abumayyaleh argues he was induced and did not have the predisposition to violate the law by obtaining and possessing a firearm. Abumayyaleh contends the undercover officer focused on him and caused him to purchase a firearm in violation of the law by implanting the criminal design in his mind. We review de novo the district court’s denial of Abumayyaleh’s motion for judgment of acquittal. See United States v. Hilliard, 490 F.3d 635, 640 (8th Cir.2007) (citation omitted). “In reviewing a district court’s denial of a motion for acquittal based on the defense of entrapment, we view the evidence in the light most favorable to the government.” United States v. Crump, 934 F.2d 947, 956 (8th Cir.1991) (citation omitted). “Entrapment is an affirmative defense, and the question of entrapment is generally for the jury.” Id. (citation omitted). The defense of entrapment has two elements (1) government inducement of the crime, and (2) the defendant’s lack of predisposition to engage in the criminal conduct. See United States v. Stanton, 973 F.2d 608, 609-10 (8th Cir.1992) (citation omitted). “ ‘The defendant carries the initial burden of presenting some evidence that he or she was induced by government agents to commit the offense.’ ” United States v. Van Slyke, 976 F.2d 1159, 1162 (8th Cir.1992) (quoting United States v. McGuire, 808 F.2d 694, 696 (8th Cir.1987) (per curiam)). Government inducement is “conduct that creates a substantial risk that an undisposed person or otherwise law-abiding citizen would commit the offense.” Stanton, 973 F.2d at 610 (citation and internal quotation marks omitted). “[Friendship with [a] confidential informant is not evidence of entrapment.” United States v. Ford, 918 F.2d 1343, 1349 (8th Cir.1990). “Inducement cannot be shown if government agents merely provide the opportunity or facilities to commit the crime or use artifice and stratagem.” Stanton, 973 F.2d at 610 (citations omitted). The government conduct in this case did not rise to the level of inducement. Abumayyaleh was simply given the opportunity to purchase the firearm after becoming acquainted with the undercover officer. Abumayyaleh does not contend the government threatened, cajoled, coerced, harassed, promised rewards, or pleaded with him to purchase the firearm. Abumayyaleh claims the government informant used his friendship as leverage. However, Abumayyaleh cites no conduct that would rise to the level of inducement. Abumayyaleh relies on Sherman v. United States, 356 U.S. 369, 373, 78 S.Ct. 819, 2 L.Ed.2d 848 (1958), where the Supreme Court held the defendant was entrapped as a matter of law when a fellow recovering addict pleaded with him to procure drugs to which both of them were addicted. Sherman does not control the outcome in this case because Abumayyaleh’s purchase of the Colt .45 was not in response to the pleadings of a friend. Though Abumayyaleh claims the undercover officer had established a friendship with him, it reasonably appears the relationship was primarily a business relationship. Regardless of the nature of the relationship, at no time did the undercover officer plead with Abumayyaleh to purchase any firearm. At one point in time, Abumayyaleh was informed he was not permitted to purchase firearms shown to him. Abumayyaleh’s response was one of irritation, showing his desire (or predisposition) to purchase a firearm. The district court correctly denied Abumayyaleh’s motion for judgment as a matter of law because the government did not induce Abumayyaleh to buy the firearm. Because we find Abumayyaleh did not show inducement, we need not address whether he had the predisposition to commit the crime. See United States v. Loftus, 992 F.2d 793, 798 (8th Cir.1993) (noting the prosecution is not required to prove predisposition when the defendant has not shown inducement). B. Sufficiency of the Evidence Abumayyaleh argues the government presented insufficient evidence he possessed the firearms found in the office because other members of his family had access to the office. “[S]uffieiency of the evidence [is reviewed] de novo, viewing evidence in the light most favorable to the government, resolving conflicts in the government’s favor, and accepting all reasonable inferences that support the verdict.” United States v. Piwowar, 492 F.3d 953, 955 (8th Cir.2007) (citation and internal quotation marks omitted). “[W]e may reverse only if we find that no reasonable jury could have found the defendant guilty beyond a reasonable doubt.” Id. (citation and internal quotation marks omitted). To convict Abumayyaleh, “the government was required to prove beyond a reasonable doubt ...: (1) [Abumayyaleh] previously had been convicted of a crime punishable by a term of imprisonment exceeding one year, (2) [Abumayyaleh] knowingly possessed a firearm and ammunition, and (3) the firearm and ammunition had been in or had affected interstate commerce.” Id. (citation omitted). The only contested issue in this case is the second element. “Knowing possession can be actual or constructive, as well as sole or joint.” Id. (citation omitted). Constructive possession is established if the defendant “had control over the place where the firearm was located, or control, ownership, or dominion over the firearm itself.” Id. (citation omitted). Simple “knowledge of presence combined with dominion over the premises in which the contraband is concealed will amount to constructive possession.” United States v. Urick, 431 F.3d 300, 303 (8th Cir.2005) (citation and internal quotation marks omitted). See United States v. Smart, 501 F.3d 862, 865-67 (8th Cir.2007). Finally, “ ‘the presence of one possible innocent explanation for the government’s evidence does not preclude a reasonable jury from rejecting the exculpatory hypothesis in favor of guilt beyond a reasonable doubt.’ ” Piwowar, 492 F.3d at 956 (quoting United States v. Maloney, 466 F.3d 663, 667 (8th Cir.2006)) (internal quotation marks omitted). The location of the firearms in the office and Abumayyaleh’s control over the area were sufficient grounds to establish Abumayyaleh possessed the firearms, regardless of whether other people had access to the office. In conversations with the undercover officer, Abumayyaleh referenced he had weapons all around him, and once Abumayyaleh declared he was “locked and loaded.” The government presented the jury with sufficient evidence to convict Abumayyaleh. C. Motion to Suppress Abumayyaleh challenges the district court’s denial of his motion to suppress evidence obtained from the search of Crystal Foods, on three grounds: (1) there was no probable cause to issue the search warrant, (2) the Leon good faith exception does not apply, and (3) the seizure of the firearms in the office was beyond the scope of the search warrant and not justified by the plain view doctrine. “We review the district court’s findings of fact for clear error” and review “Fourth Amendment seizures de novo.” United States v. Blom, 242 F.3d 799, 807 (8th Cir.2001) (citation omitted). 1. Probable Cause and Good Faith Abumayyaleh argues there was no probable cause to support the search warrant because the items listed in the affidavit were not actually stolen. Attempted receipt of stolen property is a felony in the state of Minnesota, for which impossibility is not a valid defense. See State v. Bird, 285 N.W.2d 481, 482 (Minn.1979) (holding “the defense of legal impossibility does not bar ... prosecution for either attempt or conspiracy”); see also Minn.Stat. § 609.17, subd. 2 (“An act may be an attempt notwithstanding the circumstances under which it was performed or the means employed to commit the crime intended or the act itself were such that the commission of the crime was not possible, unless such impossibility would have been clearly evident to a person of normal understanding.”). Because impossibility is not a valid defense, it is of no consequence the affidavit submitted in obtaining the warrant indicated the items sold to Abumayyaleh were not actually stolen. Finally, we need not address whether the Leon good-faith exception applies because the warrant was supported by probable cause. 2. Plain View Next, Abumayyaleh claims the search warrant was obtained and executed in bad faith, arguing: (1) the search warrant was a pretext to look for firearms, and (2) the officers waited for Abumayyaleh to purchase a firearm before executing the warrant, thus the police should not be able to use the plain view doctrine. The plain view doctrine “allows a police officer to seize evidence without a warrant when (1) the officer did not violate the Fourth Amendment in arriving at the place from which the evidence could be plainly viewed, (2) the object’s incriminating character is immediately apparent, and (3) the officer has a lawful right of access to the object itself.” United States v. Hughes, 940 F.2d 1125, 1126-27 (8th Cir.1991) (quoting Horton v. California, 496 U.S. 128, 138-40, 110 S.Ct. 2301, 110 L.Ed.2d 112 (1990)) (internal quotation marks omitted). The discovery of evidence under the plain view doctrine need not be inadvertent. Id. at 1127; see also Horton, 496 U.S. at 139-40, 110 S.Ct. 2301. If an officer has a valid warrant for one item and only a suspicion that another is in the same place, the discovery of the second item is not invalidated if it is found in plain view while looking for the first item. See id. at 139, 110 S.Ct. 2301. The six day delay in execution until after Abumayyaleh had purchased the Colt .45 from the undercover officer does not prove the government executed the search warrant in bad faith. In fact, the detective who obtained the search warrant testified, although the warrant was obtained on November 22, it was not executed until six days later because during the Thanksgiving weekend there were not enough officers to execute the search warrant safely and properly. Whether officers suspected Abumayyaleh had other weapons and whether they waited to execute the warrant until he bought a firearm from the informant does not affect the reasonableness and constitutionality of the search warrant. The district court properly denied Abumayyaleh’s motion to suppress, because probable cause supported the warrant and the plain view doctrine applies. D. Prior Convictions Abumayyaleh next appeals the district court’s denial of his motion for judgment of acquittal, or in the alternative, a new trial. Abumayyaleh argues the district court denied him a fair trial by admitting his prior convictions under Federal Rules of Evidence 403 and 404(b), even though Abumayyaleh’s firearm conviction tends to show a predisposition to possess a firearm when legally prohibited from doing so. A district court’s evidentiary rulings are reviewed for abuse of discretion. See United States v. Mejia-Uribe, 75 F.3d 395, 397 (8th Cir.1996) (citation omitted). Federal Rule of Evidence 403 allows a court to deny the admission of relevant evidence when the probative value is substantially outweighed by the danger of unfair prejudice. Fed.R.Evid. 403. Federal Rule of Evidence 404(b) allows “admission of evidence of other crimes, wrongs, or acts to show proof of motive, intent, or preparation if, among other reasons, the evidence is of bad acts similar and not overly remote in time to the crime committed.” United States v. Coleman, 284 F.3d 892, 894 (8th Cir.2002) (citation and internal quotation marks omitted). “Other crimes evidence is admissible if it is: (1) relevant to a material issue; (2) of crimes similar in kind and reasonably close in time to the crime charged; (3) sufficient to support a jury finding that the defendant committed the other crimes; and (4) more probative than prejudicial.” Mejia-Uribe, 75 F.3d at 397-98 (citation and internal quotation marks omitted). “Under this test, admissibility of other crimes evidence depends on the nature and purpose of the evidence.” Id. at 398 (citation omitted). In United States v. Engleman, 648 F.2d 473, 479 (8th Cir.1981), we allowed the admission of a thirteen-year-old conviction because of its factual similarity to the crime charged. “[T]here is no absolute rule regarding the number of years that can separate offenses.” Id. We apply a “reasonableness standard and examine the facts and circumstances of each case.” Id. (citations omitted). Evidence of prior bad acts “is admissible to show a defendant’s predisposition once the defendant has asserted the entrapment defense.” Crump, 934 F.2d at 954 (citations omitted). The government used the prior convictions to prove predisposition in response to Abumayyaleh’s assertion of entrapment as a defense and the prior convictions were sufficiently similar factually to the case at bar. In the 1993 conviction, Abumayyaleh received a stolen firearm. In the 1995 conviction, Abumayyaleh possessed a firearm as a felon and removed the identification numbers. The district court did not abuse its discretion in admitting the prior convictions because of their high probative value and the necessity to prove predisposition. E. Sentencing Finally, Abumayyaleh requests remand of this case due to errors in the calculation of his base offense level and application of several sentencing enhancements. We reverse Abumayyaleh’s sentence on one ground. ‘We review a district court’s factual findings for clear error and its interpretation and application of the advisory sentencing guidelines de novo.” United States v. Wells, 469 F.3d 716, 720 (8th Cir.2006) (citation omitted). “When construing the Guidelines, we look first to the plain language, and where that is unambiguous we need look no further.” United States v. Nevarez-Espino, 471 F.3d 926, 927 (8th Cir.2006) (citation and internal quotation marks omitted). At sentencing, the district court applied United States Sentencing Guidelines § 2K2. 1(b)(4), which allows the sentencing judge to increase the base offense level by two levels “[i]f any firearm ... was stolen....” U.S.S.G. § 2K2.1(b)(4). Under the plain language of this guideline, the two-level sentencing enhancement applies only if the firearm “was stolen.” § 2K2.1(b)(4) (emphasis added). We recognize this creates a situation in which the enhancement does not apply even if the offender intended to purchase stolen firearms, so long as the firearm involved in the sting operation was not actually stolen. Nonetheless, we are bound by the plain text of the guidelines. The district court erred in applying the enhancement given the facts of Abumayyaleh’s case, and re-sentencing is necessary. III. CONCLUSION For the foregoing reasons, Abumayyaleh’s conviction is affirmed and his sentence is reversed and remanded for resentencing in accordance with this opinion. . United States v. Leon, 468 U.S. 897, 104 S.Ct. 3405, 82 L.Ed.2d 677 (1984). . The Minnesota state search warrant was directed solely toward the purported stolen goods Abumayyaleh purchased.

4222358-28066

DUBINA, Chief Judge: Brian Scott Culver appeals his convictions and sentences on five counts of production of child pornography under 18 U.S.C. § 2251(a). For the reasons that follow, we affirm. I. FACTS On the night of November 11, 2003, K.W., a thirteen year old girl, awoke to a shock on her upper back that made her feel like she was being electrocuted. K.W. turned around, and, to her surprise, saw her stepfather, Brian Scott Culver, in bed with her with a stethoscope around his neck. As K.W. left her room, she noticed that Culver was shoving the stethoscope and some other items under her bed. After venturing to the kitchen in a state of shock to get a glass of water, K.W. woke her mother, Sharon Brasuell, and told her what had happened. K.W. and Brasuell confronted Culver, and when Culver denied that he had done anything wrong, K.W. and Brasuell looked under KW.’s bed and found a stethoscope, a vaginal syringe containing K-Y Jelly and a white pill, condoms, and various other items. Culver became angry and told Brasuell that he wanted a divorce. After packing a bag with clothing and some of the items that had been under KW.’s bed, Culver departed from the family’s Hoover, Alabama residence and headed for his lake house in Cullman County, Alabama. Concerned by the evening’s events, Brasuell called the Hoover police to report an incident of domestic violence. When the police arrived at the Hoover residence early on the morning of November 12, Brasuell gave them permission to search the entire premises. The police found an Aleve bottle that contained alprazolam, commonly known as Xanax, and diazepam, commonly known as Valium; a Pamprin bottle that contained zolpidem, commonly known as Ambien; a stun gun box; and seven Polaroid photographs. Five of the photographs depict a nude female from the hips to the mid-thighs. The female’s hands and vagina are clearly visible in these five photographs. The other two photographs depict a nude male from the waist down. The police instructed Brasuell, K.W., and HW.’s brother to continue to be on the lookout for suspicious items at the Hoover residence, and on November 13, Brasuell and KW.’s brother found a Polaroid camera and a video camera. On November 14, the police returned to the residence and discovered an 8mm videotape. The tape contains two segments: the first segment lasts nearly 19 minutes, and the second lasts approximately one minute. On the first segment of the tape, the female’s hands and vagina are clearly visible, and the female’s hands do not move at all. The tape depicts a male digitally manipulating the female’s vagina and inserting a vaginal syringe into her vagina. At trial, Culver stipulated that his thumb appears on the tape. II. PROCEDURAL HISTORY The state of Alabama brought four charges against Culver: two counts of possession of child pornography, one count of distributing drugs to a minor, and one count of domestic violence for allegedly shocking K.W. with a stun gun. The jury in Culver’s state trial convicted him of both counts of possession of child pornography, but acquitted him of the charges of drugging and shocking K.W. In January 2007, a federal grand jury indicted Culver on two counts of producing child pornography in violation of 18 U.S.C. § 2251(a). In March, the grand jury returned a superseding indictment charging Culver with one count of producing child pornography on an 8mm videotape (Count One), and five counts of producing child pornography on Polaroid film (Counts Two through Six). At trial, the government produced the 8mm videotape and the Polaroid photographs as well as pictures of K.W. and Sharon Brasuell that display the same areas of the body that are depicted on the tape and in the photographs. The jury also directly observed identifying marks on KW.’s hands, K.W. and Brasuell testified that K.W. was the subject of the sexually explicit visual depictions on the tape and in the photographs. Based on their evaluation of all of the evidence presented at trial, the jury returned a verdict of guilty on Counts One, Two, Three, Four, and Six and a verdict of not guilty on Count Five. Culver’s presentence report (“PSI”) assigned his crimes a base offense level of 27. The base level was enhanced two levels because the victim was between the ages of 12 and 16, two levels because the victim was Culver’s stepdaughter, and two levels because the victim was under the influence of drugs and thus vulnerable to sexual exploitation, for a total offense level of 33. Based on this offense level and a criminal history category of II, Culver’s advisory Guidelines sentence range was 151 to 188 months. However, because the statutory minimum on each count was 180 months, see 18 U.S.C. § 2251(e), the lower end of the advisory Guidelines sentence range was automatically adjusted to 180 months. The PSI recommended an upward departure from the Guidelines range for extreme conduct on the basis of Culver’s alleged use of a stun gun. Upon consideration of the presentence report, the testimony of various character witnesses, and the purposes of sentencing stated in 18 U.S.C. § 3553(a), the district court sentenced Culver to the statutory maximum of 360 months on each count with the sentences on Counts One and Two running concurrently; the sentences on Counts Three, Four, and Six running concurrently; and the two sets of sentences running consecutively, for a total sentence of 720 months imprisonment. III. DISCUSSION Culver raises a number of issues in his appeal. He contests the constitutionality of the statute under which he was convicted, a number of evidentiary rulings made by the district court, one of the district court’s instructions to the jury, and the sentence imposed by the district court. A. Jurisdiction The statutory provision at issue in this case was enacted as part of the Child Pornography Prevention Act of 1996 (“CPPA”), Pub.L. No. 104-208, § 121, 110 Stat. 3009-26 (codified as amended in scattered sections of 18 U.S.C. ch. 110). As relevant to Culver’s appeal, the CPPA provides that: Any person who employs, uses, persuades, induces, entices, or coerces any minor to engage in ... any sexually explicit conduct for the purpose of producing any visual depiction of such conduct ... shall be punished as provided under subsection (e) ... if that visual depiction was produced or transmitted using materials that have been mailed, shipped, or transported in or affecting interstate or foreign commerce by any means .... 18 U.S.C. § 2251(a). Culver contends that the district court did not have jurisdiction over the offense charged in Count One of the superseding indictment because § 2251(a) is unconstitutional as applied to his production of child pornography on an 8mm videotape. In addition, Culver maintains that his conduct did not meet the jurisdictional requirement of § 2251(a). We disagree with both of Culver’s jurisdictional arguments. In United States v. Maxwell, 446 F.3d 1210 (11th Cir.2006) (“Maxwell II"), we examined whether 18 U.S.C. § 2251A, another provision of the CPPA, is constitutional under the Commerce Clause in light of the Supreme Court’s decision in Gonzales v. Raich, 545 U.S. 1, 125 S.Ct. 2195, 162 L.Ed.2d 1 (2005). We explained that the task of courts faced with an as-applied Commerce Clause challenge is to determine “whether Congress could rationally conclude that the cumulative effect of the conduct by [the defendant] and his ilk would substantially affect interstate commerce — specifically the interstate commerce Congress is seeking to eliminate.” Maxwell II, 446 F.3d at 1218. Upon examination of the CPPA, we determined that “there is nothing irrational about Congress’s conclusion, supported by its findings, that pornography begets pornography, regardless of its origin. Nor is it irrational for Congress to conclude that its inability to regulate the intrastate incidence of child pornography would undermine its broader regulatory scheme designed to eliminate the market in its entirety .... ” Id. We concluded that “it is within Congress’s authority to regulate all intrastate possession of child pornography, not just that which has traveled in interstate commerce or has been produced using materials that have traveled in interstate commerce.” Id. Culver’s argument that § 2251(a) is unconstitutional as applied to his conduct is foreclosed by our conclusion in Maxwell II that Congress has broad authority to regulate both intrastate and interstate child pornography. Congress has chosen to criminalize the production of child pornography “using materials that have been mailed, shipped, or transported in or affecting interstate or foreign commerce by any means.” 18 U.S.C. § 2251(a). At trial, the government proved that the magnetic tape in the 8mm videotape at issue was manufactured in Japan and transported to Dothan, Alabama. However, because the magnetic tape at issue is a component of the finished 8mm videotape assembled in Alabama, Culver contends that the magnetic tape does not fall within the scope of the statutory term “materials.” Culver’s argument is inconsistent with the plain meaning of the statute, and it ignores the fact that he could not have made the visual depictions at issue without the magnetic tape. We conclude that the jurisdictional requirement of § 2251(a) was met in this case, and the district court had jurisdiction over the offense charged in Count One of the superseding indictment. B. Evidentiary Rulings Culver challenges a number of the evidentiary rulings made by the district court. After a thorough review of the record and having the benefit of oral argument, we conclude that all of Culver’s evidentiary claims are without merit. 1. Drug and Stun Gun Evidence Culver first asserts that the district court improperly admitted evidence under Federal Rule of Evidence 404(b) that he drugged and used a stun gun on K.W. on November 11, 2003. “We review the district court’s admission of prior crimes or bad acts under [Rule] 404(b) for abuse of discretion.” United States v. Ramirez, 426 F.3d 1344, 1354 (11th Cir.2005). The government presented evidence that Culver drugged K.W. with Valium and Xanax and that he attempted to drug K.W. with Ambien. K.W. testified that Culver gave her two blue pills from an Aleve bottle on November 11. K.W. said that she took one of the pills and threw one of them away in the kitchen garbage can. The police found an Aleve bottle containing 13 Valium tablets and 24 Xanax tablets at the Hoover residence and recovered a Xanax tablet from the kitchen garbage can. K.W. tested positive for Valium, and although the Alabama Department of Forensic Sciences did not attempt to determine the specific quantity of Valium in KW.’s blood, a departmental representative testified that test data suggested that K.W. had taken a single acute dose of Valium. Sharon Brasuell testified that she found a vaginal syringe containing K-Y Jelly and a white pill under K.W.’s bed and that she discharged the pill from the syringe and placed the pill in a Pamprin bottle containing identical white pills. The Pamprin bottle recovered by the police at the Hoover residence contained six Ambien tablets. In addition, the police found computer printouts detailing the effects of Valium and Ambien in Culver’s Jeep. The government also presented evidence that Culver shocked K.W. on her upper back with a stun gun. K.W. testified that she awoke to a shocking sensation on her upper back late in the evening on November 11 and that Culver was in her bed when she awoke. When the police arrived on the scene, they took pictures of marks on K.W.’s upper back that appeared to have been made by a stun gun, and they found a stun gun box in the closet of Culver’s bedroom. Rule 404(b) provides that: Evidence of other crimes, wrongs, or acts is not admissible to prove the character of a person in order to show action in conformity therewith. It may, however, be admissible for other purposes, such as proof of motive, opportunity, intent, preparation, plan, knowledge, identity, or absence of mistake or accident .... Fed.R.Evid. 404(b). We have explained that Rule 404(b) “is one of inclusion which allows [other act] evidence unless it tends to prove only criminal propensity.” United States v. Cohen, 888 F.2d 770, 776 (11th Cir.1989). “The list provided by the rule is not exhaustive and the range of relevancy outside the ban is almost infinite.” Id. (internal quotation marks omitted). Evidence of prior bad acts must meet a three-part test for admissibility: (1) the evidence must be relevant to an issue other than defendant’s character; (2) the probative value must not be substantially outweighed by its undue prejudice; [and] (3) the government must offer sufficient proof so that the jury could find that defendant committed the act. United States v. Ellisor, 522 F.3d 1255, 1267 (11th Cir.2008) (quoting Ramirez, 426 F.3d at 1354). The government did not offer the evidence that Culver drugged and shocked K.W. to establish that Culver’s character made him more likely to commit the charged offense. To the contrary, the government submitted evidence that Culver had the knowledge and the means to render K.W. unconscious to explain to the jury why K.W. could not remember the filming of the tape and why the female depicted on the tape remained completely motionless. The drug and stun gun evidence was offered for a non-character-related purpose. “In assessing the probative value of the extrinsic evidence, we evaluate the Government’s incremental need for the evidence to prove guilt beyond a reasonable doubt, ‘the overall similarity of the extrinsic and the charged offenses and the closeness or remoteness in time of the charged to the extrinsic offense.’ ” Ellisor, 522 F.3d at 1268 (quoting United States v. Parr, 716 F.2d 796, 805 (11th Cir.1983)). Although several months elapsed between the filming of the child pornography and Culver’s drugging and shocking of K.W., the government’s incremental need for the drug and stun gun evidence to overcome any potential doubt generated by K.W.’s inability to remember the events in question and the overall similarity between the acts depicted on the tape and the events of November 11 render the drug and stun gun evidence highly probative. Furthermore, although the drug and stun gun evidence may have had a prejudicial effect, we cannot say that the evidence’s potential for undue prejudice substantially outweighed the evidence’s probative value. With respect to the third prong of the Rule 404(b) admissibility test, Culver contends that the government did not offer proof sufficient for the jury to conclude that he drugged and shocked K.W. because he was acquitted of these acts in state court. Culver’s state trial is irrelevant to the issue before us. In our view, the government presented sufficient evi dence in the federal trial for the jury to conclude that Culver drugged and shocked K.W, and the district court did not abuse its discretion in admitting this evidence. 2. KW.’s Prior Sexual History Federal Rule of Evidence 412(a) provides that, in general, in a “criminal proceeding involving alleged sexual misconduct,” “[e]vidence offered to prove that any alleged victim engaged in other sexual behavior” is inadmissible. The rule also provides, as a narrow exception to this broad general principle, that evidence of a victim’s prior sexual history is admissible when the exclusion of such evidence “would violate the constitutional rights of the defendant.” Fed.R.Evid. 412(b)(1)(C). Culver contends that his case implicates the narrow exception to the general rule and that the district court erred by refusing to allow him to present evidence of KW.’s sexual history. Culver claims that he should have been allowed to present such evidence to rebut evidence offered by the government that Culver was responsible for condoms and a broken abstinence card found in K.W.’s room. As with other rulings on the admissibility of evidence, we review a district court’s application of Rule 412 for abuse of discretion. See Judd v. Rodman, 105 F.3d 1339, 1341 (11th Cir.1997). “In determining the admissibility of a victim’s other sexual behavior under Rule 412(b)(1)(C), we start with the premise that defendants have a constitutional right under the Fifth and Sixth Amendments to introduce evidence in their defense.” United States v. Pumpkin Seed, 572 F.3d 552, 559 (8th Cir.2009). However, “the right to present relevant testimony is not without limitation.” Rock v. Arkansas, 483 U.S. 44, 55, 107 S.Ct. 2704, 2711, 97 L.Ed.2d 37 (1987). “[T]rial judges retain wide latitude ... to impose reasonable limits on [testimony] based on concerns about, among other things, harassment, prejudice, confusion of the issues, the witness’ safety, or interrogation that is repetitive or only marginally relevant.” Delaware v. Van Arsdall, 475 U.S. 673, 679, 106 S.Ct. 1431, 1435, 89 L.Ed.2d 674 (1986). Limitations on a defendant’s constitutional right to present evidence are permissible unless they are “arbitrary or disproportionate to the purposes they are designed to serve.” Michigan v. Lucas, 500 U.S. 145, 151, 111 S.Ct. 1743, 1747, 114 L.Ed.2d 205 (1991). The district court’s exclusion of evidence of KW.’s prior sexual history was not arbitrary or disproportionate to the purposes that Rule 412 was designed to serve. The admission of such evidence would have confused the jury and harassed K.W., and the evidence is marginally relevant at best. The key issue in this case is the identity of the female on the tape and in the photographs. Whether Culver was the source of the condoms or the broken abstinence card found in KW.’s room is not relevant to the issue of the identity of the female on the tape. See United States v. Sarras, 575 F.3d 1191, 1213 (11th Cir.2009) (explaining that victim’s other sexual conduct was irrelevant to issue of identification in child pornography production case under § 2251(a)). Furthermore, the district court allowed Culver to cross-examine K.W. on every issue concerning her prior sexual history that was potentially relevant to the charged conduct. The female depicted on the tape had a shaved pubic region, and on cross-examination, Culver was allowed to ask K.W. when and why she had shaved her pubic region in an effort to prove that K.W. is not the female depicted in the tape. At that time, K.W. revealed that she had shaved her pubic region to please her boyfriend. In addition, the district court allowed Culver to attempt to establish KW.’s bias by allowing testimony that K.W. had gotten into trouble early in the morning on November 11 and that K.W. was extremely angry with Culver for his role in disciplining her. We agree with the district court that the jury did not need to hear the details of the conduct for which K.W. was disciplined in order for Culver to have a constitutionally sufficient opportunity to impeach K.W. Because the evidence Culver claims he needs to rebut is irrelevant, and the district court allowed Culver to cross-examine K.W. on every issue that had any potential relevance to his defense, we conclude that Culver has not shown that the district court’s application of Rule 412 violated his constitutional rights. The district court did not abuse its discretion by excluding evidence of K.W.’s prior sexual history, but assuming arguendo that the district court erred by excluding evidence of KW.’s prior sexual history, we conclude that any such error was harmless because the evidence establishing Culver’s guilt was overwhelming. See Fed. R.Crim.P. 52(a); United States v. Harriston, 329 F.3d 779, 789 (11th Cir.2003) (explaining that error is harmless “where there is overwhelming evidence of guilt.”). 3. Request for Additional Photographs Culver next contends that the district court abused its discretion by denying his request for additional photographs of K.W. and Sharon Brasuell. For Culver’s state trial, the prosecution took two sets of photographs of K.W., one on November 12, 2003, and one on September 9, 2004. The state also took a set of photographs of Brasuell on September 9, 2004. Nonetheless, Culver asserts that he needed additional photographs of K.W. and Brasuell to present his defense because the available photographs do not adequately depict all of the relevant areas of the bodies of K.W. and Brasuell. The second segment of the 8mm videotape displays the buttocks and the backs of the thighs of a female lying on her left side. The female depicted in this portion of the tape has a series of dark spots on the backs of her thighs. Culver claims that he needed additional photos of the backs of the thighs of K.W. and Brasuell to show that the female depicted in the second segment of the tape is not K.W. But the government did not try to prove that the second segment of the tape is illegal child pornography. Moreover, some of the photos taken of K.W. for the state trial clearly show that K.W. did not have dark spots on the backs of her thighs. Culver has not made any credible argument that the available photographs of K.W. and Brasuell do not adequately display the areas of the body that were visible on the female in the first segment of the tape. The district court did not abuse its discretion by denying Culver’s request for additional pictures. 4. Prior Felony Convictions Culver argues that the district court erred by ruling that the government could present evidence of Culver’s state court felony convictions for possession of child pornography to impeach Culver and any character witnesses that Culver might have presented. Because Culver did not testify, he may not raise a claim that the district court erroneously determined that his prior convictions could be used to impeach any testimony that he might have given. Luce v. United States, 469 U.S. 38, 43, 105 S.Ct. 460, 464, 83 L.Ed.2d 443 (1984) (“[T]o raise and preserve for review the claim of improper impeachment with a prior conviction, a defendant must testify.”). Similarly, because Culver did not call any character witnesses, we will not address his claim that the district court erroneously determined that his prior convictions could be used to impeach the testimony of any character witnesses that he might have called. See United States v. LeCroy, 441 F.3d 914, 928 (11th Cir.2006) (“The defendant could have called his witnesses, had them testify, and then objected at the proper time .... ”). 5. Cumulative Error Culver contends that all of the alleged evidentiary errors made by the district court had an aggregate prejudicial effect that amounted to the denial of a fair trial. This contention is clearly without merit in light of our conclusion that the district court did not abuse its discretion in making any of the evidentiary rulings challenged by Culver. See United States v. Waldon, 363 F.3d 1103, 1110 (11th Cir.2004) (concluding that cumulative error doctrine is inapplicable where district court commits no individual errors). C. Jury Instruction Culver asserts that the district court erred by failing to give his requested jury instruction on circumstantial evidence. “We review a district court’s refusal to give a requested jury instruction for abuse of discretion.” United States v. Klopf, 423 F.3d 1228, 1241 (11th Cir.2005). We will find an abuse of discretion where “ ‘(1) the requested instruction was substantively correct, (2) the court’s charge to the jury did not cover the gist of the instruction, and (3) the failure to give the instruction substantially impaired the defendant’s ability to present an effective defense.’ ” Id. (quoting United States v. Roberts, 308 F.3d 1147, 1153 (11th Cir.2002)). Culver’s requested instruction dealt with the topics of circumstantial evidence and reasonable doubt, and the district court’s instructions to the jury adequately covered both topics. Accordingly, we conclude that the district court did not abuse its discretion in rejecting Culver’s requested instruction. D. Sufficiency of the Evidence Culver contends that the government did not present evidence sufficient to establish that he violated § 2251(a). We review a sufficiency of the evidence challenge de novo, considering the evidence in the light most favorable to the government and resolving all reasonable inferences and credibility determinations in favor of the jury’s verdict. United States v. Robertson, 493 F.3d 1322, 1329 (11th Cir.2007). The key issue in this case is whether the female depicted on the tape and in the photographs was a minor, and Culver does not dispute that K.W. was a minor when the tape and photographs were produced. Sharon Brasuell and K.W. testified that K.W. is the female on the tape and in the photographs. Brasuell identified K.W. by her slender body, her long slender hands, the style and condition of her fingernail polish, and a distinctive red spot on her right hand. K.W. identified herself by her body shape, her shaved pubic region, the style and condition of her fingernail polish, and a distinctive red spot on her right hand. The jury also viewed pictures of K.W. taken for comparison purposes and directly observed KW.’s hands in court. In addition to the direct evidence identifying K.W. as the female on the tape and in the photographs, the government also presented substantial circumstantial evidence indicating that Culver produced illegal visual depictions of K.W. A unique set of blue sheets with snowflakes and polar bears is visible on the tape and in the photographs. Brasuell testified that she purchased these sheets for Culver for use in the master bedroom at his Cullman County lake house. K.W. testified that, at some point in early 2003, she had fallen asleep on the couch at the Cullman County lake house and woke up in the master bedroom. K.W. could not remember how she had gotten to the master bedroom and testified that she experienced a sensation of numbness in her pubic area when she awoke. As discussed above, the government presented convincing evidence that Culver knew how to render K.W. unconscious. Viewing all of the evidence presented by the government in the light most favorable to the government and drawing all reasonable inferences in favor of the jury’s verdict, we are convinced that the government presented evidence sufficient to support a finding of guilt beyond a reasonable doubt. E. Sentencing Culver argues that the sentence imposed by the district court violates the spirit of United States v. Booker, 543 U.S. 220, 125 S.Ct. 738, 160 L.Ed.2d 621 (2005), because the district court considered allegations that Culver drugged and shocked K.W. — conduct with which the government did not charge Culver in an indictment, upon which the jury did not pass in its verdict, and of which a state court jury acquitted Culver. Culver contends that the district court’s consideration of this acquitted conduct violates the Due Process Clause of the Fifth Amendment and the Double Jeopardy Clause of the Sixth Amendment. Culver’s arguments are without merit. It is well-settled that a sentencing court may consider conduct for which a defendant has been acquitted if the government proves the conduct in question by a preponderance of the evidence. United States v. Duncan, 400 F.3d 1297, 1304 (11th Cir.2005); see also United States v. Barakat, 130 F.3d 1448, 1452 (11th Cir.1997) (citing United States v. Watts, 519 U.S. 148, 153, 117 S.Ct. 633, 636, 136 L.Ed.2d 554 (1997); United States v. Frazier, 89 F.3d 1501, 1506 (11th Cir.1996); United States v. Averi, 922 F.2d 765, 766 (11th Cir.1991)). Booker merely requires that consideration of acquitted conduct does not result in “a sentence that exceeds what is authorized by the jury verdict.” Duncan, 400 F.3d at 1304. The district court properly considered evidence that Culver drugged and shocked K.W., and the sentence imposed by the district court did not exceed the sentence authorized by the jury verdict. Thus, we conclude that the sentence imposed by the district court did not violate Culver’s constitutional rights.

3517265-22645

MEMORANDUM AND ORDER MURGUIA, District Judge. Plaintiff brings this lawsuit against defendant for trademark infringement, trademark dilution, false designation of origin, and unfair competition. Defendant filed counterclaims, seeking to have plaintiffs trademark registrations canceled based on being generic, functionality, abandonment, and fraud. This matter is before the court on Plaintiffs Motion for Summary Judgment (Doc. 52) and Defendant’s Motion for Summary Judgment (Doc. 54). I. Factual Background Plaintiff Hodgdon Powder Company, Inc. and defendant Alliant Techsystems, Inc. are business competitors that supply reloading gunpowder to the shooting sports industry. The primary market for most shotgun reloading powders is “clay” target shooters. These target shooters shoot at flying round orange clay targets as part of the sports of Trap, Skeet, or Sporting Clays. Plaintiff has several registered trademarks for its gunpowders that have “clays” in the title — CLAYS, INTERNATIONAL CLAYS, and UNIVERSAL CLAYS. Plaintiff introduced CLAYS in the early 1990s. CLAYS is a shotgun gunpowder designed for target shooters and named to appeal to plaintiffs target audience — clay target shooters. The CLAYS product label includes a pair of orange clay targets in flight superimposed on the word CLAYS. Plaintiffs name is displayed at the top of the label. On January 26, 1993, plaintiff registered the trademark CLAYS with the U.S. Patent and Trademark Office (“PTO”). Dur ing the registration process, the PTO required plaintiff to “indicate whether Clays has any significance in the relevant trade, any geographical significance or any meaning in a foreign language.” (Def.’s Br. Ex. 38.) Plaintiff responded to the PTO stating that “[s]o far as trade relevant to gun powder is concerned, there is the shooting sport know (sic) as ‘shooting clays’ which involves using clay pigeons (clay discs) as the target. This is the only use of ‘CLAYS’ currently known to applicant in this field.” (Id.) Thomas Shepherd, plaintiffs president, filed an affidavit swearing that plaintiff did not intend to mislead the Trademark Examiner when it registered the CLAYS trademark. Plaintiff has continued to use the trademark and has no intention of discontinuing its use. In 2005, defendant introduced a new shotgun powder specifically designed for clay target shooters. According to his declaration, Jeffrey Bandel, defendant’s former Program Manager, named the powder CLAY DOT. Mr. Bandel named the powder after defendant’s “DOT” series of reloading powders — RED DOT, GREEN DOT, and BLUE DOT. He also states that defendant did not choose the name to create confusion with CLAYS. According to Mr. Bandel’s affidavit, defendant obtained a legal opinion from its counsel that CLAY DOT did not infringe on any trademarked name. Defendant registered the mark on the PTO’s Principal Register. The CLAY DOT label shows an orange clay target superimposed on the words CLAY DOT. Defendant’s name is displayed at the top of the label. Plaintiff has received several inquiries about defendant’s CLAY DOT powder from people apparently confusing which company sells which gunpowder. The words “clay” and “clays” and pictures of clay targets are frequently used in the shooting sports industry. Plaintiff was aware of defendant’s use of CLAY DOT in August 2005 and filed this lawsuit in March 2006. II. Standards for Judgment Summary judgment is appropriate if the moving party demonstrates that there is “no genuine issue as to any material fact” and that it is “entitled to a judgment as a matter of law.” Fed.R.Civ.P. 56(c). In applying this standard, the court views the evidence and all reasonable inferences therefrom in the light most favorable to the nonmoving party. Adler v. Wal-Mart Stores, Inc., 144 F.3d 664, 670 (10th Cir.1998) (citing Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986)). III. Defendant’s Motion for Summary Judgment Defendant moves for summary judgment on each of plaintiffs claims — trademark infringement, false designation of origin, trademark dilution, and unfair competition. A. Trademark Inñ'ingement To prevail on its trademark infringement claim, plaintiff must establish that (1) it has a valid and protected trademark; (2) defendant used a similar mark in commerce; and (3) defendant’s use of the mark is likely to cause confusion. Health Care and Ret. Corp. of Am. v. Heartland Home Care, Inc., 396 F.Supp.2d 1262, 1266 (D.Kan.2005) (citing Team Tires Plus. Ltd. v. Tires Plus, Inc., 394 F.3d 831, 832-33 (10th Cir.2005)). “The key inquiry in a trademark infringement case is the likelihood of confusion between two similar marks.” Team Tires Phis, Ltd., 394 F.3d at 832-33. When determining the likelihood of consumer confusion, the court considers the following factors: (1) the degree of similarity between the marks; (2) the intent of the alleged in-fringer in adopting its mark; (3) evidence of actual confusion; (4) the relation in use and the manner of marketing between the goods or services marketed by the competing parties; (5) the degree of care likely to be exercised by purchasers; and (6) the strength or weakness of the marks. Id. No single factor is determinative; they must all be considered together. At all times, the court’s focus is whether the similarity of the marks is likely to deceive or confuse the consumer. Id. Likelihood of confusion is a question of fact, but it is amenable to summary judgement in appropriate cases. King of the Mountain Sports, Inc. v. Chrysler Corp., 185 F.3d 1084, 1089 (10th Cir.1999) (quotations omitted). Plaintiff argues that defendant is not entitled to summary judgment because the CLAYS mark is incontestable under 15 U.S.C. § 1065. When a mark reaches incontestable status, “its registration becomes ‘conclusive evidence of the validity of the registered mark and of the registration of the mark, of the registrant’s ownership of the mark, and of the registrant’s exclusive right to use the registered mark in commerce.’” Golf Warehouse, L.L.C. v. Golfer’s Warehouse, Inc., 142 F.Supp.2d 1307, 1309 (D.Kan.2001) (quoting 15 U.S.C. § 1115(b)). Notwithstanding the mark’s incontestable status, “[t]he party alleging infringement has the burden of proving likelihood of confusion.” Universal Money Ctrs., Inc. v. Am. Tel. & Tel. Co., 22 F.3d 1527, 1530 (10th Cir.1994) (quotations omitted). Because the CLAYS mark is incontestable, it is presumed to have a secondary meaning that identifies the source of the product to consumers. Beer Nuts, Inc. v. Clover Club Foods Co., 805 F.2d 920, 924 (10th Cir.1986). Thus, the inquiry is whether CLAY DOT is likely to cause confusion in the market place as to the source of the products. 1.Degree of Similarity Between the Marks The degree of similarity is measured by the sight, sound, and meaning of the marks. First Sav. Bank, F.S.B. v. First Bank Sys., Inc., 101 F.3d 645, 658 (10th Cir.1996). These factors are examined “in the context of the marks as a whole as they are encountered by consumers in the marketplace.” King of Mountain Sports, 185 F.3d at 1090. The marks are not compared side-by-side; instead, the inquiry is whether the alleged infringing mark will be confusing to the public when singularly presented. Id. The similarities of the marks are given more weight than the differences. Id. The product labels have visual distinctions. The CLAYS product label has a light background and includes a pair of orange shotgun targets superimposed on the word CLAYS. The CLAY DOT label has a dark background and displays an orange shotgun target superimposed on the words CLAY DOT. Each label displays the company name at the top of the label. The pronunciation of CLAYS versus CLAY DOT also has distinctions. CLAY DOT is singular and contains an additional word. But the marks have similarities. Both labels picture orange clay targets. And both use the term “clay” to refer to a clay target. Both parties use the term clay to convey similar meanings — that the gunpowder can be used for clay target shooting. A reasonable fact-finder may determine that the mark’s similarities create consumer confusion. See, e.g., Beer Nuts, Inc., 805 F.2d at 926 (finding that BREW NUTS and BEER NUTS were confusingly similar and conveyed the same meaning). This factor weighs in favor of likelihood of confusion. 2. Intent of the Alleged Infringer in Adopting its Mark “Proof that a defendant chose a mark with the intent of copying the plaintiffs mark may, standing alone, justify an inference of likelihood of confusion.” Sally Beauty Co. Inc. v. Beautyco, Inc., 304 F.3d 964, 973 (10th Cir.2002). “Conversely, if the evidence indicates a defendant did not intend to derive benefit from a plaintiffs existing mark, this factor weighs against the likelihood of confusion.” Heartsprings, Inc. v. Heartspring, Inc., 143 F.3d 550, 556 (10th Cir.1998). When determining defendant’s intent, the proper focus is whether defendant intended to derive a benefit from plaintiffs reputation or goodwill. King of the Mountain Sports, 185 F.3d at 1090. Defendant selected the product name CLAY DOT as a continuation of its DOT gunpowder line. “Clay” corresponds to the orange color of the clay targets. “Dot” is consistent with defendant’s other gunpowders: RED DOT, BLUE DOT and GREEN DOT. Nothing in the record suggests that defendant chose CLAY DOT with the intent to infringe on plaintiffs CLAYS mark. In fact, prior to adopting CLAY DOT, defendant sought legal advice regarding potential infringement. Based on the record, it does not appear that defendant adopted CLAY DOT with the intent to infringe upon the CLAYS mark. This factor weighs against likelihood of confusion. 3. Actual Confusion Evidence of actual confusion is not necessary, but may be the best indication of likelihood of confusion. Sally Beauty Co., 304 F.3d at 974. Although the record contains evidence of confused consumers, it is not conclusive. There is a genuine question of fact as to whether there has been actual consumer confusion. 4. Relation in Use and the Manner of Marketing Between the Goods or Services The court next considers the similarities in the use and marketing of the gunpow-ders. “Typically, ‘[t]he greater the similarity between the products and services, the greater the likelihood of confusion.’ ” King of the Mountain Sports, 185 F.3d at 1092 (quoting Universal Money Ctrs., 22 F.3d at 1532). In this case, the products are used and marketed in a similar manner. The gunpowders are similar and sold to the same group of consumers — clay target shooters. Defendant argues that there are differences in the way the products are marketed because defendant’s canisters cannot be displayed at retail stores pursuant to the national fire regulations, which means only plaintiffs product is on the display shelf. Plaintiff argues that the fire regulations are local regulations, and thus, the gunpowders may be displayed near each other in some retail stores. Even if defendant’s gunpowder is not on display at some retail stores, this is a minor difference in the manner of marketing. The similarities in the use and marketing of the gunpowders weigh in favor of likelihood of confusion. 5. Degree of Care Likely to Be Exercised by Purchasers Defendant contends that consumers are likely to use a high degree of care when purchasing these products because they are using the products to reload their ammunition. Plaintiff argues that consumers do not exercise care in purchasing a reloading powder because the two powders are interchangeable. By its ,■ vary nature, reloading ammunition can be dangerous. Most consumers are likely to take great care in making sure they have the proper gunpowder to make their ammunition. The court finds that this factor weighs against likelihood of confusion. 6. Strength or Weakness of the Marks “The stronger the mark, the greater the likelihood that encroachment on the mark will cause confusion.” Sally Beauty Co., 304 F.3d at 975. When assessing the relative strength of a mark, the court must consider two different aspects of strength — conceptual strength and commercial strength. King of the Mountain Sports, 185 F.3d at 1093. Conceptual strength is the mark’s placement among the distinctiveness spectrum, whether the mark is fanciful, arbitrary, suggestive, descriptive, or generic. Commercial strength is the marketplace’s recognition value of the mark. Id. “Categorization of a mark along the conceptual strength spectrum generally is an issue of fact.” Big Dog Motorcycles, L.L.C. v. Big Dog Holdings, Inc., 402 F.Supp.2d 1312, 1336 (D.Kan.2005). As explained below, there is a genuine question of fact regarding CLAYS conceptual strength — whether it has become generic. In terms of commercial strength, a strong mark is one that is rarely used by anyone other than the owner of the mark; a weak mark is one that is often used by other parties. First Sav. Bank, F.S.B., 101 F.3d at 653-54. When determining commercial strength, the court considers the number of identical or more or less similar marks already in use on different kinds of goods, not just gun-powders. Id. The word “clay” and pictures of clay targets are used on other products in the shooting sport industry to refer to the clay shooting targets, which makes the mark’s commercial strength relatively weak. 7. Balancing of the Likelihood of Confusion Factors After considering all of the factors relevant to the likelihood of confusion analysis, the court concludes that a rational trier of fact could find that consumers are likely to be deceived or confused by the similarity of the marks. Accordingly, defendant’s motion for summary judgment on plaintiffs trademark infringement claim is denied. B. False Designation of Origin Plaintiff brings its false designation of origin claim under 15 U.S.C. § 1125(a) based on trade dress. Trade dress is the product’s “overall image and appearance, and may include features such as size, shape, color, or color combinations, texture, graphics, and even particular sales techniques.” Sally Beauty Co., Inc., 304 F.3d at 977. To establish trade dress infringement, plaintiff must establish (1) that the trade dress is inherently distinctive or has become distinctive through secondary meaning; (2) that there is likelihood of confusion; and (3) that the trade dress is not functional. Id. The factors underlying the likelihood of confusion analysis for this claim are the same factors the court analyzed in plaintiffs trademark infringement claim above. Id. at 979. The parties rely on the same arguments for both likelihood of confusion analyses. For the reasons explained above, the court finds that there is a genuine question of material fact regarding whether there is a likelihood of confusion between the parties trade dress and denies defendant’s motion for summary judgment on plaintiffs trade dress claim. C. Trademark Dilution To prevail on its trademark dilution claim, “plaintiff must show that (1) it owns a ‘famous’ mark and (2) defendant’s] use has or will cause dilution.” King of the Mountain Sports, Inc. v. Chrysler Corp., 968 F.Supp. 568, 577 (D.Colo.1997). When determining whether a mark is famous, the court considers the following non-exhaustive factors: (A) the degree of inherent or acquired distinctiveness of the mark; (B) the duration and extent of use of the mark in connection with the goods or services with which the mark is used; (C) the duration and extent of advertising and publicity of the mark; (D) the geographical extent of the trading area in which the mark is used; (E) the channels of trade for the goods or services with which the mark is used; (F) the degree of recognition of the mark in the trading areas and channels of trade used by the mark’s owner and the person against whom the injunction is sought; and (G) the nature and extent of use of the same or similar marks by third parties. Id. “[T]o be famous, a mark must clearly be more than just distinctive in a trademark sense.” Id. Plaintiff argues that its mark is famous in the relevant niche because it is conclusively presumed to be distinctive — because it is incontestable — and that distinctiveness is a synonym for fame. But “[section 1125(c) does not use ‘famous’ and ‘distinctive’ interchangeably.” Id. at 578. Being distinctive in a narrow market is insufficient. Id. (holding that a certain distinctiveness in the narrow market of hunting apparel is insufficient to show that the mark is famous under § 1125(c)). Here, plaintiff has presented no evidence demonstrating the level of public recognition of its mark or that it is famous outside of the narrow gunpowder market. The court finds that plaintiff has failed to meet its burden to establish a genuine issue of material fact regarding whether its mark is famous. Defendant’s motion is granted; plaintiffs trademark dilution claim is dismissed. D. Unfair Competition In the pretrial order, plaintiffs unfair competition claim appears to include claims relating to reloading data and trade secrets. In its response to defendant’s motion, plaintiff acknowledges that it has not pleaded a cause of action regarding reloading data or trade secrets and limits its unfair competition claim to mirror its federal trademark infringement claim. Scholfield Auto Plaza, L.L. C. v. Carganza, Inc., 26 Kan.App.2d 104, 979 P.2d 144, 148 (1999) (recognizing that “to prevail under either theory, plaintiff must prove (1) it owns a valid, protectable [ ]mark and (2) defendant’s [mark] is so similar to plaintiffs it is likely to cause consumer confusion.”). As discussed above, there is a genuine issue of material fact regarding whether defendant’s mark is likely to cause consumer confusion. The court, therefore, denies defendant’s motion to dismiss plaintiffs unfair competition claim. IV. Plaintiffs Motion for Summary Judgment Plaintiff moves for summary judgment on defendant’s four counterclaims — trademark cancellation based on being generic, functionality, abandonment, and fraud' — • and several of defendant’s affirmative defenses — waiver, laches, and estoppel; acquiescence; unclean hands; and no likelihood of confusion. A. Trademark Cancellation Counterclaims 1. Generic Trademark Generic terms are ineligible for protection “because ‘[t]he public has an inherent right to call a product or service by its generic name.’ ” Donchez v. Coors Brewing Co., 392 F.3d 1211, 1216 (10th Cir.2004) (quoting U.S. Search, LLC v. U.S. Search.com, Inc., 300 F.3d 517, 522 (4th Cir.2002)). Defendant, as the party seeking cancellation, bears the burden of proving that the mark has become generic. Creative Gifts, Inc. v. UFO, 235 F.3d 540, 545 (10th Cir.2000). “A mark is generic if it is a common description of products [or services] and refers to the genus of which the particular product [or service] is a species.” Donchez, 392 F.3d at 1216. Whether a mark is generic is a question of fact. Id. The fact-finder must determine the perception of the purchasing public— would the purchasers think that the mark was generic. Id. “Evidence of the public’s understanding may come from direct testimony of purchasers, consumer surveys, dictionary listings, newspapers and other publications.” Creative Gifts, Inc., 235 F.3d at 544. Defendant can only carry its burden “by showing that the public understands the mark to signify the class of goods or services of which the trademarked product or service is a part.” Id. Plaintiff argues that defendant cannot meet its burden because it has provided no evidence that CLAYS has become generic. Defendant argues that CLAYS is generic because it refers to a central aspect or purpose of the gunpowder — to shoot clay pigeons. Defendant relies on the Merriam-Webster Online Dictionary, which has “clay pigeon” as an entry under “clay” and defines “clay pigeon” as a “target ... thrown from a trap in skeet and trap shooting.” Defendant further relies on testimony from plaintiffs employees that indicates they believe CLAYS is a good name for plaintiffs gunpowder because it describes the purpose of the powder-to shoot clay targets. After reviewing the record, the court finds that a reasonable fact-finder may conclude that CLAYS has become generic. Thus, there is a genuine question of material fact that must be determined by the fact-finder. Plaintiffs motion regarding this claim is denied. 2. Functionality Defendant’s functionality claim relates to the CLAYS trademark and trade dress. Plaintiff moves for summary judgment only on defendant’s claim relating to functionality of trade dress, not the functionality of the CLAYS trademark. As discussed above, in a trade dress claim, plaintiff bears the burden to show that the trade dress is non-functional. Sally Beauty Co., Inc., 304 F.3d at 977. In its motion, plaintiff argues that defendant has not provided evidence that the trade dress is functional, but plaintiff has not presented evidence to establish that its trade dress is non-functional. Therefore, plaintiff has not met its burden, and the court denies plaintiffs motion regarding the functionality of its trade dress. 3. Abandonment Abandonment under the Lanham Act occurs when (1) the owner of the mark ceases to use the mark with an intent not to resume such use or (2) any course of conduct of the owner, including acts of omission as well as commission, causes the mark to become the generic name for the goods or services on or in connection with which it is used or otherwise to lose its significance as a mark. 15 U.S.C. § 1127; see also The Planing Mill, L.L.C. v. Hays Planing Mill, Inc., No. Civ. 05-1051-WEB, 2005 WL 1319144, at *6 (D.Kan. June 2, 2005). Defendant does not argue, and the record does not support, that plaintiff ceased using the mark. Instead, defendant argues the court should find that plaintiff abandoned its trademark because the trademark has become generic. As discussed above, there is a genuine issue of material fact regarding whether the CLAYS mark has become generic. Plaintiffs motion is denied with respect to defendant’s abandonment claim. 4.Fraud To prevail on its claim of fraud in the procurement of a federal trademark, defendant must prove the following: (1) the false representation regarding a material fact [or a failure to disclose a material fact]; (2) the registrant’s knowledge or belief that the representation is false (scienter); (3) the intention to induce action or refraining from action in reliance on the misrepresentation; (4) reasonable reliance on the misrepresentation; and (5) damages proximately resulting from such reliance.

3785837-23524

MEMORANDUM OF OPINION MANOS, District Judge. On October 28, 1983, plaintiff, the A.I. Root Company (Root), filed the above-captioned case against the defendants, Computer Dynamics, Inc. (CDI) and Management Assistance, Inc. (MAI). It alleges that CDI and MAI engaged in anti-competitive activity in violation of the Sherman Antitrust Act, 15 U.S.C. § l. Jurisdiction is invoked pursuant to 15 U.S.C. § 15. The case is currently before the court on CDI’s and MAI’s motions for summary judgment. For the following reasons, their motions are granted. I. Root is an Ohio corporation that manufactures beekeeper’s supplies, ecclesiastical candles and other products in Medina, Ohio. It has two (2) subsidiaries located in San Antonio, Texas and Council Bluffs, Iowa. MAI is a New York corporation which manufactures Basic Four computer equipment and operating software for that equipment. CDI is an Ohio corporation and MAI’s authorized dealer in Medina, Ohio. Since 1977, Root has purchased from MAI dealers, including CDI, small business computers for payroll and other administrative purposes. In the fall of 1982, it decided to computerize its inventory and manufacturing processes. To do so, it had to upgrade its computer capabilities. CDI offered Root a new MAI Model 710 computer. However, Root purchased a used MAI Model 730B computer from Assured Systems Development, Inc. (ASD)—a dealer in used computers in Cleveland, Ohio. To operate the Model 730B, Root needed properly configured “BOSS” operating software. It obtained a BOSS software package through ASD; however, Root was not satisfied with this software since it did not have an “imput buffering” feature. Root’s efforts to have the software recon figured by MAI dealers outside the Cleveland area were unsuccessful and thus it contacted CDI. A dispute arose between Root and CDI over the cost of the proposed reconfiguration services and, also, Root’s failure to sign license agreements for software it purchased previously from CDI. See MAI’s Exhibit C. The parties negotiated for approximately eight (8) months. As of September 2, 1983, CDI offered Root reconfigured BOSS software under the following terms: 1) That Root sign the appropriate license agreements for the BOSS software and other software it already purchased from CDI; and 2) That Root agree to pay a $2,500 transfer fee for any subsequent reconfigurations it should need. MAI’s Exhibit C. Root elected not to accept these terms. Rather, it purchased new IBM equipment and software. This suit followed with Root alleging that CDI’s and MAI’s concerted refusal to reconfigure its BOSS software constituted a tying arrangement and group boycott in violation of section 1 of the Sherman Antitrust Act, 15 U.S.C. § 1. See supra note 2. II. Root alleges that CDI and MAI imposed an unlawful tying arrangement by conditioning the sale of reconfigured BOSS software (the tying product) on its purchase of computer hardware (the tied product). Complaint at ¶ 18. A tying arrangement exists when a seller sells a product (the tying product) only if the buyer will purchase another product (the tied product). Accord Jefferson Parish Hospital District No. 2 v. Hyde, 466 U.S. 2, —, 104 S.Ct. 1551, 1558, 80 L.Ed.2d 2 (1984); Fortner Enterprises, Inc. v. United States Steel Corp., 394 U.S. 495, 508-09, 89 S.Ct. 1252, 1261, 22 L.Ed.2d 495 (1969); Atlantic Refining Co. v. FTC, 381 U.S. 357, 369-71, 85 S.Ct. 1498, 1506-07, 14 L.Ed.2d 443 (1965); United States v. Loew’s Inc., 371 U.S. 38, 44-45, 83 S.Ct. 97, 102, 9 L.Ed.2d 11 (1962); Northern Pacific Ry. Co. v. United States, 356 U.S. 1, 5-6, 78 S.Ct. 514, 518, 2 L.Ed.2d 545 (1958); Times-Picayune Publishing Co. v. United States, 345 U.S. 594, 605, 73 S.Ct. 872, 878, 97 L.Ed. 1277 (1953). Under section 1 of the Sherman Antitrust Act, such arrangements are unlawful per se if the seller has “sufficient economic power with respect to the tying product to appreciably restrain free competition in the market for the tied product and a ‘not insubstantial’ amount of interstate commerce is affected.” Bender v. Southland Corp., 749 F.2d 1205, 1215 (6th Cir.1984) (citing Bouldis v. U.S. Suzuki Motor Corp., 711 F.2d 1319, 1329-30 (6th Cir.1983); Bell v. Cherokee Aviation Corp., 660 F.2d 1123, 1127 (6th Cir.1981)). See Jefferson Parish Hospital District No. 2, supra, 466 U.S. at —, 104 S.Ct. at 1559-60; Fortner Enterprises, Inc., supra, 394 U.S. at 49, 89 S.Ct. at 1256; Northern Pacific Ry. Co., supra, 356 U.S. at 6, 78 S.Ct. at 518. It bears emphasis that in order to have a per se unlawful tying arrangement, the seller must possess sufficient economic power in the tying product market so that competition in the market is appreciably restrained. See United States Corp. v. Fortner Enterprises, Inc., 429 U.S. 610, 97 S.Ct. 861, 51 L.Ed.2d 80 (1977); Fortner Enterprises, Inc., supra, 394 U.S. 495, 89 S.Ct. 1252, 22 L.Ed.2d 495. Economic power in the tying product market may be established in one of three ways. First, it may be shown that the defendant occupies a dominant position in the tying product market. See United States Steel Corp., supra, 429 U.S. at 620, 97 S.Ct. at 867; Fortner Enterprises, Inc., supra, 394 U.S. at 502-03, 89 S.Ct. at 1258; Moore v. Jas. H. Matthews & Co., 550 F.2d 1207, 1215 (9th Cir.1977). Second, it may be shown that the seller’s product is sufficiently unique in that he has “some advantage not shared by his competitors in the market for the tying product.” United States Steel Corp., supra, 429 U.S. at 620, 97 S.Ct. at 868. See Fortner Enterprises, Inc., supra, 394 U.S. at 502-03, 89 S.Ct. at 1258; Moore, supra, 550 F.2d at 1215. Lastly, economic power may be demonstrated when a substantial number of customers have accepted the tie-in and there are no explanations other than the seller’s economic power for their willingness to do so. United States Steel Corp., supra, 429 U.S. at 618 n. 10, 97 S.Ct. at 866 n. 10; Moore, supra, 550 F.2d at 1216. Because CDI and MAI do not have the required economic power to impose the alleged tie-in, the court holds that Root has not established a per se tying arrangement. A. Dominant Market Position It is uncontroverted that MAI’s share of the relevant product market in 1982-83 was only 2%-4%. See Murawski Affidavit at ¶¶ 13-17. This market share is insufficient as a matter of law to infer market dominance. Accord Jefferson Parish Hospital District No. 2, supra, 466 U.S. at —, 104 S.Ct. at 1566 (30% market share insufficient to infer market power); JBL Enterprises Inc. v. Jhirmack Enterprises, Inc., 698 F.2d 1011, 1017 (9th Cir.) (seller lacked economic power in tying product market since its share of the relevant market did not exceed 5%), cert. denied, — U.S. —, 104 S.Ct. 106, 78 L.Ed.2d 109 (1983); Ron Tonkin Gran Turismo, Inc. v. Fiat Distributors, Inc., 637 F.2d 1376, 1379 (9th Cir.1981) (market share of I. 87%-5.2% too small to establish market dominance), cert. denied, 454 U.S. 831, 102 S.Ct. 128, 70 L.Ed.2d 109 (1981); Blackwell v. Power Test Corp., 540 F.Supp. 802, 816 (D.N.J.1981) (market share of 6% is insufficient to establish economic power in the tying product market), aff’d without opinion, 688 F.2d 818 (3d Cir.1982). Accordingly, the court holds that CDI and MAI did not have a dominant position in the market during 1982-83. B. Uniqueness of Tying Product Root asserts that BOSS operating software is unique and thus CDI and MAI possessed sufficient market power. “Uniqueness confers economic power only when other competitors are in some way prevented from offering the distinctive product themselves.” United States Steel Corp., supra, 429 U.S. at 621, 97 S.Ct. at 868. To prevail, Root must prove that no competitor of CDI and MAI produced or could have produced a comparable product. Id., 97 S.Ct. at 868; II E. Kintner, Federal Antitrust Law 238 (1980). In 3 P.M., Inc. v. Basic Four Corp., 591 F.Supp. 1350 (E.D.Mich.1984), Judge Phillip Pratt held that Basic Four's software products are not unique as MAI’s competitors produce comparable products. In so holding, the court stated: [Plaintiff’s] burden, rather, is to prove that none of defendants’ competitors could have produced products which would perform the functions performed by defendants’ products, because defendants possessed some advantage not shared by their competitors. [Plaintiff] has not even attempted to make such a showing. In fact, the only evidence on this record which is relevant to this issue suggests that defendants’ competitors could have produced similar products, and had actually begun to produce such products subsequently. Robert Yanover, [plaintiff’s] president testified at his deposition that [plaintiff] now sells equipment manufactured by one of B/4’s competitors which is the “functional equivalent” of the B/4 equipment which [it] earlier sold. Yanover Deposition at 70. In addition, William Bittick, a programmer for [plaintiff], has stated in an affidavit that “other computer manufacturers are now offering new business basic programming languages patterned after the Basic/Four Business Basic Language.” [Plaintiff] has produced no evidence which tends to show that none of defendants’ competitors could have offered similar products during the period at issue. 591 F.Supp. at 1358-59. In this case, Root concedes that competitors of CDI and MAI, including IBM, NCR and Seiko, produce computer hardware and software equivalent to that manufactured by MAI. See Root Deposition at 93-94; Burke Deposition at 18-19. See also Benjamin Deposition at 188 (BOSS operating system not unique as compared to Altos and IBM operating systems); Vedrody Deposition at 59 (other operating software has advantages over BOSS software). However, Root asserts that BOSS software is unique because it is copyrighted. In 3 P.M., Inc., supra, Judge Pratt rejected the same argument: Similarly, the fact that some of B/4’s software is copyrighted does not establish that defendants possessed economic power. See In Re Data General Corp. Antitrust Litigation, supra, 490 F.Supp. at 1112 (“[T]he sole fact of the existence of a copyright notice has not been held sufficient to prove economic power”). In arguing to the contrary, 3 PM relies upon United States v. Loew’s, Inc., 371 U.S. 38, 83 S.Ct. 97, 9 L.Ed.2d 11 (1962). In Loew’s, the Court held that each of a number of copyrighted motion pictures was a unique product, and that the defendants who sold or licensed these films therefore possessed economic power. However, this finding was not based merely upon the fact that each film was copyrighted; rather, the Court found that each of the films “varied in theme, in artistic performance, in stars, in audience appeal, etc.” Id. at 48, 83 S.Ct. at 104. Thus the copyrighted nature of the B/4 software, standing alone, similarly fails to establish that the B/4 units were “unique” as that term has been defined in Fortner II. 591 F.Supp. at 1359. See also Rex Chainbelt Inc. v. Harco Products, Inc., 512 F.2d 993 (9th Cir.), cert. denied, 423 U.S. 831, 96 S.Ct. 52, 46 L.Ed.2d 49 (1975). Accordingly, the court finds that BOSS operating software is not unique. C. Acceptance of Tie-in In Fortner Enterprises, Inc., supra, 394 U.S. 495, 89 S.Ct. 1252, 22 L.Ed.2d 495, the Supreme Court indicated that economic power in the tying product market may be established by showing that the alleged tie-in had been imposed on an “appreciable number” of customers. 394 U.S. at 503-04, 89 S.Ct. at 1259. In United States Steel Corp., supra, 429 U.S. 610, 97 S.Ct. 861, 51 L.Ed.2d 80, the Supreme Court held that even if the tie-in has been accepted by a large number of customers, the plaintiff is still required to prove (1) that the seller possesses economic power to raise prices and (2) that there is an absence of any other explanation for the buyers’ willingness to accept such an arrangement. 429 U.S. at 618 n. 10, 620 n. 13, 97 S.Ct. at 867 n. 10, 868 n. 13. See 2 J. von Kalinowski, Antitrust Laws and Trade Regulation at § 66.05[2] (1983). Root has failed to meet its burden. Indeed, it has identified only three (3) customers that accepted the alleged tie-in. Root did not; rather, it purchased new and comparable computer products from IBM. Failing to demonstrate that an appreciable number of customers accepted the alleged tie-in and that CDI and MAI possessed the economic power to raise prices, Root cannot prevail and the court so holds. Accord 3 P.M., Inc., supra, 591 F.Supp. at 1360-61. In sum, Root has raised no disputed issues of material fact as to CDI’s and MAI’s lack of sufficient economic power in tying product market. The facts are uncontroverted that Root was not forced to purchase computer hardware from CDI and MAI due to their market power. Indeed, Root and other buyers were and are free to choose among various sellers offering comparable computer hardware and software. As a matter of law, Root has failed to prove a per se violation of section 1. III. “In order to prevail in the absence of per se liability, [Root] has the burden of proving that the [alleged tie-in] violated the Sherman Act because it restrained competition.” Jefferson Parish Hospital District No. 2, supra, 466 U.S. at —, 104 S.Ct. at 1567. See Ware v. Trailer Mart, Inc., 623 F.2d 1150, 1153-54 (6th Cir.1980). Under this theory, commonly referred to as the “rule of reason,” Root must “establish the facts peculiar to the business involved, its condition before and after the alleged restraint was applied, the nature and history of the alleged restraint, the reason for adopting the alleged restraint, and its actual probable effect.” 3 P.M., Inc., supra, 591 F.Supp. at 1361 n. 16 (citing Chicago Board of Trade v. United States, 246 U.S. 231, 38 S.Ct. 242, 62 L.Ed. 683 (1918)). See Jefferson Parish Hospital District No. 2, supra, 466 U.S. at —, 104 S.Ct. at 1567-68. Root, however, has maintained that the alleged tying arrangement is per se illegal. Further, its reference to the rule of reason in its Memorandum in Opposition to MAI’s Motion for Summary Judgment, is limited to the following: “[E]ven if MAI’s claim that it lacks market power were correct, summary judgment would impermissably [sic] cut off plaintiff’s right to prove its case under the rule of reason.” Id. at 28. Rule 56(e) of the Federal Rules of Civil Procedure provides in pertinent part: When a motion for summary judgment is made and supported as provided in this rule, an adverse party may not rest upon the mere allegations or denials of his pleading, but his response, by affidavits or as otherwise provided in this rule, must set forth specific facts showing that there is a genuine issue for trial. If he does not so respond, summary judgment, if appropriate, shall be entered against him. CDI and MAI have moved for summary judgment on all counts of Root’s complaint. Root cannot avoid their motions by asserting, without proof, an alternative theory of recovery. Rather, it was required to present sufficient evidence supporting its rule of reason claim to demonstrate that there is a genuine issue of material fact. See Bouldis, supra, 711 F.2d at 1324 (citing Adickes v. S.H. Kress & Co., 398 U.S. 144, 159 & n. 19, 90 S.Ct. 1598, 1609 & n. 19, 26 L.Ed.2d 142 (1970); First National Bank of Arizona v. Cities Services Co., 391 U.S. 253, 288, 88 S.Ct. 1575, 1592, 20 L.Ed.2d 569 (1968); Smith v. Northern Michigan Hospitals, Inc., 703 F.2d 942, 947-48 (6th Cir.1983)). Because it failed to do so, CDI and MAI are entitled to and the court grants their motions for summary judgment. IV. In a further attempt to establish a per se section 1 violation, Root alleges that the license agreements and future transfer fee imposed by CDI and MAI constituted a group boycott. This claim is without support as a matter of law. A horizontal restraint is an agreement among independent business entities or competitors at the same market structure level. Accord Dunn & Mavis, Inc. v. Nu-Car Driveway, inc., 691 F.2d 241, 243 (6th Cir.1982); Davis-Watkins Co. v. Service Merchandise, 686 F.2d 1190, 1196 & n. 9 (6th Cir.1982), cert. denied, — U.S. —, 104 S.Ct. 1718, 80 L.Ed.2d 190 (1984); Com-Tel, Inc. v. DuKane Corp., 669 F.2d 404, 408 (6th Cir.1982). “The hallmark of such a restraint is a collusion among competitors.” Laurence J. Gordon, Inc. v. Brandt, Inc., 554 F.Supp. 1144, 1151 (W.D. Wash.1983) (citing Krehl v. Baskin-Robbins Ice Cream Co., 664 F.2d 1348, 1354 (9th Cir.1982)). On the other hand, vertical restraints involve a combination of persons at different market structure levels, such as manufacturers and distributors. Accord Com-Tel, Inc., supra, 669 F.2d at 409 (citing Oreck Corp. v. Whirlpool Corp., 579 F.2d 126, 131 (2d Cir.), cert. denied, 439 U.S. 946, 99 S.Ct. 340, 58 L.Ed.2d 338 (1978)); Muenster Butane, Inc. v. Stewart Co., 651 F.2d 292, 295 (5th Cir.1981). It is important to distinguish between horizontal and vertical restraints of trade because horizontal restraints are per se violations of section 1 while vertical restraints are judged under the rule of reason. See Continental T.V., Inc. v. GTE Sylvania, Inc., 433 U.S. 36, 58-59, 97 S.Ct. 2549, 2561-62, 53 L.Ed.2d 568 (1977); United States v. Topeo Associates, Inc., 405 U.S. 596, 92 S.Ct. 1126, 31 L.Ed.2d 515 (1972); Davis-Watkins, Co., supra, 686 F.2d at 1196; Com-Tel, Inc., supra, 669 F.2d at 408. In this case, it is uncontroverted that CDI and MAI are not competitors. Rather, their relationship is that of a manufacturer and authorized dealer. Thus, a restrictive agreement between them would be vertical, not horizontal. See Sports Center, Inc. v. Riddell, Inc., 673 F.2d 786 (5th Cir.1982); Barnosky Oils, Inc. v. Union Oil Co. of California, 665 F.2d 74 (6th Cir.1981); Ron Tonkin Gran Turismo, Inc. v. Fiat Distributors, Inc., 637 F.2d 1376 (9th Cir.), cert. denied, 454 U.S. 831, 102 S.Ct. 128, 70 L.Ed.2d 109 (1981). Because a group boycott requires a horizontal conspiracy, Root’s group boycott claim is without support. See Dunn & Mavis, Inc., supra, 691 F.2d at 243; Davis-Watkins Co., supra, 686 F.2d at 1196 & n. 9; Ron Tonkin Gran Turismo v. Fiat Distributors, Inc., 637 F.2d 1376, 1381-82 (9th Cir.1981), cert. denied, 454 U.S. 831, 102 S.Ct. 128, 70 L.Ed.2d 109 (1981); Laurence J. Gordon, Inc., supra, 554 F.Supp. at 1152. V. When a restraint is weighed under the rule of reason, the challenger bears the burden of proving the unreasonableness of the alleged restriction. See Continental T. V., Inc., supra, 433 U.S. at 59, 97 S.Ct. at 2562. Root must prove that the activity of CDI and MAI, on balance, affected competition in the relevant market adversely. See supra section III. Root has not, however, come forward with such evidence. Further, in light of CDI’s and MAI’s insignificant market power in the highly competitive market of small business computers, their activities are incapable of having a substantially adverse effect on competition. Indeed, Root’s decision not to accept the alleged restriction and to purchase a competing brand of computer hardware and software buttresses this finding. Accordingly, Root has failed in its burden to establish a restraint of trade in violation of section 1 of the Sherman Act. VI. This court is not unmindful that motions for summary judgment are generally disfavored in antitrust litigation. See Poller v. Columbia Broadcasting System, Inc., 368 U.S. 464, 473, 82 S.Ct. 486, 491, 7 L.Ed.2d 458 (1962); Bouldis, supra, 711 F.2d at 1324. “However, this general rule does not preclude the use of summary judgment in appropriate antitrust litigátion.” Bouldis, supra, 711 F.2d at 1324 (citations omitted). In order to withstand a motion for summary judgment, it is not enough to refer to disputed factual issues; rather, such issues must be material and thus affect the outcome of the litigation. See Mutual Fund Investors, Inc. v. Putnam Management Co., Inc., 553 F.2d 620, 624 (9th Cir.1977). Further, “ ‘[t]he showing of a “genuine issue for trial” is predicated upon the existence of a legal theory which remains viable under the asserted version of the facts, and which would entitle the party opposing the motion (assuming his version to be true) to a judgment as a matter of law’.” Bushie v. Stenocord Corp., 460 F.2d 116, 119 (9th Cir.1972) (quoting McGuire v. Columbia Broadcasting System, Inc., 399 F.2d 902, 905 (9th Cir.1968)). Root has failed to sustain its burden of proof. It cannot prevail as a matter of law under its asserted version of the facts. Accordingly, CDI’s and MAI’s motions for summary judgment are granted. IT IS SO ORDERED. . The case was filed initially in the United States District Court for the Southern District of Ohio. On January 6, 1984, Computer Dynamics, Inc., filed a motion for change of venue to the Northern District of Ohio pursuant to 28 U.S.C. § 1404(a). On April 18, 1984, its motion was granted. . 15 U.S.C. § 1 provides: Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal. Every person who shall make any contract or engage in any combination or conspiracy hereby declared to be illegal shall be deemed guilty of a felony and, on conviction thereof, shall be punished by fine not exceeding one million dollars if a corporation or, if any other person, one hundred thousand dollars, or by imprisonment not exceeding three years, or by both said punishments, in the discretion of the court. . 15 U.S.C. § 15 provides in pertinent part: [A]ny person who shall be injured in his business or property by reason of anything forbidden in the antitrust laws may sue therefor in any district court of the United States in the district in which the defendant resides or is found or has an agent, without respect to the amount in controversy, and shall recover threefold the damages by him sustained, and the cost of suit, including a reasonable attorney’s fee. . BOSS is the acronym for Basic Four Operating System Software. It is a copyrighted product manufactured by MAI and is not usable on non-MAI computers. . Operating system software is a set of computer programs that guide and control the basic function of a computer. It also provides the necessary link between the computer equipment "hardware” and the various application programs “software," designed to perform specific functions, such as accounting, word processing and payroll. Thus, whenever a user expands its computer system and adds peripheral equipment, the BOSS software must be reconfigured by MAI. If it is not reconfigured, the computer will not function at its full capacity. . ASD obtained the BOSS software from a MAI dealer in California. The order was placed in the name of J & B Computing, Inc.—the prior owner of the Model 730B purchased by Root. . Input buffering is a software feature that permits faster data entry. . Although MAI sells computer hardware, it distributes BOSS software only under license agreements which strictly limit the user's rights to reproduce and transfer the software. Murawski Affidavit at ¶ 7. . In its response to MAI's motion for summary judgment, Root argues that CDI’s September 2nd offer is "irrelevant,” since it already decided to purchase a new IBM computer on August 30, 1983. The court finds this argument to be without merit because Root has not offered evidence to indicate that it communicated to CDI its decision to discontinue negotiations and buy new equipment from another company.

3864172-12639

MEMORANDUM Because we write solely for the parties, we will address only those facts necessary to our decision — albeit in more detail than usual in view of our colleague’s dissent. BACKGROUND On October 16, 2008, Hernandez-Ortega pleaded guilty pursuant to a Fed. R.Crim. Pro. § 11(c)(1)(C) plea agreement to being an illegal alien found without permission in the United States following deportation. He had been deported in 2002 following his convictions of lewd acts upon children under the age of fourteen, in -violation of California Penal Code section 288(a). His convictions resulted in a sentence of ten years in state prison. In the plea agreement, the parties agreed and stipulated to a base offense level of 8 and a 16-level enhancement pursuant to U.S.S.G. § 2L1.2(b)(l)(A)(ii) for deportation after conviction of a felony that is a crime of violence, to wit his child molesting convictions. As part of the U.S. Attorney’s “fast track” program, the parties stipulated to a sentence at the low end of the Guidelines range. This program is designed to extend favorable consideration in immigration related cases to those who accept responsibility and thereby reduce the burden on our judicial system. The parties further agreed “not to seek, argue, or suggest in any way, either orally or in writing, that ... the Court impose a sentence other than what has been stipulated to by the parties herein.” The Probation Office then formally determined a Guidelines range of 27-33 months and a sentence of 27 months. The government formally accepted this calculation and, pursuant to the plea agreement, recommended a sentence of 27 months, the low end of the range. Hernandez-Ortega agreed and asked for this sentence. So far, so good — but not for long. Subsequent to Hernandez-Ortega’s plea and the original plea agreement, we decided en banc Estrada-Espinoza v. Mukasey, 546 F.3d 1147, 1160 (9th Cir.2008) which held that a conviction pursuant to California’s “statutory rape” provisions did not categorically constitute the aggravated felony of “sexual abuse of a minor” within the meaning of 8 U.S.C. § 1101(a)(43). At the hearing set for his sentencing, Hernandez-Ortega suggested pursuant to Estrada-Espinoza, that his prior convictions might warrant only an 8-level upward adjustment, not 16 as stipulated in the plea agreement. Sentencing was continued to allow Hernandez-Ortega to explore this possibility. Eventually, and because of Estradar-Es-pinoza, Hernandez-Ortega and the government filed a joint amendment to the original plea agreement. Now, the parties agreed to only an 8-level upward departure in connection with his prior felonies. They further agreed that an appropriate fast-track sentence would include imprisonment at the low end of the advisory Guidelines range. The Probation Office then calculated a new range of 6-12 months, and recommended a sentence of six months. Unexpectedly, complications began to set in. At the beginning of Hernandez-Ortega’s sentencing hearing, the district court voiced its intention to reject the amended plea agreement because of the court’s conclusion that a sentence of six months would be unreasonably low under the 18 U.S.C. § 3553(a) factors. The court then launched into a lengthy discussion regarding Estradar-Espinoza and what the court considered to be that case’s creation of “gross disparity” in the sentence of people similarly situated, as well as in this case. The court said, I struggle with the gross disparity in people who have been similarly charged and convicted. I try to think about what the purpose of this offense is and what message are we sending to people when it seems people who are not committing as serious prior offenses are getting pretty heavy sentences and then someone like [Hernandez-Ortega] getting a lighter one. At this point, the court asked for input from the substitute probation officer. The officer acknowledged the value of the fast-track program, but agreed with the court and suggested that under all the circumstances, a six-month sentence did not seem reasonable, saying, Now, my own view of this particular case is more in line with what the court has already articulated. I think this is a troubling case, and I think it does stand out from most fast-track cases when you consider the nature of Mr. Hernandez’ prior offense and the actual conduct that occurred; then this recent change in the law in the 9th Circuit, that really turned on a hyper-technical point, that the net effect of which is to equate Mr. Hernandez’ prior offense, for guideline enhancement purposes at least, as an offense no more serious than, say, a theft offense, or a felon in possession offense, which is purely a status crime. So when you look at it from that way, a reality check sort of is needed, and you need to take an honest look at the facts of the case and what actually occurred, and whether or not a six-month sentence is reasonable. And I think when you do that, at least my own analysis of it is that a six-month sentence doesn’t seem reasonable. And that’s kind of where we are at. And the court has already expressed its frustration, and I certainly see it in very similar terms. I’m not here to change on the record the probation officer’s recommendation because of the policy concerns that I have already expressed, but my own view of the case which the court has asked me to express, that’s where I’m at. The district court then invited the government’s response. Faced with the court’s and the probation officer’s opposition to the parties’ agreement, the prosecution acknowledged the court’s and the probation officer’s concerns regarding the interplay between Estrada-E spinoza and the fast-track program, adding that he had discussed “this matter in depth with the fast-track coordinator” in his office and was told to follow the Estrada-E spinoza case no matter what the result. He ended by saying that although he personally “disagreed” with the outcome, he was obliged “to follow the office policy and to follow the terms and conditions that are in the plea agreement with the defendant.” The line up now was two against two, with the government and the defense aligned in favor of a six-month sentence, to which the court and the probation officer were opposed. The court commended the AUSA for his candor and for sticking with the plea agreement, saying, “I think it would be actually disingenuous on your part ... to say that the guideline calculation should be what it was before, which is a 27-month. I would lose respect for you. And many U.S. attorneys might do that. You didn’t do that.... I commend you for it.” The court then reiterated its concerns, remarking that Estrada-Espinoza “is throwing the whole system kind of out of whack, from where I’m sitting.” The AUSA then suggested that his office in “future cases” should reconsider extending the fast-track option to cases such as this one. A lengthy discussion of the relevant sentencing factors then ensued between defense counsel and the court with counsel doing his best to save his client from a greater sentence. The prosecutor did not participate in this discussion. The court was unmoved. At this juncture, defense counsel said, Although I have a lot of respect for him and I admire him, and I don’t think he would do someone [sic] bad faith, I think that [the prosecutor’s] statements did amount to a breach today. And again, I want to stress I don’t think he acted in bad faith, your Honor, but [the prosecutor] basically noted to the court that this sentence is something that he personally disagrees with; that he thinks in the future sentences like this shouldn’t be given. If we read between the lines here, I think it’s pretty clear what [the prosecutor] is saying, and I think that amounts to a breach, your Honor. The district court responded, saying, I don’t see it that way. I mean, the record is what it is. If [the AUSA] said anything, it was actually in response to my questions to him, and so the record is clear, I said what I said to him because, not that I didn’t think he would do it, I wanted to make sure that he knew I knew that there is nothing he can say without violating the agreement. And that’s why I said, I know your hands are tied because you have agreed to the low end, and I commended him for sticking with the deal, abiding by the deal. The district court then rejected the plea agreement, gave Hernandez-Ortega an opportunity to withdraw his guilty plea, and granted his request for a continuance to consider what to do next. The defendant decided to stay the course. At sentencing, the prosecutor said, “the government’s obliged to stand by the plea agreement in this matter, and the government continues to do so today.” Hernandez-Ortega then affirmed the decision to stand by his guilty plea, and the court sentenced him to 27 months plus a period of supervised release. Ironically, we decided just a few days after Hernandez-Ortega’s sentencing— contrary to all the sentencing assumptions and conclusions by the court and all the parties in this case — that California Penal Code § 288(a) is indeed a crime of violence under our decision in Estrada-Espinoza for purposes of U.S.S.G. § 2L1.2(b)(l)(A)(ii). United States v. Medina-Villa, 567 F.3d 507, 509 (9th Cir. 2009). ANALYSIS 1. The Alleged Breach Our standard of review as to whether the facts demonstrate a breach of a plea agreement is murky at best. United States v. Franco-Lopez, 812 F.3d 984, 988 (9th Cir.2002). We need not resolve that inconsistency here, because whichever standard we apply — for an abuse of discretion, clear error, or de novo — -the result is the same. We conclude after carefully examining the record in its entirety that the prosecutor’s comments offered in response to the district court’s inquiry did not constitute a breach of the plea agreement. We so conclude for five reasons. First, the discussion and the comments at issue occurred at the request of the court and in the context of the court’s unanticipated inclination to reject the favorable disposition agreed to by the parties. Second, the core of the district court’s concern. that motivated his request for comments was that our recent decision in Estrada-Espinoza had produced an inappropriate disparity in sentencing in connection with the U.S. Attorney’s fast-track program and other cases, as exemplified by the second plea agreement. This was the precise concern addressed in response by the prosecutor. Third, the prosecution hastened to add to his comments that his office — for whom he was speaking — was sticking with the six month sentencing recommendation in this case notwithstanding the court’s vocal opposition to it. Read in context, the prosecutor was defending the plea agreement in the face of unbending resistance from the court and the probation officer. There is nothing in this record to suggest that the prosecutor was responsible for the officer’s recommendation against the agreement. Fourth, the prosecutor’s “disagree[ment] with the outcome” was directed primarily towards his office’s policy, which he had been told to follow — and he did. As he told the court, “at this point fonvard, the U.S. Attorney’s Office should reconsider future cases, whether to extend the fast-track option to individuals so situated to avoid an outcome like this.” Fifth, the court did not see the prosecutor’s comments as a breach of the agreement. To the contrary, the court regarded what the prosecutor said as “sticking with the deal.” Under these unusual circumstances, we do not regard the prosecutor’s statements or behavior as a breach of his responsibility pursuant to the agreement. His response to the court’s inquiry was not “an ‘attempt ... to influence the district court’ to impose a harsher sentence than the one to which the government agreed in the plea agreement.” United States v. Allen, 434 F.3d 1166, 1175 (9th Cir.2006) (quoting United States v. Mondragon, 228 F.3d 978, 980-81 (9th Cir.2000). See also United States v. Quack, 302 F.3d 1096, 1101 (9th Cir.2002). Moreover, in terms of the language of the agreement, he did not “suggest” that the court do anything other than sentence the defendant to six months. Also, “‘[a] plea agreement does not bar the government from honestly answering the district court’s questions. To the contrary, honest response of the government to direct judicial inquiry is a prosecutor’s professional obligation that cannot be barred, eroded or impaired by a plea agreement.’” Allen, 434 F.3d at 1175 (quoting United States v. Maldonado, 215 F.3d 1046, 1052 (9th Cir.2000) (alteration in original).

10528310-6359

CAFFREY, Senior District Judge. This appeal is taken from summary judgments entered against the defendant in two separate but factually and legally indistinguishable cases from the District Court in Puerto Rico. The defendant-appellant, Allen Radin, is a Florida resident. The plaintiff-appellees are the owners of two hotels which operate gambling casinos. The hotels are located in Puerto Rico. While on a trip to Puerto Rico, the appellant applied for and received $15,000 worth of credit from each of the hotels for use in gambling in the casinos. These debts were evidenced by demand notes or “markers” signed by the appellant. In addition to payment of the original debts, the markers obligated the appellant to pay collection expenses in the event he defaulted on the notes, including a liquidated sum representing attorneys’ fees. At the time that the hotels extended the credit, the appellant was a debtor in bankruptcy proceedings. After the appellant proved unsuccessful at the gaming tables, the hotels demanded payment of the markers. When payment was not forthcoming, each brought an action in the District Court. The appellees moved for summary judgments, presenting evidence of the debts and the unsuccessful demands for payment. In opposition to these motions, the appellant filed his own affidavit which he claims raised genuine issues for trial as to certain of his defenses to the debts. The trial judges granted the summary judgment motions and denied the appellant’s later motions for reconsideration. Mr. Radin now appeals, claiming that he was entitled to an opportunity to present evidence and, therefore, the hotels’ motions should have been denied. Specifi-eally, the appellant insists that genuine issues of fact exist concerning whether he is entitled to a reduction of his debts as permitted by the Civil Code of Puerto Rico and concerning whether he executed the markers under duress. The appellant asserts that the granting of summary judgments in favor of the ap-pellees was inappropriate because the courts did not conduct evidentiary hearings to determine whether he qualified for an equitable reduction of his debts under Article 1701 of the Civil Code of Puerto Rico, P.R. Laws Ann. tit. 31, § 4774 (1968), (the “good father” statute). This statute permits a trial judge to deny enforcement of excessive gambling debts or to reduce such debts by the amount they may exceed “the customs of a good father of a family”. As the parties recognize, this statute creates no absolute rights in favor of a gambler. Whether a debt will be reduced is a decision fully within the discretion of the trial court. United Hotels of Puerto Rico v. Willig, 89 P.R.R. 185, 193 (1963). We discern no reason why the trial judges should have conducted evidentiary hearings before determining whether the appellant merited a reduction of his gambling debts under the good father statute. The appellant has pointed to no additional facts which he sought to present at a hearing which were not already in the record when the trial judges granted the motions for summary judgment. Nor does he demonstrate the existence of any factual dispute. None of the facts which appellant relies on to establish the worthiness of his request for a debt reduction are contested by the appellees. Indeed, the appellant himself admits that the facts on which he stakes his claim to a reduction are uncontradicted. Initial Brief for the Appellant at p. 6. Where the relevant facts are undisputed and, as in this case, the remaining issue is one of law for the court to decide, an evidentiary hearing is not mandated. A trial judge may freely grant summary judgment on a non-jury issue if no dispute over material fact exists and a trial or hearing would not enhance its ability to decide the issue. Nunez v. Superior Oil Co., 572 F.2d 1119, 1124 (5th Cir.1978). Because the appellant has demonstrated no issue of fact to be determined at an eviden-tiary hearing and has failed to clarify how a hearing would aid in the decision of the equitable reduction issue, we see no error in the courts’ failure to hold such hearings prior to granting the appellees’ motions for summary judgment. While conceding that a reduction of his debts was an issue within the discretion of the trial court, the appellant argues that the trial judges’ granting of the summary judgment motions without a hearing amounted to a refusal to exercise any discretion at all. We disagree. Judge Lafitte expressly rejected the defense as meritless in his order granting summary judgment in favor of appellee Posadas de San Juan Assoc., Inc. Although Judge Pieras did not refer to the defense, it was brought to his attention twice, once in the affidavit filed in opposition to the appellee Posadas de Puer-to Rico, Inc.’s motion for summary judgment, and once again in the appellant’s motion for reconsideration or relief from judgment. From his ruling against the defendant on both these motions, we infer that Judge Pieras declined to grant appellant’s request for a debt reduction. Cf. Addington v. Farmer’s Elevator Mutual Insurance Co., 650 F.2d 663, 666 (5th Cir.), cert. denied, 454 U.S. 1098, 102 S.Ct. 672, 70 L.Ed.2d 640 (1981) (district court denied party’s motion by implication when it entered an order inconsistent with the relief sought). We see no abuse of discretion in either judge’s refusal to reduce the appellant’s debts. As his second point of appeal, Mr. Radin claims that genuine issues of material fact existed as to whether he executed the markers while under duress and undue influence. To support this defense, the appellant offered only his own affidavit which stated in pertinent part: That the obligation sought to be enforced on behalf of the Plaintiff, is in the nature of an adhesion contract. Any obligation, if at all, was incurred by undue duress and influence by the Plaintiff upon the Defendant. That the said Defendant was forced by the acts of the Plaintiff to execute the agreement, as well as being forced to submit to the jurisdiction. That said acts were not the free and voluntary act of the Defendant, and the Defendant is not indebted to the Plaintiff for the amounts claimed, (sic). A vaguer and more conclusory affidavit is hard to imagine. Nowhere does the appellant specifically state how he was coerced into signing the markers and by whom.

10519399-16307

MICHEL, Circuit Judge. Electronic Design & Sales, Inc. (“Electronic Design” or “applicant”) appeals the decision of the United States Patent and Trademark Office, Trademark Trial and Appeal Board (“Board”), sustaining Electronic Data Systems Corporation’s (“Electronic Data” or “opposer”) opposition and denying Electronic Design’s application Serial No. 680,741 for registration of the block letter trademark “E.D.S.” enclosed in a stylized box. Electronic Data Systems Corp. v. Electronic Design & Sales, Inc., Opposition No. 77,738 (TTAB Sept. 5,1990). The Board concluded that purchasers and users of Electronic Data’s computer services sold under the service mark “EDS” who saw applicant’s power supplies or battery chargers with the above trademark would likely be confused and believe that applicant’s equipment is produced or endorsed by Electronic Data. We hold that the Board failed to assess properly the differences in purchasers, channels of trade, and what each company sold, and overlooked the sophistication of the purchasers; that the Board accorded too much weight to the renown and strength of Electronic Data’s mark; and that the Board’s legal analysis was deficient. Because the Board’s conclusion of a likelihood of confusion among relevant persons was incorrect as a matter of law, we reverse. BACKGROUND In opposing the application of Electronic Design, Electronic Data asserted prior use and registration of the service mark “EDS” (Registration No. 952,895, issued Feb. 6, 1973) for computer programming services including the design, implementation and management of electronic data processing programs and telecommunications services. Opposer also plans or arranges the installation of computer hardware and software as part of its overall computer services. Whereas in the past, opposer leased and sold computer equipment it made, it currently sells and leases only equipment made by others bearing the names and marks of those manufacturers. Opposer sells its computer services to customers in the medical, automotive, merchandising, communications and other fields. Its customers are mostly large corporations such as Blue Cross and Blue Shield, General Motors, Sears, Roebuck & Co., and International Business Machines. Applicant, by contrast, started operations as a sole proprietorship in the fall of 1976, performing custom contract work for others by designing power supplies under the trademark “EDS.” Since 1982, applicant has made and sold its own battery chargers and power supplies with the mark contained in its registration application. Applicant sells ten to fifteen percent of its goods directly to individuals through retail electronic stores and mass merchandisers. The majority of its sales, however, consist of large original equipment manufacturer (“OEM”) sales in which applicant’s goods are sold to other manufacturers who incorporate the products into their own electronic devices, which are then sold under the other manufacturers’ marks. Approximately forty percent of applicant’s OEM power supplies are incorporated into medical instruments and devices. Like op-poser, applicant sells to customers in the automotive, merchandising and communications fields. Specifically, both parties sell to General Motors and Sears. However, the parties advertise in different media and exhibit at different trade shows. Opposer relied on the deposition testimony from employees of various third parties who were aware of opposer and its services and who testified to its previous use of the mark “EDS” on its own computer hardware, particularly terminals. Opposer also introduced deposition testimony and exhibits regarding the amount of its sales and the extent of its advertising: Revenues in recent years were in the billions of dollars, while advertising expenses exceeded $40 million in 1989 alone. Upon consideration of the record as a whole, the Board concluded that applicant’s power supply goods and opposer’s computer services are sufficiently related and would likely be encountered by the same persons so that confusion is likely, especially in view of the near identity of the parties’ respective marks and the renown and strength of opposer’s mark. Electronic Data, slip op. at 7. On appeal, applicant broadly challenges the Board’s holding that there is a likelihood of confusion. We have jurisdiction over the appeal pursuant to 28 U.S.C. § 1295(a)(4)(B) (1988) (jurisdiction over all Trademark Trial and Appeal Board final decisions). DISCUSSION We need only address one issue: whether the Board’s conclusion that likelihood of confusion was proven is correct. Because we conclude that likelihood of confusion was not established, we do not reach the issues of laches or estoppel which applicant asserted below as equitable defenses and again argues here. While we review the underlying factual findings by the Board for clear error, Weiss Assocs., Inc. v. HRL Assocs., Inc., 902 F.2d 1546, 1548, 14 USPQ2d 1840, 1841 (Fed.Cir.1990), the ultimate issue of likelihood of confusion is a question of law which we review de novo. Id. at 1548, 14 USPQ2d at 1842; In re Bed & Breakfast Registry, 791 F.2d 157, 158, 229 USPQ 818, 818-19 (Fed.Cir.1986) (Likelihood of confusion, on appeal from the Board, is reviewed for correctness as a matter of law.). I In determining likelihood of confusion, the Board relied heavily on the relatedness of the goods and services. Electronic Data, slip op. at 7. The Board’s conclusion, that applicant’s “goods are sufficiently related [to opposer’s services] and would likely be encountered by some of the same persons so that confusion is likely,” id. (emphasis added), incorporated doubtful fact findings concerning the relatedness of the goods and the services and, in any event, is incorrect as a matter of law. 15 U.S.C. § 1052 currently provides that an applicant’s trademark shall not be refused registration unless it consists of or comprises a mark which so resembles a mark registered in the Patent and Trademark Office, or a mark or trade name previously used in the United States by another and not abandoned, as to be likely, when used on or in connection with the goods of the applicant, to cause confusion, or to cause mistake, or to deceive.... 15 U.S.C. § 1052(d) (1988). Originally, this section of the statute expressly limited consideration of possible confusion to purchasers. In amending section 1052 of Title 15 of the United States Code to its current version, Congress deleted the term “purchasers.” See S.Rep. No. 2107, 87th Cong., 2d Sess. 4, reprinted in 1962 U.S.C.C.A.N. 2844, 2847. The legislative history states that the word “purchasers” was deleted because “the provision actually relates to potential purchasers as well as to actual purchasers.” Id. Therefore, we do not construe this deletion to suggest, much less compel, that purchaser confusion is no longer the primary focus of the inquiry. Instead, we believe that, at least in the case of goods and services that are sold, the inquiry generally will turn on whether actual or potential “purchasers” are confused. As set forth in the First Circuit’s post-amendment decision in Astra Pharmaceutical Prods. v. Beckman Instruments, 718 F.2d 1201, 1206, 220 USPQ 786, 790 (1st Cir.1983): “If likelihood of confusion exists, it must be based on the confusion of some relevant person; i.e., a customer or purchaser.” See also Ferrari S.P.A. Esercizio Fabriche Automobili E Corse v. Roberts, 944 F.2d 1285, 1245, 20 USPQ2d 1001, 1010 (6th Cir.1991) (Relevant persons include subsequent purchasers even when the initial purchaser was informed of the actual source.). For determining likelihood of confusion, however, “relevant persons” is not always limited to purchasers, past or future. For some owners of marks, such as the American Red Cross with its well-known mark, there are no purchasers. In these instances, “relevant persons” would encompass all who might know of their services and then become purchasers of goods or services of others. In this case, however, we are concerned only with goods and services that are sold. So here, our concern is directed primarily toward the likelihood of confusion among actual and potential purchasers. The essential inquiry in this appeal then is whether there is likely to be sufficient overlap of the respective purchasers of the parties’ goods and services to confuse actual and potential purchasers. In Astra, the parties marketed and sold goods marked with the name “ASTRA” to the same purchasing institutions — large hospitals. 718 F.2d at 1206, 220 USPQ at 790. Although both parties manufactured goods “in the same broad health care field,” id. at 1210, 220 USPQ at 793, Astra sold pharmaceutical products to hospital pharmacies and Beckman sold laboratory instrumentation to hospital laboratories. Id. at 1206, 220 USPQ at 790. In affirming a grant of summary judgment of no infringement, the court held that use in the same broad field “is not sufficient to demonstrate that a genuine issue exists concerning likelihood of confusion.” Id., at 1206, 220 USPQ at 790. The First Circuit’s holding recognized that “[t]he ‘hospital community’ is not a homogenous whole, but is composed of separate departments with diverse purchasing requirements, which, in effect, constitute different markets for the parties’ respective products.” Id. at 1207, 220 USPQ at 791. Because a common purchasing agent for several autonomous departments “merely fills out the necessary forms and arranges the shipping details,” id. at 1206, 220 USPQ at 790, even when there is an overlap in purchasing persons due to a common purchasing agent, such an agent is not necessarily a “relevant person” for determining likelihood of confusion. Similarly, in the instant case, where both applicant’s goods and opposer’s services are marketed and sold in the medical and certain other fields, it is error to deny registration simply because "applicant sells some of its goods in some of the same fields in which opposer provides its servic es,” Electronic Data, slip op. at 6 (emphasis added), without determining who are the “relevant persons” within each corporate customer. This is especially true where, as here, the Board acknowledged that “applicant’s goods are specifically different and noncompetitive.” Id. Thus, although the two parties conduct business not only in the same fields but also with some of the same companies, the mere purchase of the goods and services of both parties by the same institution does not, by itself, establish similarity of trade channels or overlap of customers. Astra, 718 F.2d at 1206, 220 USPQ at 790. The likelihood of confusion must be shown to exist not in a purchasing institution, but in “a customer or purchaser.” Id., at 1206, 220 USPQ at 790. As one of our predecessor courts, the Court of Customs and Patent Appeals, stated in Witco Chem. Co. v. Whitfield Chem. Co., 418 F.2d 1403, 1405, 164 USPQ 43, 44-45 (CCPA 1969), aff'g, 153 USPQ 412 (TTAB 1967): We are not concerned with mere theoretical possibilities of confusion, deception, or mistake or with de minimis situations but with the practicalities of the commercial world, with which the trademark laws deal. Although opposer’s services and applicant’s goods are purchased by some of the same large corporations, the individual departments therein may be as independent in their purchasing activities as were the hospital departments in Astra. In such corporations, it cannot be presumed, as the Board apparently did, that the general computer services are selected by the same individuals who select battery chargers and power supplies. There is no evidence here, for example, that those computer specialists in the administrative departments at General Motors responsible for purchasing computer services are also responsible for purchasing battery chargers for the auto parts and services departments. That persons in charge of such purchasing cannot be presumed to be the same as between opposer and applicant is further borne out by the fact that they advertise in completely different media and exhibit at different trade shows. Therefore, the Board’s finding that the goods “would likely be encountered by some of the same [relevant] persons,” Electronic Data, slip op. at 7, while true, does not establish that the actual and potential purchasers from each party would be the same, due to specialization among their corporate customers’ departments. The tenuous connection between applicant’s and opposer’s trade channels becomes clearer when one considers the uses of their respective marks within the medical field. Opposer supplies data processing services for medical insurers, whereas applicant sells batteries and power supplies to makers of medical equipment such as bedside alert systems and crib monitors. As to which persons might be confused, or would even see both marks in connection with these goods and services, opposer suggests that when a medical device fitted with one of applicant’s power supplies malfunctions and the unit is opened to reveal applicant’s mark (“E.D.S.” in a stylized box), opposer’s reputation is damaged by the negative context in which applicant’s mark appears. However, opposer offers no reason to infer, for example, that Blue Cross officials responsible for purchasing its computer services might decide to discontinue purchasing from opposer because of confusion by a secretary in a physician’s office who mistakenly attributes the malfunction to opposer, even though the secretary will process patients’ claims to Blue Cross. Indeed, it seems clear such officials would not even become aware of the secretary’s confusion. Therefore, the secretary cannot be a relevant person. Nor, for the same reason, can the physician or nurse. None of them ordinarily would have any involvement in Blue Cross’s purchase of computer services. Accord Astra, 718 F.2d at 1207, 220 USPQ at 791 (“[A]ny confusion has to exist in the mind of a relevant person.”). Because the Board only considered corporate customers as a whole rather than determining the “relevant persons” within, its analysis was legally deficient. The Board’s concern that opposer’s customers “who come into contact with” applicant’s goods “may well believe that applicant’s goods are produced or sponsored by oppo-ser,” Electronic Data, slip op. at 7, is unwarranted because it would involve at most only a de minimis number of sophisticated purchasers. In other words, any overlap in customers is too small to be significant much less dispositive. While the Board also referred to “users,” Electronic Data, slip op. at 7, not all “users” are necessarily “relevant persons” within the meaning of the statute and the case law. We broadly construe purchasers and potential purchasers to include those persons, such as some users, who might influence future purchasers. For commercially sold items, only those users who might influence future purchasers can be considered “relevant persons.” Even as to those users who might be relevant persons, however, the Board’s analysis failed to identify any involvement with purchases and therefore was deficient. Therefore, a separate analysis with respect to mere users is not required here. II The Board also apparently failed to consider, and certainly failed to address, the sophistication of the buyers. “In every case turning on likelihood of confusion, it is the duty of the examiner, the board and this court to find, upon consideration of all the evidence, whether or not confusion appears likely.” In re E.I. DuPont DeNemours & Co., 476 F.2d 1357, 1362, 177 USPQ 563, 568 (CCPA 1973) (emphasis in original). Even though the Board made explicit factual findings as to five of the thirteen factors set forth in DuPont, 476 F.2d at 1361, 177 USPQ at 567, the Board gave too much weight to certain DuPont factors, such as the strength of opposer’s mark, and failed to give due weight to countervailing DuPont factors, such as the sophistication of purchasers. Even assuming, arguendo, that the Board was correct in finding sufficient relatedness of the goods and services, the relevant persons— potential or actual purchasers — are nevertheless mostly different and in any event are sophisticated enough that the likelihood of confusion remains remote.

3500433-24545

EMILIO M. GARZA, Circuit Judge: Plaintiff-Appellant Rebecca Gonzalez (“Relator”) brought a qui tam action under the False Claims Act (“FCA”), 31 U.S.C. § 3729 et seq., against Defendants-Appellees Fresenius Medical Care North America, Fresenius Medical Care Holdings, Inc., Bio-Medical Applications of Texas, Inc. (collectively, “Fresenius”), and Alfonso Chavez, M.D. Relator also brought retaliation claims against Fresenius and her former supervisor Larry Ramirez. The district court granted in part and denied in part the defendants’ motions for judgment as a matter of law, and the jury returned a verdict in favor of the defendants on the remaining claims. The district court then awarded Fresenius $15,360 in attorney’s fees from Relator’s counsel under 28 U.S.C. § 1927. Relator now appeals the district court’s judgment with respect to her FCA and retaliation claims. Relator’s counsel also appeals the award of attorneys’ fees. We affirm the judgment of the district court in all instances. I Fresenius is a provider of dialysis services to patients with end stage renal disease (ESRD). Chavez is a nephrologist serving as the medical director and attending physician at two of Fresenius’s clinics. Relator’s Fourth Amended Complaint alleged that while she was employed by Fresenius, Fresenius and Chavez submitted false claims to Medicare in violation of the FCA. Specifically, Relator alleged that Ramiro Devora and Arturo Orozco (“assistants”), two non-physicians who worked for Chavez, performed tasks and made patient-care decisions at Fresenius clinics in violation of state and federal regulations, and that Chavez billed Medicare for his assistants’ work. Relator also contended that, in return for Fresenius overlooking his illegal use of assistants, Chavez referred patients from his private practice to Fresenius in violation of federal anti-kickback laws. After filing her qui tam action, Relator filed a separate complaint against Fresenius and Ramirez alleging that, in retaliation for her qui tam action, she was harassed, threatened, and eventually forced to resign. The district court consolidated Relator’s qui tam and retaliation actions, and Fresenius and Chavez filed motions to dismiss portions of Relator’s complaints. The court granted the motions, leaving the following causes of action from the FCA Complaint viable at the start of trial: Count 1 (knowingly presenting fraudulent or false claims in violation of the FCA, § 3729(a)(1)); Count 2 (knowingly making a false record or statement in presentation of false claims in violation of the FCA, § 3729(a)(2)); Count 3 (presenting false claims for Medicare reimbursement for services rendered in violation of the Stark Law, 42 U.S.C. § 1395nn); Count 6 (presenting false claims for Medicare reimbursement for services rendered in violation of the Anti-Kickback Act, 42 U.S.C. § 1320a-7b(b)); and Count 7 (conspiring to submit false claims in violation of the FCA, § 3729(a)(3)). The following causes of action from the Retaliation Complaint were viable at the start of trial: Count 1 (retaliation in violation of the FCA, § 3730(h)), as against Fresenius; Count 2 (retaliatory constructive discharge in violation of the FCA, § 3730(h)), as against Fresenius; and Count 3 (intentional infliction of emotional distress) as against Fresenius and Ramirez. Relator, Fresenius, and Chavez all filed motions for summary judgment, which the court carried through trial. At the close of Relator’s case-in-chief, Fresenius and Chavez moved for judgment as a matter of law. The district court granted the motions in part and denied them in part, holding the defendants were entitled to judgment as a matter of law on Counts 1, 3, and 6 of the FCA Complaint, and Counts 1, 2, and 3 of the Retaliation Complaint. The court also concluded that, because Fresenius obtained judgment as a matter of law as to Count 1 of the FCA Complaint (knowingly presenting false claims, § 3729(a)(1)), only false claims by Chavez could form the basis for either Chavez’s or Fresenius’s liability under § 3729(a)(2) (false records or statements) or § 3729(a)(3) (conspiracy). The district court then submitted the following claims to the jury: Count 1 of the FCA Complaint (knowingly presenting false claims) as against Chavez only; Count 2 of the FCA Complaint (false records or statements) as against Chavez and Fresenius; and Count 7 of the FCA Complaint (conspiring to submit false claims) as against Chavez and Fresenius. The jury returned a verdict in favor of the defendants on all three counts. Following the entry of judgment, all of the defendants moved for attorney’s fees. Fresenius and Ramirez requested fees arising from their defense of Relator’s retaliation claim, and Chavez requested fees for the entire lawsuit. The court awarded Fresenius $15,360 in attorney’s fees from Relator’s counsel under § 1927, finding that counsel unreasonably and vexatiously multiplied proceedings with respect to the retaliation suit. Relator timely appealed the district court’s judgment in the FCA/retaliation case, and Relator’s counsel separately appealed the award of attorney’s fees. We consolidated the two appeals. II Relator first contends that the district court erred in granting Fresenius judgment as a matter of law on Count 1 of the FCA Complaint (knowingly presenting false claims, § 3729(a)(1)). She bases her argument on two separate legal theories: (1) that Fresenius falsely certified compliance with applicable statutes and regulations and (2) that Fresenius assisted in the presentation of claims that were “grounded in fraud.” We review the district court’s grant of judgment as a matter of law de novo, applying the same legal standards as the district court. Price v. Marathon Cheese Corp., 119 F.3d 330, 333 (5th Cir.1997). Judgment as a matter of law is appropriate after “a party has been fully heard on an issue during a jury trial and the court finds that a reasonable jury would not have a legally sufficient evidentiary basis to find for the party on that issue.” Fed.R.CivP. 50(a). “In evaluating such a motion, the court must consider all of the evidence in the light most favorable to the nonmovant, drawing all factual inferences in favor of the non-moving party, and leaving credibility determinations, the weighing of evidence, and the drawing of legitimate inferences from the facts to the jury.” Price, 119 F.3d at 333. The False Claims Act is designed to permit “suits by private parties on behalf of the United States against anyone submitting a false claim to the Government.” Hughes Aircraft Co. v. United States ex rel. Schumer, 520 U.S. 939, 941, 117 S.Ct. 1871, 138 L.Ed.2d 135 (1997). The FCA imposes liability on an individual who: (1) knowingly presents, or causes to be presented, to an officer or employee of the United States ... a false or fraudulent claim for payment or approval; (2) knowingly makes, uses, or causes to be made or used, a false record or statement to get a false or fraudulent claim paid or approved by the Government; [or] (3) conspires to defraud the Government by getting a false or fraudulent claim allowed or paid. 31 U.S.C. § 3729(a)(l)-(3) (2008). In determining whether liability attaches under the FCA, this court asks “(1) whether there was a false statement or fraudulent course of conduct; (2) made or carried out with the requisite scienter; (3) that was material; and (4) that caused the government to pay out money or to forfeit moneys due (i.e., that involved a claim).” United States ex rel. Longhi v. Lithium Power Techs., Inc., 575 F.3d 458, 467 (5th Cir.2009) (quoting United States ex rel. Wilson v. Kellogg Brown & Root, Inc., 525 F.3d 370, 376 (4th Cir.2008)) (internal quotation marks omitted). “[C]laims for services rendered in violation of a statute do not necessarily constitute false or fraudulent claims under the FCA.” United States ex rel. Thompson v. Columbia/HCA Healthcare Corp., 125 F.3d 899, 902 (5th Cir.1997). However, under a false certification theory, a defendant may be liable where “the government has conditioned payment of a claim upon a claimant’s certification of compliance with, for example, a statute or regulation” and the claimant “falsely certifies compliance with that statute or regulation.” Id. Relator alleged that Fresenius submitted claims based on a referral scheme that violated the Anti-Kickback Act, the Stark Law, and a host of federal and state regulations that govern dialysis facilities. According to Relator, Fresenius falsely certified compliance with these statutes and regulations in its annual cost reports. On the record before us, Fresenius’s cost reports would present a difficult basis for FCA liability. Evidence adduced at trial showed that, although the cost reports were a condition of Medicare participation and failure to submit accurate cost reports would trigger Medicare’s remedial scheme, the cost reports would not cause payment to be withheld. Only two wit nesses testified about the cost reports: one testified that the cost reports were not a condition of payment, the other that the cost reports were only capable of affecting payment the following year. Neither did Relator offer any evidence that a statute or Medicare regulation conditioned payment on the cost report’s certification. This challenging factual predicate for FCA liability, based on these attenuated cost report submissions, need not be resolved because we affirm the district court’s separate and sufficient conclusion that the Relator did not demonstrate that Fresenius and Chavez violated the FCA by falsely certifying that they were in compliance with the Anti-Kickback Statute because the Relator did not provide legally sufficient evidence that Fresenius and Chavez knowingly and willfully entered into an illegal kickback scheme involving dialysis referrals. As the district court explained: Relator attempted to show that, by permitting Devora and Orozco to work in the clinics and assist Chavez with his duties, Fresenius provided Chavez with remuneration in exchange for referral of patients. Based on the evidence at trial, in the light most favorable to the Relator, the jury would be entitled to believe that Chavez received a benefit. But Relator did not present any witness or document that would promote the inference of criminal intent to induce referrals. Furthermore, the evidence showed that Chavez’s volume of referrals remained constant during the period of time when a medical assistant was working in the clinic and when one was not. Gonzalez, 748 F.Supp.2d at 113 n. 31. Specifically, the assistants only worked with Chavez in 2000-2001 and 2005-2006. Chavez referred the same number of patients to Fresenius’s clinics whether or not he had these assistants working for him. Chavez also referred patients to Fresenius when he had a licensed medical assistant working for him. Additionally, the assistants were employed and paid by Chavez; not Fresenius. The district court did not err in concluding that there is insufficient evidence to establish that the assistants’ ability to work at the clinic induced Chavez to refer patients to Fresenius. For these reasons, we also uphold the district court’s grant of judgment on the Relator’s Anti-Kickback Act claim. Alternatively, Relator argues that Fresenius’s claims were false because they were “grounded in fraud” and “per se tainted,” even if Fresenius did not certify statutory compliance. At the district court, Relator based this theory on this court’s statement in Longhi that “[i]n certain cases, FCA liability may be imposed ‘when the contract under which payment is made was procured by fraud.’ ” Longhi, 575 F.3d at 467-68 (quoting United States ex rel. Willard v. Humana Health Plan of Tex., Inc., 336 F.3d 375, 384 (5th Cir. 2003)). The district court rejected this argument, reasoning that Longhi is limited to the fraudulent inducement context. See id. at 468 (“Under a fraudulent inducement theory, although the Defendants’ ‘subsequent claims for payment made under the contract were not literally false, [because] they derived from the original fraudulent misrepresentation, they, too, became actionable false claims.’ ” (quoting United States ex rel. Laird v. Lockheed Martin Eng’g & Science Servs. Co., 491 F.3d 254, 259 (5th Cir.2007))). Relator contends that the district court construed her argument too narrowly, and she directs this court to United States ex rel. Marcus v. Hess, 317 U.S. 537, 63 S.Ct. 379, 87 L.Ed. 443 (1943), in which the Supreme Court explained that the three provisions of § 3729(a) “considered together, indicate a purpose to reach any person who knowingly assisted in causing the government to pay claims which were grounded in fraud, without regard to whether that person had direct contractual relations with the government.” Hess, 317 U.S. at 544-45, 63 S.Ct. 379 (emphasis added). Relator contends that in United States ex rel. Riley v. St. Luke’s Episcopal Hosp., 355 F.3d 370 (5th Cir.2004), and United States ex rel. Grubbs v. Kanneganti, 565 F.3d 180 (5th Cir.2009), this court employed similar “grounded in fraud” language which supports § 3729(a)(1) liability for Fresenius based on Chavez’s Medicare claims. Relator argues that, in light of these cases, Fresenius may be held liable under § 3729(a)(1), not just for submitting false claims, but for causing the presentation of Chavez’s claims by assisting in the allegedly false billing scheme. Under this theory, if Relator adduced evidence on the basis of which a reasonable jury could conclude that Fresenius in any way participated in the scheme, and the scheme produced any potentially false claims, then Fresenius’s liability under (a)(1) should have gone to the jury. Relator reads too much into Hess, Riley, and Grubbs. In Hess, the Supreme Court stated that the three FCA provisions considered together evidence a congressional intent for the FCA to reach all parties knowingly involved in a fraudulent scheme. See Hess, 317 U.S. at 544, 63 S.Ct. 379. In this case, the FCA did in fact reach Fresenius. Relator’s claims against Fresenius under (a)(2) and (a)(3) proceeded to the jury. Second, an interpretation of the FCA that imposed (a)(1) liability for mere participation in a false billing scheme would arguably render superfluous (a)(2) and (a)(3) liability for producing false records and conspiring to submit false claims, activities which necessarily constitute participation. We explained in Grubbs that a doctor “can cause the fraud by putting a fraudulent record into a system” and by “entering records of unprovided or unnecessary services.” Grubbs, 565 F.3d at 190 n. 31. This is the type of activity which § 3729(a)(2) was intended to reach. Although a defendant may be held liable under the FCA for engaging in a “fraudulent course of conduct” which does not result in a false claim, this type of liability is, as the district court noted, limited to the fraudulent inducement context found in Longhi. The Supreme Court’s decision in Hess and our decisions in Riley and Grubbs do not counsel otherwise. We also reject Relator’s argument that the district court improperly instructed the jury. Because Relator’s counsel timely objected to the instruction at trial, we review for abuse of discretion. See Price v. Rosiek Constr. Co., 509 F.3d 704, 708 (5th Cir.2007). “A challenge to jury instructions must demonstrate that the charge as a whole creates substantial and ineradicable doubt whether the jury has been properly guided in its deliberations.” Id. (quoting Thomas v. Tex. Dep’t of Criminal Justice, 297 F.3d 361, 365 (5th Cir. 2002)). The contested jury instruction read as follows: Dr. Chavez may delegate to a qualified and properly trained person acting under his supervision, any medical act that a reasonable and prudent physician would find within the scope of sound medical judgment to delegate if, in Dr. Chavez’s opinion, all of the following conditions are met: 1. The act a. can be properly and safely performed by the person to whom the medical act is delegated; b. is performed in its customary manner; and c. is not in violation of any other statute. And 2. The person to whom the delegation is made does not represent to the public that the person is authorized to practice medicine. On appeal, Relator does not contend that any of the instruction is legally erroneous. Indeed, the language of the instruction quotes verbatim Texas Occupations Code § 157.001. Relator instead contends that the issue of delegation of duties by a physician is irrelevant, and that the jury, having returned a verdict in less than ninety minutes, was obviously misled by the instructions. In other words, Relator seems to contend that the instruction distracted the jury from the issue of whether Chavez falsely billed Medicare for services provided by Devora and Orozco, and led the jury to end its inquiry upon deciding that Chavez was allowed by law to delegate. But in addition to the aforementioned instruction, the district court also instructed the jury that Chavez knowingly submitted a false claim if he “billed for face-to-face patient interactions that [he] himself never performed,” and the court instructed the jury that it could hold Chavez or Fresenius hable if it found that either of them “made, used, or caused to be made or used a false record or statement to get a false or fraudulent claim paid[.]” Relator has not shown that the charge “create[d] substantial and ineradicable doubt whether the jury [was] properly guided in its deliberations.” Price, 509 F.3d at 708. Ill We turn to Relator’s retaliation claims and the resultant award of attorney’s fees. Section 3730 of Title 31 provides the relevant cause of action: Any employee who is discharged, demoted, suspended, threatened, harassed, or in any other manner discriminated against in the terms and conditions of employment by his or her employer because of lawful acts done by the employee on behalf of the employee or others in furtherance of an action under this section, including investigation for, initiation of, testimony for, or assistance in an action filed or to be filed under this section, shall be entitled to all relief necessary to make the employee whole 31 U.S.C. § 3730(h) (2008). The district court concluded that, even if Relator had been threatened, harassed, and discriminated against, she had nevertheless produced insufficient evidence that Fresenius or Ramirez actually knew of her qui tam action, and granted the defendants’ motion for judgment as a matter of law. On appeal, Relator again offers a bald assertion that management knew of the lawsuit and argues in the alternative that we should presume knowledge because her FCA complaint was unsealed prior to her termination. Relator does not offer evidence or authority in support of either proposition. Additionally, Relator expressly disclaimed in attorney fee proceedings her contention, central to her retaliation claim, that Ramirez ordered her to assist in the alleged fraud. Moreover, Relator fails to address the district court’s conclusion that Fresenius had a legitimate basis for taking disciplinary action, including allegations that Relator violated Fresenius’s theft policies and claimed hourly wages while on workers compensation. For all of these reasons, Relator’s retaliation claims are without merit. Relator’s counsel also appeals the district court’s award of sanctions under § 1927 in connection with Relator’s retaliation suit. Section 1927 provides: Any attorney or other person admitted to conduct cases in any court of the United States or any Territory thereof who so multiplies the proceedings in any case unreasonably and vexatiously may be required by the court to satisfy personally the excess costs, expenses, and attorneys’ fees reasonably incurred because of such conduct. 28 U.S.C. § 1927. Section 1927 sanctions are not to be awarded lightly. They require “evidence of bad faith, improper motive, or reckless disregard of the duty owed to the court.” Edwards v. Gen. Motors Corp., 153 F.3d 242, 246 (5th Cir. 1998). This court reviews the district court’s award of sanctions under § 1927 for abuse of discretion. Cambridge Toxicology Group, Inc. v. Exnicios, 495 F.3d 169, 180 (5th Cir.2007). Relator’s inconsistent statements with respect to whether she had refused requests to help cover up the fraud were central to the attorney fee proceedings. Relator initially alleged that she had been directed to participate in the defendants’ alleged Medicare fraud. The complaint specifically referenced a July 3, 2007, letter to Ramirez in which Relator said that she would not lie to the Medicare authorities, would not help cover up the fact that medical assistants were performing some of the work, and would not be coming back to work under those conditions. Relator’s story then changed during discovery. When asked in deposition testimony if she had ever been asked to lie to Medicare auditors or ever felt like it was a job requirement that she assist in fraud, Relator replied in the negative. After the deposition, Relator’s counsel submitted an errata sheet containing 101 corrections to Relator’s testimony, some of which again changed Relator’s answers to match her original complaint allegations that her supervisors wanted her to lie to Medicare authorities. The defendants then moved to strike the errata sheet from the record and to re-depose Relator. They also requested sanctions under § 1927. The magistrate judge denied in part and granted in part the defendants’ motion, determining that the errors were presumably made in good faith, that sanctions were unnecessary, and that the errata sheet need not be stricken from the record. The magistrate judge also ordered that Relator be re-deposed at no cost to the defendants. During her second deposition, Relator maintained that her July 3 letter accurately reflected the situation at Fresenius. At trial, Relator’s story changed yet again. She testified that she had never been asked to lie, and that her answers in the first deposition had been accurate. She testified that her attorney had “literally word[ed]” some of the errata sheet changes and had also helped her write the July 3 letter referenced in her complaint. The district court inferred bad faith on the part of counsel, concluding that counsel had helped Relator push a meritless claim to trial. On this basis, the district court awarded sanctions. Counsel argues on appeal that Relator was entitled to submit an errata sheet and make substantive changes to her deposition under Federal Rule of Civil Procedure 30(e). We do not necessarily disagree, but the only question for our purposes is whether the district court abused its discretion in concluding that Relator’s counsel unreasonably and vexatiously multiplied proceedings. We find no abuse of discretion. The district court assumed good faith in the initial filing of the complaint but noted that counsel should at least have developed questions about the merits of Relator’s claim when she disclaimed a critical allegation from her complaint in the first deposition. Additionally, Relator’s testimony at trial supported the district court’s conclusion that counsel exerted improper influence over the drafting of the errata sheet. Although clients do sometimes make substantive missteps in deposition testimony which may be corrected with an errata sheet, attorneys may not use an errata sheet to push a case to trial where the client no longer adheres to the allegations supporting the claim. See Norelus v. Denny’s, Inc., 628 F.3d 1270, 1281-82 (11th Cir.2010). The evidence in the record before us supports the district court’s conclusion that Relator’s counsel did just that. We are likewise unpersuaded by counsel’s argument that the defendants’ failure to file a motion for summary judgment at the close of discovery somehow precludes the award of sanctions. The district court denied the defendants’ motion to strike the errata sheet from the record, and the defendants did not have any way of knowing that Relator would again change her testimony at trial. Similarly, we reject counsel’s broader contention that if a case has enough merit to proceed to trial it cannot possibly be so meritless as to warrant sanctions. This argument turns § 1927, designed to prevent the vexatious multiplication of proceedings, on its head. No multiplication of proceedings would be more vexatious than one which gave a frivolous claim the appearance of trial-worthy merit.

2201661-14938

MEMORANDUM OPINION GRANTING DEFENDANT’S CROSS-MOTION FOR PARTIAL SUMMARY JUDGMENT REGARDING BID PREPARATION AND PROPOSAL COSTS WILLIAMS, Judge. This post-award bid protest comes before the Court on the parties’ cross-motions for partial summary judgment regarding Plaintiffs bid preparation and proposal costs. On December 3, 2003, the Court granted Plaintiffs protest, finding that the Air Force had improperly evaluated the awardee’s noncom-pliant solution as an advantage, allowing the awardee to “trade off’ its noncompliance for lowered cost, while Gentex was not informed that this could be done. Although the Court found a prejudicial violation of procurement regulation and unequal treatment of offerors, the Court denied Plaintiffs request for injunctive relief, finding that national security considerations dictated that the contract performance continue. As a remedy for the violation, the Court awarded Plaintiff its bid preparation and proposal (B & P) costs in an amount to be determined in further proceedings. Gentex v. United States, 58 Fed.Cl. 634, 636 (2003). On May 7, 2004, the parties submitted cross-motions for partial summary judgment on two discrete legal issues: (1) whether Plaintiff may recover the B&P costs incurred by its teammates; and (2) whether profit can be included in the B&P costs. Because Plaintiff is not obligated to pay its teammates’ bid preparation and proposal costs and has not itself incurred those costs, it cannot recover them in this action. Nor can Gentex recover profit on its B & P effort. B&P costs are a type of reliance damages intended to reimburse an offeror for the costs or expenses wasted in preparing an offer which was not fairly considered. Profit is not an element of those costs. As such, Plaintiffs Motion for Partial Summary Judgment is denied; Defendant’s Motion is granted. Background Pursuant to the Court’s order of December 3, 2003, Gentex Corporation (“Gentex”) submitted to the United States a statement of bid preparation and proposal (“B & P”) costs relating to the Joint Service Aircrew Mask (“JSAM”) procurement under Request for Proposals (“RFP”) F41624-02-R-1007 for System Development and Demonstration (“SDD”). Gentex’s B&P statement included B&P costs of its team members on this procurement, i.e. $214,837 incurred by ILC Dover and $33,641 incurred by Calspan-UB Research Center (“CUBRC”) with respect to proposal efforts for the JSAM SDD RFP. Gentex’s B & P statement also included a claim for 15 percent profit in the amount of $806,031. Teaming Arrangements SDD RFP Synopsis The May 31, 2002, SDD RFP synopsis indicated that offerors would address JSAM teaming or partnering arrangements in the SDD proposals: Teaming or partnering within industry allows for the most promising technical design and expertise. Please indicate how teaming or partnering will be considered in your approach. SDD RFP Provisions Clause YA-H007 “Teaming Arrangement” provided that offerors’ JSAM SDD proposals identify “team members.” (e) The following subcontractors were evaluated during source selection and are considered to be team members. Section L 4.2.1 of the SDD RFP requested that offerors address “PDRR Team Effort.” Section L 5.1, “Organizational Structure,” requested that the offerors “[d]escribe the organizational structure of the team assigned to the proposed effort, including interfaces with other company divisions, associate contractors, and the Government, and how this structure would contribute to a synergistic environment that will be effective in this program.” Section M of the RFP stated that “PDRR Team Effort” would be an evaluation subfactor for the JSAM SDD competition. Gentex’s Proposal The Executive Summary of Gentex’s Initial SDD proposal addressed the Gentex Team The GENTEX Team has held a leadership role in aircrew safety and protection for over fifty years. :'fi >¡< ij; Our Team: GENTEX Corporation, ILC Dover, Crew Systems Corporation (CSC) and CUBRC-Veridian, possess a unique blend of capabilities to successfully accomplish the JSAM Program. AR Vol. 7, Tab B1.2, at 00003469. The Executive Summary of Gentex’s Initial SDD proposal described the “Organizational Structure” with a “GENTEX Team Overview” identifying ILC Dover and CUBRC-Veridian as part of the “GENTEX Team.” AR Vol. 7, Tab B1.2, at 00003474-75. Gentex’s Initial SDD proposal described the operation of the Gentex Team, including fee sharing: The GENTEX Team will operate as a single synergetic team, with product-based Integrated Product Teams (IPTs) charged with responsibility for developing and delivering the major JSAM system products. The Program Manager will implement an integrated management approach to direct and control the efforts of the GENTEX Team. All team members have committed to this single management system and have co-signed a common set of operating guidelines captured in the “Team Operations” process description in the Integrated Master Plan (IMP). To underscore their full commitment to JSAM, the teammates have agreed to a sharing plan for all earned award fees, [emphasis in original] AR Vol. 7, Tab B1.2, at 0003475. Volume IV of Gentex’s Initial SDD proposal identified ILC Dover and CUBRC-Veridan as part of the “GENTEX JSAM Team Organization.” AR Vol. 8, Tab B1.2, at 00004001. In Clause YA-H007 “Teaming Arrangements,” Gentex’s proposal included the following entry: (e) The following subcontractors were evaluated during source selection and are considered to be team members. ILC Dover, Inc., Crew Systems Corporation, Cal-span-University at Buffalo Research Center, Inc. AR Vol. 8, Tab B1.2, at 00004298. Gentex and ILC Dover entered into a teaming agreement for the JSAM program. The teaming agreement stated, in part, that the team members would provide support for proposal effort and “Each party shall bear its own costs during the proposal stage in support of winning the program.” Gentex and CUBRC entered into a teaming agreement for the JSAM program. The teaming agreement provided for joint proposal effort and stated, in part: “Both CUBRC and GENTEX intend to expend a great deal of effort at their own expense with a view toward developing the best approach to the proposal.” DCAA Audit In Audit Report No. 04901-2004D10790001 dated March 22, 2004, the Defense Contract Audit Agency (“DCAA”) questioned the entire $214,837 for ILC Dover costs: Although ILC Dover incurred JSAM B & P costs, we question the entire $214,837 included in this submission as Gentex did not incur any expense related to ILC Dover B & P costs and has no obligation to reimburse ILC Dover for any B & P costs. In fact, the teaming agreement between Gentex and ILC Dover states “each party shall bear its own costs during the proposal stage in support of winning the program.” Audit Report at 13-14. In this report, DCAA questioned the entire $33,641 for CUBRC costs: Although CUBRC incurred JSAM B & P costs, we questioned the entire $33,641 included in this submission as Gentex did not incur any expense related to CUBRC B & P costs and has no obligation to reimburse CUBRC for any B & P costs. In fact, the teaming agreement between Gentex and CUBRC states, “Both CUBRC and Gentex intend to expend a great deal of effort at their own expense with a view toward developing the best approach to the proposal.” Id. at 14. In this report, DCAA questioned the entire amount of profit of $306,031: We question the entire $306,031 of the fee included on the contractor’s statement of B & P costs. Fee is not considered a cost. Id. at 16. Payment of Teammate Costs Pursuant to the terms of their teaming agreement, Gentex is not presently required to reimburse ILC Dover for any of ILC Dover’s B & P costs. In the event that the Court finds that Gentex is entitled to recover the requested $214,837 (or any part thereof) in B & P costs incurred by ILC Dover, however, Gentex has agreed with ILC Dover that Gentex will pay the full amount of its recovery to ILC Dover. Pursuant to the terms of their teaming agreement, Gentex is not presently required to reimburse CUBRC for any of CUBRC’s B & P costs. In the event that the Court finds that Gentex is entitled to recover the requested $33,641 (or any part thereof) in B & P costs incurred by CUBRC, however, Gentex has agreed with CUBRC the Gentex will pay the full amount of its recovery to CUBRC. Discussion Gentex May Not Recover Bid Preparation and Proposal Costs on Behalf of its Teammates Defendant contends that Gentex may not recover B & P costs on behalf of its teammates because Gentex has no obligation to pay its teammates those costs and Gentex has not itself incurred their B & P costs. The Court agrees. In essence, this issue is one of standing. It is well established that the standing doctrine embraces the general prohibition against a litigant’s raising another person’s legal rights. Allen v. Wright, 468 U.S. 737, 751, 104 S.Ct. 3315, 82 L.Ed.2d 556 (1984). In the context of a bid protest, this Court’s authorizing legislation confers standing on “an interested party objecting to the solicitation by a Federal Agency for bids or proposals for a proposed contract or to a proposed award or the award of a contract . . . .” 28 U.S.C. 1491(b)(1); American Federation of Government Employees v. United States, 258 F.3d 1294, 1299 (Fed.Cir.2001). Although the Tucker Act does not define the term “interested party,” the Federal Circuit has applied the Competition In Contracting Act’s (CICA) definition of an “interested party” to the Tucker Act’s jurisdictional grant. 31 U.S.C. § 3551(2); American Federation of Government Employees, 258 F.3d at 1302. CICA defines an interested party as “ ‘an actual or prospective bidder or offeror whose direct economic interest would be affected by the award of the contract or by failure to award the contract.’ ” Id. In Myers Investigative and Security Services, Inc. v. United States, 275 F.3d 1366 (Fed.Cir.2002), the Federal Circuit applied that definition and stated further that a party must have a “substantial chance” of award in order to be considered an “interested party” under the Tucker Act. Myers, 275 F.3d at 1370; accord Information Technology & Applications Corp. v. United States, 316 F.3d 1312, 1319 (Fed.Cir.2003) (“prejudice (or injury) is a necessary element of standing.”) Applying the CICA definition of interested party, GAO denied a protester recovery of proposal preparation costs incurred by its teammates absent evidence of an obligation by the protester to repay such costs regardless of whether or not they would be recovered from the Government. Sodexho Management, Inc. — Costs, B-289605.3, 2003 CPD ¶ 136, 2003 WL 21910567 (Aug. 6, 2003). GAO explained: As defined in 31 U.S.C. § 3551(2), an “interested party” is an “actual or prospective bidder or offeror.” Under this definition, the interested party is the protester, not its potential subcontractor, even if it participates in preparing the protester’s proposal. Accordingly, only if there is evidence of an obligation by the protester to repay the subcontractor for its proposal preparation costs regardless of whether the protester ultimately recovers those costs from the government can we conclude that those costs are those of an interested party as required by CICA. Id. at *14; see also Boines Constr. & Equip. Co., Inc. — Costs, B-279575.4, Apr. 5, 2000, 2000 CPD ¶ 56 at 4-5, 2000 WL 361647 (April 5, 2000). GAO’s rationale is persuasive. Although ILC Dover and CUBRC were teammates of Gentex in this procurement and participated in the proposal effort, they were not themselves offerors, only Gentex was. Gentex has not alleged that it formed a joint venture with ILC Dover and CUBRC, and the record does not support such a conclusion. Rather, ILC Dover and CUBRC are referred to as subcontractors as well as teammates in the proposal and evaluation, and Gentex is not obligated to pay them their B & P costs. Where, as here, a teaming agreement or subcontract “expressly negates any liability of the prime contractor to the subcontractor,” the prime may not recover those costs. Donovan Constr. Co. v. United States, 138 Ct.Cl. 97, 99, 149 F.Supp. 898 (1957), cert. denied, 355 U.S. 826, 78 S.Ct. 34, 2 L.Ed.2d 39 (construing United States v. Blair, 321 U.S. 730, 737, 64 S.Ct. 820, 88 L.Ed. 1039 (1944)). As our appellate authority held: Quite logically where the subcontract absolves the prime contractor from liability to his subcontractor there can be no derivative liability of the Government to the subcontractor even where the Government would otherwise be culpable, for actual damage to the prime is a prerequisite to recovery either for himself or for those subordinate to him. Gardner Displays Co. v. United States, 171 CT.C1. 497, 346 F.2d 585, 586-87 (1965). Because Plaintiffs teaming agreements with ILC Dover and CUBRC clearly indicate that Plaintiff was under no obligation to compensate its teammates for their B & P costs, Gentex may not recover those costs on their behalf in this action. Gentex’s post hoc agreement to reimburse their B & P costs if it recovers them in this action does not create an obligation or liability sufficient to imbue Gentex with the requisite actual injury necessary for standing. Absent such obligation, the Court would be allowing a plaintiff to raise another entity’s legal rights and recover the damages of nonparties in disregard of traditional threshold requirements of standing. Allen, 468 U.S. at 751, 104 S.Ct. 3315. Gentex May Not Recover Profit As Part Of Its Bid Preparation And Proposal Costs Plaintiff has asked that a 15% markup, or “profit,” be included in its bid preparation and proposal costs. However, because profit is not a cost incurred in the bid preparation and proposal process, the Court denies recovery. The Comptroller General has expressly recognized that “[a] protestor may not recover profit on its own employees’ time in filing and pursuing protests or preparing bids or proposals.” John Peeples — Claim for Costs, 91-2 CPD ¶ 125, 1991 WL 162540 (Aug. 5, 1991). Instead, bid proposal costs “must be based upon actual rates of compensation, plus reasonable overhead and fringe benefits, and not market rates.” Id. (emphasis added) (citing W.S. Spotswood & Sons, Inc. — Claim for Costs, 90-2 CPD ¶ 50, 1990 WL 293706 (July 19, 1990)); see also Rocky Mountain Trading Company, 89-3 BCA ¶ 22,110, 1989 WL 84262 (July 26, 1989) (protestor improperly calculated the hourly rate of its president in its request for bid preparation and proposal costs because the rate likely included profit, “and costs do not include an allowance for recovery of profit.”) In Lion Raisins, Inc. v. United States, 52 Fed.Cl. 629 (2002), this Court cited with approval GAO’s decision in Spotswood for the proposition that “claimed costs must be based on actual rates of compensation and reasonable overhead and fringe, but cannot include profit.” Lion, 52 Fed.Cl. at 635.

6109702-18968

MEMORANDUM OPINION AND ORDER RICHARD L. SPEER, Bankruptcy Judge. This cause comes before the Court after Continued Hearing on Debtors’ Objection to Relief from Stay by David Parks and Mello Creme, Inc. At the Hearing, the parties had the opportunity to present the evidence and arguments that they wished the Court to consider in reaching its decision. The Court has reviewed the evidence and the arguments of counsel, as well as the entire record in this case. Based on that review, and for the following reasons, the Court finds that the contract for sale of the ongoing doughnut and baked goods business is not separable. FACTS In June of 1985, David L. Parks entered into an agreement to sell his doughnut business to the Debtors, K. Lowell Ritchey and Darla Ritchey. In a contract entitled “Supplemental Agreement”, Mr. Parks both individually and as president of Mello-Creme, Inc., agreed to sell the business, fixtures, equipment, name, good will, inventory, and real estate. Some of the assets of the business, including real property, were owned by Mr. Parks individually, the balance being held by Mello-Creme, Inc.. The corporation known as Mello-Creme, Inc. was not transferred to the Ritcheys. Mr. Parks was, and still is, the sole shareholder of Mello-Creme, Inc.. This matter comes before the Court on a Motion for Relief from Stay, but the issues presented primarily center on the question of whether the individual land contracts, and other agreements, entered into by the parties are severable as separate contracts, or are parts of one indivisible contract. If the land contracts are susceptible to division into individual contracts, the Debtors may seek to reject some of the land contracts and retain others under 11 U.S.C. § 365. The Supplemental Agreement states the purchase price of the business to be Five Hundred Twenty-five Thousand Dollars ($525,000.00). The purchase price is then “apportioned to the following assets of the business” in the Supplemental Agreement. Values are assigned to the different parcels of real estate, to the inventory, and provision are made for the transfer of the equipment, good will, fixtures, and other personal property by means of a Bill of Sale. The Supplemental Agreement contains the following clause: It is acknowledged by and between the parties hereto that the foregoing documents of transfer are essential to the orderly sale of the business and as such each and every document referred to hereinabove shall be executed in conjuction [sic] with this Supplemental Agreement. In the event that one or more of the foregoing instruments are not executed pursuant to this agreement, then in that event this agreement — and all other remaining instruments shall be held null and void. Mr. Parks testified that he had completed all the acts required in the Supplemental Agreement, and the Ritcheys had done all they were required to do, with the exception of paying the balance of the purchase price. The down payment of One Hundred Thousand Dollars ($100,000.00) was paid to Mr. Parks. It was paid in one lump sum, and was not apportioned in the Supplemental Agreement. Mr. Parks testified that he offered the business as a whole, and sold it as a whole. The apportionment was done partly for tax purposes, so that Debtors could take certain deductions for depreciation. The Ritcheys did not testify. LAW It is well established that a Debtor cannot retain the beneficial aspects of a contract while rejecting the contract’s burdens. In re Tirenational Corp., 47 B.R. 647, 650 (Bankr.N.D.Ohio 1985); In re Texstone Venture, Ltd., 54 B.R. 54, 56 (Bankr.S.D.Tex.1985); In re LHD Realty Corp., 20 B.R. 717, 719 (Bankr.S.D.Ind.1982). As was stated in In re Holland Enterprises, Inc., 25 B.R. 301, 303 (E.D.N.C.1982): “[A]n executory contract or unexpired lease must be rejected in to to. To hold otherwise, would construe the bankruptcy law as providing a debtor in bankruptcy with greater rights and powers under a contract than the debtor had outside of bankruptcy.” Consequently, if this Court finds that the agreement between Mr. Parks and the Ritcheys is one contract, the Debtors must assume or reject the entire agreement. However, the question presented here is whether there is in fact “one contract”, or several “separate contracts”. If the contracts are separate agreements, the Debtors may assume or reject each separate contract under § 365. In deciding whether a contract is divisible or indivisible, the Bankruptcy Court should look to state law. See In re Gardinier, 831 F.2d 974, (11th Cir.1987); Budge v. Post, 544 F.Supp. 370, 381-382 (N.D.Tex.1982); In re Chemtoy Corp., 19 B.R. 475, 481 (Bankr.N.D.Ill.1982) (All cite to law of forum state in determining the divisibility of contracts). In deciding issues founded upon state common law, federal courts should look to the decisions of the state’s highest court. If the state’s highest court has not spoken to the question in controversy, a federal court must discern how the state’s highest court would respond if confronted with the question. Erie Railroad Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938); Hartford Fire Ins. v. Lawrence, Dykes, Goodenberger, 740 F.2d 1362, 1365 (6th Cir.1984); A & M Records, Inc. v. M.V.C. Dist. Corp., 574 F.2d 312, 314 (6th Cir.1978); In re Stone, 52 B.R. 305, 306 (Bankr.W.D.Ky.1985); In re Sexton, 16 B.R. 240, 242 (Bankr.D.Tenn.1981). The most recent Ohio Supreme Court case in this area is Material Contractors, Inc. v. Donahue, 14 Ohio St.2d 19, 235 N.E.2d 525 (1968). The Court quoted from the first paragraph of the syllabus in Huntington and Finke Co. v. Lake Erie Lumber & Supply Co., 109 Ohio St. 488, 143 N.E. 132 (1924): Whether a contract * * * is entire or divisible depends generally upon the intention of the parties, and this must be ascertained by the ordinary rules of construction, considering not only the language of the contract, but also, in cases of uncertainty, the subject-matter, the situation of the parties and circumstances surrounding the transaction, and the construction placed upon the contract by the parties themselves. * * * 109 Ohio St. at 488, 143 N.E. at 132. In the case at bar, there are significant areas of uncertainty. Therefore, the Court should look to the surrounding circumstances in ascertaining the intentions of the parties. Based upon the Court’s review of the factors quoted in Material Contractors, supra, it appears that the parties intended a single, indivisible contract. Following the quote from Huntington, supra, the Supreme Court cites Armstrong v. Bankers Life Assn., 217 Ind. 601, 29 N.E.2d 415 (1940). The decision in Material Contractors is specifically based on the principles set forth in Huntington, supra, and Armstrong, supra, as well as criteria established in 3A Corbin on Contracts, § 695-696. The Armstrong court lists several rules to guide a court’s decision on whether a contract is entire or severable. One subject for inquiry is whether the parties reached an agreement regarding the various items as a whole, or whether the agreement was reached by regarding each item as a unit. In the present case, the parties reached an agreement as to the whole doughnut business. However, while the contract first states a price for the entire business, the contract does apportion values to different parcels of real property, inventory, and “equipment, good will, covenant not to compete, exclusive use of the name, fixtures and other personal property excluding inventory.” Discussing apportionment, the Armstrong court quotes: ... The test chiefly relied upon is whether the parties have apportioned the consideration on the one side to the different covenants on the other. If the consideration is apportioned, so that for each covenant there is a corresponding consideration, the contract is severable. If, on the other hand, the consideration is not apportioned, and the same consideration supports all the covenants and agreements, the contract is entire. A contract is entire when by its terms, nature, and purpose, it contemplates and intends that each and all of its parts and the consideration shall be common to each other and interdependent. On the other hand, it is the general rule that a severable contract is one which in its nature and purpose is susceptible of division and apportionment. 29 N.E.2d at 420-421. In the case sub judice, the Supplemental Agreement does apportion values, but it also makes all the “parts” interdependent. The Armstrong opinion does include an exception to the general rule on apportionment: “this [apportionment] test will not necessarily prevail over other provisions of the contract showing a contrary intent of the parties.” 29 N.E.2d 421. Evidently, under Armstrong, the most important factor in determining whether a contract is “entire” or “divisible” is the intent of the parties. This is also the modern rule. “No formula has been devised which furnishes a test for determining in all cases what contracts are severable and what are entire. The primary criterion for determining the question is the intention of the parties ...” 17 Am.Jur.2d Contracts § 325. In the older Huntington decision, the Ohio Supreme Court cited the “general rule” on apportionment, but did not specifically state the exception. The court quoted from 6 Ruling Case Law § 246 at 858: If the consideration is expressly or by necessary implication apportioned, the contract is severable. * * * If the part to be performed by one party consists of several and distinct items, and the price to be paid by the other is apportioned to each item to be performed, or is left to be implied under the law, such a contract will generally be held to be separable. 109 Ohio St. at 496-497, 143 N.E. at 135. Thus, under Huntington, it appears that the apportionment of different values to the items listed in the Supplemental Agreement would, generally, prevent a finding that the parties entered into a single contract for the sale of the business. However, the Supplemental Agreement makes all sections of the Agreement dependent upon the completion of the parts. The Huntington court quoted the definition of a separable contract put forward in 2 A.L. R. 643, 645: ... One in its nature and purposes susceptible of division and apportionment, having two or more parts in respect to the matters and things contemplated and embraced by it, not necessarily dependent upon each other; the consideration not being single or entire as to all of its several provisions, as a whole. 109 Ohio St. at 497, 143 N.E. at 135. [emphasis added.] In the case at bar, the parties made all the parts of the Supplemental Agreement dependent upon total completion of the terms of the Agreement. Each of the documents mentioned in the Supplemental Agreement is termed “essential to the orderly sale of the business”, and they are all “null and void” if even one of the instruments is not executed. This interdependence appears to support the finding of a single contract under Huntington’s “necessarily dependent” language. The Huntington court did not quote the preceding paragraph in the A.L.R. annotation: The contract is entire if it is one bargain, and it matters not whether there is one article, or many, each having an apportioned price. 2 A.L.R. 643, 645. It is unclear whether the omission was because of a disagreement with the statement, or simply because it was not relevant to the Huntington case. The Huntington decision contains another criteria which also supports the finding of a single, unseverable contract. The Huntington court noted: Authorities agree that in determining whether a contract shall be treated as severable or as an entirety the intention of the parties will control ... Again, it appears to this Court that the parties intended the sale of the business to be a single transaction. The entire business was offered as a whole, and not as separate individual transactions for land, inventory, equipment, and good will. The Supplemental Agreement reflects this intention by stating the price of the entire business first, and making the contract provisions interdependent. All in a single document, signed by all the parties. The Ohio Supreme Court has addressed the issue of when transactions constitute one or several contracts in other older cases. The case that is most similar to the one presently before the Court is Burckhardt v. Burckhardt, 36 Ohio St. 261 (1880). The Burckhardt case involved the determination of whether the Plaintiff’s interest in a business, including the good will, was sold to the defendant as an entirety. The Burckhardt court noted that the property was sold as a going concern. “The consideration was entire for all that was purchased; and there was no separation, in the contemplation of the parties, of the good will from the other property.” Id. at 279. As part of the partnership dissolution, the business was sold by auction, the two partners in the business bidding against each other for the half of the business they did not own. After the high bid was accepted, a deed was executed to transfer the half interest in the real property. A value of Forty-five Thousand Dollars ($45,000.00) was assigned to the real property upon the advice of counsel, for tax purposes. The Burckhardt court held that the value assigned to the property for tax stamp purposes was not an apportionment, and that the court would not infer that a separate value had been agreed upon for the good will. The consideration named in the deed did not operate to destroy or sever the entirety of the consideration for the purchase, as fixed by the contract for dissolution sale. Id. at 279-280. While this case would appear to strongly support a finding by this Court of a single, indivisible contract, it should be noted that there was no apportionment in the contract to competitively bid for the business, or in the bids themselves. The apportionment took place later, when the parties went to transfer the real property by deed. An even older Ohio Supreme Court case addresses the importance to be placed on the intentions of the parties. In Steamboat Wellsville v. Geisse, 3 Ohio St. 333, 338 (1854), the court quoted from Johnson v. Reed, 9 Mass. 78, 83 [1812] “... the true intentions of the parties, as apparent in the instrument, should determine whether covenants are independent or conditional, instead of any technical rules of which the parties were totally ignorant, and the application of which would, in most cases, utterly defeat their intention.” The court found the contract to have new machinery made and old machinery repaired and put in running order, was for a single purpose. The court observed that the work was not to be done part by part, but rather as a whole, the parts bearing a necessary relationship to each other. The court also noted that the provisions for payment indicated that the parties themselves regarded the agreement as an entirety. Accordingly, their intentions prevailed over any technical rules of construction, and the contract was to be taken as an entirety. Steamboat Wellsville, 3 Ohio St. at 338-339. Looking at the case at bar, as this Court has previously noted, it appears that the parties intended a single transaction: the sale of the ongoing doughnut and baked goods business. After review of these cases, it appears that most of the case law supports the finding of an indivisible contract, with one major exception. The major exception is, of course, the language in Huntington relative to apportionment and severability. This Court is faced with a conflict between a line of cases which hold that the parties intentions are controlling, and the ruling in Huntington that apportionment results in divisibility. The Armstrong case, cited in Material Contractors, states the well recognized exception to the rule set forth in Huntington, but the status of Armstrong in relation to the older Huntington decision is unclear. Consequently, in simply examining existing Ohio case law, it is unclear whether the intentions of the parties or the rule in Huntington would be controlling when there is a conflict between the two. The Sixth Circuit Court of Appeals considered a similar situation in Ann Arbor Trust Co. v. North American Company for Life & Health Insurance, 527 F.2d 526 (6th Cir.1976), cert. denied, 425 U.S. 993, 96 S.Ct. 2206, 48 L.Ed.2d 818 (1976). See also Troutman v. State Farm Fire & Cas. Co., 570 F.2d 658 (6th Cir.1978). The Court of Appeals held that where the Federal Court cannot be certain of the interpretation which a state Supreme Court would place on several older decisions, it was the Federal Court’s obligation, in applying state law, to make a considered educated guess as to what decision would be reached by the state Supreme Court. Id. 527 F.2d at 527. In Ann Arbor Trust Co., the latest decision had been issued seventy years earlier. In the present case, the Huntington decision is sixty-three years old. It is significant that this issue is one involving contract law. The law of contracts has undergone relatively rapid evolution which is partially attributable to a change in the underlying philosophy of contracts, the modem idea being that the law should reflect actual business practices and expectations. The modem view is that the determination of whether a transaction constitutes one contract or several contracts is based on a facts and circumstances approach. What courts hope to determine is the intentions of the parties. Williston on Contracts (3rd ed.) § 863; 17 Am.Jur.2d Contracts § 325. Perhaps the most useful test in ascertaining the parties’ intentions as to whether a number of promises constitute an indivisible contract, is to inquire “whether the parties assented to all the promises as a single whole, so that there would have been no bargain whatever, if any promise or set of promises were struck out.” United States v. Bethlehem Steel Corp., 315 U.S. 289, 298, 62 S.Ct. 581, 587, 86 L.Ed. 855, 862 (1942) (citing Williston on Contracts ). Therefore, in addressing the case at bar, it is this Court’s “considered educated guess” that the Ohio Supreme Court would not follow the narrow quotation in Huntington, and instead, would look to the intent of the parties. An examination of the Supplemental Agreement, the manner in which the business was offered, and the nature of the business itself, leads this Court to the conclusion that the parties intended an indivisible contract. Accordingly, this Court finds that the contract is not divisible, and must be assumed or rejected in its entirety. This Court also rejects the argument that the Supplemental Agreement is not relevant because all parts of the contract have been performed, except for payment. The Supplemental Agreement continues to affect the character of the various deeds and the Bill of Sale. The underlying intent of the parties was expressed in the Supplemental Agreement.

5742105-16119

OPINION OF THE COURT SARAGOSA, Judge: The appellant was convicted in accordance with his pleas of three specifications of violating a lawful general order, two specifications of dereliction of duty and one specification of wrongful use of marijuana on divers occasions, in violation of Articles 92 and 112a, UCMJ, 10 U.S.C. §§ 892, 912a. Furthermore, a panel of officer members sitting as a general court-martial convicted the appellant of three additional specifications of violating a lawful general order and one specification of dereliction of duty, in violation of Article 92, UCMJ. The adjudged and approved sentence consists of a bad-eonduet discharge, eight months of confinement, and reduction to the grade of E-l. Based upon the military judge’s ruling on a pretrial motion regarding illegal pretrial punishment in violation of Article 13, UCMJ, 10 U.S.C. § 813, the appellant was granted relief in the form of 100 days of confinement credit. The appellant raises three issues on appeal. First, he asserts the military judge erred in denying the full relief requested in his pretrial motion for appropriate relief based on illegal pretrial punishment. He asks this Court to grant one-for-one credit for the 491 days the appellant was detailed to the “Thunder Pride” Team Detail Program (“Thunder Pride” team). Second, he argues the military judge erred in failing to instruct the members during sentencing in accordance with Rule for Courts-Martial (R.C.M.) 1005(e)(4). In substance, the appellant argues the military judge should not have instructed the members he had been granted 100 days of administrative confinement credit. He asks this Court to set aside the sentence and order a rehearing on sentence or reassess the sentence to one that does not include a bad-conduct discharge. Finally, the appellant asserts he was deprived of his right to speedy post-trial review based on the fact that 243 days elapsed between announcement of the sentence and action by the convening authority. He argues this delay is so egregious, unexplained, and unnecessary he is entitled to a presumption of prejudice. He asks this Court to approve appropriate sentence relief. Background Appellant served as an Air Force recruiter for the 362nd Recruiting Squadron and was assigned to the recruiting office in Goodyear, Arizona. The charges for which he stands convicted stem from violations of Air Education and Training Command Instruction (AETCI) 36-2909, Professional and Unprofessional Relationships, and derelictions in his duties. Each of these charges relate to the appellant’s conduct with female recruits or applicants of the Air Force. He was convicted of wrongfully seeking sexual favors from three separate female reeruits/appli-cants in violation of the aforementioned Instruction. Further, he was convicted of engaging in a sexual relationship with a fourth female recruit/applicant. He was also convicted of wrongfully providing alcohol to two of the female recruits/applicants. Each of the four women involved ultimately joined the Air Force; three were still on active duty at the time of the trial and one had been medically discharged. The remaining charges for which he stands convicted are use of government vehicles for activities of a personal nature and wrongful use of marijuana on divers occasions. Rlegal Pretrial Punishment When the allegations of misconduct arose, the appellant was relieved of his duties as an Air Force recruiter and was issued an order by his commander to have no contact with any recruits/applicants. As such, he was unable to work in his recruiting office location. In an effort to keep him gainfully employed, he was assigned to the “Thunder Pride” team at Luke Air Force Base (AFB), Arizona, beginning in December 2007. This program assigns enlisted personnel who are unable to perform regular duties within their unit to a team that performs a variety of base details. In a pretrial motion for appropriate relief, the appellant asserted he had been subjected to illegal pretrial punishment in violation of Article 13, UCMJ, when he was assigned to work with the “Thunder Pride” team. An Article 39(a), UCMJ, 10 U.S.C. § 839(a), hearing was held, at which the military judge heard from the appellant’s 362nd Recruiting Squadron supervisor and flight chief, the “Thunder Pride” team supervisor, and sever al other active duty members who were also assigned to the “Thunder Pride” team. The military judge rendered findings of fact. He concluded: none of the circumstances the appellant faced constituted any type of pretrial restraint or conditions tantamount to confinement; there was no intent to punish the appellant by assigning him to the “Thunder Pride” team; the “Thunder Pride” team itself is not punishment; and, none of the circumstances describing the “Thunder Pride” team are in and of themselves punishment. However, the military judge articulated concerns over: the length of time the appellant remained assigned to the “Thunder Pride” team (approximately 16 months which was twice as long as the other witnesses that testified on the motion); the fact that there is a base level instruction that governs the program and there is a provision that states no member will be assigned to the team for more than 60 days (there are noted exceptions); the failure to strictly comply and adhere to another provision of the instruction that requires legal coordination in the event a member remains on the “Thunder Pride” team for more than 60 days; and, what he deemed was a shortfall by the unit in efforts to find somewhere else to put the appellant while he was pending court-martial. Based upon these concerns, the military judge awarded the appellant 100 days of administrative confinement credit. The question of whether an “appellant is entitled to credit for a violation of Article 13, UCMJ, is a mixed question of fact and law.” United States v. Mosby, 56 M.J. 309, 310 (C.A.A.F.2002) (citing United States v. Smith, 53 M.J. 168, 170 (C.A.A.F.2000)). This Court “will not overturn a military judge’s findings of fact, including a finding of no intent to punish, unless they are clearly erroneous.” Mosby, 56 M.J. at 310 (citing Smith, 53 M.J. at 170). The ultimate question of whether an appellant is entitled to administrative credit for a violation of Article 13, UCMJ, is reviewed de novo. Mosby, 56 M.J. at 310. See also Smith, 20 M.J. at 532-33. Based upon a review of the record, including trial motions, their attachments, and testimony presented on the motion, we hold the military judge’s findings are not clearly erroneous. We further hold, as a matter of law, the appellant is not entitled to additional sentence credit beyond the 100 days previously granted by the military judge for an Article 13, UCMJ, violation. Sentencing Instructions The appellant contends the military judge erred in failing to instruct the members in accordance with R.C.M. 1005(e)(4). However, the record of trial reveals the military judge properly instructed the members when he advised them, “You must not adjudge an excessive sentence in reliance upon possible mitigating action by the convening or higher authority.” This complies with R.C.M. 1005(e)(4). The real gravamen of the appellant’s argument regarding the sentencing instructions is that he contends the military judge erred when he instructed the members regarding the 100 days of administrative credit granted pursuant to the appellant’s Article 13, UCMJ, motion. The military judge gave the following instruction: In determining an appropriate sentence in this case, you should consider that the accused has been granted 100 days of confinement credit. If you adjudge confinement as part of your sentence, these days will be credited against any sentence to confinement you may adjudge. This credit will be given by the authorities at the correctional facility where the accused is sent to serve his confinement and will be given on a day-for-day basis. After closing the court for deliberations, the members had the following questions: PRES [ ]: ... In your instructions that you gave us, you talked about a hundred days confinement credit. The question is, and we can expound if we need to, can we, as the members, differentiate between a hundred days of confinement credit for Thunder Pride versus a hundred days of actual confinement? MJ: Okay. I guess I’m not exactly clear on what your question is. PRES [ ]: The question is, understanding based on the defense exhibits that we were provided and knowing what Thunder Pride is and knowing that it’s not actual confine ment, is it okay for us to differentiate from that hundred days or do we have to consider that as confinement? Upon receiving these questions from the members regarding how they should consider the confinement credit, the military judge responded: Okay. There had been a motion for some credit that I had to take up related to the circumstances of Thunder Pride. ... And after reviewing the evidence and the issues involved in that, I determined that the accused was to be granted 100 days of credit toward any confinement that the court may adjudge. So as I instructed earlier, if the court adjudges confinement, then the 100 days credit that I granted already will be applied toward that to be applied by the correctional facility wherever the accused would go for any period of confinement. Still needing further clarification, a member asked: So legally, is it okay for us to consider that hundred days of credit less than what we would consider actual confinement? That’s the question that’s come up in our discussions. And maybe for ease of understanding and, please, this is just for the example, if we consider 300 days as appropriate confinement but we know the hundred days credit is there but we think that the 300 days confinement should be actual confinement so we bump it up to 400 days because we know we’re going to subtract a hundred days; is that legal for us to do that? In response, the military judge further instructed: What I can instruct you in this regard is that you should determine a sentence that you believe is appropriate for this accused for the offenses that he’s been found guilty of, considering all of the evidence that you’ve been presented in the case. You’ve been provided the fact or circumstance that, if you adjudge confinement, then he will have 100 days of credit toward any period of confinement that is adjudged by the court. The military judge then held an Article 39a, UCMJ, hearing, where the matter of the instruction regarding the 100 days of confinement credit was argued. The trial defense counsel argued the military judge should specifically instruct the members they cannot determine that a specific number of days is an appropriate sentence and then increase that by 100 days knowing the appellant would be awarded the credit. The government argued the defense raised the evidence of “Thunder Pride” through their sentencing exhibits and that no further instruction that may sway the deliberative process was appropriate. The military judge ultimately gave the following instruction to the members: Your duty is to adjudge an appropriate sentence for this accused that you regard as fair and just when it is imposed and not one whose fairness depends upon actions that others may or may not take in this case. These instructions must not be interpreted as indicating an opinion as to the sentence which should be adjudged for you alone are responsible for determining an appropriate sentence in this case. In arriving at your determination, you should select the sentence which will best serve the ends of good order and discipline, the needs of the accused, and the welfare of society. A military judge has a duty to particularly instruct the members to consider an accused’s pretrial confinement in arriving at an appropriate sentence; failure to do so constitutes legal error. United States v. Miller, 58 M.J. 266, 269 (C.A.A.F.2003); United States v. Davidson, 14 M.J. 81, 86 (C.M.A.1982). The language approved for such an instruction comes from United States v. Balboa, 33 M.J. 304, 305 (C.M.A.1991), and is incorporated into the Department of the Army Pamphlet (D.A. Pam.) 27-9, Military Judges’ Benchbook, ¶ 2-5-22 (15 September 2002). In the instant case, the military judge used a slight tailoring of the Balboa instruction to refer to the 100 days as “confinement credit” only, rather than as “pretrial confinement credit.” See Balboa, 33 M.J. at 305. We find the language used was an appropriate tailoring given the evidence presented during the sentencing phase. The question presented is whether the military judge has the same duty, as in actual pretrial confinement cases, to instruct the members to consider administrative confinement credit given for violations of Article 13, UCMJ, and whether such an instruction should be given over a defense objection. A military judge has a duty to tailor the instructions to the members on “the sentence to the law and the evidence.” United States v. Wheeler, 38 C.M.R. 72, 75, 1967 WL 4375 (C.M.A.1967). “[T]o avoid the possibility of prejudice and consequent reversal, we urge [military judges] carefully to shape their instructions on the sentence to the evidence presented and to inform the court members fully as to their responsibilities.” Id. at 76. R.C.M. 1005(e)(5) sets forth that instructions on sentence shall include “a statement that the member should consider all matters in extenuation, mitigation, and aggravation, whether introduced before or after findings, and matters introduced under R.C.M. 1001(b)(1), (2), (3) and (5).” The Discussion following this Rule further guides that tailored instructions on sentencing should bring attention to any pretrial restraint imposed on the appellant. In the case at hand, it was the appellant who offered evidence regarding his time spent with the “Thunder Pride” team at Luke AFB. Based upon this evidence, both the government and the defense addressed the evidence during their sentencing arguments. The government argued for a bad-conduct discharge, 24 months of confinement, and reduction to the grade of E-l. The trial defense counsel argued for a bad-conduct discharge and “an amount of confinement that will allow [the appellant] to return to his family and not destroy the new life he has begun.” In line with the military judge’s duty to shape the instructions on sentence to the evidence presented and to the law, this Court finds the appellant stands as the “gatekeeper” as to whether or not the evidence of the illegal pretrial punishment is presented to the members. Id.; United States v. Gammons, 51 M.J. 169, 182 (C.A.A.F.1999). It is akin to cases in which an accused has been subjected to prior nonjudicial punishment (NJP) under Article 15, UCMJ, 10 U.S.C. § 815, for the same act or omission he is facing before a court-martial. Under Article 15(f), UCMJ, 10 U.S.C. § 815(f), “the fact that a disciplinary punishment has been enforced may be shown by the accused upon trial, and when so shown shall be considered in determining the measure of punishment to be adjudged in the event of a finding of guilty.” If the appellant chooses to present prior NJP punishment information to the members for the purpose of mitigation, “the military judge must instruct the members on the specific credit to be given of the prior punishment under NJP.” Gammons, 51 M.J. at 184. In this case, where the appellant chose to introduce evidence of the 16 months he spent assigned to the “Thunder Pride” team as evidence in mitigation, we find the military judge had a duty to instruct the members on the administrative credit awarded so they may consider that information during their deliberation on sentence. As in Balboa, the instruction given did not expressly or by inference invite the members to award extra confinement to compensate for the administrative confinement credit awarded by the military judge pursuant to the Article 13, UCMJ, motion. Balboa, 33 M.J. at 304. We find no error in the sentencing instructions given. PosP-Trial Delay

6091387-24423

Simpson, Judge: The Commissioner determined the following deficiencies in the petitioners’ Federal income taxes: Petitioner TYE Deficiency John F. Tufts and Mary A. Tufts.12/31/72 $30,398.75 Clark, Inc. 7/31/73 12,729.68 William T. Steger and Ruth C. Steger.12/31/72 30,405.00 Robert C. Austin, Sr., and Birdie L. Austin.... 12/31/72 6,683.49 J. C. Pelt and Jewel Pelt.12/31/72 2,707.00 James E. Stephens and Eula F. Stephens.12/31/72 3,360.89 The Commissioner also determined, in the case of John F. Tufts and Mary A. Tufts, an addition to tax under section 6651(a) of the Internal Revenue Code of 1954 in the amount of $8,209.25 and an addition to tax under section 6653(a) in the amount of $1,519.24, but the Commissioner has conceded that the petitioners are not liable for such additions. The issues remaining for decision are: (1) Whether the amount realized by the petitioners upon the sale of their partnership interests includes nonrecourse liabilities allegedly in excess of the fair market value of the property owned by the partnership; and (2) whether the petitioners are entitled to an allowance for attorney’s fees under the Civil Rights Attorney’s Fees Awards Act of 1976. FINDINGS OF FACT Some of the facts have been stipulated, and those facts are so found. The petitioners, John F. Tufts and Mary A. Tufts (husband and wife), William T. Steger and Ruth C. Steger (husband and wife), and Robert C. Austin, Sr., and Birdie L. Austin (husband and wife), all resided in Dallas, Tex., at the time they filed their petitions in these cases. The petitioners, J. C. Pelt and Jewel Pelt (husband and wife), and James E. Stephens and Eula F. Stephens (husband and wife), all resided in Duncanville, Tex., at the time they filed their petitions in these cases. The petitioner, Clark, Inc. (Clark), is a Texas corporation whose mailing address was Duncanville, Tex., at the time it filed its petition in this case. Mr. and Mrs. Tufts filed their joint Federal income tax return for 1972 with the District Director of Internal Revenue, Dallas, Tex. Mr. and Mrs. Steger, Mr. and Mrs. Austin, Mr. and Mrs. Pelt, and Mr. and Mrs. Stephens filed joint Federal income tax returns for 1972 with the Internal Revenue Service Center, Austin, Tex. Clark filed its corporate Federal income tax return for the taxable year ending July 31, 1973, with the Internal Revenue Service Center, Austin, Tex. On August 1,1970, Mr. Pelt and Clark entered into a general partnership agreement; the newly formed partnership was known as Westwood Townhouses (the partnership). The agreement provided for allocation of partnership profits and losses in the following proportions: Mr. Pelt, 90 percent and Clark, 10 percent. Neither Mr. Pelt nor Clark made any capital contributions to the partnership at the time of its formation. On August 7, 1970, the partnership entered into a building loan agreement with the Farm & Home Savings Association (F. & H.), under the terms of which F. & H. agreed to loan the partnership $1,851,500 for the construction of a 120-unit apartment complex in Duncanville, Tex. (the complex). The complex was endorsed for mortgage insurance under section 221(d)(4) of the National Housing Act, 12 U.S.C. sec. 1715 ((d)(4). Also on August 7, 1970, the partnership executed a note and a deed of trust in favor of F. & H. Under the terms of the note, interest alone (at a rate of 8.5 percent per annum) was payable monthly, commencing September 1,1970, to and including April 1, 1972. Beginning May 1, 1972, installments of interest and principal in the sum of $13,573.24 were payable monthly until the entire indebtedness was paid. In any event, the balance of principal remaining unpaid, plus accrued interest, was due and payable April 1, 2012. Under the terms of the note and deed of trust, neither the partnership nor its partners assumed any personal liability for the payment of the loan. On August 21,1970, the partnership agreement was amended to admit Mr. Tufts, Mr. Steger, Mr. Stephens, and Mr. Austin as additional general partners. Under the terms of the amendment to the agreement, the profits and losses of the partnership were allocated as follows: Mr. Pelt. 25 percent Clark., 10 percent Mr. Tufts. 25 percent Mr. Steger.... 25 percent Mr. Stephens .7.5 percent Mr. Austin.... .7.5 percent None of the newly admitted partners made any capital contribution to the partnership at the time he was admitted as a partner. The new partners were relatives and friends of Mr. Pelt. In addition, Mr. Steger and Mr. Tufts helped the partnership to obtain financing to build the complex. Although Mr. Pelt had been a builder since 1924, he had not built any apartments previously. Construction of the complex commenced a short time after financing was arranged. The complex was completed on or about August 21,1971, at a cost within the projected budget. As a result of the nonrecourse liability of the partnership, each partner’s adjusted basis in his partnership interest on August 21, 1970, was as follows: Partner Basis Mr. Pelt. .$462,875.00 Clark. .. 185,150.00 Mr. Tufts. .. 462,875.00 Mr. Steger.... .. 462,875.00 Mr. Stephens .. 188,862.50 Mr. Austin.... .. 138,862.50 1,851,500.00 During the taxable year 1971, the partners made contributions of cash to the partnership in the following amounts: Partner Contribution Mr. Pelt. ..$21,439 Clark. .308 Mr. Tufts. .2,771 Mr. Steger.... .2,771 Mr. Stephens .231 Mr. Austin.... .831 During the taxable year 1972, Mr. Pelt contributed an additional $15,861.00 to the partnership. None of the other partners made any additional contributions to the partnership. During the taxable years 1970, 1971, and 1972, the partners claimed the following amounts as ordinary losses resulting from the partnership operation, exclusive of depreciation: Partner 1970 1971 1972 Mr. Pelt .$21,946 $40,409.00 $20,629.25 Clark .8,779 16,163.40 8,251.50 Mr. Tufts .21,946 40,409.00 20,629.25 Mr. Steger .21,946 40,409.00 20,629.25 Mr. Stephens .6,584 12,122.80 6,188.38 Mr. Austin .6,584 12,122.80 6,188.38 In addition, during the taxable years 1971 and 1972, the partners claimed as their allocable shares of depreciation the following amounts: 1971 First-year 1971 1972 Partner depreciation depreciation depreciation Mr. Pelt .$96 $15,334.00 $11,578.75 Clark .38 6,133.60 4,631.50 Mr. Tufts .96 15,334.00 11,578.75 Mr. Steger .96 15,334.00 11,578.75 Mr. Stephens .29 4,600.20 3,473.62 Mr. Austin .29 4,600.20 3,473.62 As of August 28,1972, the adjusted basis of each partner in the partnership was as follows: Partner Adjusted basis Mr. Pelt .$390,182.00 Clark .141,461.00 Mr. Tufts .355,653.00 Mr. Steger .355,653.00 Mr. Stephens .106,095.50 Mr. Austin .106,695.50 During 1971 and 1972, major employers in the Duncanville, Tex., area laid off substantial numbers of employees. In addition, overbuilding of apartments occurred. As a result of such economic conditions, the partnership was unable to rent its apartments at the originally established rents and reduced the rents in an effort to obtain more tenants. Even at the lower rentals, the complex never achieved full occupancy; 90 out of the 120 apartments in the complex represented the highest occupancy ever achieved by the partnership. The income generated by the complex was never sufficient to enable the partnership to make payments on the principal of its mortgage debt. Thus, as of August 28,1972, the principal balance due on the mortgage note was $1,851,500. On August 28,1972, each partner sold his partnership interest to Fred Bayles, an unrelated third party. On the same date, each partner also conveyed all of his right, title, and interest in property owned by the partnership to Mr. Bayles. Under the terms of the agreement of sale, Mr. Bayles agreed to pay the expenses incurred by the partners as the result of such sale, including attorney’s fees and accountant’s fees, up to the sum of $250. He paid no other consideration to the partners. He acquired the complex subject to the liability of $1,851,500. However, as of August 28, 1972, the fair market value of the complex did not exceed $1,400,000. Each partner reported the sale of his partnership interest on his Federal income tax return for the year 1972, and indicated that a loss had been suffered; however, no deduction was claimed for such loss. In his petition, each partner alleged that he had realized a deductible long-term capital loss by reason of the sale of his partnership interest in an amount equal to the full amount of his cash basis, and claimed he was entitled to a refund for overpayment of taxes “in an amount to be determined by the Court.” In his notices of deficiency, the Commissioner determined that each of the partners had realized a gain on the sale of his partnership interest, computed in the table on p.762. OPINION Section 741 provides that the sale or exchange of an interest in a partnership shall, except to the extent section 751 applies, be treated as the sale or exchange of a capital asset. Gain or loss from the sale of a partnership interest is measured by the difference between the amount realized and the adjusted basis of the partnership interest, as determined under section 705. Sec. 1.741-l(a), Income Tax Regs. The issue in the case before us is the extent to which partnership nonrecourse liabilities are includable in the amount realized upon the sale or exchange of a partnership interest. The petitioners’ position is that nonrecourse liabilities are included in the amount realized only to the extent of the fair market value of the partnership property securing the indebtedness. The Commissioner’s position is that under the decisions of this Court, the fair market value of the property is immaterial in determining the amount of gain realized by the petitioners upon the sale of their partnership interests. In the alternative, the Commissioner argues that the fair market value of the complex was at least equal to $1,851,500, the amount of the indebtedness. The petitioners presented substantial and persuasive evidence supporting their view that the fair market value of the property on August 28, 1972, did not exceed $1,400,000; whereas, the Commissioner offered no substantial evidence in support of his claim for a higher valuation. Accordingly, we have made a finding in accordance with the petitioners’ evidence, and that disposes of the Commissioner’s alternative argument. In support of their position, the petitioners argue first that a proper analysis of the Supreme Court’s decision in Crane v. Commissioner, 331 U.S. 1 (1947), requires a decision in their favor. In Crane, the taxpayer inherited from her husband property subject to a mortgage debt, in an amount equal to the fair market value of the property. Several years later, facing the threat of foreclosure, the taxpayer sold the property subject to the mortgage, receiving net cash proceeds of $2,500. 331 U.S. at 3-4. The Court held that the basis of property subject to a mortgage includes the amount of the mortgage, although the owner of the property has assumed no liability for payment (331 U.S. at 11) and that when such property is sold subject to the mortgage, the amount realized includes the amount of the mortgage debt (331 U.S. at 13). In support of its determination that the amount realized included the amount of the mortgage, the Court stated at pages 15-16: She was entitled to depreciation deductions for a period of nearly seven years, and she actually took them in almost the allowable amount. The crux of this case, really, is whether the law permits her to exclude allowable deductions from consideration in computing gain. We have already showed that, if it does, the taxpayer can enjoy a double deduction, in effect, on the same loss of assets. The Sixteenth Amendment does not require that result any more than does the Act [Rev. Act of 1938] itself. [Fn. refs, omitted.] In support of their interpretation of Crane, the petitioners point to the Court’s note 37 (331 U.S. at 14) and argue that it implies that if the fair market value of the property is less than the liability, the amount realized is limited to the value of the property. Such footnote states: Obviously, if the value of the property is less than the amount of the mortgage, a mortgagor who is not personally liable cannot realize a benefit equal to the mortgage. Consequently, a different problem might be encountered where a mortgagor abandoned the property or transferred it subject to the mortgage without receiving boot. That is not this case. The petitioners also contend that when the value of the property is less than the liability, there is no economic benefit to the taxpayer except to the extent of the fair market value of the property. Similar arguments have been advanced by other taxpayers and have been consistently rejected by this Court. Millar v. Commissioner, 67 T.C. 656, 660 (1977), affd. on this issue 577 F.2d 212 (3d Cir. 1978); Woodsam Associates, Inc. v. Commissioner, 16 T.C. 649, 654-655 (1951), affd. 198 F.2d 357 (2d Cir. 1952); see also, Mendham Corp. v. Commissioner, 9 T.C. 320, 324 (1947); Lutz & Schramm Co. v. Commissioner, 1 T.C. 682, 688-689 (1943). In Millar v. Commissioner, supra, the taxpayers, shareholders in a corporation known as Grant County Coal Corp. (Grant County), borrowed $500,000 from a third party. The shareholders were not personally liable for the debt; rather, the loans were secured solely by the shareholders’ Grant County stock. The borrowed funds were contributed to the capital of Grant County by the shareholders. Grant County had filed an election to be treated as an electing small business corporation under subehap-ter S (sec. 1371 et seq.) of the Internal Revenue Code. It suffered net operating losses which, as a result of its subchapter S election, were passed through to its shareholders in proportion to their interests in the corporation; the shareholders claimed such losses as deductions on their individual Federal income tax returns. Subsequently, the lender demanded repayment of the loans; when payment was not forthcoming, he foreclosed on the taxpayers’ Grant County stock. At the time of the foreclosure, the value of the stock was less than the amount of the nonrecourse loans. 67 T.C. at 657-659. The taxpayers, relying upon note 37 of Crane, argued that no gain had been realized. The Court rejected such argument, and held that the taxpayers had a gain to the extent that the amount realized, in that case the amount of the nonrecourse loans, exceeded the adjusted basis of the surrendered stock. The Court found the fact that the value of the stock surrendered was less than the amount of the loans to be immaterial. 67 T.C. at 660. The Court pointed out that under section 1374(c)(2), the losses deductible by the taxpayers were limited to the adjusted basis of their stock in the corporation and stated with respect to the loans: Except for the contributions to capital obtained in this manner, petitioners would not have been entitled to deduct the losses of the corporation in the first instance. * * * * * * petitioners were entitled to include as a part of their adjusted basis within the meaning of section 1374(c)(2) the respective contributions to the capital of the corporation made out of “borrowed” funds. To the extent of such contributions, the petitioners received the benefit of deducting the losses sustained by the corporation. [67 T.C. at 659-660.] The Court of Appeals for the Third Circuit, in affirming our decision, found it to be “totally in keeping with the spirit and reasoning of Crane” 577 F.2d at 215. The court held that the principal reason for the Cram holding was to prevent the double tax deductions which would otherwise result. 577 F.2d at 215. The court further found that note 37 of the Cram opinion was not intended to create an exception to the rule in cases in which the fair market value of the property surrendered or exchanged is less than the amount of the nonrecourse liability to which the property is subject. 577 F.2d at 215. The footnote merely pointed out that the Supreme Court did not have before it a situation in which the value of the property was less than the liability and that the economic consequences might be different in such a situation. If note 37 were read to provide an exception when the value of the property is less than the liability, the result would be totally inconsistent with the rationale for the holding of the Court, that is, since the total liability has been taken into consideration in determining other tax consequences of the transaction, the total liability must also be included in the amount realized when the property is transferred. 577 F.2d at 215. In the alternative, the petitioners argue that since they sold interests in a partnership, section 752(c) compels a decision in their favor. In its entirety, section 752 provides: (a) Increase in Partner’s Liabilities. — Any increase in a partner’s share of the liabilities of a partnership, or any increase in a partner’s individual liabilities by reason of the assumption by such partner of partnership liabilities, shall be considered as a contribution of money by such partner to the partnership. (b) Decrease in Partner’s Liabilities. — Any decrease in a partner’s share of the liabilities of a partnership, or any decrease in a partner’s individual laibilities by reason of the assumption by the partnership of such individual liabilities, shall be considered as a distribution of money to the partner by the partnership. (c) Liability to Which Property Is Subject. — For purposes of this section, a liability to which property is subject shall, to the extent of the fair market value of such property, be considered as a liability of the owner of the property. (d) Sale or Exchange of an Interest. — In the case of a sale or exchange of an interest in a partnership, liabilities shall be treated in the same manner as liabilities in connection with the sale or exchange of property not associated with partnerships. The petitioners focus upon the language, “For purposes of this section,” in subsection (c) and aruge that the fair market value limitation of subsection (c) is applicable to a sale of a partnership interest under subsection (d). Thus, they contend, the amount realized upon the sale of a partnership interest includes a partnership nonrecourse liability only to the extent of the fair market value of the partnership property which is subject to the liability. The Commissioner contends that the provisions of subsection (c), including the fair market value limitation, were intended to be applied only in connection with the rules of subsections (a) and (b), relating to contributions to and distributions from the partnership or amounts treated as such contributions or distributions. He asserts that subsection (d) operates independently of subsection (c). After a careful consideration of the parties’ arguments, we agree with the Commissioner. Section 752, enacted as part of the Internal Revenue Code of 1954, generally has been regarded as a codification of the Crane doctrine for the purpose of determining the basis of a partner’s interest in a partnership. A. Perry, “Limited Partnerships and Tax Shelters: The Crane Rule Goes Public,” 27 Tax L. Rev. 525, 542 (1972). Subsection (a) provides generally that any increase in a partner’s share of the liabilities of the partnership will be treated as a contribution of money by the partner to the partnership, thus increasing (under secs. 705 and 722) his basis for his partnership interest. Under subsection (b), any decrease in a partner’s share of the liabilities of the partnership is treated as a distribution of money by the partnership to the partner. Such a distribution reduces the partner’s basis for his partnership interest, and if the distribution exceeds the adjusted basis, the excess will be recognized as gain. Secs. 705, 731, and 733. Subsection (c) adopts the Crane rule as to nonrecourse liabilities, providing that a liability to which property is subject shall, to the extent of the fair market value of the property, be treated as a liability of the owner of the property, and there may be reason for applying the fair market value limitation in determining the basis of a partner in the .partnership (see 1 W. McKee, W. Nelson, and R. Whitmire, Federal Taxation of Partnerships and Partners, par. 7.04, pp. 7-14 — 7-15 (1977)). The legislative history of section 752 suggests that the fair market value limitation of subsection (c) was intended to have narrow applicability. The committee reports state with respect to section 752: Frequently, a partner will assume partnership liabilities or a partnership will assume a partner’s liabilities. In some eases this occurs as the result of a contribution of emcumbered property by the partner to the partnership or as the result of a distribution of such property by the partnership to the partner. The provisions of this section prescribe the treatment for such transferred liabilities. * * * The transfer of property subject to a liability by a partner to a partnership, or by the partnership to a partner, shall, to the extent of the fair market value of such property, be considered a transfer of the amount of the liability along with the property. [H. Rept. 1337, to accompany H.R. 8300 (Pub. L. 591), 83d Cong., 2d Sess. A236 (1954); S. Rept. 1622, to accompany H.R. 8300 (Pub. L. 591), 83d Cong., 2d Sess. 405 (1954).] These statements reveal that in setting forth the fair market value limitation, Congress had in mind only two situations in which it would be applicable: upon the contribution of encumbered property by a partner to the partnership, and upon the distribution of encumbered property by the partnership to a partner. In contrast, the committee reports state with respect to the sale or exchange of a partnership interest: “When a partnership interest is sold or exchanged, the general rule for the treatment of the sale or exchange of property subject to liabilities will be applied.” H. Rept. 1337, supra at A236-A237 (emphasis supplied); S. Rept. 1622, supra. The fair market value limitation is not mentioned. The regulations also support the view that subsection (c) has a limited effect. Section 1.752-1 (c), Income Tax Regs, provides: (c) Liability to which 'property is subject. Where property subject to a liability is contributed by a partner to a partnership, or distributed by a partnership to a partner, the amount of the liability, to an extent not exceeding the fair market value of the property at the time of the contribution or distribution, shall be considered as a liability assumed by the transferee. * * * The regulations, issued contemporaneously with the enactment of the statute, are entitled to great weight. Commissioner v. South Texas Lumber Co., 333 U.S. 496 (1948); Fawcus Machine Co. v. United States, 282 U.S. 375 (1931). Though the language of section 752(c) is broad enough to support the petitioners’ interpretation, the result of adopting such interpretation would be inconsistent with the language of section 752(d) and the rationale for the holding of Crane. Subsection (d) expressly provides that “In the case of a sale or exchange of an interest in a partnership, liabilities shall be treated in the same manner as liabilities in connection with the sale or exchange of property not associated with partnerships.” (Emphasis supplied.) The general law is well settled that when there is a sale or exchange of property subject to a liability, the amount realized includes the full amount of the liabilities, even though the liability exceeds the value of the property. Millar v. Commissioner, supra; Woodsam Associates, Inc. v. Commissioner, supra; see also Mendham Corp. v. Commissioner, supra; Lutz & Schramm Co. v. Commissioner, supra. Moreover, under the petitioners’ reading of the statute, they are permitted to include in the bases of their partnership interests the full amount of nonrecourse liabilities, with the result that they are entitled to deduct the partnership losses. However, if they were permitted to exclude a portion of such liabilities from the amount realized on the disposition of their partnership interests, they could avoid accounting for such deductions upon the disposition of their partnership interest, a result Crane sought to prohibit.

4204841-4990

CAMPBELL, District Judge. Late at night on the 7th-8th of February, 1940, the Steamtug “Wyomissing” was making up a tow at the rack for light boats at 96th Street, East River, New York City, Manhattan, and the Steamtug “Overbrook” was making up a tow at the same rack just beyond her, and in doing so was drilling boats inside and beyond where the “Wyo-missing” was making up her tow. The “Wyomissing” had three boats abreast made fast to each other, the “G. A. Stillwell” being the inshore boat the “Mohawk” the center boat, and the “Babe Ruth” the outside boat with a line from the “Mohawk” to the Tracy boat “Cape Barry”. With these boats all light, lying as aforesaid, the “Wyomissing” went to the north end of the rack to get another barge, the “Ditmas”, which was lying close to the rack on its north end. The “Wyomissing’s” deckhand went on board the “Ditmas” and the “Wyomissing” had the boat on the outside of the “Ditmas” get a line out, and after that the “Ditmas” cleared that boat, and the “Wyomissing” put the other boats in and tied them up. A tug, the “Overbrook” had been making up a tow at the middle of the rack, and had been putting in at least one boat, not put in by the “Wyomissing”, and drilling boats below, and inside the “G. A. Stillwell”, “Mohawk” and the “Babe Ruth”. While the “Wyomissing” was taking out the “Ditmas” to put her in the tow the “Wyomissing” was making up, the Pilot of the “Overbrook”, which was making up her tow, blew the regular Reading signal, and the Pilot of the “Wyomissing” asked the Pilot of the “Overbrook” what he wanted, and he answered that there were some boats adrift astern of her tow. The Pilot of the “Wyomissing” told him that he had a boat coming out with a deckhand on her, and that as soon as he got the boat alongside he would go down to see what he could do to take care of the boats that were drifting. The “Overbrook”, at the time she blew the Reading signal to the “Wyomissing”, had hawsers on her tow moving them out. The “Wyomissing”, at the time the signal was given by the “Overbrook”, had the “Ditmas” with the “Wyomissing’s” deckhand on board coming out, and could not leave the “Ditmas” as she would have gone adrift, and could not have left without securing the barges she held up to allow the “Ditmas” to pass out. The three boats “G. A. Stillwell”, “Mohawk”, and the “Babe Ruth” made fast to each other in one tier with the “Cape Barry”, to which the “Mohawk” had a line, drifted down the river together, and struck the rocks off Welfare Island, and received some damage. The “Wyomissing”, having taken the “Ditmas” out from 96th Street, picked her up and proceeded after the drifting boats, including the “G. A. Stillwell”, which she found with the other boats in Newtown Creek. At the time that the barges broke adrift, the “Wyomissing” had not made up her tow, nor started on the voyage, but had made them fast one to the other, and the center boat to the “Cape Barry”, another boat at the rack. This was a common custom, as was also the making up of tows at that rack, and in so doing, for the tugs of several companies to put in and drill out the boats they were looking for, and to push up and make fast the boats remaining. No lines on any of the said boats broke, and without interference by some other tug, no reason can be found for such boats going adrift. The boats were not in tow of the “Wyomissing”, as the tow had not yet been made up. therefore, there is no presumption of negligence on the part of the “Wyomissing” because of the stranding of the boats, in fact the “G. A. Stillwell” was while at the rack immediately before going adrift almost at the same place where she had originally been left by a Russell tug. The “Wyomissing” was not an insurer, and no recovery can be had against her, without showing negligence, and the burden to show such negligence rests on the libellant. It is true that no one has said that he saw the eyes of the cables thrown off, or whether they were lifted off in any other way, but it is clearly shown that no lines parted and, therefore, there was no negligence on the part of the “Wyomissing”. No negligence was shown by the “Wyo-missing” leaving the three boats made fast on one line to the “Cape Barry” while making up the tow, as that line never parted, in fact the three barges drifted made fast to the “Cape Barry”. The “Wyomissing” was not guilty of negligence in going after the barge “Ditmas” to bring her out and put her in the tow, as that was the common custom at that rack. The three barges had gone adrift without any negligence on the part of the “Wyomissing”, and the “Wyomissing” was not guilty of negligence in not leaving the “Ditmas” to go adrift, and go immediately to the assistance of the boats that had gon^ adrift, including the “G. A. Stillwell” when informed that they had gone adrift. The “Wyomissing” was not at fault in standing by when the barges were found and allowing another boat to pláce them in a suitable position.

10813995-10544

Bennett, Judge, delivered the opinion of the court: This taking case, before the court on defendant’s motion for summary judgment, involves a long-standing problem which Congress addressed in legislation only 5 years ago, although its solution did not go far enough to rescue the present plaintiffs from their predicament. This historic difficulty is the dilemma of the real property owner whose landholding neighbor is the United States: he generally cannot obtain specific judicial relief when the boundary between his and his sovereign neighbor’s land is in dispute, for his neighbor is cloaked with immunity from suit. Malone v. Bowdoin, 369 U.S. 643 (1962); Carlson v. Tulalip Tribes of Wash., 510 F. 2d 1337 (9th Cir. 1975); County of Bonner, Idaho v. Anderson, 439 F. 2d 764 (9th Cir. 1971); Steadman, Land Title Disputes With the Sovereign, 1972 Duke L. J. 15. Congress largely alleviated this problem by waiving sovereign immunity in most quiet title actions, through the Act of Oct. 25, 1972, Pub. L. 92-562, § 3(a), 86 Stat. 1176, now codified as 28 U.S.C. § 2409a (Supp. V, 1975). However, excepted from this waiver were "trust or restricted Indian lands” held by the United States. 28 U.S.C. § 2409a(a); Carlson v. Tulalip Tribes of Wash., supra. Plaintiffs’ land at issue in this action borders an Indian reservation, title to which is vested in the United States as trustee, and their dispute with the Indians, and the Government here, is over where the reservation ends and their property begins. Thus, any attempt on plaintiffs’ part to obtain specific relief on their land title claim necessarily runs afoul of the statutory exception and they are left without the redress of a quiet title action. The foregoing in fact did happen to plaintiffs. They brought an action against their federally incorporated Indian neighbor, the Tulalip Tribes of Washington (the tribe), in the United States District Court for the Western District of Washington, claiming that they were the owners in fee simple of a tract of low-lying, alluvial land in Snohomish County, Washington, which during the period described in the petition (1962-75) was unimproved, unoccupied, and (except for a sale agreement in part of the period) unencumbered. The tract, the disputed part of which borders the Tulalip Reservation, was conveyed to plaintiffs in 1962 under a referee’s deed, resulting from their purchase at a sale following a partition suit and decree in the state court under 25 U.S.C. § 403a-l (1970). The controversy in the district court and here revolves about the partition decree and the referee’s deed, that is to say, plaintiffs and the tribe cannot agree on exactly what it was that plaintiffs purchased in 1962. Plaintiffs told the district court that the tribe, by letter of counsel dated July 16, 1969, asserted to plaintiffs the tribe’s ownership of that part of their tract consisting of tidelands contiguous to the reservation. The tribe maintained that an earlier survey, determining the line of the tidelands, had understated the extent of the tidelands of which the tribe was holder. According to plaintiffs, the tribe’s claim clouded their title to the tract and made it unmarketable, for they could not obtain the title insurance necessary to carry out their agreement in 1966 to sell the tract to their, co-plaintiff in that suit, a limited partnership named Shorewood Park. Plaintiffs did not manage to get their title cleared in that action, however, for the district court on July 16, 1973, dismissed the suit with prejudice, before reaching the merits, on the ground that a party necessary to the adjudication had not been and could not be joined. Fed. R. Civ. P. 19(a) and (b). The dismissal resulted from the tribe’s motion to require plaintiffs to join the reservation’s legal titleholder, the United States, as a necessary party, or else suffer the consequence of dismissal. Of course, the United States enjoyed immunity from such suit, as mentioned above, leading the district court to conclude that the suit could not be maintained. The Court of Appeals for the Ninth Circuit affirmed, on February 3, 1975, noting that "[bjecause the United States has refused to be joined as a party, the litigation could not properly proceed.” Carlson v. Tulalip Tribes of Wash., supra, 510 F. 2d at 1339. The court of appeals reasoned that the Government was a necessary party in that "[bjecause the United States has fee title to unalloted Reservation lands, the dispute involves the fixing of a boundary between lands of the United States and the lands claimed by the plaintiffs.” Id. Plaintiffs next filed suit here on August 18, 1975, having been barred from specific relief, asking money damages from the Government for an uncompensated taking of property under the fifth amendment. Plaintiffs in essence now complain that the cloud cast upon their title by the tribe’s claim, coupled with the Government’s immunity to suit for specific relief, have effected an inverse condemnation of their interest in the disputed tract, again because the cloud which they could not judicially remove impaired the land’s merchantability. This presents an issue of first impression under the law of inverse condemnation. Defendant concedes the existence of the cloud, and even that plaintiffs may have been injured thereby, but denies liability on the grounds that sovereign immunity cannot in itself give rise to a taking of property, that there was no authority for any taking here, that the admitted lack of any invasion, possession or use of the disputed tract by the Government belies the claim of taking, and that in any event the statute of limitations has run on plaintiffs’ action in this court. Since no facts are controverted which are material to the resolution of this case on defendant’s motion for summary judgment, we proceed to decide it. Plaintiffs’ contention that their inability to sue the Government in order to clear their title gives rise to a taking of property, at least when viewed in light of the tribe’s claim casting a cloud on their title, is simply without support in the case law. Plaintiffs cite us no cases, for indeed there are none, which hold that the sovereign immunity of the United States, without any further action or omission by the Government or its authorized agent, creates in them a right to damages under the fifth amendment. The sovereign’s refusal to be sued, by virtue of Congress’ declination to alter the common law with respect to governmental immunity from legal process, 1 Blackstone, Commentaries *242, 246, can amount to no more than a limitation on remedies, and cannot extend to give rise to a taking for which the Constitution pledges just compensation. Prior to the establishment of this court, the Government was not of right amenable to suit either for specific relief or for taking damages. Enactment of the Tucker Act, 28 U.S.C. § 1491 (1970), while providing a basis for monetary relief from inverse condemnations, United States v. Causby, 328 U.S. 256 (1946), did not change the sovereign’s liability to process in an action for specific relief. By the same token, it did not make the Government liable in damages for the fact of this immunity. Plaintiffs’ complaint on this score is only that Congress has failed to accord them an avenue of judicial relief similar to that available to them as against private individuals. Though the fact complained of is true, and regrettable, it is not a basis for fifth amendment relief, and thus plaintiffs’ claim must fail. In a related contention, plaintiffs emphasize that the United States has the right, as the sovereign and as the trustee of Indian lands, to initiate suit or to intervene in order to quiet title to land in which it claims an interest. See 28 U.S.C. § 1345 (1970). Plaintiffs gather from this that the Government could have taken some action to prevent their quiet title suit from being dismissed, or otherwise to help them resolve the validity and extent of their title in the disputed tract. But because the Government did nothing in this regard, say plaintiffs, and stood idly by as the cloud cast upon their title refused to go away, a deprivation of their property rights was effected with the Government’s blessing. We must also deny plaintiffs’ allegation that these facts state a claim redressable in damages under the Constitution, for this contention is really no different from the one just disposed of. To the extent that the Government is immune from suit, it has the right to stand on that immunity, without being answerable in damages for so doing. Nothing in the law will imply a taking when the Government, otherwise immune from suit over its title to property, declines to exercise its discretionary right to place its own property interests at issue in a court of law, along with those of adverse claimants. With our rejection of the Government’s reliance on its immunity as a possible action resulting in a taking, there remains the other action giving plaintiffs great consternation — the tribe’s assertion of ownership over the tract, which after all was the catalyst of the cloud and the quiet title action. It might be hypothesized, as those viewing plaintiffs’ title as clouded seem to think, that the tribe’s claim is itself of some effect, perhaps leading to the conclusion that the claim amounts to a taking. Of course, it does not do so, for the tribe had no authority to claim any land in behalf of the United States. "The first element in establishing a taking consists of showing that the governmental agent’s act which is said to amount to an inverse condemnation was within the scope of the agent’s authority. Absent such a showing, there can only be a tortious trespass, for which the fifth amendment does not require compensation by the sovereign.” Coast Indian Community v. United States, 213 Ct. Cl. 129, 148, 550 F.2d 639, 649 (1977). The Tulalip tribal community is a ward of the United States, deemed by the law not to be competent in administering its affairs with regard to the reservation land. If the tribe could, in contemplation of the law, effectively assert and preserve its property rights, there would be no need for its status as a ward, and no need to charge the Government, as this court has often done in the cases of other Indian communities, with a fiduciary responsibility to the tribe. For this very reason, the tribe’s claim that rights belonging to their trustee exist within plaintiffs’ supposed property lines can have no effect on plaintiffs.

1768321-11875

OPINION Per CURIAM. On September 24, 1948, an indictment was returned against appellants, charging them with a conspiracy to raise, fix and maintain prices for the sale of milk, in violation of Section 1 of the Sherman Act, 26 Stat. 209, as amended, 15 U. S. C. A., Section 1, et seq. The facts alleged in the indictment set forth that the Cincinnati Area, here in question, has a population in excess of 650,000 persons, who annually consume more than 175,000,000 pounds of milk, for which they pay more than $16,000,000; that more than 40% of the milk sold by distributors in the Cincinnati Area is produced in Kentucky and Indiana, and is transported from those states, in interstate commerce, to the Cincinnati Area; that appellants sell approximately 67% of the total amount of milk from all sources sold in the Cincinnati Area, and that the remaining 33% is sold by 31 other distributors; that 48% of the milk sold by appellants in the Cincinnati Area is produced in Kentucky and Indiana, and shipped from those states into the Cincinnati Area. It was further set forth that milk, by its nature, is perishable; that it can not be stored, but must reach the consumer with in a short time after production; that, in anticipation of, and in response to demands of consumers and other purchasers, the distributors for the Cincinnati Area regularly purchase milk produced in Kentucky, Indiana, and Ohio, and that milk so purchased in Kentucky and Indiana is intermingled with milk purchased in Ohio, and is almost immediately distributed and sold to consumers and other purchasers in the Cincinnati Area; that there is, from day to day, a continuous flow of milk in interstate commerce from producers in Kentucky and Indiana to consumers and other purchasers in Ohio. The indictment then sets forth that beginning on or about July 1, 1946, and continuously thereafter up to and including June 1, 1948, the appellants engaged in a combination and conspiracy to raise, fix, and maintain prices for the sale, in the Cincinnati Area, of milk produced in Kentucky, Indiana, and Ohio, in violation of Section 1 of the Sherman Act; that the conspiracy involved agreement upon prices at which appellants sold milk in the Cincinnati Area and the use of various devices to assure uniformity in the milk prices charged by distributors selling in this Area; that increases in prices charged by distributors in the Cincinnati Area for milk sold to consumers and other purchasers have had the effect of reducing the volume of milk purchased by them, thus reducing the quantity of milk purchased by the distributors from producers in Kentucky, Indiana, and Ohio; and that the act of appellants in furtherance of the conspiracy were intended to and did raise, fix, and maintain the prices of milk shipped into the Cincinnati Area from outside the State of Ohio and sold in that Area, and thereby restrained interstate commerce in milk. Appellants moved to dismiss the indictment on the ground that it failed to state an offense under the Sherman Act, and, in support of their motions, appended thereto a milk marketing order and amendments issued pursuant to the Agricultural Marketing Agreement Act of 1937, as amended, 7 U. S. C. A., Section 671, et seq., the official bulletin of the Milk Market Administrator for January-February, 1949, showing official statistics, and affidavits containing the regulations of the Board of Health of the City of Cincinnati and operations thereunder, all' of which appellants claim “nullified” the allegations of the indictment stating the offense under the Sherman Act. Thereafter, the district court overruled the motions to dismiss the indictment, stating, in its decision, that “Under the familiar rule the facts as alleged are admitted, on the pending motions, to be true, for the purposes of this decision.” [85 F. Supp., 625.] Subsequently, appellants withdrew their pleas of not guilty theretofore entered, and pleaded nolo contendere; and following entry of judgments of conviction by the district court, they appealed on the ground that the district court erred in not granting their motions to dismiss the indictment. It is agreed that when a demurrer or motion to quash has been filed and overruled, followed by a plea of nolo contendere, the same questions raised on the demurrer or motion to quash could be presented on appeal. See Hocking Valley R. R. Co. v. United States, 6 Cir., 210 F. 735. Under the Federal Rules of Criminal Procedure, defenses and objections which theretofore could have been raised by demurrers and motions to quash are now raised by motions to dismiss. Rule 12(a). Appellants contend that the documents which they filed in support of their motions to dismiss the indictment should have been accepted by the district court -as disproving the allegations of the indictment and as proof that the indictment failed to state an offense under the Sherman Act. In support of their contention, they rely upon Rule 12 of the Federal Rules of Criminal Procedure, claiming that the district court was bound to consider the above mentioned documents and affidavits as proof of the fact that appellants did not violate the Sherman Act, and consequently erred in failing to hold that the milk marketing order, in effect during the entire indictment period, nullified the allegations of the indictment. The objection that the indictment fails to charge an offense may be raised before trial by motion to dismiss. Rule 12(b) (2). See Notes to Subdivisions (b) (1) and (2), of Advisory Committee on Rules, 18 U. S. C. A. Federal Rules of Criminal Procedure, pages 205, 206. Appellants contend that the district court should have dismissed the indictment on their motions on the ground that it did not charge an offense because the milk marketing order, copy of which was included in, and made a part of the motions, showed that all prices paid for milk by appellants were established by the Secretary of Agriculture and that all milk produced by producers in Ohio, Indiana, and Kentucky for the Cincinnati Area must be purchased under such order, “so that the statement made in paragraph 24,” of the indictment, charging the offense, “is false and untrue.” This is not an attack on the indictment based on the objection that it failed to state an offense. It is, rather, an answer to the allegations of the indictment claiming that those allegations are false and untrue. These are issues of fact. In a criminal case, such issues are to be tried by a jury, unless waived. See United States v. Greater Kansas City Retail Coal Merchants’ Assn., D. C. Mo., 85 F. Supp. 503, 511; United States v. Mertine, D. C. N. J., 64 F. Supp., 792, 794. Rule 12(b) (1) permits the raising by motion of defenses or objections only where they are “capable of determination without the trial of the general issue,” the general issue being the issue presented by the allegations of the indictment and the plea. Allegations of the indictment essential to prove the offense charged and the pleas in answer to such allegations require a trial of the general issue. Here, the issue presented by the defense or objections raised by appellants in their motions is that the allegations of the indictment are false and untrue. This is the general issue, and this issue could only be determined on the trial. Appellants, therefore, under Rule 12, can not present such a defense or raise such an objection by a motion to dismiss the indictment. Although appellants moved to dismiss the indictment on the stated ground that it did not charge an offense under the Sherman Act, they based their claims on documents attached to the motions, which, it was contended, proved that the allegations in the indictment were false and untrue. If appellants had moved to dismiss the indictment on the ground that the allegations in the indictment were false, it must be conceded that the district court could not have determined the truth or falsity of the allegations of the indictment on such motions, and would properly have dismissed them. But that is, in reality, what appellants did in this case by moving to dismiss on the alleged ground that the indictment did not state an offense, and then offering, in support of their motion, documentary evidence, not that the indictment did not state an offense, but that the allegations of the indictment were false. This was not permitted under the former practice, and is not permitted under Rule 12. The district court, in dismissing the motions, explicitly ruled that the allegations of the indictment, for the purposes of the determination of the motions, were admitted to be true. As presenting issues of fact, the contentions set forth in the motions could have been availed of in pleas as defenses to the charges in the indictment. But appellants, instead of going to trial on pleas of not guilty, pleaded nolo contendere. The district court was not required, on the motions to determine factual issues raised by appellants as to the truth or falsity of the allegations of the indictment, and w?as not in error in holding that the indictment stated an offense under the Sherman Act and in denying appellants’ motions to dismiss the indictment. Appellants contend that failure to allege in the indictment that the acts claimed to have been done by the corporate appellants were authorized or performed by officers or agents of the corporations, deprived the indictment of the necessary allegation of intent. It is not necessary to allege intent in a charge of violation of the Sherman Act. United States v. Griffith, 334 U. S. 100, 105, 106, 68 S. Ct., 941, 92 L. Ed. 1236; United States v. Masonite Corp., 316 U. S. 265, 275, 62 S. Ct., 1070, 86 L. Ed. 1461. As a matter of fact, intent was here alleged — that “The acts to be performed, * * * pursuant to and in furtherance of the conspiracy herein alleged, were intended to and do raise, fix and maintain the prices of milk shipped into the Cincinnati area * * * and thereby unreasonably restrain trade and commerce among the several states.” In this case, the corporations admitted the allegations of the indictment by pleading nolo contendere. It is not required that the indictment must contain an allegation that an act done by a corporation was authorized by its officers and agents. Appellants’ contention that the indictment did not state an offense against the laws of the United States in that the indicment charges purely an intrastate conspiracy was fully discussed and rejected by the District Judge in an opinion which pointed out how the indictment in this case differed from the indictment in United States v. French-Bauer, Inc., D. C., 48 F. Supp., 260, which is strongly relied on by appellants. We agree with that ruling and the reasons given in support of it. See United States v. Universal Milk Bottle Service, D. C., 85 F. Supp., 622. (56 Abs 225.) Appellants contend, however, that the intermingling ol milk which moved in interstate commerce into the Cincinnati area with other milk after it reached that area, and the processing of such milk after it reached that area, before its distribution to the consumer in that area, caused such milk to lose its interstate character, and that these questions were not considered by the District Judge. We believe that the first of these contentions is answered by Peoples Natural Gas Co. v. Public Service Commission, 270 U. S. 550, 46 S. Ct. 371, 70 L. Ed. 726, and that the second of these contentions is answered by Mandeville Island Farms, Inc. v. American Crystal Sugar Co., 334 U. S. 219, 68 S. Ct. 996, 92 L. Ed. 1328, and Swift & Co. v. United States, 196 U. S. 375, 25 S. Ct. 276, 49 L. Ed. 518. In any event, such contentions are of the same character, and are met by the same answer, as is the additional contention of the appellants discussed in the second paragraph following hereafter.

12034708-14764

VAN GRAAFEILAND, Circuit Judge: On August 1, 1986, the Inn at Saratoga Associates, a limited partnership, Monia Rynderman, its general partner, and seven of its limited partners sued Berkshire Bank & Trust Company in New York Supreme Court alleging that Berkshire reneged on a loan contract. Thereafter, Berkshire was acquired by the Bank of New England, N.A., which subsequently was declared insolvent. When the Federal Deposit Insurance Corporation (“FDIC”) took over as receiver for the Bank of New England, the case was removed to federal court. There, the FDIC moved for summary judgment, arguing that plaintiffs’ claims were barred under 12 U.S.C. § 1823(e) and the equitable estoppel doctrine articulated in D’Oench, Duhme & Co. v. FDIC, 315 U.S. 447, 62 S.Ct. 676, 86 L.Ed. 956 (1942). The district court (Gagliardi, J.) granted the motion and judgment was entered in favor of the FDIC. Plaintiffs appeal from that judgment. We affirm. The facts have been stipulated by the parties. On January 15, 1985, Rynderman met with William Porter, a vice president and regional loan officer of Berkshire, to discuss a possible $617,500 loan for the purchase and renovation of a hotel known as the Coachman Inn. Rynderman told Porter that he planned to form a limited partnership, of which he would be the general partner, for the purpose of this renovation project. On January 24, Berkshire sent Rynderman a loan commitment letter which provided that the commitment would expire if Rynderman did not sign and return the letter and pay an origination fee within fourteen days. Ryn-derman neither returned the letter nor paid the fee. Shortly thereafter, Rynderman informed the bank that he would like to increase his loan request so that rooms could be added to the hotel. On April 9, Berkshire issued a second commitment letter in the amount of $875,000, which again specified a limited period for acceptance. Once more, Rynderman failed to indicate his acceptance within the specified period. On April 25, Rynderman and two of his associates, Steven Fischer and Richard Kot-low, met with Porter to discuss increasing the proposed loan to over $1 million. While this request was pending, Rynderman, acting on behalf of the partnership, entered into a contract to purchase the Coachman Inn. On July 3, plaintiffs agreed to provide $200,000 in personal guarantees to induce Berkshire to approve a loan of $1.3 million. That same day, Berkshire’s loan committee approved the $1.3 million loan subject to ten conditions, including participation by a second lender in the amount of $500,000. This action is memorialized in the committee minutes. On July 15, Porter sent a letter to Kotlow. The letter states in pertinent part as follows: In order that we might conform to existing holding company policy, I must ask that you forward to me ... personal financial statements on the five limited partners who are willing to sign the $200,000 recourse guaranty. Our Loan Committee, subsequent to a formal review of the March 31, 1985 financial statements on the Lookout Inn [another entity owned by Rynderman], have ratified the $1.3 million loan. I assumed [sic] that the financial statements on the Lookout Inn will give us the comfort that we seek in those statements and I look forward to ironing out all the final details relative to this mortgage loan at the earliest possible convenience. On August 21, plaintiffs forwarded proposed closing documents to Berkshire, referring to the total loan amount as $1.3 million. A few days later, Berkshire officers drafted a proposed commitment letter in the amount of $1.3 million. However, Berkshire did not approve the letter and it did not execute plaintiffs’ closing documents. On August 30, plaintiffs met with Berkshire officials for a loan closing, bringing the personal financial statements requested by Berkshire. The outcome of this meeting was that plaintiffs received a $375,000 loan from Berkshire. Although plaintiffs contend that this was the first installment of a $1.3 million loan, none of the signed documents in the transaction mentions the larger amount. Plaintiffs repaid this loan within four months. On September 10, Berkshire lending officers, meeting with representatives of the partnership, informed them that they still lacked supporting documentation for their proposed $1.3 million loan. The bankers also questioned the appraisal of the hotel provided by plaintiffs. At this meeting, the need for a participating lender was discussed. While Berkshire searched for a participating lender on the $1.3 million loan, construction on the hotel commenced. On October 3, 1985, an Inn representative telephoned Berkshire and asked for an advance to pay construction expenses. Because no participating lender had yet been found, Berkshire refused this request. A week later, Rynderman demanded the advance and confirmation of the $1.3 million commitment and threatened legal action if Berkshire did not comply. Berkshire declined to comply with this demand. On August 1, 1986, plaintiffs commenced this litigation against Berkshire in state court, contending that an agreement had been reached as to the $1.3 million loan. After this suit was brought, the Bank of New England acquired Berkshire. On January 6, 1991, the Bank of New England was declared insolvent and the FDIC was appointed as its receiver. The FDIC removed plaintiffs’ action to federal court and the grant of summary judgment followed. The district court’s opinion is reported at 856 F.Supp. 111. The principles which compel the rejection of the plaintiffs’ claim were set forth first in D’Oench, Duhme, supra. In D’Oench, Duhme, the FDIC sued to enforce a promissory note that it had acquired from a failed bank. The maker of the note raised as a defense an oral agreement he had with the bank that the note never would be called for payment. Relying on “a federal policy to protect [the FDIC], and the public funds which it administers, against misrepresentations as to the securities or other assets in the portfolios of the banks which [the FDIC] insures or to which it makes loans,” 315 U.S. at 457, 62 S.Ct. at 679, the Supreme Court rejected this defense. It held that persons who lend themselves “to a scheme or arrangement whereby the banking authority on which [the FDIC] relied in insuring the bank was or was likely to be misled” may not raise the scheme or arrangement as a defense to an FDIC collection action. Id. at 460, 62 S.Ct. at 681. Congress incorporated the doctrine thus articulated in section 13(e) of the Federal Deposit Insurance Act, Pub.L. No. 81-797, 64 Stat. 873, 889 (1950), codified as amended at 12 U.S.C. § 1823(e). The amendment broadened the statute to protect assets acquired by the FDIC when it acts as receiver for a failed bank. See Financial Institutions Reform, Recovery, and Enforcement Act, Pub.L. No. 101-73, 103 Stat. 183, 256 (1989). As amended, section 1823(e) provides as follows: No agreement which tends to diminish or defeat the interest of the Corporation in any asset acquired by it ... either as security for a loan or by purchase or as receiver of any insured depository institution, shall be valid against the Corporation unless such agreement— (A) is in writing, (B) was executed by the depository institution and any person claiming an adverse interest thereunder, including the obligor, contemporaneously with the acquisition of the asset by the depository institution, (C) was approved by the board of directors of the depository institution or its loan committee, which approval shall be reflected in the minutes of said board or committee, and (D)has been, continuously, from the time of its execution, an official record of the depository institution. 12 U.S.C.A. § 1823(e)(1) (Supp.1995). In the instant case, plaintiffs allege that Berkshire reneged on an agreement to provide a $1.3 million loan. To prove the existence of this agreement, plaintiffs proffered three writings: the minutes of meetings of Berkshire’s board of directors, the unexecut-ed loan commitments drafted by Berkshire, and the Porter letter. The district court found that none of these documents met the criteria of section 1823(e). 856 F.Supp. at 116-17. Because plaintiffs could not produce indicia of an agreement that met the statutory requirements, the district court granted the FDIC’s motion for summary judgment. On appeal, plaintiffs argue that section 1823(e) should not have been applied to their claims. They contend that section 1823(e)(1) applies only to agreements relating to particular, identifiable assets acquired by the FDIC and that the instant dispute does not involve such an asset. Case law weighs in favor of plaintiffs’ statutory construction. See John v. Resolution Trust Corp., 39 F.3d 773, 776 (7th Cir.1994) (“Section 1823(e) requires an identifiable ‘asset’ which is acquired by the bank and then transferred to the regulatory agency, and to which the unenforceable agreements must relate.”); E.I. du Pont de Nemours and Co. v. FDIC, 32 F.3d 592, 597 (D.C.Cir.1994) (“Most courts have read the statute as applicable only to cases involving a specific asset, usually a loan, which in the ordinary course of business would be recorded and approved by the bank’s loan committee or board of directors.”). The district court held that the asset requirement was met because the relevant “asset” in this case was the “Bank’s conditional promise of a future loan in the amount of $1.3 million.” 856 F.Supp. at 115. Although we agree with the result reached below, we are not persuaded to adopt the district court’s reasoning. As generally construed, the term “assets” means “everything which can be made available for the payment of debts.” Black’s Law Dictionary 151 (rev. 4th ed. 1968). Although the terms of section 1823(e) should be interpreted broadly, see, e.g., Langley v. FDIC, 484 U.S. 86, 91, 108 S.Ct. 396, 401, 98 L.Ed.2d 340 (1987), we believe that construing a promise to make a loan as an asset may bend the term “asset” beyond recognition. The Fifth Circuit cases relied on by the district court (see 856 F.Supp. at 114) involved applications of the common law D’Oench, Duhme doctrine, which, unlike its statutory counterpart, is not limited to circumstances where the agreement alleged relates to a traditional bank “asset” acquired by the FDIC. See OPS Shopping Ctr., Inc. v. FDIC, 992 F.2d 306, 309-10 (11th Cir.1993); see also Hall v. FDIC, 920 F.2d 334, 339 (6th Cir.1990), cert. denied, 501 U.S. 1231, 111 S.Ct. 2852, 115 L.Ed.2d 1020 (1991); North Ark. Medical Ctr. v. Barrett, 962 F.2d 780, 788-89 (8th Cir.1992). Those courts that adhere to the common law doctrine generally believe that application of the statutory “asset” requirement would undercut an important purpose of that doetrine — allowing the FDIC to rely on a bank’s records when insuring the bank. See D’Oench, Duhme, supra, 315 U.S. at 460-61, 62 S.Ct. at 680-81. Rather than looking to possible subsequent activity, the common law doetrine focuses on “ “whether the agreement, at the time it was entered into, would tend to mislead the public authority.’ ” Brookside Assocs. v. Rifkin, 49 F.3d 490, 496 (9th Cir.1995) (quoting Timberland Design, Inc. v. First Serv. Bank for Sav., 932 F.2d 46, 50 (1st Cir.1991)); see also Federal Sav. & Loan Ins. Corp. v. Two Rivers Assocs., 880 F.2d 1267, 1275-76 (11th Cir.1989) (citing Langley v. FDIC, supra, 484 U.S. at 91-92, 108 S.Ct. at 401-02). The fact that some of plaintiffs’ claims sound in tort does not bar the application of D’Oench, Duhme estoppel. So long as the tort claims arise out of the secret agreement alleged, the common law doctrine applies. See Timberland, supra, 932 F.2d at 50; see also Resolution Trust Corp. v. Dunmar Corp., 43 F.3d 587, 593-96 (11th Cir.1995) (en banc) (listing cases). Furthermore, the fact that plaintiffs assert the alleged agreement in support of their affirmative claim, rather than as a defense to an FDIC action, does not protect it from D’Oench, Duhme scrutiny. See Timberland, supra, 932 F.2d at 49-50; Bowen v. FDIC, 915 F.2d 1013, 1015 (5th Cir.1990); Two Rivers, supra, 880 F.2d at 1277. Plaintiffs likewise err in arguing that the equitable character of the common law doctrine bars its application to the instant dispute. Plaintiffs misapprehend the equitable balance that D’Oench, Duhme strikes. The Supreme Court held that a borrower would be prevented from asserting a side agreement if the agreement “was designed to deceive the creditors or the public authority, or would tend to have that effect.” D’Oench, Duhme, supra, 315 U.S. at 460, 62 S.Ct. at 680 (emphasis added). Merely lending oneself to a scheme or arrangement that is likely to mislead the FDIC suffices to trigger the equitable bar. Whether the signer of the note actually intended to deceive creditors or the FDIC is not dispositive. Id. at 459-60, 62 S.Ct. at 680-81. In other words, the D’Oench, Duhme doctrine “favors the interests of depositors and creditors of a failed bank, who cannot protect themselves ... over the interests of borrowers, who can.” In re Century Centre Partners Ltd., 969 F.2d 835, 839 (9th Cir.1992) (internal quotations and citations omitted). In the present case, plaintiffs failed to support their claim that the parties had agreed to a $1.3 million loan when they signed a loan document for $375,000 that included no reference to the larger amount. Because the breach they assert refers to an alleged side agreement that conflicts with the terms of the written loan agreement, plaintiffs’ claims based on the side agreement can not be sustained. Hall, supra, 920 F.2d at 341. Neither the minutes of the bank executive committee nor the unexecuted loan commitments establishes an enforceable agreement against the FDIC. See Resolution Trust Corp. v. Carr, 13 F.3d 425, 431 (1st Cir.1993) (board of director minutes) and Federal Sav. & Loan Ins. Corp. v. Gemini Mgmt., 921 F.2d 241, 245 (9th Cir.1990) (unexecuted loan commitment letter). The Porter letter also fails to establish a claim against the FDIC. The conditional promises in the letter are not the type of explicit statements that survive D’Oench, Duhme scrutiny. See Beighley v. FDIC, 868 F.2d 776, 783-84 (5th Cir.1989); Gemini Mgmt., supra, 921 F.2d at 245; Two Rivers, supra, 880 F.2d at 1275-76; Baumann v. Savers Fed. Sav. & Loan Ass’n, 934 F.2d 1506, 1515-16 (11th Cir.1991), cert. denied, 504 U.S. 908, 112 S.Ct. 1936, 118 L.Ed.2d 543 (1992). We do not reach plaintiffs’ argument that the letter established a contract under New York law. Federal law applies here, and the letter fails to establish an obligation of the FDIC under D’Oench, Duhme. See Resolution Trust Corp. v. Daddona, 9 F.3d 312, 317-19 (3d Cir.1993).

9076166-18711

DECISION GRANTING DEFENDANT McPHERSON’S MOTION FOR PARTIAL SUMMARY JUDGMENT, DENYING PLAINTIFF’S MOTION TO EXCLUDE EVIDENCE AND OMNIBUS MOTION FOR PRECLUSION, AND DISMISSING COMPLAINT AS TO WEBER, ROGERS AND ALL JOHN DOE DEFENDANTS McMAHON, District Judge. This is an action commenced pursuant to 42 U.S.C. § 1983. Plaintiff, Flor Vasquez, claims that on October 30, 1998, in the Town of Port Chester, she was falsely arrested and subjected to excessive force by members of the New York State Police. She also claims that she was thereafter maliciously prosecuted. Trooper Duane McPherson, Sergeant Rodney Rogers and Lieutenant Louis Weber, the three named defendants, move this Court for an order pursuant to Rule 56 of the Federal Rules of Civil Procedure, granting summary judgment in their favor, and dismissing the false arrest and malicious prosecution claims. McPherson has not moved for summary judgment on the excessive force claim, which is directed solely at him. Plaintiff does not oppose summary judgment as to Lieutenant Weber and Sergeant Rogers. Indeed, plaintiff specifically withdraws her action as against these defendants. (See Plaintiffs Rule 56.1 statement). Accordingly, the complaint is dismissed as to defendants Weber and Rogers. Because the time for amending the complaint to add “John Doe” defendants has long since past, the complaint is dismissed as to all John Does. Plaintiff does, however, oppose McPherson’s motion for summary judgment on the false arrest and malicious prosecution claims. As part of her response, she asks the Court to exclude from its consideration Defendant’s moving exhibits A and C, and paragraph 9 of McPherson’s affidavit. Plaintiff also seeks an order “barring defendant from introducing any evidence [at trial] regarding the time that McPherson or the New York State Police accessed the New York State Police Information Network (N.Y.SPIN) and National Criminal Information Center (NCIC) computers pri- or to 1659 hours (4:59 p.m.) on October 3, 1998 in order to obtain warrant information regarding plaintiff.” (See Plaintiffs Omnibus motion at 1). Plaintiff states that, if the Court denies her motion to exclude evidence, she “will withdraw her action and seek alternative relief in the nature of sanctions.” The Facts On October 3, 1998 at approximately 3:45 p.m., Flor Vasquez was driving her car, a 1980 Volvo station wagon west bound on Route 287 in the vicinity of Port Chester, New York. As Vasquez was driving, she felt something in her eye and pulled over to the side of the road to rest and see if her eye would feel better. (Vasquez Aff. at ¶ 11). On October 3, 1998, defendant McPherson was employed as a New York State Trooper at the State Police Barracks in Tarrytown, New York. At approximately 4:00 p.m. on that day, while driving on patrol on Interstate 287, McPherson observed a green Volvo station wagon bearing State of New York plates U225TB, parked on the right shoulder of the roadway in the Village of Port Chester, New York. (McPherson Aff. ¶4). McPherson pulled his vehicle onto the shoulder and parked directly behind the Volvo to further investigate. Id. at ¶ 5. McPherson approached the vehicle on the driver’s side and observed a white female (later identified as plaintiff) who appeared to be asleep in the driver’s seat. Id. at ¶ 4. He tapped on the window to get plaintiffs attention. When plaintiff opened her eyes, McPherson noticed that they were red — which is not inconsistent with plaintiffs testimony that she pulled her car off the road because something was bothering her eye. (Vasquez Aff. at ¶ 5). According to Vasquez, McPherson started to look around her car in a very suspicious way. Id. at ¶ 6. He also asked in a “forceful tone” for Vasquez’s license. After Vasquez gave McPherson her license, the Trooper returned to his car. Id. A few minutes later, McPherson returned to the side of Vasqez’s car and demanded her registration. Id. at ¶ 8. Vasquez asked McPherson what happened, to which McPherson replied, “Don’t ask me questions. Give me your registration.” Id. When Vasquez finally found her registration in her wallet, McPherson had already returned to his car. Id. at ¶ 9. Vasquez got out of her car and began to walk toward McPherson’s car so she could provide him with her registration. McPherson left his car at that point and met Vasquez before she could reached his car. She again asked, “What happened?” After Vasquez handed McPherson her registration he told her that he was going to arrest her. Incredulous, Vasquez asked why she was being arrested. McPherson told her not to ask questions, and that he would tell her later. In response to that statement, Vasquez claims she told McPherson, “If you’re going to arrest me I could sue you. You don’t have any reason.” Id. at ¶ 9. Vasquez alleges that McPherson proceeded to hit her in the chest, hit her in the leg and throw her to the ground face first. He then pulled her by the hair, rolled her over, put his foot on her chest and handcuffed her. Id. at ¶ 11. After she was handcuffed, McPherson pulled her up by the hair and grabbed her arm and threw her in the front seat of his police vehicle. Id. Once Vasquez was in the police vehicle, McPherson allegedly searched the console and underneath the carpet of the car. Id. McPherson claims that, when he first approached Vasquez, he asked her if she was okay, to which plaintiff purportedly replied, ‘Yes, I was just resting. Why do you ask?” McPherson says he believed the plaintiff had a Spanish accent and appeared to be irritated by his question. He told her that he wanted to ensure that she was safe and not in need of assistance. Id. at ¶ 7. When he asked plaintiff for her driver’s license and registration, she became argumentative, hostile and defensive and insisted that she had done nothing wrong. Id. at ¶ 8. After several requests, plaintiff produced a New York State drivers license with the name Flor Vasquez, DOB 9/20/63, 340 King St. Port Chester, New York 10573. McPherson returned to his car and radioed New York dispatch for a Department of Motor Vehicle (“DMV”) inquiry. Headquarters advised him that plaintiffs information came back as a “file 5 association hit.” According to McPherson, the common factors of a “file 5” in this case were the same for the last name, date of birth, height, hair, and eye color. He was further advised that the warrant was issued for immigration violations by the United States Border Patrol in Marfa, Texas, and that the driver’s license was valid. Id. at ¶ 9; Defs. Exh. A and C. This is the evidence that plaintiff seeks to have excluded. Vasquez approached McPherson’s vehicle with her registration. McPherson began to ask her questions in order to gather sufficient information to either confirm or deny the “hit.” Plaintiffs tone of voice was loud, hostile, and argumentative and she insisted that she had done no wrong. Id. at ¶ 10. McPherson advised her that if she could not provide information to establish her identity, she would be taken into custody. At that point, plaintiff shouted, ‘You arrest me, I shoot you, I shoot you.” Id. at ¶11. McPherson states that he became concerned for his personal safety and placed plaintiff under arrest and attempted to handcuff her. Plaintiff immediately resisted and began to struggle. During the struggle, plaintiff fell to the ground next to the passenger side of his vehicle. She fell face up and started to kick McPherson. McPherson immediately placed handcuffs on Vasquez, and placed her in the front passenger seat of his vehicle and applied the seatbelt. Id. at ¶ 12. While in the Trooper vehicle, Vasquez was kicking the radio unit and screaming. McPherson advised Headquarters of the incident and requested back-up. Id. at ¶ 13. When another Trooper arrived on the scene, plaintiff was re-handcuffed with her hands behind her back. McPherson performed a cursory search of her vehicle and contacted a tow truck company to tow plaintiffs vehicle. Id. at ¶ 14. McPherson advised plaintiff of her Miranda rights and transported her to the State Police Barracks in Tarrytown for processing. Id. at ¶ 15. Back at the Barracks, McPherson and Sgt. Malaterra questioned plaintiff. Plain tiff stated that she is a citizen of Colombia and came to the United States through the Miami Port. She stated that she had never been in Texas. Indeed, plaintiff proved not to be the person wanted by the Border Patrol in Marfa, Texas. Plaintiff was ultimately charged with resisting arrest and disorderly conduct. Id. at ¶ 16. While Plaintiff was at the police barracks, she was allowed to use the bathroom and telephone. Plaintiff contacted her husband, Ramon Vasquez. McPherson spoke to plaintiffs husband and advised him of the procedures to follow in order to obtain her release. Id. at ¶ 17. McPherson transported plaintiff to the Village of Port Chester Court for arraignment before Justice Peter Sisco. Plaintiff was arraigned. She posted $500 bail and was released. Id. at ¶ 18. Plaintiffs criminal case ended when she accepted an adjournment in contemplation of dismissal. (Vasquez Dep. at 74-75). Plaintiff’s Motion to Exclude and for Sanctions Plaintiff does not refute the arguments raised in defendants’ summary judgment motion. Instead, she has filed motions asking the Court to: (1) exclude from its consideration defendants’ exhibit A (computer generated radio log for October 30, 1998) and exhibit C (handwritten log pages) and paragraph 9 of McPherson’s affidavit, and (2) preclude defendant from introducing any evidence “regarding the time that defendant McPherson obtain warrant information regarding plaintiff.” (See Plaintiffs Omnibus motion at 1). As noted above, Plaintiff states that, if the Court denies her motion to preclude the introduction of this evidence, she “will withdraw her action and seek alternative relief in the nature of [monetary] sanctions.” Id. Plaintiff willingness to withdraw her action if her motion to exclude is denied suggests that she agrees that the challenged evidence shows that McPherson had probable cause to arrest Vasquez. And she should, because the challenged evidence proves that McPherson was informed of the “File 5 association hit” prior to his arrest of plaintiff. What plaintiff is asking the Court to do is to ignore critical and highly probative (actually, determinative) evidence so that she can maintain her action. This the Court cannot do. Plaintiff argues that paragraph 9 of McPherson’s affidavit and the attached exhibits are all inadmissible under Fed. R.Evid. 802, 901 and 1002. In paragraph 9, McPherson states how he was informed by Headquarters prior to arresting plaintiff that her pedigree information came back as a “File 5 association hit.” (McPherson at ¶ 9). Exhibit A (the radio log) and Exhibit C (handwritten log pages) corroborate defendant’s position that Headquarters informed him of the warrant hit prior to arresting plaintiff. Plaintiff contends that the challenged exhibits are “unauthenticated hearsay.” Contrary to plaintiffs assertion, however, the challenged evidence is admissible. The radio logs and the transmission transcript are business records that would be admissible at trial pursuant to Fed. R.Evid. 803. It is entirely proper for the Court to consider these documents in the form presented in defendants’ summary judgment motion. Indeed, these exhibits, along with the State Police log and the NYSPIN computer print out — which, collectively, show that McPherson was aware of the warrant hit prior to arresting plaintiff — would all be admissible at trial as business records. McPherson’s statements in paragraph 9 are also admissible. Obviously McPherson has personal knowledge of the events in question. His statements about what “Headquarters” told him are admissible. Indeed they are not hearsay, because they are not offered for the truth of the matter asserted, but to explain why he did what he did. Even if Headquarters provided McPherson with erroneous information, the fact that McPherson was told there might be an outstanding warrant is relevant to whether a reasonable officer in McPherson’s position had reason to believe that plaintiff had committed a crime, and also whether McPherson is entitled to qualified immunity. At trial McPherson would be able to testify that Headquarters told him that Vasquez’s information came back as a “File 5 association hit.” Regardless of whether the challenged evidence is admissible under the Federal Rules of Evidence, plaintiff contends that any evidence regarding the time McPherson learned of the warrant should be precluded at trial, pursuant to Fed. R.Civ.P. 37(b)(c). Apparently, the information was not produced to plaintiff during discovery. Plaintiff contends that if defendants had produced the radio log, radio transcripts and NYSPIN reports early on during discovery, she would not have pursued this action and thereby incurred more than $15,000 in fees and expenses. Plaintiff characterizes defendants’ failure to produce these documents as “negligent, if not reckless.” Rule 37(c) provides for sanctions where a party refuses to disclose information. The Court finds that there was no such refusal in this case. The history of pretrial discovery in this case, as set forth by the parties, suggests that the defendants complied with plaintiffs request for discovery by responding to interrogatories and providing some of the documents plaintiff sought. It appears that defendants objected to certain interrogatories and particular document requests — documents that both sides now agree show that McPherson learned of the existence of the warrant prior to arresting Yasquez on the grounds that the requested information was public knowledge and information that could be subpoenaed from the New York State Police. Had the matter been brought to the attention of either this Court or the magistrate judge assigned to supervise discovery, I am sure that defendants would have been told to produce the documents, but plaintiff did not see fit to use the mechanisms provided in the Federal Rules of Civil Procedure to try to resolve the discovery dispute. Neither did plaintiff subpoena the State Police. Finally, plaintiff could have also deposed McPherson to find out what the trooper knew and when he learned it. She did not do so, however, even though defendants were made available for depositions on two occasions. Accordingly, plaintiffs motion for preclusion and/ or sanctions is denied. McPherson’s Summary Judgment Motion Plaintiff having withdrawn her claims against Lieutenant Weber and Sergeant Rogers, the only motion remaining for the Court to decide is that of Trooper McPherson. McPherson asks the Court to grant summary judgment in his favor on plaintiffs claims of false arrest and malicious prosecution. The motion is granted. A party is entitled to summary judgment when there is no “genuine issue of material fact” and the undisputed facts warrant judgment for the moving party as a matter of law. Fed.R.Civ.P. 56(c); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). In addressing a motion for summary judgment, “the court must view the evidence in the light most favorable to the party against whom summary judgment is sought and must draw all reasonable inferences in [its] favor.” Matsushita Elec. Indus. Co. Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). Whether any disputed issue of fact exists is for the Court to determine. Balderman v. United States Veterans Admin., 870 F.2d 57, 60 (2d Cir.1989). The moving party has the initial burden of demonstrating the absence of a disputed issue of material fact. Celotex v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). Once such a showing has been made, the non-moving party must present “specific facts showing that there is a genuine issue for trial.” Fed.R.Civ.P. 56(e). The party opposing summary judgment “may not rely on conclusory allegations or unsubstantiated speculation.” Scotto v. Almenas, 143 F.3d 105, 114 (2d Cir.1998). Moreover, not every disputed factual issue is material in light of the substantive law that governs the case. “Only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude summary judgment.” Anderson, supra, 477 U.S. at 248,106 S.Ct. 2505. To defeat summary judgment, the non moving party must produce evidence of such weight that “a jury would return a verdict for that party.... If the evidence is merely colorable, or is not significantly probative, summary judgment may be granted.” Id. at 249, 106 S.Ct. 2505 (citations omitted). While the Court must view the record “in the light most favorable to the non-moving party,” Leberman v. John Blair & Co., 880 F.2d 1555, 1559 (2d Cir.1989) (citations omitted), and “resolve all ambiguities and draw all reasonable inferences in favor of the party against whom summary judgment is sought,” Heyman v. Commerce and Indus. Ins. Co., 524 F.2d 1317, 1320 (2d Cir.1975) (citations omitted), the non-moving party nevertheless “must do more than simply show that there is some metaphysical doubt as to the material facts.” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S.Ct. 1348, 1356, 89 L.Ed.2d 538 (1986) (citations omitted). (1) False Arrest The elements of a claim of false arrest under § 1983 are “substantially the same” as the elements of a false arrest claim under New York law. See Hygh v. Jacobs, 961 F.2d 359, 366 (2d Cir.1992). Under New York law, “a plaintiff claiming false arrest must show, inter alia, that the defendant intentionally confined him without his consent and without justification.” Weyant v. Okst, 101 F.3d 845, 852 (2d Cir.1996). The existence of probable cause to arrest is a complete defense to a false arrest claim, whether under state law or under § 1983. See Weyant, 101 F.3d at 852. “Courts evaluating probable cause must consider those facts available to the officer at the time of the arrest and immediately before it.” Lowth v. Town of Cheektowaga, 82 F.3d 563, 569 (2d Cir.1996). Probable cause exists when there are “facts and circumstances ‘sufficient to warrant a prudent man that the [suspect] had committed or was committing an offense.’ ” Id. (quotations omitted); see Dunaway v. New York, 442 U.S. 200, 208, n. 9, 99 S.Ct. 2248, 60 L.Ed.2d 824 (1979) (probable cause to arrest exists when police officers have knowledge or reasonably trustworthy information of facts and circumstances that are sufficient to warrant a person of reasonable caution in the belief that the person to be arrested has committed or is committing a crime.)

6559974-20794

OPINION LAURENCE E. HOWARD, Bankruptcy Judge. This action was commenced by Walter E. Heller & Company (“Heller”), the holder of a perfected security interest in the accounts receivable of the debtor, Fasa-no/Harriss Pie Company (“Fasano/Har-riss”) and Richard C. Remes, the duly appointed Chapter 7 trustee in this case, to recover $36,340.04 for frozen pies allegedly sold by the debtor, a Michigan corporation, to Food Marketing Associates, Ltd. (“FMA”), a Missouri corporation. The facts concerning the underlying relationship of the parties and transfer of pies are as follows. FMA operates as an institutional food broker in the state of Missouri. Paul Phillips, president of FMA, testified by way of deposition that as broker FMA does not directly sell, ship or warehouse any product but rather represents the sale to a customer, the distributor, (depo. at 6) The usual method of operation is for a customer to place an order for a certain product with FMA and for FMA to contact the principal-manufacturer, confirm the order and make certain that the product is shipped to the customer, (depo. at 6, 15) The principal bills the appropriate customer directly and FMA receives its brokerage fees from the principal after the invoice is paid by the customer, (depo. at 15, 16) Before Fasano/Harriss ceased operations on March 29, 1982, it was in the business of selling frozen desserts and pies. In April, 1982, the debtor received and serviced two separate orders for frozen pies for a combined invoice price of $36,340.04. Both invoices list the defendant as the broker and Foodservice Center, Inc. (“FSC”), a Missouri corporation, as the customer. The record is unclear as to who actually placed these orders with the debtor. Mr. Phillips testified that his company dealt and ordered directly with an entity called Fasano Pie Company (“Fasano”) based in Chicago, Illinois, and not with the debtor, (depo. at 6-8, 28) The president of FSC, James Volansky, testified, also by way of deposition, that although his company had ordered the debtor’s products in the past from FMA as the debtor’s exclusive broker (depo. at 5-9), FSC did not place the two orders previously mentioned (depo. at 15, 16) and had switched suppliers of pie products prior to the date of these orders, (depo. at 19) When the pies pursuant to the first purchase order arrived at FSC’s facilities, delivery was refused and the carrier was referred to the defendant, (depo. at 18) Upon receipt of a call from the carrier of the pies, Mr. Phillips instructed him to place the product in cold storage, (depo. at 18-19) Numerous attempts were made by Mr. Phillips to contact Fasano in Chicago to determine what should be done with the pies but no reply was received, (depo. at 19) The identical course of events transpired with a second shipment of pies from the debtor under the second purchase order which occurred approximately one week later. (Phillip’s depo. at 31, Yolansky’s depo. at 21) Ultimately, on April 22, 1982, the pies were sold by FMA to Food Products International, Inc. (“Food Products”) for $26,088.41. (depo. at 21-23, answ. to inter-rog. # 3) The complaint seeks recovery on the accounts receivable due and owing in the amount of $36,340.04. The parties stipulated that neither invoice has been paid despite a demand letter from Heller to the defendant seeking payment, (trans. at 6-8) FMA defends this action by asserting that: 1) no contract had been formed between the parties, 2) its liability, if any, is limited to $18,718.16, the amount that FMA ultimately received for the pies in question, and 3) it is also entitled to a setoff in the amount of $16,457.88 which allegedly represents a judgment in favor of the defendant against Fasano for uncollected brokerage fees. I. CONTRACTUAL LIABILITY The record indicates that the defendant, as broker, ordered pies from Fasano which orders were eventually serviced by the debtor. While admittedly, there is a void in the evidence as to who placed the orders with the debtor, it is reasonable to assume that the orders were transmitted by Fasa-no. The contractual liability of the defendant ultimately rests on which of two possible scenarios the Court views the facts. Under the first scenario, Fasano entered into an independent contractual relationship with the debtor. It is hornbook law thát an offer may only be accepted by the party to whom it is made. See Grant v. Naylor, 4 Cranch (U.S.) 224, 2 L.Ed. 222 (1808); Ott v. Home Savings & Loan Association, 265 F.2d 643 (9th Cir.1958). Accordingly, a purported acceptance of an offer, either by reply or attempted performance, by one other than the offeree, to whom the latter has in some manner communicated knowledge of the offer, is ineffectual to complete a valid contract_ To constitute a valid contract, the minds of the parties must have met on the identity of the persons with whom they are dealing. 17 Am.Jur.2d Contracts § 42 at 380. This rule is premised on the notion that the offeror is the master of his offer, Kroeze v. Chloride Group Ltd., 572 F.2d 1099 (5th Cir.1978), and accordingly has “a right to select with whom he will contract, and cannot have another person thrust on him without his consent.” 17 Am.Jur.2d Contracts § 17 at 353. See also Arkansas Valley Smelting Co. v. Belden Mining Co., 127 U.S. 379, 8 S.Ct. 1308, 32 L.Ed. 246 (1888); Potucek v. Cordeleria. Lourdes, 310 F.2d 527 (11th Cir.1962), cert. den. 372 U.S. 930, 83 S.Ct. 875, 9 L.Ed.2d 734 (1963). In National Crankshaft Company v. National Gas Industries, Inc., et al., 158 So.2d 370 (La.Ct. of App.1963), the defendant ordered a reconditioned crankshaft from a third party with whom it had done business for many years. The shipment was made instead by the plaintiff, without the knowledge of the defendant. Only after the crankshaft was installed in the defendant’s machinery was the defendant informed of the true supplier. Under these facts the Court denied any recovery on the basis of contractual liability. To be distinguished, however, is the situation where the offeror accepts the goods and uses them with knowledge that the supplier was other than the offeree. See Cincinnati Siemens-Lungren Gas Illuminating Co. v. Western Siemens-Lungren Co., 152 U.S. 200, 14 S.Ct. 523, 38 L.Ed. 411 (1894). To avoid contractual liability, the appropriate course of action in such a case would be for the offeror to return the goods and decline to have any dealings with the third party. Id. 152 U.S. at 202, 14 S.Ct. at 524. See also 67 Am.Jur.2d Sales § 98 at 213. There is no direct evidence that FMA was aware, at any time before the pies were eventually sold, that it was dealing with Fasano/Harriss rather than Fasano Pie Co. Circumstantial evidence indicates that such actual knowledge cannot be attributable to the defendant. The defendant instructed the carrier to place the pies in cold storage under the name of Fasano Pie Co. In the meantime, the defendant awaited instructions from Fasano Pie Co. after making numerous efforts to contact its officers. Additionally, Mr. Phillips testified that it was not unusual for Fasano Pie Co. to ship goods from places other than Chicago since it had warehouses located elsewhere, (depo. at 24) Accordingly, without knowledge that it was dealing with the plaintiff, the defendant cannot be held contractually liable under the first scenario. Under the second scenario, Fasano Pie Co. acted as agent for the debtor, its undisclosed principal. The general rule is, absent a personal service contract, reliance on the personal qualities of the agent or the like, "[a] contract entered into by an agent for or on behalf of an undisclosed principal, is the contract of the undisclosed principal, and by appearing and claiming the benefit of the contract, it thereby becomes his own_ The fact that...the other party to the contract was unaware of the agency relationship, does not preclude enforcement of the contract by the undisclosed principal.” 3 C.J.S. Agency § 448 at 320. See also Socomet, Inc. v. City of Detroit, 33 Mich.App. 626, 190 N.W.2d 551 (1971). Michigan courts follow the general rule than an undisclosed principal may sue in his own name on a contract made in his behalf. American Enameled Brick & Tile Co. v. Brozek, 251 Mich. 7, 231 N.W. 45 (1930). (Although being contractually liable under this scenario, FMA would be potentially entitled to setoff against the plaintiff any debt or claim it had against Fasano Pie Co. which arose before it acquired notice of the agency. See Id. 251 Mich, at 10, 231 N.W. 45; 3 C.J.S. Agency § 450. FMA’s right of setoff will be discussed in more detail infra Part III.) Upon the facts, the Court cannot find either an express agency or an agency by estoppel. Of greater concern is whether the conduct of Fasano and the debtor gave rise to an implied agency. The District Court for the Western District of Michigan has recognized, “[wjithout an express appointment and acceptance, the creation of an agency may be implied from the words and conduct of the parties and the circumstances of the particular case,” Van-Koevering v. Manufacturers Life Co., 234 F.Supp. 786, 791 (W.D.Mich.1964) citing 1 MPL Agency § 5 at 309, as where one holds out another to be his agent by investing him with ostensible authority. Id. The existence of an implied agency must be supported by a finding that the agent was acting in behalf of his principal and with the knowledge or consent of the latter. United States v. Marroso, 250 F.Supp. 27, 30 (E.D.Mich.1966). While it is possible to find that Fasano Pie Co. acted in behalf of the debtor, it is also possible that Fasano, acting in its own behalf, simply could not service the defendant’s particular orders and referred them to Fasano/Harriss without purporting to act in a representative capacity. There has been no showing of any general course of dealings between the two companies and an agency relationship cannot be presumed simply because one party performs an act for another. In re Gruber Bottling Works, Inc., 16 B.R. 348, 353 (Bankr.E.D.Pa.1982); 3 C.J.S. Agency § 491 at 383, or transacts business for another. McKay v. Brink, 275 N.W. 72 (Sup.Ct.S.D.1937). Absent proof of an agency relationship, the Court finds the first scenario controlling. II. QUASI CONTRACT AND RESTITUTION The absence of a binding express contract does not preclude the plaintiff’s recovery. A quasi contract is a contract implied in law which employs the legal fiction that a person who has been unjustly enriched promises to make repayment and is based on the dictates of reason and justice. 17 C.J.S. Contracts § 6. The essential elements of a quasi contract are a benefit conferred on the defendant by the plaintiff and acceptance and retention by the defendant of such benefit under circumstances whereby it would be inequitable for him to retain the benefit. Atlas Concrete Pipe, Inc., v. Roger J. Au & Son, Inc. 467 F.Supp. 830 (E.D.Mich.1979). Where neither party is proven to be at fault, the court should strive to return the parties to their pre-dealing status quo. Clearly, since FMA acquired control of the plaintiffs goods and retained the proceeds upon sale without any remittance to the plaintiff it has been unjustly enriched. Heller argues that it should recover $36,-340.04 which represents the invoice price of the pies. Mr. Johnson testified that the invoice prices represent the prices that Heller instructed him to charge, (trans. at 45) Plaintiff has offered no evidence, however, that the invoice prices reflect the true fair market value of the goods at the date of their receipt by FMA. Clearly, as to this issue the plaintiff has the burden of proof. In his answer to interrogatories Mr. Phillips indicated that FMA sold the pies to Food Products, of which he is sole shareholder. The pies were apparently invoiced by FMA in the amount of $26,088.41 on April 22, 1982 (answ. to interrog. # 3), which Mr. Phillips claims represented their market value in the industry at this date, (answ. to interrog. # 4) However, FMA did not receive remuneration for the pies until they were eventually resold by Food Products (answ. to interrog. # 6(c)) , the proceeds of such sales totaling only $18,-718.16. (answ. to interrog. # 6(c)(i)) Mr. Phillips has also testified that due to Fasa-no Pie Co. going out of business, Fasano products were selling from forty to fifty cents on the dollar, (depo. at 22) The discrepancy between the FMA invoice prices and the amount it actually received was unexplained by the defendant. Since FMA took custody of the pies and control of their sale, the Court believes that it is properly chargeable with their value at the time of their receipt. FMA apparently made no attempt to locate an independent purchaser who was willing to pay the full value of the pies on April 22, 1982. Accordingly, the plaintiffs are entitled to restitution in the amount of $26,088.41. III. SETOFF The defendant has pleaded a right to setoff against its liability to Heller $16,-457.88 representing unpaid commissions for brokerage services supplied to Fasano by FMA. Mr. Phillips testified that FMA did not order the pies at issue with the intention of acquiring a right of setoff. (depo. at 42) Under 11 U.S.C. § 553(a), a creditor may only offset those debts that are mutually owing between the debtor and creditor. “To be mutual the debts must be in. the same right and between the same parties, standing in the same capacity.” 4 Collier on Bankruptcy ¶ 553.04 at 553-22 (15th ed. 1980). The mutuality requirement is to be strictly construed. See In re Virginia Block Co., 16 B.R. 560, 562 (Bankr.W.D.Va.1981). FMA’s claim of setoff is premised on the right of the party who contracts with an agent for an undisclosed principal to offset against the undisclosed principal any claim he could have asserted against the agent. Since the Court has found that no agency relationship existed between Fa-sano and the debtor, see discussion Part I supra, the defendant’s claim of setoff must be denied on this basis. Further, the parties have offered no evidence as to any intercorporate relationship between Fasano and Fasano/Har-riss. Even assuming that one exists, it is well established that “one subsidiary may not setoff a debt owed to a bankrupt against a debt owing from the bankrupt to another subsidiary.” Depositors Trust Co. v. Frati Enterprises, 590 F.2d 377, 379 (1st Cir.1979). The same rule applies with a parent corporation and a wholly owned subsidiary. See Inland Steel Co. v. Berger Steel Co., Inc. 327 F.2d 401, 403-404 (7th Cir.1964). Since an intercorporate relationship is insufficient to meet the mutuality requirement in an offensive claim of setoff by a member at the corporate family against a third party, it likewise is insufficient to meet the mutuality requirement in a third party claim of setoff against a member of the corporate family. Courts have carved out an exception to this general rule in the “triangular tradeoff” situation. The courts have found mutuality between three parties, as a matter of contract law, where there was an express agreement clearly evidencing the intent of the parties to treat the related corporations as a single entity. In re Balducci Oil Co., Inc., 11 B.C.D. 237, 240, 33 B.R. 847 (Bankr.D.Col.1983). Such an arrangement has been described as a “unique situation” in which the parties must establish their agreement “at the outset of their relationship.” In re Virginia Block Co., supra at 562. Since no intercorporate relationship and agreement to treat the Fasano companies as a single entity has been proved, the defendant’s claim of setoff must fail. Obviously, this does not preclude FMA from continuing to prove any such claim against Fasano Pie Co. directly. Accordingly, the plaintiffs are entitled to recover $26,088.41, each party to bear its own costs and attorneys fees. . An involuntary chapter 7 petition was filed against Fasano/Harriss on May 10, 1982. By order of this Court entered on July 27, 1982, Heller was granted relief from the automatic stay and was authorized to collect the debtor’s outstanding accounts receivable pursuant to its security interest. . Although the debtor was no longer producing pies at this time, it was liquidating its inventory to satisfy its debt, (trans. at 10, 11) At a trial held on this matter on May 2, 1984, Jack Gril-ley, the debtor's former distribution manager, testified that he had prepared the bills of lading for the two orders (exhs. 6 & 9) and that the pies were shipped pursuant to each order respectively on April 12, 1982, and April 16, 1982, to Foodservice Center, (trans. at 56, 58-60) . David Johnson, former manager of the debtor, testified at trial that he had participated in preparing the two purchase orders from information supplied to him from another former employee of the debtor, Mr. Burkis, and consequently had no personal knowledge of who actually placed the orders with the debtor, (trans. at 16, 33, 45) Mr. Johnson did indicate his belief however, upon reviewing the purchase orders, that the first order originated from FMA and the second order originated from Tom Boyle, who he identified as a master broker for the debtor through which specific brokers, such as FMA, placed orders, (trans. at 34, 49, 50) Mr. Phillips however, could not recall any business being transacted between his company and Mr. Boyle, (answ. to interrog. # 9) .The complaint was amended to assert a second count for fraud alleging that the defendant’s orders for pies were fictitiously placed. The plaintiffs have presented no clear evidence supporting this claim thus precluding any recovery on this'basis. . The plaintiffs rely on the fact that Mr. Phillips admitted to receipt of copies of correspondence from Mr. Volansky to the debtor and copies of the debtor’s invoices both of which bore the debtor’s name and address in Michigan, (depo. at 27, 28) While this might be sufficient to find that the defendant was placed on constructive notice of Fasano/Harriss’ involvement in the deliveries at issue, the court does not deem this sufficient for purposes of contract formation. . While the pies were originally stored in Fasa-no Pie Co.'s name, they were subsequently placed in the name of the defendant. Mr. Phillips testified that the reason for this change of names was due to the storage company’s concern with Fasano’s financial situation. Placing the product in FMA’s name assured the storage company, with which FMA regularly conducts business, of renumeration, (depo. at 20, 21) . An express agency requires an agreement that such a relation shall exist and there must be a meeting of the minds of the parties. . An agency by estoppel arises from acts and appearances which lead a third party to believe that an agency has been created and the third party detrimentally relied on this appearance. . The Court notes that the majority decision in National Crankshaft Co. v. National Gas Industries, supra did not consider the unjust enrichment doctrine in holding that the defendant was not contractually liable while the dissenting judge believed restitution should have been ordered. . Mr. Phillips has listed no sales transacted between FMA and Food Products between 1980-1983 except those reflected by two invoices both dated April 22, 1982, in the combined amount of $26,088.41. While invoice # 1418 in the amount of $17,207.57 is identified as a sale of pies (answ. to interrog. # 4) and has been supplied to the Court, the Court has no direct information on invoice # 1424 in the amount of $8,880.84. However, comparing the debtor’s invoices, which are more inclusive, to the defendant’s invoice # 1418, it appears that invoice # 1424 must also represent the sale of the debtor’s pies. . Mr. Phillips indicated that invoice # 1418 was based upon the market value in the industry for the pies at the date of the transaction with Food Products, (answ. to interrog. # 4) Presumably, the same would be true of invoice # 1424. The Court dismisses Heller’s contention that the sale between FMA and Food Products was not an arms length transaction or that FMA had no incentive to receive the fair market value of the pies since it would be obligated to turnover any amount in excess of its claimed setoff as mere speculation. . The dates of resale of the pies by Food Products are as follows: April 26, 1982; April 27, 1982; May 26, 1982; June 3, 1982; and July 8, 1982. . The court notes that the storage fees incurred over a two month period in the total amount of $2,314.20 were paid by Food Products, not FMA, therefore the defendant cannot offset this expense. Further, there was no evidence that Food Products acted diligently, by industry standards, in disposing of the pies over a two month period.

1832065-5319

BLAND, Associate Judge. The application in this appeal relates to a process of reducing iron oxide materials to metallic iron, and involves the consideration of three claims, 2, 56 and 57, of which claim 2 is illustrative and reads as follows: “2. The process of reducing iron oxide materials to metallic iron without melting, which consists in first heating the ore in a state of division in an internally heated inclined rotating cylinder to approximately the temperature of reaction, in discharging the heated ore into a second, reducing, inclined rotating cylinder, introducing fuel into said second cylinder, and also introducing solid carbonaceous material in a state of division into the second cylinder near the inlet end thereof at a place whereby said material is entrained with the ore and moves therewith and whereby nascent gases are liberated in situ, passing the gases-from the second cylinder into the first and burning them to effect the internal heating referred to, and in cooling the product of reduction, at all stages excluding all air save that actually required for the combustion.” - • The rejection of the three claims by the Examiner was affirmed by the Board of Appeals of the United States Patent Office, and, from the decision of the latter, appeal was taken to this court. In the Board’s decision the following references were listed : Jones, 981,280, Januarj 10, 1911; Rendall, 1,053,436, February 18, 1913; Alford, 1,097,156, May 19, 1914; Jones, 1,174,729, March 7, 1916; Stansfield, 1,403,576, January 17, 1922. Rendall, Alford, and Stansfield were relied upon. In the method disclosed the ore is first heated in a state of division in an internally heated, inclined, rotary cylinder to approximately the temperature of reduction. The heated ore is then discharged into a second reducing, inclined, rotating cylinder into which last-named cylinder is introduced fuel by a pipe, and also into the last-named cylinder is introduced solid carbonaceous material in a state of division, which material is coal or coke finely pulverized. The gases generated in the second cylinder during the reducing process are passed upwardly through a chute into the first cylinder, and these gases are then mixed with additional fuel and are burned to effect the internal heating of the first cylinder. The product of the reduction is cooled in a third cylinder. During the process all air is excluded save that which is necessary for combustion. The claims were rejected on the patent to Rendall for the reason that no patentable invention would be involved in substituting a solid carbonaceous reducing agent for “that part of the gaseous reducing agent in Rendall, the solid reducing agent being well known and old in the art as shown by Alford and Stansfield. The claims were also rejected on the ground that there was no in vention in substituting the reduction of Stansfield in the process of Rendall. Appellant admits in liis brief that “the separate elements of which this combination is composed may be separately found in diverse patents,” and cleverly and earnestly argues that this fact constitutes no true anticipation of the combination itself. He argues at length that the substitution which would have to be made by taking one element from one patent and putting it into another could not be made in a successfully operating process, since no desirable results would obtain, and discusses, in detail and with obvious familiarity with the subject, the technical phases of the process under consideration. The process necessarily involves a consideration of highly technical matters. The Board and the Examiner have given these matters careful consideration, and, notwithstanding appellant’s exhaustive treatment of the subject, we are not convinced that the Board’s conclusions are wrong. In matters appealed here from the Patent Office, which involve the findings of the experts of the Office on highly technical questions, such findings are given great weight and are only rejected when it is clear that they are erroneous." In re Beswick, 16 App. D. C. 345; In re Demarest, 38 F. (2d) 895, 17 C. C. P. A. 904; In re Wietzel et al., 39 F.(2d) 669, 17 C. C. P. A. 1079. Since it is admitted that all of the elements of the process are old, we are not prepared to say, contrary to the decision of the Board, that invention resulted from the combination of these old elements. The Board sustained the Examiner in ■ holding that “there is no invention in substituting the reduction step of Stansfield in the process of Rendall,” and the Board states further that: “We see no reason why the Stansfield patent would not suggest the use of-solid carbonaceous material as a substitute for the hydrocarbon reducing gas of Rendall if it were found to be of any advantage.” And also: “ * * * if Stansfield were willing to sacrifice the advantage of effecting partial reduction of his.ore in the reducing cylinder as described on page 1, lines 106 to 107, there is no reason why he should not use Rendall’s direct preheating system of feeding his carbonaceous material to the reducing cylinder as Rendall does his reducing gas. This mode of feeding is also disclosed in Alford though he uses indirect heating for both cylinders.” With the above-quoted conclusions we are not-prepared to disagree.

11193398-15682

WILLIAMS, Circuit Judge. Carlos E. Santiago and Carlos M. Santiago seek the return of funds forfeited to the government following family-member Josué Santiago’s conviction on charges of conspiracy to distribute cocaine. They contend that certain funds included in the district court’s forfeiture order belong to them and are not the proceeds of illegal activities. With limited exceptions, the district court rejected the Santiagos’ claims. We affirm. I On July 9, 1996, a federal grand jury returned a ten-count superseding indictment against Josué Santiago and his father, Carlos E. Santiago. The indictment charged Josué with conspiracy to distribute cocaine and possession with the intent to distribute cocaine, and charged Josué and his father with laundering the proceeds of cocaine trafficking and conspiracy to commit that crime. The indictment also sought the forfeiture of the proceeds of the defendants’ drug-related activities and all property used to facilitate those activities. In particular, the indictment identified approximately $530,000 held in thirteen separate bank accounts in the names of various Santiago family members including Josué, Carlos E., and Josue’s brother, Carlos M. Eventually, Josué agreed to plead guilty to conspiring to distribute cocaine in exchange for the dismissal of the remaining charges against him and the dismissal of all the charges against his father. Josué also agreed to “forfeit any right, title and interest in the property described in the forfeiture provision of the indictment.” The district court accepted Josue’s plea and sentenced him to 92 months’ imprisonment. After sentencing, and on the government’s motion, the district court entered an order forfeiting to the government Josue’s right to the property identified in the indictment. Then, pursuant to 21 U.S.C. § 853(n)(l), the government published notice of its intent to dispose of the forfeited property. In response, Carlos E. and Carlos M. filed a joint motion for return of property, asserting that the funds in the thirteen bank accounts included in the forfeiture order belong to one or the other of them and are not the proceeds of illegal activities. In January 1998, the district court held a series of hearings on the Santiagos’ motion. Jeffery Doss, an investigator with the Milwaukee County, Wisconsin, District Attorney’s Office testified about the evidence that led law enforcement officials to suspect that the funds in the various bank accounts at issue were the proceeds of Josue’s illegal drug trafficking activities and were simply being held in Carlos E.’s and Carlos M.’s names to conceal and protect the funds. He testified that officers searching Josue’s residence at the time of Josue’s arrest discovered numerous financial documents, many of which were addressed to the residence Carlos E. and Carlos M. shared, not Josue’s residence. Doss also noted that a subsequent search of Carlos E.’s residence uncovered documents relating to the accounts at issue in this case, including a notebook in which Carlos E. kept track of his finances and envelopes and bank statements from a Puerto Rican bank. Doss further testified that two confidential informants provided information regarding Josue’s financial dealings. One informant told police that Josué told him that he did not keep bank accounts or property in his name, but rather kept his assets in the names of relatives and girlfriends. This same informant also told police that Josué told him that he had money in Puerto Rican bank accounts. The other confidential informant told police that Josué had several hundred thousand dollars at a pair of area banks in his father’s name and in his brother’s or sister’s name. The information provided by these confidential informants was later confirmed by the existence of accounts at the banks identified, in the names of Carlos E., Carlos M., and Neida Collazo (Josue’s sister). Investigation of these accounts eventually led police to the rest of the accounts the government seeks to have forfeited, all of which were in the names of various Santiago family members. Doss finally testified that while investigating Josue’s illegal activities in Milwaukee, the police learned that Josué had a prior arrest for a drug-related offense in California. Police investigating that crime had discovered several bank accounts in the names of Josué, Carlos E., and Carlos (no middle initial) Santiago, which Josué admitted held the proceeds of his crimes. Police also discovered that someone identifying himself as Carlos Santiago attempted to close these accounts shortly after Josue’s arrest. The government also elicited testimony from, and submitted exhibits prepared by, Jeff Mesarich, an Auditor with the U.S. Attorney’s Office, who had conducted an analysis of the accounts at issue and had examined the Santiagos’ financial circumstances. With respect to each account at issue, Mesarich described the history of the account, including the names on the account, the likely sources of deposits, and other evidence relating to the account. For instance, he explained how the money in many accounts moved through a tor-toed history of successive accounts and the name or names on certain accounts changed several times. In addition, he pointed to documentary evidence establishing that Carlos E. himself recognized that several of the accounts in his name contained Josue’s funds. Mesarich further testified about the income Carlos E. and Carlos M. declared on their tax returns over the years prior to Josue’s arrest. Before his retirement in the early 1980s, Carlos E.’s reported wages ranged between approximately $8,600 and $22,800. After his retirement, Carlos E.’s reported pension and retirement income varied between approximately $12,200 and $18,300 (with the exception of one year in which his income was approximately $3,000). Carlos E. also enjoyed substantial interest income beginning in the early to mid-1980s (when Josué purportedly began his illegal activities), which at one point exceeded $27,000 dollars. The evidence regarding Carlos M.’s reported income is restricted to the 1990s, but reveals that his combined income from wages and unemployment benefits ranged between approximately $8,600 and $13,200 and that he reported virtually no interest income. Carlos E. and Carlos M. also testified in support of their motion, offering details regarding their income. Carlos E. testified that both he and his wife (before her 1991 death) had been wage-earners most their lives, that they received income from certain rental properties, that one rental property was sold for $20,000 in the late 1970s, and that he had inherited $10,000 from his father. Carlos M. testified that he had worked nearly thirty years at three successive jobs, earning between five and eight dollars per hour. Neither Carlos E. nor Carlos M., however, offered any documentary support for their assertions regarding their income or otherwise accounting for how they accumulated so much money. Both simply asserted that the money in the accounts they claim derived from income they saved over the years. In cross-examining the Santiagos, the government elicited testimony regarding the Santiagos’ expenses. Carlos E. admitted that he paid property taxes, utility bills, health insurance premiums, and thousands of dollars on health care not covered by insurance. Carlos M. conceded that he paid child support for two children and paid many of the bills he and his father accumulated. Moreover, the government successfully impeached Carlos E. with evidence that he himself had previously recognized (in the notebook detailing his financial matters and in a passbook for one of the accounts at issue) that certain funds he claims actually belonged to Josué. Likewise, the government successfully impeached Carlos M. with his grand jury testimony, which omitted any mention of the funds he claims despite questions regarding what bank accounts he had. After considering all the evidence presented at the hearing and reviewing post-hearing briefs, the district court issued a thorough, written decision finding for the government. The district court first reaffirmed its earlier oral ruling that the government had discharged its initial burden of establishing probable cause to believe a nexus exists between the funds the Santia-gos claim and illegal drug activity. The court then carefully examined the evidence in the record regarding each account at issue. Based on this review of the evidence, the district court concluded that the Santiagos had met their burden of establishing that they are the legitimate and rightful owners of the claimed funds in five of the accounts (one of the four Carlos M. claims, four of the nine Carlos E. claims, containing just under $25,000 together), but had failed to meet their burden with respect to the remaining eight accounts. Accordingly, the district court released to the Santiagos the funds in the former accounts and divested the Santiagos of their interests in the funds in the latter accounts. The Santiagos now appeal the district court’s rulings with respect to the funds not released to them. II Despite the fact that this case is a criminal drug forfeiture proceeding, the district court and the parties have employed the legal standards applicable to civil drug forfeitures. We have doubts about whether this is correct, but neither party makes anything of this issue nor have we discovered any cases addressing the topic. Thus, we will analyze the Santiagos’ appeals using the same civil drug forfeiture standards the district court used. Under these standards, a court adjudicating a forfeiture claim employs a burden-shifting method of proof. 21 U.S.C. § 881(d), incorporating 19 U.S.C. § 1615; United States v. All Assets & Equip. of West Side Bldg. Corp., 58 F.3d 1181, 1188 (7th Cir.1995). The government has the initial burden of establishing probable cause to believe that the property at issue has a connection with illegal drug activity and is therefore subject to forfeiture. United States v. $87,118.00 in United States Currency, 95 F.3d 511, 518 (7th Cir.1996); All Assets, 58 F.3d at 1188. Probable cause exists if the government has established that the totality of the circumstances demonstrates a nexus between the property and illegal drug activity. $87,118.00, 95 F.3d at 518; All Assets, 58 F.3d at 1188-89. Once the government has met its burden, the ultimate burden shifts to the claimant to prove by a preponderance of the evidence that the property at issue has no connection with illegal drug activity and is therefore not subject to forfeiture. $87,118.00, 95 F.3d at 518; All Assets, 58 F.3d at 1189. If the claim ant fails to satisfy this burden, the government’s initial showing will suffice to support a forfeiture order. $87,118.00, 95 F.3d at 518; All Assets, 58 F.3d at 1189. The Santiagos claim that (1) the government did not establish probable cause to believe that any of the funds to be forfeited had a connection to Josue’s illegal drug activity and (2) they proved by a preponderance of the evidence that the funds belonged to them and had no connection to Josue’s illegal drug activity. The Santia-gos’ arguments are unpersuasive, however. A. Probable Cause As our recitation of the facts of this case demonstrates, there is considerable evidence establishing a nexus between the money the government seeks to have forfeited and Josue’s illegal drug activity. This evidence includes: (1) bank records and family financial records linking Josué to many of the bank accounts at issue; (2) drug dealing by Josué in California during the 1980s and in Milwaukee during the 1990s that coincided with large infusions of cash into bank accounts held by family members; (3) information from two confidential informants that Josué used family members as nominees to hold drug money in various bank accounts; (4) Josue’s and Carlos E.’s history of attempting to hide and launder drug proceeds in California during the 1980s; (5) the constant transfer and movement of funds between various family bank accounts and the repeated changing of names on those accounts; and (6) the discrepancy between legitimate income earned by Carlos M. and Carlos E. and the amount of money in the bank accounts each claims. Contrary to the Santiagos’ protests, this evidence is not simply evidence regarding the unexplained existence of large amounts of money held in a suspicious manner. Contrast United States v. $506,231 in United States Currency, 125 F.3d 442, 451-54 (7th Cir.1997). Rather, taken as a whole, the evidence connects Josue’s known and admitted illegal drug activity to the money the Santiagos claim. Especially damning is the evidence establishing Josue’s practice of hiding his drug proceeds in bank accounts held by family members. As the evidence demonstrates a nexus between the funds at issue and Josue’s illegal drug activity, probable cause to believe the funds are subject to forfeiture exists. Therefore, the district court did not err in concluding that the government had discharged its initial burden of proof. B. Preponderance of the Evidence The Santiagos’ effort to challenge the district court’s preponderance of the evidence ruling fares no better than their probable cause challenge. To begin with, the Santiagos proceed as if the government shouldered the ultimate burden of proof and its failure to indisputably establish that each dollar in each account derived from Josue’s illegal drug activity requires judgment in their favor. Of course, the opposite is true; the burden was on the Santiagos to establish that they own the funds at issue and that the funds derive from legitimate sources. See $87,118.00, 95 F.3d at 519-20; All Assets, 58 F.3d at 1190. The evidence offered by the Santiagos to establish these propositions is far from overwhelming, however. Their evidence consists entirely of their own self-serving statements as to the source of the funds at issue. They offered no independent verification of their claims. Moreover, the district court specifically found that neither Carlos E. nor Carlos M. testified credibly. In light of these facts, it is difficult to give the Santiagos’ evidence much weight at all. Still, the Santiagos’ evidence convinced the district court that the funds in five of the accounts at issue should not be forfeit ed. On the other eight, however, the district court concluded otherwise. In making these determinations, the district court thoroughly examined each of the accounts at issue and carefully weighed the evidence presented by the parties. We see no need to rehash this analysis, as the Santiagos have brought nothing to our attention that causes us to question the district court’s conclusions. Suffice it to say that there is sufficient evidence to allow a fact-finder to conclude that the money in each of the accounts claimed by the Santiagos on appeal derived from Josue’s illegal drug activities. Cf. $87,118.00, 95 F.3d at 519-20 (rejecting challenge to forfeiture where claimant failed to provide credible explanation for large amounts of money that could be linked to illegal drug activities). Accordingly, we conclude that the district court did not commit reversible error in ruling that the Santiagos had not established by a preponderance of the evidence that the funds at issue on appeal are not subject to forfeiture. Ill The Santiagos’ challenges to the district court’s forfeiture ruling are without merit. Therefore, we AffiRM the judgment of the district court. . Because the defendant and the claimants all share the same last name, we will refer to them by their first names.

11639930-12153

KEARSE, Circuit Judge: Defendant Jose Pimentel appeals from a judgment entered in the United States District Court for the Southern District of New York after a jury trial before Robert P. Patterson, Jr., Judge, convicting him of conspiracy to traffic in narcotics, in violation of 21 U.S.C. § 846 (1994); distribution of, and possession with intent to distribute, narcotics, in violation of 21 U.S.C. §§ 841(a)(1) and 841(b)(1)(C) (1994); and possession and use of a firearm during and in relation to a drug trafficking crime, in violation of 18 U.S.C. §§ 924(c) and 2 (1994). He was sentenced principally to 10 years’ imprisonment, to be followed by four years’ supervised release. On appeal, Pimentel contends that the evidence was insufficient to support his conviction on the firearm count and that the trial . court’s instructions to the jury on that count were erroneous. For the reasons that follow, we affirm. I. BACKGROUND The present prosecution arose from an investigation into a Bronx, New York heroin distribution organization headed by one Rafael Cruz. The evidence at trial included testimony by law enforcement agents and by coconspirator Rafael Morell, a seller and manager in the Cruz organization. Taken in the light most favorable to the government, the evidence showed the following. The Cruz organization sold heroin principally at 550 East 139th Street (“139th Street”); its inventory was stored in several locations, including an apartment building called Oak Terrace. The organization used a Chrysler automobile to transport drugs from Oak Terrace to 139th Street, secreting them in a compartment located on the back of the front passenger seat. The compartment could be opened by pressing the rear defogger button on the car’s dashboard plus a button by the door on the driver’s side of the car. In the compartment, which opened toward the back seat of the car, were kept drugs, money, and a gun. Morell testified that the gun “was used to protect the drugs.” As a co-manager of the operation, Morell had responsibility for overseeing sales, inventory, and security workers. In early 1994, Cruz instructed Morell to train Pimentel to succeed Morell as a manager because Morell, having recently been arrested for drug-related conduct, was too conspicuous. Accordingly, in March, Morell began training Pimentel daily, instructing him about the drug business, the Chrysler’s secret compartment, and the presence in that compartment of drugs and a gun. On one or two occasions during this period, Pimentel took heroin from a storage location to the point of sale; at other times, he helped to supervise the workers. He was in the Chrysler once or twice, though apparently never alone. On the evening of April 28, 1994, Morell found prospective customers at 139th Street and telephoned organization co-manager Robinson Berroa at Oak Terrace, asking Berroa to bring heroin. Berroa drove the Chrysler to 139th Street; Pimentel accompanied him, sitting in the front passenger seat. When they arrived, Morell received money from a customer, got in the car, and had Berroa open the compartment. Morell put the money into the compartment and took out drugs which he gave to the customer. After Morell repeated this process with another customer, Morell, Berroa, and Pi-mentel drove off in the Chrysler. As they returned to Oak Terrace, they were arrested by agents of the Drug Enforcement Administration. A subsequent search of the ear revealed the secret compartment. In it were found 14 grams of heroin, approximately $7,400, and a .38 caliber gun containing four rounds of ammunition. Pimentel and Morell were indicted on the narcotics counts described above, and were charged with using and carrying a firearm in connection with their narcotics trafficking, in violation of 18 U.S.C. §§ 924(c) and 2. Morell pleaded guilty and testified for the government at the trial of Pimentel. The jury found Pimentel guilty on all counts, and he was sentenced as described above. II. DISCUSSION On this appeal, Pimentel does not challenge his convictions on the narcotics counts, but he makes two challenges to his conviction on the firearm count. First, he contends that the firearm count should be dismissed because the evidence was insufficient to show that he used or carried the gun found in the Chrysler because it was not accessible to him; second, he contends that even if the evidence was sufficient, he should have a new trial on that count because the court’s instructions to the jury were erroneous. For the reasons that follow, we find no basis for relief. A. Sufficiency of the Evidence of “Carrying” To the extent pertinent here, § 924(c) provides for a five-year term of imprisonment for any person who “during and in relation to any ... drug trafficking crime ... uses or carries a firearm.” 18 U.S.C. § 924(c)(1). Although until recently this Court had interpreted the “use” prong of § 924(c) to encompass the strategic placement of a gun in a narcotics trafficking location where it could reasonably be inferred that the defendant kept the gun on hand for use, if necessary, in connection with a drug transaction, see generally United States v. Giraldo, 80 F.3d 667 (2d Cir.1996) (discussing cases), the Supreme Court in December 1995 ruled in Bailey v. United States, - U.S. -, 116 S.Ct. 501, 133 L.Ed.2d 472 (1995) (“Bailey”), that the term “use” in § 924(c) means the “active employment” of the gun in some way, id. at -, 116 S.Ct. at 505 (emphasis in original), and that “[i]f the gun is not disclosed or mentioned by the offender, it is not actively employed, and it is not ‘used,’” id. at -, 116 S.Ct. at 508. The government concedes that, in light of Bailey, there was insufficient evidence to convict Pimentel of “using” the gun. Pimentel also argues that, from his position in the front passenger seat of the car, he could not open the compartment or reach inside to get the gun and that there was thus insufficient evidence to convict him under the “carrying” prong of § 924(c). Whether or not Pimentel himself could open the compartment or reach the gun, however, the evidence was ample to convict him of carrying the gun on a Pinkerton theory of liability, see Pinkerton v. United States, 328 U.S. 640, 646-48, 66 S.Ct. 1180, 1183-85, 90 L.Ed. 1489 (1946). Under Pinkerton, a co-conspirator who does not directly commit a substantive offense may be liable for that offense if it was committed by another cocon-spirator in furtherance of the conspiracy and was a reasonably foreseeable consequence of the conspiratorial agreement. In United States v. Giraldo, we held that a defendant had committed the substantive offense of carrying a firearm within the meaning of § 924(c) when he drove to the site of a planned narcotics transaction with a gun concealed in a compartment in the ear, the compartment was easily accessible to him from the driver’s seat, and there was evidence from which it could be inferred that he had knowledge of the car’s contents. See 80 F.3d at 678. In the present ease, the gun was in the secret compartment of the Chrysler as it was driven on the evening of April 28 to 139th Street by Berroa, with Pimentel in the front passenger seat. Morell’s testimony was easily sufficient to establish that Pimentel had become a member of the Cruz narcotics conspiracy, of which Morell and Berroa were also members; that the gun was routinely kept in the compartment with the money and drugs for the purpose of protecting the drugs; that on the evening in question, Mo-rell, Berroa, and Pimentel all had reason to believe that the gun was in the compartment; and that Morell and Berroa had collaborative access to the gun, as Berroa opened the compartment, which was directly in front of Morell as he sat in the back seat and removed drugs from the compartment. Accordingly, the jury could properly find that at least Berroa and Morell “carried” the gun during and in relation to a drug transaction. Further, given Morell’s training of Pi-mentel, which included instruction on the presence of narcotics and the gun in the compartment, the jmy could also easily infer that the transport of the gun on April 28 in connection with the sale of narcotics was foreseeable to Pimentel. Indeed, following his arrest, Pimentel admitted that he had been in the Chrysler for some time that evening and that he was aware that there was a gun in the ear. The jury was properly instructed on the Pinkerton theory of liability, and we conclude that, on that theory, the evidence was ample to support Pimentel’s conviction of carrying a firearm in violation of § 924(c). B. The Trial Court’s Other Instructions Pimentel contends that even if the evidence was sufficient, he is entitled to a new trial on the § 924(c) count because the court’s instructions to the jury as to what the government was required to prove to establish “use” of a firearm within the meaning of that section were erroneous in light of Bailey. Though the instructions were flawed in light of Bailey, harmless-error analysis applies, see generally United States v. Giralda, 80 F.3d at 678, and we find no basis for reversal. In connection with the § 924(c) count, the court instructed the jury, in pertinent part, as follows: [I]n order for the government to sustain its burden of proof that the defendant used or carried a firearm, it is not necessary for the government to prove that the defendant actually carried the firearm on his person. It is sufficient if you find that the defendant transported or conveyed a firearm or had possession of it in the sense that, at a given time, he had both the power and the intention to exercise control over it either directly or through others. Further, the government need not prove that the firearm was fired, brandished, or even displayed. It is sufficient if the proof establishes that the firearm furthered the commission of the drug trafficking crime or crimes, or was an integral part of the underlying crime being committed. ... [I]f you find that the government has proven beyond a reasonable doubt that the defendant had possession of the firearm alone or with others in a place where heroin or heroin proceeds were stored, packaged, or distributed in order to enable drug traffickers to protect heroin or proceeds of heroin sales, then you should find that element in favor of the government. (Trial Transcript at 315-16.) These instructions are flawed, first, in that they conflate the offenses of using and carrying. Further, insofar as the instruction that the jury could convict even if the gun had not been “fired, brandished, or even displayed” referred to the “use” prong of § 924(c), it was, on the record in this case (which included no evidence that, in connection with the drug transactions, the gun was mentioned to any nonmember of the conspiracy), erroneous in light of Bailey. However, as noted above, the court’s instructions never expressly distinguished between the concepts of use and carrying. Even if we view the instruction as treating these concepts separately, any error was harmless. As to the “carrying” prong, the only “carrying” that a rational jury could possibly have found was the act of transporting the gun in the compartment on the back of the front passenger seat. To the extent that the jury was advised that it could convict Pimentel of “carrying” even if the gun had not been fired, brandished, or displayed, the instruction was not incorrect, because a gun can be “carried” within the meaning of § 924(c) when it is concealed in a location that is immediately accessible to a perpetrator of a drug offense. While the court’s “carrying” instruction did not mention a requirement of immediate accessibility in haec verba, that concept was adequately communicated by the court’s accompanying explanation that a defendant could be found to have “transported,” “conveyed,” or “possess[ed]” the gun only if he had, inter alia, the “power ... to exercise control over” it. In sum, read as a whole, the instructions adequately informed the jury of what it needed to find in order to conclude that Pimentel had “carried” the gun in violation of § 924(c).

10814800-12770

Dureee, Senior Judge, delivered the opinion of the court: Plaintiff seeks to collect transportation charges upon which the General Accounting Office withheld payment in order to satisfy an alleged indebtedness from plaintiff to the Railroad Retirement Board. In 1957 and 1958, plaintiff acquired control of the Chicago, St. Paul, Minneapolis and Omaha Railway Company and the Litchfield, and Madison Railway Company, and pursuant to the order of the Interstate Commerce Commission authorizing such control, paid displacement and dismissal allowances to certain employees of these railroads. Although these employees had received unemployment insurance benefits from the Railroad Retirement Board (hereinafter the Board), plaintiff did not reimburse the Board for the amount of these benefits when the allowances were paid, on the groimd that such payments were not “remuneration” under section 2(f) of the Railroad Unemployment Insurance Act (hereinafter the Act), 45 U.S.C. § 352(f) (1970), Thereafter, on Novem ber 22, 1961, tbe Eailroad Eetirement Board directed an administrative proceeding, in which plaintiff and other railroads were named as parties. The purpose of this proceeding was to determine whether the displacement and dismissal allowances paid to employees by these railroads were “remuneration”, as defined in section 2(f) of the Act, and to determine whether the railroad parties were required to reimburse the Board for said payments. On May 31, 1962, and again on May 27, 1963, plaintiff agreed in writing with the Board to extend the time for the Board to make any assessments on the above-mentioned displacement and dismissal allowances until May 31, 1964. No assessments were actually made prior to the expiration of this extension. The report of the examiner, designated by the Board to receive evidence and report to the Board pursuant to section 5(c) of the Act, was rendered on November 6, 1964. Exceptions thereto were filed by some of the parties including plaintiff, and the Eailroad Eetirement Board rendered its final decision on June 9, 1965, with one member dissenting. The Board held that plaintiff’s allowances to its employees were pay for time lost, remuneration and compensation, and that there was due from plaintiff to the Board $31,718.63 in reimbursements under section 2(f) of the Eailroad Unemployment Insurance Act; and $2,057.74 in contributions under section 8 of the Act, with respect to the particular allowance payments involved in the proceeding. On August 5,1965, plaintiff, through its General Attorney, wrote the Secretary of the Eailroad Eetirement Board requesting a ninety-day extension of time within which to file an appeal of the Board’s decision of June 9, 1965. On August 9, 1965, the Board granted the motion for extension of time to and including December 18, 1965. On December 14, 1965, plaintiff again through its General Attorney, wrote the Board stating that it considered the decision of the Board moot with respect to plaintiff, and further advised that plain tiff did not intend to file a petition for judicial review of said Order. The premise stated 'by plaintiff for this position was that the time for making assessments under sections 2(f) and 8 of the Act had expired on May 31,1964 and “[assessment and collection of the amounts declared to be due from North Western by the Board’s order in this proceeding is, therefore, barred.” On June 29, 1966, the Board through its General Counsel, requested the General Accounting Office to effect collection of $33,776.37 plus interest, from the date of the Board’s decision. During the period February 28,1967 to May 24,1967, the General Accounting Office withheld the total amount of $41,233.85 from revenues otherwise due plaintiff for services rendered. As requested by the Board, and as provided in 20 C.F.E. §345.16 (1971), interest was assessed from June 9, 1965 at the rate of one percent per month or fraction thereof. Plaintiff filed its suit herein on February 25,1970 seeking recovery of these amounts. Plaintiff does not now contest the holding of the Board that the displacement and dismissal allowances paid by plaintiff generally constitute “pay for time lost” for which the Board must be reimbursed under section 2(f). What plaintiff does contest here is the right of the Board, through the General Accounting Office, to withhold the total amount of $41,233.85 from revenues otherwise due plaintiff for services rendered. Plaintiff now contends that the limitations period specified in the three-year statute of limitations provided in 26 U.S.C. § 6501(a) (1970), commenced in the 1950’s when plaintiff actually paid these allowances to its employees, and expired on May 81,1964, the last time extension date agreed upon by the parties. This was some five months prior to the hearing examiner’s report of November 6, 1964, and more than one year before the Board decision of June 9, 1965. Plaintiff contends that the Board proceeding ordered on November 22, 1961 under § 5 (c) of the Act, 45 U.S.C. § 855 (c) (1970), is merely permissive and not mandatory and consequently, neither creates a right for defendant to collect nor tolls the three-year statute of limitations on the right of defendant to collect. Section 8(f) of the Eailroad Unemployment Insurance Act, 45 U.S.C. § 358(f) (1970), authorizes the Board to collect contributions due from railway companies. Further, § 2(f), which states that railroads remunerating employees for time lost shall reimburse the Board for any benefits paid those employees, also provides that such reimbursements shall be collected pursuant to the mechanics established in section 8. Therefore, the requirement of section 8 that collections are “subject to the statute of limitations properly applicable thereto”, covers reimbursements under §2(f). 45 U.S.C. § 358 (e) (1970). Section 8 (h) determines the particular limitations applicable by establishing that all provisions of law (including statutes of limitations) applicable to the Eailroad Eetirement Tax Act also apply to the collection of contributions and reimbursements under § 8(e). The statute of limitations applicable to the Eailroad Eetirement Tax Act is Title 26 of the United States Code, § 6501(a) which establishes a three-year limitation on the collection of taxes, as follows: Except as otherwise provided in this section, the amount of any tax imposed by this title shall be assessed within 3 years after the return was filed (whether or not such return was filed on or after the date prescribed), or, if the tax is payable by stamp, at any time after such tax became due and before the expiration of 3 years after the date on which any part of such tax was paid, and no proceeding in court without assessment for the collection of such tax shall be begun after the expiration of such period. Sections 5 (b) and (c) of the Act, 45 U.S.C. § 355 (b) and (c) (1970) authorized the Board to conduct administrative proceedings such as those herein in order to determine whether plaintiff was required to reimburse the Board. A full reading of subsection (c) shows that it authorizes the Board to make determinations as to whether a company should be required to pay contributions, even though no claims based upon service with such company have been filed. Western Pacific R.R. Co. v. Habermeyer, 882 F. 2d 1003, 1010 (9th Cir. 1967), cert denied 390 U.S. 980 (1968). Plaintiff was a party to and participated in these proceedings. During the hearings plaintiff twice agreed therein with the Board to extend the time for the Board to make assessments involved in the administrative proceedings. Despite its present contention that the three-year statute of limitations had expired on May 31, 1964, plaintiff continued to participate in the Board proceedings. The Board’s examiner filed his report on November 6, 1964, and specific exceptions thereto were subsequently filed by plaintiff and the other railroads. At no time does it appear that plaintiff ever raised its present defense of the statute of limitations during these proceedings. In its decision dated June 9, 1965, the Board adopted, with certain exceptions, the Examiner’s findings of fact and conclusion of law. The Board concluded its decision by stating: The administrative bureaus of the Board are hereby authorized and directed, in making final settlement of the obligations of the 4 Bail roads under this decision, to revise downward (but not upward), without further reference to the Board, the amounts due from the Bail-roads as stated in the findings herein adopted, to correct any clerical errors, errors in computation, etc. which may be brought to their attention. Section 5(g) of the Act (45 U.S.C. § 355(g) (1970)) provides: (g) Finality of Board decisions. Findings of fact and conclusions of law of the Board in the determination of any claim for benefits or refund, the determination of any other matter pursuant to subsection (c) of this section, and the determination of the Board that the unexpended funds in the account are available for the payment of any claim for benefits or refund under this chapter, shall be, except as provided in subsection (f) of this section, binding and conclusive for all purposes and upon all persons, including tbe Comptroller General and any other administrative or accounting officer, employee, or agent of the United States, and shall not be subject to review in any manner other than that set forth in subsection (f) of this section. Subsection 5 (f) of the Act provides for judicial review of a final decision of the Board “only after all administrative remedies within the Board will have been availed of and exhausted * * Certainly, these requirements of the Bailroad Unemployment Insurance Act as to Board hearings, finality of decisions .and exhaustion of administrative remedies establish a clear intent of Congress that these administrative proceedings were mandatory, and not merely permissive. Accordingly, we find that the three-year statute of limitations was tolled by the mandatory administrative proceedings herein. These proceedings began well within the three-year statutory limitations and the right to collect did not accrue to defendant until the final decision of the Board on June 9, 1965. Cf. Nager Electric Co. v. United States, 177 Ct. Cl. 234, 368 F. 2d 847 (1966), cited in Crown Coat Front Co. v. United States, 386 U.S. 503 (1967) ; Friedman v. United States, 159 Ct. Cl. 1, 310 F. 2d 381 (1962), cert. denied 373 U.S. 932 (1963). There is also a serious question in this case whether plaintiff waived the statute of limitations by failing to plead it at any time during the proceedings, in which it participated fully and extensively as a party. Plaintiff was well aware of a defense under the three-year statute of limitations as evidenced by its agreement to extend the time to May 31, 1964. Only after the Board had rendered its decision and after plaintiff had requested, and been granted, an extension of time for appeal, did plaintiff for the first time assert that the Board’s decision was moot because of the three-year statute of limitations. The Board proceedings extended from November 22,1961 to June 9,1965 — over three and a half years. Nowhere in the Board proceedings, even after expiration of the agreed time extension to May 31, 1964, or in the Board decision is there any other reference to the statute of limitations. In bis authoritative treatise on Administrative 1/aw, Yol. 3, sec. 20.06, Professor Davis bas not dealt directly with tbe specific question as to tbe waiver of a statute of limitations by failure to plead it during administrative proceedings, as generally required in civil court actions. However, be points outthat: Many cases support tbe proposition, as stated by the Supreme Court, that “A reviewing court usurps the agency’s function when it sets aside the administrative determination upon a ground not theretofore presented and deprives the Commission of an opportunity to consider the matter, make its ruling, and state the reasons for its action.” [Unemployment Compensation Commission v. Aragon, 329 U.S. 143 (1946)]. 3 Davis, Administrative Law Treatise § 20.06 (1958). Professor Davis further states that this basic idea is embodied in several statutes creating major federal regulatory agencies. For example, the National Labor Eolations Act, 29 U.S.C. § 160(e) (1970) states: “No objection that has not been urged before the Board, its member, agent, or agency, shall be considered 'by the court, unless the failure or neglect to urge such objection shall be excused because of extraordinary circumstances.” See also Securities Exchange Act of 1934,15 U.S.C. § 78y (1970); Fair Labor Standards Act, 29 U.S.C. § 210(a) (1970).

12010451-15289

ORDER ON MOTIONS FOR SUMMARY JUDGMENT SWARTZ, United States Magistrate Judge. THIS CAUSE is before the Court on the Defendants, CORRECTIONAL MEDICAL SERVICES, INC.’s (CMS), JEFF SCHULTZ’S (Schultz) and DON HUNTER’S (Sheriff Hunter) Motions for Summary Judgment. In these motions, the defendants raise the defense of qualified immunity. The Court has carefully reviewed the submissions of the parties. The parties consented to proceed before a United States Magistrate Judge for all proceedings. FACTS ALLEGED IN THE SECOND AMENDED COMPLAINT In the Second Amended Complaint, plaintiff alleges the following facts against the defendant Schultz. On November 5, 1993, Mark J. Douglas was incarcerated in the Collier County Jail awaiting trial. Mr. Douglas met with Schultz whose title and position were as a clinical psychologist. However, Schultz was not licensed in the State of Florida as a clinical psychologist. Both the Intake Record and the Suicide Screening Report indicated that on November 5, 1993, Mr. Douglas was placed on “strict suicide precaution” by Schultz so as to permit him to assess Mr. Douglas’ suicide potential and need for mental health services. The Mental Health Screening Report, prepared and signed by Schultz on November 5, 1993, notes suicide ideation with intent, and a diagnosis of adjustment disorder with depression. The Receiving Screening Form, also dated November 5, 1993 notes a suicide attempt in 1988, mentions that three close friends of Mr. Douglas had committed suicide, and that Mark Douglas “is contemplating suicide.” The form calls for a “later medical referral.” The Intake Mental Health Screening shows no “disposition” ac tion taken. On November 8, 1993, and all times thereafter, Mark Douglas was removed from the suicide watch by Schultz and confined in a general population cell that was not equipped for a known suicidal inmate. Instead, the cell contained several known in-strumentalities for suicides, such as clothing, sheets, towels, and various means and instru-mentalities from which to tie and suspend those items. At the time of his removal from the suicide watch, Mr. Douglas had not been seen by a psychiatrist or any other licensed mental health provider. On December 8, 1993, defendant Schultz saw Mark Douglas and charted that he was upset over his girlfriend’s testimony in court and that he had been thinking of suicide. The diagnosis by Schultz was that Mark Douglas was significantly depressed, had sleep difficulty, and an impaired appetite. Further, Schultz charted that he would assess Mark Douglas the following week. He did not. Nor did Schultz refer Mark Douglas to a psychiatrist or other licensed mental health professional. A progress note by Schultz on December 14, 1993, states that Mark Douglas was mildly dys-phoric but much improved with no suicide ideation. Schultz noted that Mark Douglas declined psychiatric evaluation and Schultz was to monitor Mr. Douglas’ progress. Schultz thereafter never monitored Mark Douglas. Mark Douglas attempted suicide in the Collier County Jail on December 24, 1993, was taken to a hospital and later a nursing home where he remained in a vegetative state until his death on July 17, 1994. The plaintiff alleges that Schultz knew of plaintiffs mental health history, including his prior suicide attempts and knew that there was a substantial risk that Mr. Douglas would attempt suicide. Despite this knowledge, defendant Schultz failed to intervene and provide any assistance to Mark Douglas, failed to refer Mark Douglas to a psychiatrist (or other appropriate mental health professional), failed to provide Mark Douglas with any medication, failed to regularly monitor Mark Douglas’ mental health needs, and, for all practical purposes, simply abandoned Mark Douglas as a patient. According to the plaintiff, all of these allegations amounted to deliberate and callous indifference on the part of Schultz and were the direct and proximate cause of Mr. Douglas’ suicide. In the Second Amended Complaint, the plaintiff alleges the following facts against the defendant CMS. The above actions and omissions of Schultz were taken in accordance with the established policies, practices and procedures of CMS. The officers, servants, agents, employees and contractors of CMS knew of Mark Douglas’ prior suicide attempts and mental health history while in the jail. With that knowledge, the agents, servants and employees of CMS, abandoned Mark Douglas as a patient. CMS is responsible for the policies, practices, procedures and customs which govern the operation of the mental health services at the Collier County Jail. CMS was deliberately indifferent to the serious mental health needs of Mark Douglas in that the policy, practice, procedure and custom in effect at the Collier County Jail, at all times material to this action, permitted a person with no more than a Master’s Degree, and with no professional licenses: (A) to have primary responsibility for the care of seriously mental ill inmates, and to determine (1) when an inmate should be referred to a psychiatrist or other qualified mental health professional, (2) when an inmate with an extensive history of mental health problems should be placed on suicide precautions, (3) when an inmate with an extensive history of mental health problems should be taken off of suicide precautions, (4) when an inmate with an extensive history of mental health problems, and a record of violent crimes, should or should not be deemed a danger to himself or others, and (5) when an inmate with an extensive history of mental health problems should or should not be deemed to be acting in an appropriate manner so as to preclude the need for referral to a psychiatrist; (B) to use his own discretion as to when to consult with the jail psychiatrist, or any other physician, about the mental health status of an inmate with an extensive history of mental health problems; and (C) to decide for himself whether or not to report to the jail psychiatrist, or any other physician, that a patient with an extensive history of mental health problems was expressing thoughts of suicide. In addition, the policy, practice, procedure and custom in effect at the Collier County Jail, at all times material this action, did not require the contract psychiatrist, the jail physician nor any other physician to supervise Schultz. Finally, the plaintiff alleges that these policies, practices, procedures and customs which permit non-medical staff to determine the need for and the course of treatment of an inmate known to have extensive and serious mental health problems are policies, practices, procedures and customs which are deliberately indifferent to the serious medical needs of prisoners. In the Second Amended Complaint, the plaintiff alleges the following facts against the defendant Sheriff Hunter. Sheriff Hunter operated and controlled the Collier County Jail and was under a nondelegable duty to treat and render medical and mental health assistance to all inmates, including decedent Mark Douglas. CMS was under contract with Sheriff Hunter to provide medical and mental health services to inmates in his jail. Sheriff Hunter was negligent in failing to properly supervise and ensure compliance with the contract by CMS and in failing to ensure that properly licensed mental health personnel were fulfilling the terms and conditions of the contract. Sheriff Hunter knew or should have known that CMS and Schultz were not adequately and competently performing this contractual duties to provide mental health services, as evidenced by the recent suicide attempt by at least one other inmate. Sheriff Hunter remains liable for the constitutional deprivations caused by the policies or customs of CMS because he has delegated final decisions to CMS. Therefore the acts, policies and customs of CMS become the official policy of Sheriff Hunter. In addition, Sheriff Hunter was negligent through his failure to properly train his correctional officers and staff to recognize and report the suicidal ideations of inmates. Sheriff Hunter is liable to the plaintiff for the negligence of his officers, agents, servants, employees, and contractors, one or more of who negligently performed their ordinary duties. STANDARD FOR SUMMARY JUDGMENT Under Fed.R.Civ.P. 56(c) a motion for summary judgment is proper “if the pleadings, depositions, answers to interrogatories, and admission on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” The burden of establishing the absence of a genuine material fact is on the moving party. Celotex Corp. v. Catrett, 477 U.S. 317, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986) Once this burden is met the nonmov-ing party must “go beyond the pleadings and by her own affidavits, or by the ‘depositions, answers to interrogatories, and admissions on file,’ designate ‘specific facts showing that there is a genuine issue for trial.’ ” Celotex Corp., 477 U.S. at 324, 106 S.Ct. at 2553. When the nonmoving party fails to make a sufficient showing of an essential element of the case to which the nonmoving party has the burden of proof, the moving party is entitled to a judgment as a matter of law. In making this determination, the Court must view all of the evidence in a light most favorable to the non-moving party and resolve all reasonable doubts in that party’s favor. Spence v. Zimmerman, 873 F.2d 256 (11th Cir.1989), Samples on Behalf of Samples v. City of Atlanta, 846 F.2d 1328, 1330 (11th Cir.1988). The Eleventh Circuit has determined the reasonableness standard: In deciding whether an inference is reasonable, the Court must “cull the universe of possible inferences from the facts established by weighing each against the abstract standard of reasonableness.” [citation omitted]. The opposing party’s inferences need not be more probable than those inferences in favor of the movant to create a factual dispute, so long as they reasonably may be drawn from the facts. When more than one inference reasonably can be drawn, it is for the trier of fact to determine the proper one. WSB-TV v. Lee, 842 F.2d 1266, 1270 (11th Cir.1988). “Thus, if a reasonable fact finder evaluating the evidence could draw more than one infer ence from the facts, and if that inference introduces a genuine issue of material fact, then the court should not grant the summary judgment motion.” Jeffery v. Sarasota White Sox, Inc., 64 F.3d 590 (11th Cir.1995), Augusta Iron and Steel Works, Inc. v. Employers Ins. of Wausau, 835 F.2d 855, 856 (11th Cir.1988). A dispute regarding a material fact is “genuine” if there is sufficient evidence that a reasonable jury could return a verdict for the nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986). The Court must determine if there is a sufficient disagreement of facts to submit the case to the jury or whether it is one-sided and that one party must prevail as a matter of law. Id. at 251-252, 106 S.Ct. at 2511-2512. ANALYSIS SCHULTZ’S MOTION FOR SUMMARY JUDGMENT In his Motion for Summary Judgment, Schultz states that he was entitled to and raised the defense of qualified immunity claiming that the plaintiff has not produced any evidence, expert or otherwise that shows Schultz was deliberately indifferent to the serious medical needs of Mark Douglas or that Schultz was aware of any substantial risk of serious medical harm to Douglas. In a motion for summary judgment, this Court must view the facts in the light most favorable to the plaintiff. Dolihite v. Maughon By and Through Videon, 74 F.3d 1027 (11th Cir.1996). The facts in the instant ease, are very similar to the facts set forth in Dolihite supra and Greason v. Kemp, 891 F.2d 829 (11th Cir.1990). In each of those cases, summary judgment was denied by the District Court and affirmed by the Eleventh Circuit although the Defendants who were the primary care giver raised the defense of qualified immunity. In this case, Schultz, who was not a licensed psychologist, nonetheless was given the authority by CMS, to place or remove inmates from the suicide watch who were in Collier County Jail. Two expert witnesses, both psychiatrists, testified in their depositions that Schultz was not qualified for such a responsibility. Dr. Dennis F. Koson, who is plaintiffs expert stated that Schultz was not qualified to be the sole determiner as to which inmates should see a psychiatrist, and Dr. Daniel J. Sprehe, Sheriff Hunter’s expert, who is a forensic psychiatrist testified in his deposition that Schultz should have obtained a psychiatrist consult for Mr. Douglas or a referral should have been made by CMS. It appears that Schultz was motivated in several respects concerning his handling or mishandling of Mr. Douglas’ case. First, CMS is a private, for-profit company. The policy of private corporations was precisely stated by a District Court in Tennessee: In the case of a private for-profit corporation hired to perform a private function, there is an increased risk that the corporation’s actions will diverge from the public interest ... unlike public employees, corporate employees are always compelled to make decisions that will benefit their shareholders, without any direct consideration for the best interest of the public ... Especially when a private corporation is hired to operate a prison, there is an obvious temptation to skimp on civil rights whenever it would help to maximize shareholder’s profits. Manis v. Corrections Corp. of America, 859 F.Supp. 302 (M.D.Tenn., 1994). It is obvious that CMS as a private contract corporation was in the business of earning money handling the medical attention needed by the inmates of jails throughout Florida and elsewhere, and was responsible to its owners and stockholders to make a profit. CMS’s policies therefore were to take inmates off suicide watch as early as possible to avoid use of extra manpower, and to avoid using the contract psychiatrist unless absolutely necessary. In fact, Schultz was almost fired by his previous supervisor for not taking an inmate off of a suicide watch fast enough. The second motivating factor on the part of Schultz was that he was preparing to leave for his own holiday vacation. Apparently Schultz was so excited about his vacation that he did nothing to warn any of the medical staff about Douglas’s depression or thoughts of suicide, and only left a list of his caseload with one of the nurses. It is clear to this Court from the facts adduced in the case that there were more than sufficient warnings that Mr. Douglas was a serious suicidal risk, and that Schultz chose to ignore those warnings. In the Greason, supra and Dolihite, supra, cases, such actions or non-actions were deemed to constitute deliberate indifference. After viewing the pleadings, depositions and other evidence now before this Court, on Schultz’s claim of qualified immunity, there remains a genuine issue as to material facts concerning whether Schultz was deliberately indifferent to the medical needs of Mark Douglas, and therefore, the motion for summary judgment must be denied. CMS’S MOTION FOR SUMMARY JUDGMENT

6626277-4491

OPINION OF THE COURT Duncan, Chief Judge: A belated rescission of convening - orders leads to a jurisdictional problem in this case. The issue is whether the military judge who served at the trial was properly empowered to act as such in light of a change in orders. The charges against thé accused were originally referred to trial before a court-martial appointed by Court-Martial Convening Order Number 123. This order named Captain Barry P. Steinberg as. military judge. It was subsequently amended by Court-Martial Appointing Order Number 129 to remove Captain Steinberg as military judge and to replace him with Captain M. Scott Magers. The accused then requested trial before a court-martial, the membership of which included enlisted personnel. His case was, therefore, withdrawn from the court previously appointed by Court-Martial Appointing Order Number 123, as amended by Court-Martial Appointing Order Number 129, and referred to a court-martial appointed by Court-Martial Appointing Order Number 133. This order reappointed Captain Steinberg as military judge and added the necessary enlisted men to the court. At the commencement of the trial, the accused elected to withdraw his request for enlisted members.. Captain Steinberg, uncertain of his authority to excuse the enlisted members, recessed the proceedings and directed the trial counsel to contact the convening authority regarding their release. He stated that he assumed the convening authority would excuse the enlisted members and continue with the appointed officers or perhaps add others to the panel. After consulting with the convening authority during a recess, the trial counsel returned and informed the judge: Your Honor, the convening authority has rescinded convening order— court-martial convening order number 133 and leaves the case referred to court-martial convening order number 123. Thereafter, the accused was arraigned on the charges and pleaded not guilty, and the case proceeded to trial on the merits. At the Court of Military Review level, the Government conceded that the court had not been properly constituted, due to the removal of Captain Steinberg by .the amendment to order 123, and requested the findings and sentence be set aside. The Court of Military Review nevertheless examined the record, determined that it was the intent of the convening authority to remove only the enlisted members from the court and to have Captain Steinberg preside. In light of the clear and unambiguous language of the convening orders and the equally clear communication by the trial counsel that order 133 had been rescinded and the case re-referred to the court appointed by order 123, we disagree with the rationale of the Court of Military Review. In this case, the sole evidence of the convening authority’s intent is in the express announcement by the trial counsel of the former’s order rescinding order 133 and directing that the case be tried by the court appointed by order 123. Unfortunately, Captain Steinberg had been removed as military judge of that court by order 129 and replaced by Captain Magers. If we are to presume that the convening authority knew anything, we would have to incline to the view that he was aware that he had so removed Captain Steinberg. But this is not necessary. The convening orders and the trial counsel’s announcement are clear and unambiguous. To attempt from this record to construct an intent on the part of the convening authority that Captain Steinberg be reappointed to the court and serve as a military judge is to engage in nothing short of speculation. This we may not do. Unlike civil courts, courts-martial are creatures of statute and, to retain their jurisdiction, they must be constituted strictly in accordance with the procedures those statutes lay down. McClaughry v Deming, 186 U. S. 49, 55 (1902). Thus, the Supreme Court stated in Runkle v United States, 122 U. S. 543 at 555-6 (1887): A court-martial organized under the laws of the United States is a court of special and limited jurisdiction. It is called into existence for a special purpose, and to perform a particular duty. When the object of its creation has been accomplished it is dissolved. . . . To give' effect to its sentences, it must appear affirmatively and unequivocally that the court was legally constituted; that it had jurisdiction; that all the statutory regulations governing its proceedings had been complied with; and that its sentence was conformable to law.

5709275-6470

BELLONI, District Judge. This action is presently before the court on plaintiffs motion for preliminary injunction. Based upon exhibits in the record and testimony received at a hearing held on May 4, 1981, I make the following findings of fact and conclusions of law pursuant to Fed.R.Civ.P. 52. The underlying facts which give rise to this dispute are largely uncontested. For a number of years, plaintiff Local 162 has represented the employees of a business entitled K-Lines. Likewise, for a number of years intervenor, Local 81, had represented the employees of a business entitled Transport Services. In June, 1979, K-Lines purchased a number of trucks from Transport Services and hired the individuals who had been operating them while owned by Transport Services to continue to operate them. A dispute arose between Local 162 and Local 81 over which local had jurisdiction over the employees of K-Lines, including the ex-Transport Services employees. Pursuant to Article XII, Section 12 of the constitution of the International Brotherhood of Teamsters, Local 81 presented this dispute to the Executive Board of the Joint Council of Teamsters No. 37 for resolution. On July 12, 1979, the Joint Council of Teamsters No. 37 awarded jurisdiction over the K-Lines employees to Local 81. On July 22, plaintiff, Local 162, filed an appeal, as provided for by Article XII, Section 12, with the president of defendant International Brotherhood of Teamsters (IBT). On August 7, 1979, the president of IBT entered a stay of all proceedings pending his resolution of the matter. In August, 1979, Local 81 filed petitions in the National Labor Relations Board (NLRB) requesting that an election be held to determine whether Local 81 or Local 162 would be entitled to represent the employees of K-Lines. Local 162 lodged an objection to this procedure with defendant IBT and asserted that the appropriate manner in which to resolve the dispute was through the internal union appellate process set out in Article XII, Section 12. Defendant IBT directed Local 81 to retract the petitions. Local 81 complied with this directive. Despite the stay of proceedings ordered by the IBT, on September 23, 1979, Local 162 entered into an oral collective bargaining agreement with K-Lines. When defendant IBT was apprised of this fact, it directed Local 162 not to sign the agreement. Local 162 followed this directive and as a result thereof K-Lines filed a petition in the NLRB alleging a failure to bargain in good faith and seeking an order directing Local 162 to sign the collective bargaining agreement. On January 24, 1980, the president of IBT affirmed the decision of Joint Council No. 37 which had awarded jurisdiction over K-Lines employees to Local 81. Thereafter, K-Lines’ petition in the NLRB came up for decision. At no time did Local 162 appear in the NLRB proceeding, instead it allowed a default judgment to be taken against it. Local 81 attempted to intervene in the proceeding, however, its request was denied. It found the Local 162 was “and is now, the lawfully designated exclusive collective bargaining representative” of K-Lines’ employees and that Local 162, by refusing to sign the collective bargaining agreement to which it had agreed, had failed to bargain in good faith. It ordered Local 162 to sign the collective bargaining agreement and to post certain notices which essentially recited that it would no longer fail to bargain in good faith. On November 19, 1980, the Ninth Circuit Court of Appeals enforced the decision of the NLRB. The petition for enforcement was unopposed. On December 3, 1980, Local 162 signed the collective bargaining agreement. In January, 1981, defendant IBT directed Local 162 to comply with its decision, made pursuant to Article XII, Section 12, awarding jurisdiction over K-Lines employees to Local 81. Local 162 can comply with this decision by disclaiming all interest in representing the bargaining unit at issue. Local 162 refused to disclaim. On March 18, 1981, after notice and hearing, IBT suspended Local 162 from participating in the affairs of the International Union for failure to comply with the jurisdictional award. As a result of the suspension, plaintiff Edgars has been suspended from his position on Joint Council No. 37. This is because plaintiff Edgars is a member of Local 162 and a requirement of holding office on a Joint Council is membership in a local which is in good standing with IBT. The testimony at the hearing tended to show that as a result of the suspension plaintiffs were suffering the following harm: 1). Strike benefits from IBT are being denied to members of Local 162 who are on strike. (Currently, only a very small number of individuals are on strike.) 2). Local 162 is being denied use of the union newspaper, except for the purposes of publishing meeting notices. 3). Local 162 will be excluded from the international convention this summer, except for the purpose of appealing the jurisdictional award. 4). The suspension hinders administration of collective bargaining grievance procedures. 5). Plaintiff Edgar can no longer mediate labor disputes. 6). Members of Local 162 and employers with which it has contracts are concerned about its status. I further find that Local 162 could rid itself of the above disadvantageous consequences by complying with IBT’s .request to disclaim any interest in representing the K-Lines bargaining unit. The primary relief which plaintiffs seek through this action is removal of the suspension. They contend that they were justified in refusing to disclaim, because such a disclaimer would violate the judgment of the Ninth Circuit which enforced the NLRB decision. They contend that the suspension is a breach of the union constitution and is a violation of section 101 of the Labor-Management Reporting & Disclosure Act, 29 U.S.C. § 411. “One moving for a preliminary injunction assumes the burden of demonstrating either a combination of probable success and the possibility of irreparable injury or that serious questions are raised and the balance of hardships tips sharply in his favor.” Wm. Inglis & Sons Baking Co. v. ITT Continental Baking Co., 526 F.2d 86 (9th Cir.1975). I do not find that plaintiffs are entitled to preliminary injunctive relief under either of these tests. The harm plaintiffs are suffering is not substantial. Moreover, plaintiffs’ claims appear to have very little chance of probable success on the merits.

9499274-10684

ORDER RANDOLPH BAXTER, Bankruptcy Judge. HPM Corporation (“HPM”) seeks Payment of an Administrative Claim (“Request”). The Chapter 11 Trustee, Mary Ann Rabin (“Trustee”) filed an Objection. The Court acquires core matter jurisdiction over the matter pursuant to 28 U.S.C. §§ 157(a) and (b), 28 U.S.C. § 1334, and General Order Number 84 of this District. Upon the following factual findings and conclusions of law, said request is denied: The Debtor, Visi-Trak, Inc. (“Debtor”), was the manufacturer of sensors, monitors, and control systems employed in the die-casting and plastics industries. (Flicking-er, Direct.) On February 3, 1999, the district court for the Southern District of New York issued an opinion which determined that the Debtor had willfully induced the infringement of certain patents held by one John R. Mickowski (“Mickow-ski”), and accordingly awarded Mickowski a judgment against the Debtor in the amount of $5,998,627. That judgment precipitated the Debtor’s Chapter 11 petition filing on June 15,1999. HPM was a pre-petition trade partner of the Debtor, and continued its trade relationship post-petition. On February 17, 1998, Mickowski filed a Complaint for Patent Infringement against HPM in the Dis trict Court of New Jersey. (Exh. 1.) The gravamen of that Complaint was that HPM willfully infringed upon Mickowski’s patents by using, selling, or offering to sell infringing products, including those of the Debtor. (Rice, Direct.) The procedure by which HPM ordered goods from the Debtor included the completion of a Purchase Order form, the back of which listed “Conditions of Purchase Unless Otherwise Specified.” (Exh. 13.) That form was generated by HPM, and the conditions were drafted by HPM’s attorneys. (Ullom, Direct.) Included in the Conditions of Purchase was the following provision: By accepting this order you agree to defend at your own expense all suits against us or our customers for infringement of any United States patent, copyright or trademark by any material (or manufacture for us or the normal use thereof) covered by this order and will save us or our customers harmless from all expense of defending any such suit and all payments by final judgment therein assessed on account of such infringement except infringement necessary arising from adherence to specifications or drawings which you are directed by us to follow as to such material or residing in parts or supplies furnished by us to you for use hereunder (other than, in each case, items of your design or selection or the same as any of your commercial merchandise). (Exh. 13-2.) Mickowski’s patent infringement action against HPM has not yet been set for trial in the New Jersey District Court, but HPM has reportedly incurred substantial fees and expenses ($86,541.37) in defending that law suit. Based upon the indemnity provisions in the Conditions of Purchase and § 2-312(3) of the Uniform Commercial Code, HPM asserts a claim in the Debtor’s bankruptcy case, though it has filed no proof of claim. The issue before the Court is whether HPM’s incurred legal expenses are entitled to administrative expense status pursuant to § 503(b)(1)(A) of the Bankruptcy Code. Actually, the dispositive issues are threefold: (1) Whether an alleged indemnity claim is entitled to an administrative expense priority under the Bankruptcy Code; (2) Whether HPM has demonstrated any expenses which would qualify as an administrative expense claim; and (3) Whether the conduct between the parties gives rise to an indemnity claim. Section 503(b) provides, in pertinent part: After notice and a hearing, there shall be allowed administrative expenses, other than claims allowed under section 502(f) of this title, including— (1)(A) the actual, necessary costs and expenses of preserving the estate, including wages, salaries, or commissions for services rendered after the commencement of the case. 11 U.S.C. § 503(b). The party asserting administrative expense status bears the burden of proving the applicability of § 503(b) by a preponderance of the evidence. In re Unitcast, Inc., 219 B.R. 741, 746 (6th Cir. BAP 1998); In re Weikel, 1995 WL 126598 (Bankr.N.D.Ohio 1995) (citing General Am. Transp. Corp. v. Martin (In re Mid Region Petroleum, Inc.), 1 F.3d 1130 (10th Cir.1993)). The presumptive validity afforded to properly scheduled or filed claims is not extended to a request for payment of administrative expenses. In re Fulwood Enters., Inc., 149 B.R. 712 (Bankr.M.D.Fla.1993). Application of § 503(b) is guided by two policies. One is “to facilitate the rehabilitation of insolvent businesses by encouraging third parties to provide those business with necessary goods and services.” In re N.P. Mining Co., Inc., 963 F.2d 1449, 1453 (11th Cir.1992). See also United Trucking Serv., Inc. v. Trailer Rental Co., Inc. (In re United Trucking Serv., Inc.), 851 F.2d 159, 161 (6th Cir.1988). On the other hand, another “overriding concern [is] with keeping fees and administrative expenses at a minimum so as to preserve as much of the estate as possible for creditors.” Otte v. United States, 419 U.S. 43, 53, 95 S.Ct. 247, 42 L.Ed.2d 212 (1974). Courts have afforded administrative expense priority under § 503(b) only if: (1) the claim arose from a transaction with the bankruptcy estate; and (2) it directly and substantially benefitted the estate. Pension Benefit Guar. Corp v. Sunarhauserman, Inc. (In re Sunarhauserman, Inc.), 126 F.3d 811 (6th Cir.1997). See also In re White Motor Corp., 831 F.2d 106, 110 (6th Cir.1987); Matter of Jartran, Inc., 732 F.2d 584 (7th Cir.1984); In re Mammoth Mart, Inc., 536 F.2d 950 (1st Cir.1976). “A creditor provides consideration to the bankruptcy estate only when the debtor-in-possession induces the creditor’s performance and performance is then rendered to the estate. If the inducement came from a pre-petition debtor, then consideration was given to that entity rather than to the debtor-in-possession.” White Motor Corp., supra, at 110. Herein, HPM argues that the Debtor is obligated to indemnify HPM’s costs of defense, by virtue of post-petition contracts with the Debtor and U.C.C. § 2-312(3). Further, HPM contends that because that obligation arises partially out of post-petition contracts, it is entitled to administrative expense status. In response, the Trustee argues that HPM should not be entitled to administrative expense priority because: (a) HPM is not a supplier of goods but, rather, is a purchaser; (b) the transactions giving rise to the indemnification were pre-petition; and (c) the payment of HPM’s legal fees would not benefit the bankruptcy estate. Section 2-312(3) of the U.C.C. is codified at § 1302.25(C) in the Ohio Revised Code. It provides: Unless otherwise agreed a seller who is a merchant regularly dealing in goods of the kind warrants that the goods shall be delivered free of the rightful claim of any third person by way of infringement or the like but a buyer who furnishes specifications to the seller must hold the seller harmless against any such claim which arises out of compliance with the specifications. Ohio Rev.Code Ann. § 1302.25(C). In this case, the testimony adduced at the eviden-tiary hearing revealed that HPM regularly added specifications to the orders placed with the Debtor. (Ullom, Court Inq.; Jack Vann, Direct.) Even if HPM could establish that the Debtor holds an obligation to indemnify, it has not met its burden of proof with regard to the administrative expense priority. First, HPM has not proven by a preponderance of the evidence that its claim arose from a transaction with the bankruptcy estate. HPM and the Debtor entered into an ongoing series of contracts, both before and after the Debtor filed its Chapter 11 petition. Each of those contracts contained the Conditions of Purchase. (Ullom, Direct.) HPM seeks reimbursement for the attorney’s fees that are attributable to any infringement arising out of the post-petition contracts. Again, however, with the Mickowski law suit not yet fully adjudicated, HPM cannot demonstrate what fees are attributable to post-petition contracts. The Debtor contends that it altered its product to avoid any infringement after Mickowski obtained his judgment against it on February 3, 1999, approximately four months pre-petition. (Vann, Direct.) In order for HPM to satisfy the first prong of the “benefit to the estate” test, it would need to establish that its claim arose from an infringing product manufactured by the Debtor, without any specifications provided by HPM, and obtained by virtue of a post-petition benefit or contract. See Mammoth Mart, supra; Matter of Baldwin-United Corp., 43 B.R. 443, 453 (S.D.Ohio 1984) (noting that the dispositive date is that of the underlying contract). Regardless of the veracity of its alleged alterations, HPM has not properly established that its claim arises out of post-petition contracts. Second, HPM has not established a clear benefit to the estate. In its brief, HPM cites to a number of cases in support of its proposition that a breach of a post-petition contract or warranty creates an administrative claim. (HPM Brief, 8-11.) The language of § 503(b) does not, however, support such a broad proposition that all breaches of post-petition contracts are to be afforded administrative priority. Rather, interpretations of § 503(b) and other priority sections have required that they be strictly construed. Baldwin-United, supra, at 451 (citing In re Club Dev. & Mgmt. Corp., 27 B.R. 610, 612 (9th Cir. BAP 1982); In re O.P.M. Leasing Servs., Inc., 23 B.R. 104, 121 (Bankr.S.D.N.Y.1982)). HPM argues that simply by maintaining its status as a trade creditor, it has bene-fitted the estate by contributing to the reorganization effort. Courts have often allowed administrative expenses where a supplier of goods or services enters a post-petition contract with a debtor in bankruptcy, but that scenario fulfills the policy of aiding “the rehabilitation of insolvent businesses by encouraging third parties to provide those business with necessary goods and services.” N.P. Mining Co., supra, at 1453. In the present case, however, HPM is the purchaser of goods. It cites to no authority in support of an administrative expense arising out of a purchase from a debtor-in-possession. Further, the claim in this case is one step further removed from the transaction. Whereas a supplier may be granted an administrative expense for the payment for its supplies, in this case the Debtor has already delivered the goods. No administrative expense is necessary to ensure that the trade creditor receives consideration, because the Debtor has already performed.

1034963-7381

J. JOSEPH SMITH, Circuit Judge: Giuseppe Capotorto, a longshoreman, appeals the dismissal by the United States District Court for the Eastern District of New York, John R. Bartels, Judge, of his action for a judgment declaring invalid his purported release of Compañía Sud Americana de Vapores, Chilean Line, Inc. (the defendant) from all claims arising out of an accident which injured him while working aboard defendant’s vessel. We affirm. On October 9, 1972, while working as a longshoreman aboard defendant’s vessel, Capotorto injured his back. His employer, Pittston Stevedoring Corporation, sent him initially to two doctors for treatment and then in November of 1972 to a third, a Dr. Vaccarino, for further examination. All three doctors diagnosed Capotorto’s injury as a lumbosacral sprain. In February of 1973, at the suggestion of the doctor then treating him, Capotorto resumed work as a longshoreman. In June of 1974, however, he had another accident while working on a vessel not belonging to the defendant. At trial he testified that as a result he reinjured his back, but the doctors who examined him after this accident noted injury only to his knee, ankle, and foot. Prior to the 1974 accident, Capotorto sued the defendant on the basis of the injuries sustained in the accident of 1972. But on December 24, 1974, upon the advice of the attorney then representing him, he concededly signed a document purporting to release the defendant from all claims arising out of the 1972 accident in return for $16,-182.57. On March 2, 1976, the court concluded that this document constituted an effective release and dismissed the declaratory judgment action brought by Capotorto to set it aside. On appeal, Capotorto challenges the validity of the release on two grounds. First, he contends that at the time it was signed the parties mistakenly thought that the 1972 accident had resulted in merely a lumbosacral sprain when, in fact, it had resulted in a herniated disc. Capotorto bases this contention on Dr. Vaccarino’s testimony that, after re-examining Capotorto in February of 1975, he concluded that the appellant was suffering from a herniated disc caused by the accident in 1972 and exacerbated by the one in 1974. The district court rejected this testimony, however, stating: The Court concludes that the diagnosis by Dr. Vaccarino in the beginning of 1975 of a herniated disc caused by the 1972 accident and exacerbated by the 1974 accident is not plausible and is not accepted by the Court for the reason that after the October 1972 accident, Dr. Vaccarino diagnosed the injury only as a lumbarsacral [sic] sprain. Moreover, since all the other doctors stated the plaintiff only suffered a knee and ankle injury in the 1974 accident, that [sic] it is very difficult to see how the June 14th, 1974 accident could exacerbate or create a herniated disc condition not theretofore diagnosed. It is to be noted that at the trial no X-rays were offered or produced, nor was a myelogram performed on the plaintiff. The trial court’s conclusion that Capotorto had not suffered a herniated disc because of the 1972 accident was not clearly erroneous. Capotorto failed to establish that his 1972 injury was more serious than he realized when he signed the release on the advice of his then lawyer in December, 1974, or that the lawyer failed to advise him, even though he may have taken only five minutes from a Christmas party to talk with him. He failed to prove any mistake in his then estimation of the extent of his injuries. His lawyer had long and successful experience in the field. His lawyer’s treatment of him, while no model of attorney-client relations, forms no basis for a finding of lack of appreciation of the nature of his claim. Appellant’s argument that the release was predicated upon an erroneous diagnosis of the accident’s consequences therefore fails for lack' of a factual basis. Capotorto also contests the validity of the release on the ground that he would not have signed it had he not been inadequately advised by the attorney then representing him as to possible claims for future sequelae of the injury. Even if there were a factual basis for this argument, it appears to be legally insufficient. Capotorto does not contend that a release should normally be set aside because of the injured party’s reliance upon the inadequate advice of his own attorney. Rather he makes the more narrow two-step argument that a shipowner may not rely upon a release executed by a seaman because of inadequate advice of counsel and that a longshoreman should be treated like a seaman where the validity of a release obtained by a shipowner is in issue. Courts have historically been more hostile to seamen’s releases than to those executed by other workers. Compare, e. g., Garrett v. Moore-McCormack Co., 317 U.S. 239, 248, 63 S.Ct. 246, 87 L.Ed. 239 (1942) and Kelcey v. Tankers Co., 217 F.2d 541, 545 (2d Cir. 1954) with Callen v. Pennsylvania R. R., 332 U.S. 625, 630, 68 S.Ct. 296, 92 L.Ed. 242 (1948), and Ricketts v. Pennsylvania R. R., 153 F.2d 757, 759, 770 (2d Cir. 1946). See also, e. g., Muruaga v. United States, 172 F.2d 318, 320 (2d Cir. 1949); Bartholomew v. Universe Tankerships, Inc., 168 F.Supp. 153, 156-57 (S.D.N.Y.1957), aff’d, 2 Cir., 263 F.2d 437, cert. denied, 359 U.S. 1000, 79 S.Ct. 1138, 3 L.Ed.2d 1030 (1959). In Blanco v. Moran Shipping Co., 483 F.2d 63 (5th Cir. 1973), cert. denied, 416 U.S. 904, 94 S.Ct. 1608, 40 L.Ed.2d 108 (1974), the Fifth Circuit vacated a summary judgment upholding a seaman’s release because some question remained as to whether the seaman’s attorney had sufficient information and afforded him “adequate legal advice.” We need not consider Blanco and other seamen’s cases here, however, since longshoremen do not share with seamen the special problems that may justify the invalidation of releases executed by them because of inadequate advice of counsel. The particularly authoritarian relationship of shipowners and their representatives to seamen and the isolation of the latter from the legal, economic, and psychological support of a landbased community may put the seamen at a serious bargaining disadvantage. Longshoremen, more closely similar to other workers ashore, do not confront these problems. Nor do we think special treatment of longshoremen is dictated by other considerations formerly cited to justify the status of seamen as “wards of admiralty,” such as their alleged propensity toward “rashness” and “credulity,” see, e. g., Brown v. Lull, 4 Fed. Cas. 407, 409 (No. 2018) (C.C.D.Mass.1836); Harden v. Gordon, 11 Fed.Cas. 480, 485 (No. 6047) (C.C.D. Maine 1823), and the United States’ military and commercial interest in protecting its maritime industry, see, e. g., Hume v. Moore-McCormack Lines, Inc., 121 F.2d 336, 346-47 (2d Cir.), cert. denied, 314 U.S. 684, 62 S.Ct. 188, 86 L.Ed. 547 (1941). We note that the Congress, shortly after the accident here, has recognized a difference between the status of seamen and longshoremen in relation to the ship, ending the liability of the ship to longshoremen for personal injuries due to unseaworthiness, while increasing compensation rates for longshoremen’s injuries under the Longshoremen’s and Harbor Workers’ Compensation Act. See Napoli v. Hellenic Lines, Ltd., 536 F.2d 505, 507 (2d Cir. 1976), and cases cited in n.3.

5889965-17248

ORDER (Motion to Dismiss or Motion for a More Definite Statement — dkt. no. 6) MIRANDA M. DU, District Judge. I. SUMMARY Before the Court is Defendant Ramparts, Inc., d/b/a Luxor Hotel Casino’s (“LHC”) Motion to Dismiss or Motion for More Definite Statement. (Dkt. no. 6.) For the reasons stated below, the Motion to Dismiss is granted, and the Motion for a More Definite Statement is denied as moot. II. BACKGROUND Plaintiff Anthony Luu uses a wheelchair for mobility. He alleges that on April 12, 2010, he visited Defendant’s property, Luxor Las Vegas (“Luxor”). When Luu arrived, he requested an ADA accessible guest room. He was assigned East Tower Room 7337, which Defendant states is an ADA accessible room with a shower chair. When Luu used the shower, his disability caused him to shake and fall off the shower chair. Luu reported the incident to Defendant. He received medical assistance and was reassigned to an ADA accessible room with a roll-in shower and tub. Plaintiff sued, alleging that the existing conditions at the Luxor violate the ADA Accessibility Guidelines for buildings and facilities (“ADAAG”). See 28 C.F.R. § 36; 28 C.F.R. pt. 36, App. A. Plaintiff alleges that Defendant’s facility violates ADAAG guidelines concerning (1) entrance access and path of travel; (2) access to goods and services; and (3) access to guest rooms. Plaintiff also brings one count of violation of the Nevada ADA and one count of negligence. (See dkt. no. 1.) Defendant moves to dismiss the Complaint under Federal Rule of Civil Procedure 12(b)(1), arguing that Plaintiff lacks standing to bring this lawsuit. III. MOTION TO DISMISS A. 12(b)(1) Legal Standard Rule 12(b)(1) of the Federal Rules of Civil Procedure allows defendants to seek dismissal of a claim or action for a lack of subject matter jurisdiction. Dismissal under Rule 12(b)(1) is appropriate if the complaint, considered in its entirety, fails to allege facts on its face that are sufficient to establish subject matter jurisdiction. In re Dynamic Random Access Memory (DRAM) Antitrust Litigation, 546 F.3d 981, 984-85 (9th Cir.2008). Although the defendant is the moving party in a motion to dismiss brought under Rule 12(b)(1), the plaintiff is the party invoking the court’s jurisdiction. As a result, the plaintiff bears the burden of proving that the case is properly in federal court. McCauley v. Ford Motor Co., 264 F.3d 952, 957 (9th Cir.2001) (citing McNutt v. General Motors Acceptance Corp., 298 U.S. 178, 189, 56 S.Ct. 780, 80 L.Ed. 1135 (1936)). Federal courts are courts of limited jurisdiction. Owen Equip. & Erection Co. v. Kroger, 437 U.S. 365, 374, 98 S.Ct. 2396, 57 L.Ed.2d 274 (1978). “A federal court is presumed to lack jurisdiction in a particular case unless the contrary affirmatively appears.” Stock West, Inc. v. Confederated Tribes of the Colville Reservation, 873 F.2d 1221, 1225 (9th Cir.1989). Thus, federal subject matter jurisdiction must exist at the time an action is commenced. Mallard Auto. Grp., Ltd. v. United States, 343 F.Supp.2d 949, 952 (D.Nev.2004). Defendant brings a factual attack on the Complaint. Attacks on jurisdiction pursuant to Rule 12(b)(1) can be either facial, confining the inquiry to the allegations in the complaint, or factual, permitting the court to look beyond the complaint. See Savage v. Glendale Union High Sch., 343 F.3d 1036, 1039 n. 2 (9th Cir.2003). “In a facial attack, the challenger asserts that the allegations contained in a complaint are insufficient on their face to invoke federal jurisdiction. By contrast, in a factual attack, the challenger disputes the truth of the allegations that, by themselves, would otherwise invoke federal jurisdiction.” Safe Air for Everyone v. Meyer, 373 F.3d 1035, 1039 (9th Cir.2004). Once a moving party has converted the motion to dismiss into a factual motion by presenting affidavits or other evidence properly brought before the court, the party opposing the motion must furnish affidavits or other evidence necessary to satisfy its burden of establishing subject matter jurisdiction. Savage, 343 F.3d at 1040, n. 3 (citing St. Clair v. City of Chico, 880 F.2d 199, 201 (9th Cir.1989)); see also Trentacosta v. Frontier Pacific Aircraft Industries, Inc., 813 F.2d 1553, 1559 (9th Cir.1987) (stating that on a factually attacked 12(b)(1) motion to dismiss, the non-moving party’s burden is that of Rule 56(e)). However, on a factual attack, the court may not “resolve genuinely disputed facts where the question of jurisdiction is dependent on the resolution of factual issues going to the merits.” Kohler v. CJP, Ltd., 818 F.Supp.2d 1169, 1172 (C.D.Cal. 2011) (citations and quotation marks omitted). B. Standing and the ADA 1. Legal Principles “Though its purpose is sweeping ... and its mandate ‘comprehensive,’ 42 U.S.C. § 12101(b)(1), the ADA’s reach is not unlimited. Rather, as with other civil rights statutes, to invoke the jurisdiction of the federal courts, a disabled individual claiming discrimination must satisfy the case or controversy requirements of Article III by demonstrating his standing to sue at each stage of the litigation.” Chapman v. Pier 1 Imports (U.S.) Inc., 631 F.3d 939, 946 (9th Cir.2011) (citing U.S. Const, art. Ill, § 2; Lujan v. Defenders of Wildlife, 504 U.S. 555, 560, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992); (remaining citation omitted; ellipses added)). To establish standing, Luu must “demonstrate that he has suffered an injury-in-fact, that the injury is traceable to the [Defendant’s] actions, and that the injury can be redressed by a favorable decision.” See Chapman, 631 F.3d at 946. Only the first element, injury-in-fact, is at issue here. “The existence of federal standing ‘often turns on the nature and source of the claim asserted.’ ” Chapman, 631 F.3d at 947 (quoting Warth v. Seldin, 422 U.S. 490, 500, 95 S.Ct. 2197, 45 L.Ed.2d 343 (1975)). “Under the ADA, when a disabled person encounters an accessibility barrier violating its provisions, it is not necessary for standing purposes that the barrier completely preclude the plaintiff from entering or from using a facility in any way.” Id. (Citing Doran, 524 F.3d at 1041, n. 4 (stating that the ADA “does not limit its antidiscrimination mandate to barriers that completely prohibit access”)). “Rather, the barrier need only interfere with the plaintiffs ‘full and equal enjoyment’ of the facility.” Chapman, 631 F.3d at 947 (citing 42 U.S.C. § 12182(a)). In fact, “[o]nce a disabled individual has encountered or become aware of alleged ADA violations that deter his patronage of or otherwise interfere with his access to a place of public accommodation, he has already suffered an injury in fact traceable to the defendant’s conduct and capable of being redressed by the courts, and so he possesses standing under Article III.... ” Doran, 524 F.3d at 1042, n. 5. A barrier “will only amount to such interference if it affects the plaintiffs full and equal enjoyment of the facility on account of his particular disability.” Chapman, 631 F.3d at 947. “Because the ADAAG establishes the technical standards required for ‘full and equal enjoyment,’ if a barrier violating these standards relates to a plaintiffs disability, it will impair the plaintiffs full and equal access, which constitutes discrimination under the ADA.” Id. (internal quotation marks omitted). “That discrimination satisfies the ‘injury-in-fact’ element of Lujan.” Id. “As [the Ninth Circuit has] held, once a disabled plaintiff has encountered a barrier violating the ADA, that plaintiff will have a personal stake in the outcome of the controversy so long as his or her suit is limited to barriers related to that person’s particular disability.” Id. (internal quotation marks and citations omitted). “Damages are not recoverable under Title III of the ADA-only injunctive relief is available for violations of Title III.” Wander v. Kaus, 304 F.3d 856, 858 (9th Cir.2002). Moreover, “[although encounters with the noncompliant barriers related to one’s disability are sufficient to demonstrate an injury-in-fact for standing purposes, a plaintiff seeking injunctive relief must additionally demonstrate ‘a sufficient likelihood that he will again be wronged in a similar way.’ ” Chapman, 631 F.3d at 948 (citing Lyons, 461 U.S. at 111, 103 S.Ct. 1660). “That is, he must establish a ‘real and immediate threat of repeated injury.’ ” Id. (quoting Lyons 461 U.S. at 102, 103 S.Ct. 1660 (other citation omitted)). 2. Analysis An ADA Title III plaintiff may establish standing in one of two ways: (1) demonstrating an intent to return to a noncompliant accommodation; or (2) demonstrating that s/he is deterred from visiting a noncompliant public accommodation because s/he has encountered barriers related to his/her disability there. Chapman, 631 F.3d at 949. a. Intent to Return Defendant first argues that Luu lacks standing because he fails to demonstrate an intent to visit the Luxor and encounter the alleged ADA violations again. Importantly, isolated, past incidents of ADA violations do not support an inference that a plaintiff faces a real and immediate threat of continued, future violations of the ADA in the absence of injunctive relief. See Midgett v. Tri-Cnty. Met. Trans. Dist. of Or., 254 F.3d 846, 850 (9th Cir.2001). Plaintiff has not demonstrated an intent to return to the Luxor. Plaintiffs affidavit contains only conclusory statements about Plaintiffs plans to return to the Luxor. He states that he plans on revisiting the Luxor on “a spontaneous but fair and equal basis.” (Dkt. no. 8-1 at ¶ 3.) He continues, stating “Las Vegas is an exciting city, it is not too far away from my home in California and I believe many people travel from California to Las Vegas on a ‘spontaneous’ basis,” (id. at ¶ 4) and that “[t]he Luxor is an exciting facility and fits with my desire for a hotel in Las Vegas which I can sometimes get away without traveling very far.” (Id.) In Norkunas v. Wynn Resorts Holdings, LLC, 2:07CV00096-RLH-PAL, 2007 WL 2949569, at *1 (D.Nev. Oct. 10, 2007), affd sub nom. Norkunas v. Wynn Las Vegas, LLC, 343 Fed.Appx. 269 (9th Cir.2009), plaintiff Norkunas alleged that he experienced a series of ADA violations at defendant’s property. Defendant brought a factual attack under Fed.R.Civ.P. 12(b)(1). Id. at *2. The Court held that Norkunas and the other plaintiffs had not provided facts in the form of an affidavit or other evidence demonstrating an intent to return to the property. Id. at *3. The Court noted that the plaintiff did not present “any evidence, or even argument, of a definite and concrete plan” to return to the Wynn. Id. The Court cited the Supreme Court’s holding in Lujan, 504 U.S. at 564, 112 S.Ct. 2130, noting that “ ‘some day’ intentions — without any description of concrete plans, or indeed even any specification of when the some day will be — do not support a finding of [ ] ‘actual or imminent’ injury.” Id. (emphasis in Lujan; brackets in Norkunas.) Though Norkunas and the other plaintiffs there alleged “in their Amended Complaint that they desire[d] to use the goods and services of Wynn Las Vegas ..., a mere expressed desire does not, by itself, imply an intent to return.” Id. (citing Tandy v. City of Wichita, 380 F.3d 1277, 1288 (10th Cir.2004)). “[F]ailure to respond to [defendants’ substantive attacks constitutes a concession to their truth.” Norkunas, 2007 WL 2949569, at *3. In Norkunas, the court determined that merely stating their intent to return to the Wynn Las Vegas was not an adequate response to the defendant’s 12(b)(1) factual attack on standing. Id. Likewise here, Luu’s representation that he may travel from his home in California to Las Vegas on a “spontaneous” basis (dkt. no. 8-1 at ¶ 4) and that he may stay at the Luxor on “a spontaneous but fair and equal basis” (id. at ¶ 3) demonstrates no more than a desire to return to the Luxor. Luu’s affidavit contains classic “some day,” non-concrete plans to stay at the Luxor, and these statements accordingly cannot survive Defendant’s Motion. Accord Lujan, 504 U.S. at 564, 112 S.Ct. 2130. Contra Fiedler v. Ocean Properties, Ltd., 683 F.Supp.2d 57, 71-73 (D.Me.2010) (holding that the plaintiffs sworn affidavit testimony stating that he intended to spend a summer vacation staying at the defendant’s hotel if and when it was brought into ADA compliance sufficed to establish standing for the purposes of summary judgment). b. Deterred from Visiting Plaintiffs affidavit statements about deterrence are substantially similar to his statements about his intent to return there. For example, Luu states that he intends “to once again stay at” the Luxor “on a spontaneous but fair and equal basis if it can be made accessible between now and the next time” he visits. (Dkt. no. 8-1 at 2.) The Pickern v. Holiday Quality Foods Inc. court held that the plaintiff was deterred from visiting defendant’s store and had standing where the plaintiff had visited the defendant’s store “in the past and state[d] that he ha[d] actual knowledge of the barriers to access at that store[,] [and stated that he] preferred] to shop at [defendant’s property] and that he would shop at the [store] if it were accessible.” 293 F.3d 1133, 1137-38 (9th Cir.2002) (citing for the purposes of comparison Dudley v. Hannaford Bros. Co., 146 F.Supp.2d 82, 86 (D.Me.2001) (disabled plaintiff alleged actual injury where he evinced a desire to patronize a store that had discriminated against him in the past and had not changed its discriminatory policies or practices ...) with Moreno v. G & M Oil Co., 88 F.Supp.2d 1116, 1116 (C.D.Cal.2000) (disabled plaintiff could not show actual injury with respect to defendant’s other gas stations, because plaintiff “[did] not claim he want[ed] to visit the other stations, or will ever do so.”); see also Parr v. L & L Drive-Inn Restaurant, 96 F.Supp.2d 1065, 1079-80 (D.Haw.2000) (disabled plaintiff established likelihood of future injury by submitting evidence that he would like to visit defendant’s restaurant in the future, had patronized other restaurants in the chain, and the restaurant was close to his residence and was on a familiar bus line) (remaining citation omitted)). Conversely, the plaintiff in Johnson v. Overlook at Blue Ravine, LLC, stated that defendant’s ADA violations deterred him from returning to the property and that he would like to return once the property was ADA-compliant. 2:10-CV-02387, 2012 WL 2993890, at *4 (E.D.Cal. July 20, 2012). Because the plaintiff merely stated that he was deterred from returning, and presented no corroborating evidence to support this contention, the court determined that he was not in danger of an “imminent injury,” and lacked standing. Id. at *4-5. Luu has not presented evidence that he is deterred from returning to the Luxor because of its ADA non-compliance. Unlike the plaintiffs in Pickem and Dudley, Luu does not state that he has visited the Luxor at any other time. See Pickem, 293 F.3d at 1137-38; Dudley, 146 F.Supp.2d at 86. Unlike the plaintiffs in Pickem and Parr, Luu cannot demonstrate that he either prefers to stay at the Luxor or that it is the most convenient hotel and casino location for him. See Pickem, 293 F.3d at 1137-38; Parr, 96 F.Supp.2d at 1079-80. Finally, Luu cannot demonstrate that the Luxor has discriminated against him in the past and failed to change its discriminatory practices and/or policies, as the plaintiff in Dudley demonstrated. See 146 F.Supp.2d at 86. Rather, like the plaintiff in Johnson, Luu merely states that he is aware of the ADA barriers at the Luxor and will stay there on a “spontaneous but fair and equal basis” should the property be made accessible. Accord Johnson, 2012 WL 2993890, at *4; (dkt. no. 8-1 at ¶ 8). This is not sufficient evidence to demonstrate that Luu is in danger of suffering an “imminent injury.” Accord id. C. State Law Claims Both parties agree that this Court has supplemental rather than original jurisdiction over Plaintiffs state law claims. (Dkt. nos. 6 at 12 and 8 at 9.) Plaintiff presents no argument regarding why this Court should retain jurisdiction over the state law claims should the federal claims be dismissed. (See dkt. no. 8 at 9.) The Court accordingly dismisses Plaintiffs state law claims without prejudice to their filing in state court. See 28 U.S.C. § 1367(c)(3); Warren v. Fox Family Worldwide, Inc., 328 F.3d 1136, 1139, 1143 n. 7 (9th Cir.2003). D. Remaining Issues The parties briefed two additional issues not discussed herein: (1) Luu’s standing to challenge barriers unrelated to his specific disability, and (2) whether Luu should file a more definite statement. This Order moots both of these issues. IV. CONCLUSION IT IS HEREBY ORDERED that Defendant’s Motion to Dismiss (dkt. no. 6) is GRANTED. Plaintiffs Complaint is DISMISSED WITHOUT PREJUDICE as to his federal cause of action. Plaintiffs Complaint is DISMISSED WITHOUT PREJUDICE as to his state law causes of action. Plaintiff may file a complaint containing these causes of action in state court. IT IS FURTHER ORDERED that Defendant’s Motion for a More Definite Statement (dkt. no. 6) is DENIED AS MOOT. The Clerk of the Court is HEREBY ORDERED to close this case.

1690945-7888

KILLITS, District Judge. In May, 1919, a paper manufacturing company made to the appellee, the Equitable Trust Company of New York, as trustee, its mortgage and deed of trust, with an after-acquired property clause, securing the payment of certain first mortgage bonds. The instrument was duly filed, both as a real estate and chattel mortgage. A short time thereafter the appellants severally entered into contracts with the paper company for the extension of existing automatic sprinkler systems. Each contract contained the usual conditional sale clause. It was also provided in each that the vendor, however, was privileged at any time to change the conditional sale to an absolute sale, and thereupon to pursue any statutory or other remedy applicable to the situation. Later other mortgages were placed upon the paper company’s properties. Subsequent to the foregoing transactions, a creditor’s bill was filed against the paper company in the District Court, upon which, with the consent of the defendant, a receiver was appointed. Shortly thereafter, and in March, 1921, each of the appellants filed with the recorder of the proper county affidavits for mechanics’ liens on the property, of the paper manufacturing company, based upon the contracts of sale of the materials for the extension of the respective sprinkler systems above referred to. In March, 1922, a special master commissioner was named and empowered to hear and determine the questions of existence, validity, extent, and priority of all claims presented to the receiver and submitted by him, or whieh might he presented to the master by other persons, companies or corporations claiming to be creditors of the paper company. The master was directed to report his findings and conclusions of fact and law for the consideration of the court. The appellants each filed with the special master claims based solely upon their respective mechanics’ liens, and each appeared before the special master and offered proof of its lien claims. The special master found that the appellants were, severally, entitled to liens for the full amount of their respective contract claims; but that these liens were subject to the prior mortgage liens of the appellee, the Equitable Trust Company of New York, as trustee, and to certain other mortgages. His report was filedi May 31, 1923. To it neither of the appellants excepted in any way. More than a year thereafter the Equitable Trust Company, as trustee, commenced an action in foreclosure in the same court, whereupon a consolidation was had of the two causes. Following the commencement of the second proceeding, and in January, 1925, each of the appellants caused to be verified and, filed with the county recorder of the proper county the contracts of sale in question, in an attempt to perfect conditional sale liens under the law of Ohio, and thereupon each of the appellants filed answers and cross-petitions to the complaint of the Equitable Trust Company, setting forth their respective claims as secured by conditional sale liens, praying for the repossession of the apparatus described in the several contracts. In the consolidated case a special master was also appointed, who reported, among other things, that that part of the sprinkler system which was involved in the several conditional sales contracts might be considered to be chattel property, hut that, quoting from the record, “whether their nature has beep changed from chattels to fixtures by any action of the Grinnell Company and the Fire Extinguisher Company is a question to be determined by the court and is not within the province of your special master.” In decreeing foreclosure, the court held that the liens of the Equitable Trust Company of New York and of a certain second mortgagee were superior to the rights of the appellants, General Fire Extinguisher Company and the Grinnell Company, as set forth in their several answers and cross-petitions, and refused to order the receiver to surrender possession of the apparatus to the several appellants as demanded therein. From this situation came .the appeal before the court. We must hold that the rights of the appellants and the status of their respective claims were fixed by the taking of mechanics’ liens in 1921, followed by the prosecution of these claims as protected hy mechanics’ liens before the first special master. By reason of the failure of appellants to except to that master’s report, the findings became established under equity rule 66. It was not until nearly two years had elapsed from the filing of this report, and, indeed, four years after appellants had severally asserted material-men’s liens upon the property, that they sought upon the same claims the privileges of the Ohio conditional sales law. Under the circumstances, the action of appellants, in taking peehanics’ liens in 1921¿ followed by an assertion of such liens before' the special master, and by acceptance of his findings of the establishment of such liens, worked an irrevocable election by appellants to abandon rights under the conditional sales law. Van Winkle v. Crowell, 146 U. S. 42, 51, 13 S. Ct. 18, 36 L. Ed. 880; Fire Protection Co. v. Hawkeye Tire & Rubber Co. (C. C. A.) 8 F. (2d) 810, 813, 45 A. L. R. 180. This, we think, was not, as claimed, “but an assertion of an additional remedy consistent with the terms of conditional sales contract,” for a remedy through the assertion of a materialman’s lien is inconsistent with a claim to the same materials through a conditional sale contract. Appellants, neither by law nor by the terms of their contract, could, generally, enjoy both as concurrent rights, and an election to pursue one, followed by effective steps to establish it, necessarily worked an abandonment of the other. This ease is easily distinguishable upon the facts from Bierce v. Hutchins, 205 U. S. 340, 347, 27 S. Ct. 524, 525 (51 L. Ed. 828). There the holding was simply that “the assertion of a lien by one who has title, so long as it is only an assertion and nothing moré, is merely a mistake. It does not purport to be a choice, and it cannot be one because the party has no right to choose.” This language aeeords with the facts as they existed in that case. There the vendor company, holding a conditional sale contract, had indeed asserted a materialman’s lien, and had actually brought an action to enforce it; but this action was dismissed without anything having been done under it, and the vendor subsequently undertook to rely upon its assertion of title. The court points out the inability of the vendor in that ease to force title upon the vendee, a party to a conditional sale contract, without the latter’s consent. Here, however, the appellants not only asserted a merchanie’s lien, but established it by aetive proceedings before the master. Again, it cannot be said that in the instant case the vendee could not have been compelled to accept title, for the paper company had actually stipulated to do that very thing, if that were the election of the vendor. The contracts have almost identical provisions, differing only in a very slight degree in phraseology. We quote from that of the General Eire Extinguisher Company: “This [vendor] company, however, being privileged at any time to change this conditional sale to an absolute sale, and thereupon to pursue any statutory or other remedies in such ease made and provided.” Action, to a finding, under this privilege, we think, worked an effective election, and made it impossible for appellants to take any position subsequently inconsistent therewith. In re Levin, Kronenberg & Co. (C. C. A.) 220 F. 451, 452; Fire Protection Co. v. Hawkeye Tire & Rubber Co., supra; Robb v. Vos, 115 U. S. 13, 42, 15 S. Ct. 4, 39 L. Ed. 52; Van Winkle v. Crowell, supra; Grand Rapids Trust Co. v. American Woodworking Machinery Co. (C. C. A.) 5 F.(2d) 812.

1119497-9764

SIMONS, Circuit Judge. The questions involved in this appeal relate to the coverage and the constitutional validity of the Renegotiation Act of April 28, 1942, 56 Stat. 226, 245, as amended by the Revenue Act of 1943, the Act of February 25, 1944, 58 Stat. 21, 78, 50 U.S.C.A. Appendix, § 1191. The appeal is from a summary judgment entered in favor of the government against the appellants for the recovery of excessive profits made under subcontracts on construction work done for the War Department. The appellants reside in Cincinnati and their partnership will be referred to as Southern. In 1942 Southern was a subcontractor in nine subcontracts awarded to it after competitive bidding, for the construction of buildings and facilities. The prime contracts likewise resulted from such bidding. On October 20, 1944, Robert P. Pat terson, then Undersecretary of War, issued an order pursuant to the Renegotiation Act, determining that Southern had realized, during 1942, excessive -profits of $70,000 on its subcontracts, and directed it to pay into the Treasury the amount of such excessive profits less a tax credit of $42,980.61. Southern filed no petition with the Tax Court for a redetermination of the Undersecretary’s order, and the time for filing such petition has long since expired. Of the nine contracts involved, four were executed prior to April 28, 1942, the date of the original Renegotiation Act, and the remaining five were executed prior to October 21, 1942 the date of the initial amendment to the Renegotiation Act. Of the nine contracts involved, only two were i-n an amount in excess of $100,000 and were executed prior to April 28, 1942. The remaining seven were for amounts less than $100,000. Southern having failed to comply with an order of the Undersecretary of War to repay the determined excessive profits to the government, the United States brought suit for recovery. Southern defended on the ground that all of the subcontracts were specifically exempt from renegotiation by the terms of the Act, as amended; that in any event its contracts executed prior to April 28, 1942 and those less in principal amount than $100,000 were not renegotiable; and finally, that the Renegotiation Act" is unconstitutional. The district court held the Renegotiation Act as originally enacted, and as subsequently amended, to-be a constitutional exercise of the war powers of the Congress, that it applied to excessive profits realized under contracts entered into prior to April 28, 1942, and as so applied was likewise constitutional; that the failure of the appellants to seek a review de novo in the Tax Court of the United States, of the Undersecretary of War’s determination of excessive profits as provided by § 403 (e) (2) of the Renegotiation Act, foreclosed the appellants from asserting their defenses, other than the constitutional invalidity of the Act, in the District Court of the United States. Southern’s contention that the district court had jurisdiction to consider all of its defenses, derives from the chronological sequence of the Act and its amendments, and rests specifically upon the phrasing of the amendatory provisions of §§ 403(e)(2) and 403(c) of the Revenue Act of 1943. It points out that prior to that amendment the rights of any person involved in renegotiation procedures were the same as in reference to other statutes, so that the validity of any claim or defense could be determined in a judicial proceeding. This is made clear, it says, by the fact that the original bill before the Congress contained a provision prohibiting a contractor from going into the courts, which was stricken before its passage. It also points out that the requirement, if it be a requirement, that a contractor submit his claims to the Tax Court of the United States, first appeared in the Revenue Act of 1943, enacted February 25, 1944, and that its contracts, all being part of its 1942 business, were not thereby affected. . A proper appraisal of this contention requires consideration of the terms of the amendment. Section 403(e)(2) provides: “Any contractor or subcontractor * * * aggrieved by a determination of the Secretary made prior to the date of the enactment of the Revenue Act of 1943, with respect to a fiscal year ending before July 1, 1943, as to the existence of excessive profits, which is. not embodied in an agreement with the contractor or subcontractor, may, within ninety days * * * after the date of the enactment of the Revenue Act of 1943, file a petition with the Tax Court of the United States for a redetermination thereof, and any such contractor or subcontractor aggrieved by a determination of the Secretary made on or after the date of the enactment of the Revenue Act of 1943, with respect to any such fiscal year, as to the existence of excessive profits, which is not embodied •in an agreement with the contractor or subcontractor, may, within ninety days * • * * after the date of such determination, file a petition with The Tax Court of the United States for. a redetermination thereof.” - It urges that this language is permissive and not mandatory, and that this is made clear by contrast with the phrasing of § 403(c), which is as follows: “* * * If the Board does not make an agreement with respect to the elimination of excessive profits received or accrued, it shall issue and enter an order determining the amount, if any, of such excessive profits, and forthwith give notice thereof by registered mail to the contractor or subcontractor. In the absence of the filing of a petition with The Tax Court of the United States under the provisions of and within the time limit prescribed in subsection (e)(1), such order shall be final and conclusive and shall not be subject to review or redetermination by any court or other agency * * It urges also that by § 403(c)(6) the application of subsection (c) is limited to amounts received or accrued for fiscal years ending after June 30, 1943, the provision being in the following language: “This subsection shall be applicable to all contracts and subcontracts, to the extent of amounts received or accrued thereunder in any fiscal year ending after June 30, 1943, * * •* ”. From this comparison of sections it is argued that, in the absence of the filing of a petition with the Tax Court, the order that is by § 403(c) declared to be final and conclusive and not subject to review or determination by any court, applies only to amounts received or accrued under renegotiable contracts for fiscal years ending after June 30, 1943. Even were the question open it would not be difficult to reject this contention. Section 403(e) (1) of the Act provides that the Tax Court “ * * * shall have exclusive jurisdiction, by order, to finally determine the amount, if any, of such excessive profits * * *.” In conferring jurisdiction upon a court or administrative tribunal it is neither novel nor unusual to use the term “may” in referring to the right of an aggrieved person to initiate proceedings. Indeed, a mandatory term such as “shall,” would be in negation of the clear purpose of the Congress, for in conferring upon persons the right to avail themselves of remedies, the Congress does not undertake to compel them to do so, and if an option is implicit in the term “may,” it is an option not as between the Tax Court and a constitutional court, but an option to seek or refrain from seeking review, and so to abide the administrator’s determination. Moreover, it is incongruous to suggest that a procedure which is to be final and conclusive and not subject to review or redetermination by any court, permits avail to a court from which appeals lie, extending in some cases even to review by the Supreme Court of the United States. But the question is not open. It was settled, in so far as present issues are concerned, by Macauley v. Waterman SS Corp., 327 U.S. 540, 66 S.Ct. 712, in reliance upon Myers v. Bethlehem Shipping Corp., 303 U.S. 41, 58 S.Ct. 459, 82 L.Ed. 638. There it was held, in rejecting argument similar to that here presented, that § 403(e)(1) confers power upon the Tax Court to decide questions of coverage, for a decision as to what are and what are not negotiable contracts is an essential part in determining the amount of a contractor’s excessive profits, an the legislative history of the Renegotiation Act shows that the Congress intended the Tax Court to have jurisdiction to decide questions of fact and law. The latter included the issue raised there as it includes the issues raised here. The Waterman case is even broader than that in its scope, for even were we to concede that the language of the jurisdictional grant to the Tax Court is permissive rather than mandatory, Southern would still be foreclosed in presenting its claims or defenses in the district court, by the application made in the Waterman case of the rule which requires a litigant, before resorting to judicial remedies, to exhaust his administrative remedies. Of similar import is United States v. Ruzicka, 67 S.Ct. 207, 211. There, in considering the general scheme of the Agricultural Act of 1937, 7 U.S.C.A. 601 et seq., it was said, “This is not Stark v. Wickard, 321 U.S. 288, 64 S.Ct. 559, 88 L.Ed. 733. In that case it was concluded that since Congress had provided no administrative remedy for a producer to review the legality of an order against him, presumably the courts were not closed to him. But by § 8c(15) Congress has made precisely such provisions for handlers. As to them the procedural scheme is complete.” If the Renegotiation Act is a constitutional exercise of the war powers of the government and was in this case constitutionally applied, the district court was right in granting summary judgment.

439014-5790

FOLEY, District Judge. On December 31, 1956, James A. Ziarno, while acting within the scope of his government employment, and driving a Dodge truck owned by the United States of America, was involved in a collision with an automobile owned and operated by Edward T. Chamberlain. This common-type accident ordinarily follows simple legal procedure for solution although at times the issues of negligence, contributory negligence and damages may be bitterly contested. However, despite the simple factual situation outlined, complexity is created by a varied series of legal maneuvers. Chamberlain sued Ziarno in Supreme Court, Saratoga County, for personal injuries. His collision insurance carrier, American Fidelity Fire Insurance Company, sued Ziarno in Chamberlain’s name for the property damage involved in County Court, Albany County. At first the attorneys for the plaintiff here, Government Employees Insurance Company, filed an answer for Ziarno in the Sara-toga action, but later disclaimed on the ground that the policy of insurance issued by it to Ziarno did not cover him for bodily injury liability and property damage liability because of the special provisions of the policy and endorsement. Such coverage is the problem presented to me. Next, Chamberlain instituted in this Court an action against the United States under the Federal Tort Claims Act, 28 U.S.C.A. §§ 1346, 2671-2680, for the same injuries and damages he claimed in his State action. The American Fidelity Fire Insurance Company, now in its own name as assignee, sued the United States under the same Act in this District Court for the same property damages claimed in the Albany County Court. Thus we now have four actions pending. The plaintiff Insurance Company filed a suit in this Court under the Federal Declaratory Judgment Act, 28 U.S.C.A. §§ 2201, 2202, requesting mainly a declaration and interpretation of its responsibility to Ziarno as to coverage under the terms of its policy issued to him. Based upon this suit, the United States Attorney, acting in behalf of named defendant, Ziarno, moves for summary judgment requesting construction of the policy in his favor as to coverage and the plaintiff moves for summary judgment as to the relief requested in its declaratory judgment complaint. Chamberlain and American Fidelity Fire Insurance Company seem only to be waiting on the sidelines for decision, because although their attorneys participated in the oral argument no affidavits in opposition to either contention here or briefs are filed in their behalf. The suit by the Plaintiff for declaratory judgment under these circumstances is a proper one. The Federal Declaratory Judgment Act with respect to these situations of liability insurance coverage is discussed in 6 Moore 2d ed., pages 3111-3115. Settled law also supports such declaratory action by liability insurance companies when in the position of the plaintiff here. Associated Indemnity Co. v. Garrow Co., D.C., 39 F.Supp. 100, affirmed 2 Cir., 125 F.2d 462; Maryland Casualty Co. v. Pacific Oil & Coal Co., 312 U.S. 270, 61 S.Ct. 510, 85 L.Ed. 826; Maryland Casualty Co. v. Boyle, 4 Cir., 123 F.2d 558, 565. Rule 56 of the Federal Rules of Civil Procedure, 28 U.S. C.A., permits motions for summary judgment in declaratory judgment actions. The prime question concerning the interpretation of the coverage under the policy of liability insurance to Ziarno by the plaintiff is, in my judgment, as simple as one can encounter. An endorsement is attached to the policy of insurance entitled “Special Named Non-owner Federal Employees”. For the protection granted under the policy of insurance and this endorsement Ziarno agreed to pay $10.20 and this amount in itself indicates substantial limitation of the usual liability coverage of ordinary policies of liability insurance. The endorsement is complete agreement in itself with clear terms and applies the coverage “with respect to an automobile owned by or in the care, custody or control of the Federal Government or any political subdivision thereof subject to the following provisions: “(1) * * * “(2) The insurance afforded by this endorsement shall not apply to any liability for which protection is afforded under the provisions of the Federal Tort Claims Act, whether claim is asserted against the United States of America, the operator insured under this endorsement, or both; “(3) The insurance afforded by this endorsement is limited to the legal liability of the named insured under circumstances wherein protection is not afforded him in the operation of Government-owned or leased vehicles under the provisions of the Federal Tort Claims Act. “(4) * * *» These limiting provisions are clearly stated in layman’s language and to me unmistakably evidence agreement to afford insurance coverage only when the insured is driving a government-owned automobile and is not “acting within the scope of his office or employment.” In such situation he would not have the protection of the Federal Tort Claims Act and legal liability then could only be imposed upon him as an individual. 28 U.S.C.A. §§ 1346(b), 2674. I do not follow the brief of the government arguing inconsistencies in the terms of the policy and endorsement as to private passenger automobiles, automobiles, trucks being automobiles and also motor vehicles, in an attempt to obtain interpretation that the policy and endorsement affords coverage. We have here a concrete factual situation that the employee, Ziarno, was driving a government-owned Dodge truck admitted by the government in its brief and answers in this Court within the scope of his employment. These actual circumstances bring the occurrence under precise and plain terms of the agreement. There is no need for abstract interpretation.

866731-7244

BAZELON, Chief Judge: The Federal Communications Commission refused to renew appellant’s license to operate WGMA, a standard radio broadcast station in Hollywood, Florida. Appellant’s only shareholders, Daniel En-right and Jack Barry, produced television quiz shows prior to 1960 in which some contestants were secretly given assistance in answering questions. The hearing examiner stated that Enright and Barry “have engaged in activities relating to television quiz programs which are censurable and [which] * * * reflect adversely upon their character qualifications to be a licensee of a radio station. However * * * such activities do not constitute an absolute disqualification. * * The examiner found, as mitigating factors, that WGMA had provided “outstanding service,” and that Enright and Barry had violated no law or express Commission policy when they conducted the deceptive programs, though Congress has since amended the Communications Act to forbid such practices. The examiner further stated: “[S] imple justice requires that Barry and Enright’s conduct be considered in the light of the then-existing circumstances. Certainly the networks which broadcast these then highly rated programs had both network and licensee responsibility, since the programs in question were broadcast over their own stations, as well as over those of their affiliates. “From the evidence, it appears that, at least, the higher echelons of the networks were not aware of the use of such controls. It is, however, equally evident that there had been public exposés which would appear likely to alert persons with a desire to know the facts * * * and to cause real investigations to be made * * *. [A]s was pointed out to the vice president and general attorney of NBC by at least two members of the congressional committee [which investigated these practices in 1960], it was singular indeed that no suspicion had been aroused * * On the basis of these findings, the examiner recommended license renewaL On April 15, 1964, the Commission reversed the examiner, because Enright and Barry “lack the requisite character qualification to be licensees” on the ground that their “prolonged deception practiced upon the television viewing public * * * is so patently and flagrantly contrary to the public interest as to warrant, without more, the denial of an application for renewal * * The Commission also found that Enright and Barry had attempted “to discourage and to frustrate” initial investigations by a New York City grand jury and by network officials. Appellant petitioned the Commission to reconsider its decision and to consolidate oral argument with pending applications for renewal of operating licenses by the National Broadcasting Company, the network which carried, and for a time owned, the quiz shows produced by En-right and Barry. Alternatively appellant asked the Commission to vacate its decision and withhold further decisions until it had decided the NBC case. It appears that before the Commission’s initial decision in the present case, the hearing examiner in the NBC case rendered his opinion, stating in pertinent part: “NBC contends that it was duped, and that it acted promptly to protect the public interest as soon as it determined what was going on. * * * The manner in which NBC reacted when the revelations inescapably broke upon it shows how clearly it was recognized inside the company that the trickery of its quiz shows was on the wrong side of the line separating downright dishonesty from the permissible make-believe of show business. The record urges the judgment that so long as there was no danger of disclosure to threaten audience acceptance of the shows, NBC turned its back on the evidence that the quiz programs might be counterfeit, and acted finally only when it was compelled by the growing tide of public dissatisfaction and by the threat posed in the aroused interest of various public agencies. Clearly, any disposition to frame conduct not according to ordinary morality and public requirements but in response to business necessities, and which shuns misconduct only because of the risks in discovery, is a substantial discredit.” The examiner concluded, however, that this discredit was counterbalanced by “the record of the network” in broadcasting, and that its role in the deceptive quiz shows thus did not disqualify it from holding broadcast licenses. On July 24, 1964, while the NBC proceedings were still pending, the Commission denied appellant’s request for reconsideration in conjunction with the NBC applications on the ground that “no useful purpose would be served.” One week later, on July 30, 1964, the Commission granted several license renewals to NBC without any mention of the network’s role in the deceptive quiz shows. We think the Commission’s refusal at least to explain its différent treatment of appellant and NBC was error. Both were connected with the deceptive practices and their renewal applications were considered by the Commission at virtually the same time. Yet one was held disqualified and the other was not. Moreover, while in other cases the Commission found that criminal violations of antitrust laws were not sufficient character disqualifications to bar license renewals, in the present case it found noncriminal conduct sufficient. The Commission stated, “Obviously, misconduct of the nature here involved in the broadcast field is necessarily in a somewhat different category [from criminal antitrust violations] and, on the facts of this case, of a most serious consequence.” Without intimating any opinion as to whether any of the misconduct discussed here is “in a somewhat different category” from appellant’s, we think the differences are not so “obvious” as to remove the need for explanation. And whether there are differences may be a question of decisional importance. Moreover, “the Commission has not explained its decision ‘with the simplicity and clearness through which a halting impression ripens into reasonable certitude. In the end we are left to spell out, to argue, to choose between conflicting inferences. * * * We must know what a decision means before the duty becomes ours to say whether it is right or wrong.’ ” Secretary of Agriculture v. United States, 347 U.S. 645, 654, 74 S.Ct. 826, 832, 98 L.Ed. 1015 (1954). We therefore remand this case for further proceedings. The Commission should reconsider appellant’s application in accordance with the purposes of this remand. Whatever action the Commission takes on remand, it must explain its reasons and do more than enumerate factual differences, if any, between appellant and the other cases; it must explain the. relevance of those differences to the purposes of the Federal Communications Act. So ordered. . Section 509, Federal Communications Act, 47 U.S.C. § 509 (Supp. V, 1964). . In re Applications of Nat’l Broadcasting Co., Docket Nos. 13085, 14091-92, 14054-56, initial decision of Hearing Examiner, released Nov. 20, 1963. . Following oral argument before this court, counsel for the Oommission submitted a memorandum stating that “no formal findings as to the network’s lack of knowledge or participation in the shows had been publicly made” by the Oommission.

3572807-8818

MEMORANDUM AND ORDER JACKSON, District Judge. The 13 individual plaintiffs were indisputably employees of someone when they worked for varying periods between 1949 and 1964 under a contract for scholarly services between the Georgetown University and the Department of the Army, and they have brought suit here to set aside the decision of the Appeals Review Board (“ARB” or “Board”) of the Civil Service Commission upholding the determination of the Bureau of Retirement, Insurance and Occupational Health (“BRIOH”) that they were not federal employees within the meaning of 5 U.S.C., § 2105, during their respective tenures and, thus, not entitled to have those periods included in computing their civil service retirement benefits. The case is now before the Court on cross-motions for summary judgment. For the reasons hereinafter set forth plaintiffs’ motion will be denied, the defendant’s motion granted, and the complaint dismissed. This Court may vacate the ARB’s decision if it finds it to be arbitrary and capricious, an abuse of discretion, unsupported by substantial evidence, or otherwise not in accordance with law. Jankovic v. United States, 384 F.Supp. 1355, 1358 (D.D. C.1974); McKenzie v. Calloway, 456 F.Supp. 590, 593-95 (E.D.Mich.1978). But its judicial review is confined to the record compiled before the agency. The Court is not empowered to undertake a de novo develop ment of the facts, nor may it substitute its judgment for that of the ARB. See Cooperative Services v. HUD, 562 F.2d 1292, 1295 (D.C.Cir.1976); Beverly Enterprises v. Califano, 446 F.Supp. 599, 604 (D.D.C.1978). The administrative record establishes that Georgetown University entered into a contract (the “Contract”), pursuant to 10 U.S.C., § 2304(a)(5), with the Department of the Army to perform certain unspecified studies for it. Section 10 of the Contract expressly provided that all persons employed thereunder were to be employees of the “contractor” and not the U.S. government, but it nonetheless gave the Army’s contracting officer (“CO”) veto power over the university’s hiring decisions and the right to remove personnel already hired for cause. (The CO also supervised all work done on the projects covered by the Contract). Moreover, plaintiffs enjoyed a number of the customary perquisites of official civilian service with the military, such as use of officers’ clubs, post exchanges and government parking, and they were issued Army civilian identification cards. On the other hand, plaintiffs were paid directly by the University (and without deductions for civil service retirement contributions). At common law there were no formal requisites to the creation of the master-servant relationship, see 53 Am.Jur.2d, Master & Servant at §§ 14-15 (1970), the primary indicium of which was simply the exercise of control by the putative employer. Joint Council of Teamsters No. 42 v. N.L.R.B., 450 F.2d 1322, 1326 (D.C.Cir.1971). See Restatement (Second) of Agency § 220; Prosser, Law of Torts at ch. 13, ¶ 70 (4th ed. 1971). But a host of consequences attends the federal employment relationship beyond the common law’s primary concern with the master’s vicarious liability for his servant’s tortious conduct. The status of civil servant is sui generis, Shepherd v. Merit Systems Protection Board, 652 F.2d 1040, 1041 n. 6 (D.C.Cir.1981), and it is clear that bona fide federal employment does not commence unless and until each of the requirements of law is met. National Treasury Employees Union v. Reagan, 663 F.2d 239, 246 (D.C.Cir.1981); Baker v. United States, 614 F.2d 263, 266 (Ct.Cl.1980). The relevant statute, 5 U.S.C., § 2105, defines a federal employee as an individual who is: (1) appointed to the civil service by a designated federal officer acting in his official capacity as such; (2) engaged in the performance of a federal function under authority of an Act of Congress or Executive Order; and (3) subject to the supervision of a federal officer during the performance of his duties. The ARB assumed (although OPM has never conceded) that the two latter requirements — federal function and federal supervision — were met in this case. It found, however, that plaintiffs were never appointed to a position in the civil service. Holding that a federal appointment must be evidenced by some formal appointive instrument in plaintiffs’ personnel records, and finding none, the Board ruled that plaintiffs must have been, as the Contract said they were, employees of Georgetown University. Plaintiffs contend that evidence of federal appointment is not limited to any particular documentation (which they concededly cannot produce) but should be found from the intent of the parties as manifested by the totality of facts and circumstances surrounding the inception and continuation of the relationship. The totality-of-circumstances test advocated by plaintiffs, however, would render the lack of evidence of appointment a mere technicality, to be remedied by other indicia of intent to employ. Yet since Marbury v. Madison, 5 U.S. (1 Cranch) 137 (1803), it has been clear that there can be no employment of a federal officer until the “last act” necessary to perfect the appointment has been made. See also United States v. Testan, 424 U.S. 392, 402, 96 S.Ct. 948, 955, 47 L.Ed.2d 114 (1976). Whether the “last act” is ministerial or not, the appointment requirement cannot simply be read out of the statute. The only case plaintiffs cite which offers substantial support for the totality-of-circumstances test is that of the MSPB in Acosta v. OPM, Docket No. DC 08318010060 (Nov. 26, 1982). While federal courts should ordinarily pay heed to the interpretation of a statute by an agency charged with its enforcement, Udall v. Tail-man, 380 U.S. 1, 16, 85 S.Ct. 792, 801, 13 L.Ed.2d 616 (1965); Miller v. Bond, 641 F.2d 997, 1002 (D.C.Cir.1981), the principle obtains only when the statute is consistently so applied by the agency. Bamberger v. Clark, 390 F.2d 485 (D.C.Cir.1968). See Shewmaker v. Parker, 479 F.Supp. 616, 618 (D.D.C.1979). The Acosta decision is an apparent aberration from prior agency and court interpretations of 5 U.S.C., § 2105, and while it might be distinguished from the instant case on several factual bases, the decision is nonetheless fundamentally at odds with the current state of the law in this area which finds most recent expression in Costner v. United States, 665 F.2d 1016 (Ct.Cl.1981). In Costner an electronics technician on a private payroll, who had provided technical services to the Air Force pursuant to its contract with his corporate employer, claimed to be a federal employee for much the same purposes as plaintiffs here, and also satisfied the two latter requirements of 5 U.S.C., § 2105. The Court of Claims held, however, that the statute required formal appointment to the civil service'as well. Noting that “this view of the law eliminates a ‘totality of the circumstances’ approach,” the court said, “an abundance of federal function and supervision will not make up for the lack of an appointment.” 665 F.2d at 1020. It rejected plaintiff’s contention that his interview with a federal officer sufficed as an appointment, reaffirming its prior determination that execution of a standard personnel form was “the sine qua non ” of a federal appointment. Id. at 1022, quoting, Goutos v. United States, 552 F.2d 922, 924 (Ct.Cl.1976). As a number of courts have noted, elimination of the formal appointment requirement would create the potential for “chaos in government personnel management,” Goutos v. United States, supra by introducing uncertainty into the federal employment process to the confusion of employer and employee alike, not to mention the public which is generally entitled to know when it is treating with a government employee and when it is not. For similar reasons this Court concludes that plaintiffs here were not federal employees within the meaning of 5 U.S.C., § 2105, while employed under the Contract. Federal employment must ultimately depend on the execution of some “last-act” ceremony of “appointment,” even so humble a rite as the completion of a standard personnel form, which will thereafter evince an unequivocal intent on the part of the government to admit an individual to its service. See National Treasury Employees Union v. Reagan, 663 F.2d 239, 246 (D.C.Cir.1981). The Court finds that the decision of the ARB is neither arbitrary, capricious, an abuse of discretion, nor otherwise not in accordance with law, and is supported by substantial evidence, and it is, therefore, this 25th day of July, 1983, ORDERED, that plaintiffs’ motion for summary judgment is denied; and it is FURTHER ORDERED, that defendant’s motion for summary judgment is granted and the complaint dismissed with prejudice.

1234723-25877

WILLIAM E. DOYLE, Circuit Judge. The International Brotherhood of Electrical Workers, defendant-appellant herein, seeks reversal of a judgment of the United States District Court for the District of Wyoming, which was based on a jury verdict holding the Brotherhood liable for breach of duty to fairly represent plaintiff-appellee- Leroy Foust in grievance proceedings addressed to the Union Pacific Rail road and ultimately to the Railway Adjustment Board. The judgment of the district court was in favor of Foust and included an award of $40,000 actual damages and $75,-000 punitive damages. The crucial question on this appeal is whether the evidence supports the judgment based upon breach on the part of the Brotherhood of a duty owed to Foust, a member of the Union. Foust was a radioman, who had been employed by Union Pacific Railroad and had been a member of the International Brotherhood of Electrical Workers, which organization was his collective bargaining representative while he was employed by the railroad. The individual defendants herein are the officers of the Union. The injury to Foust occurred on March 9, 1970, while he was on the job. He had a claim against the railroad under the Federal Employer’s Liability Act, which claim was settled on September 25,1973. The settlement provided for payment of $75,000 to Foust less $2,600 in sickness benefits. He waived future right of employment and any claim that he might have had for alleged wrongful discharge against the railroad. His second claim was that which had arisen as a result of the railroad company terminating his employment. A release was given with respect to this when he received the $75,000 settlement. The claim in the instant case is against the Union and is based on its alleged failure to represent him fairly in the proceedings having to do with his grievance which grew out of the termination of his employment by the Union Pacific Railroad Company. Our main concern is, therefore, whether the proof at trial was legally sufficient to establish a claim that the Union violated a legal duty to represent him, supported by sufficient evidence. After his injury on March 9, 1970, Foust went on leave of absence from his job in order to obtain medical treatment for his injured back. The rules in the Collective Bargaining Agreement provided for an employee to file a request for a leave of absence for a limited period of time with rights of renewal on request. Based upon Rule 23(b) of the Collective Bargaining Agreement, he must apply for leave of absence at the peril of being terminated. The Agreement provides: Failure to report for duty at the expiration of leave of absence shall terminate an employe’s service and seniority, unless he presents a reasonable excuse for such failure not later than seven days after expiration of leave of absence. On January 12, .1971, Union Pacific advised Foust by letter that his current leave of absence had expired December 22, 1970; that they had not heard from him; and that it was necessary that a proper request for an extension accompanied by a statement from his doctor be furnished. On January 21,1971, Foust’s then attorney informed the railroad that Foust had filed a request for extension in December and asked whether it had been received and, if not, what forms were needed. The railroad responded on January 25, 1971, advising the attorney that it still did not have a physician’s statement and that when one was received Foust’s request for leave would be considered. However, on February 3, the railroad wrote to Foust and advised him that he was being terminated for failure to request an extension prior to expiration of his leave and for failure to furnish a statement from his doctor as to the necessity for additional leave. Foust’s attorney contacted the railroad in an attempt to get the decision to discharge Foust reversed. On March 26, 51 days after the date of discharge, he wrote to one Dean Jones, District Chairman of the Brotherhood. This letter was received Saturday, March 27. Thereupon, Jones contacted the General Chairman of the Systems Council in Omaha, Leo Wisniski. Wisniski prepared a letter which was sent first to Jones in Omaha, and then sent to Foust with Jones’ signature. This was dated April 5. It acknowledged receipt of the letter from Foust’s lawyer. It explained that Rule 21 of the Collective Bargaining Agreement required a grievance to be presented in writing by or on behalf of the employee involved. The necessity to receive a written authority to handle claims or grievances on behalf of an employee was explained. The letter went on to say that: “ . Upon receipt of your grievance in writing, and request to the undersigned to handle your initial claim pertaining to the Carrier terminating your service, it will be reviewed and handled under the proper grievance procedures . . ” Jones filed a claim on Foust’s behalf, but did not do so before April 6, which was two days after the deadline. The claim letter was prepared by Wisniski in Omaha and was mailed to Jones in Rawlins, Wyoming, and then sent by Jones to the railroad officer in Omaha. It is not surprising that this claim was denied because of its not having been timely filed. The Union appealed this decision, but it was finally denied by the Railway Board of Adjustment as having been filed two days late. The issues which are advanced on behalf of the International Brotherhood, defendant-appellant, as a basis for reversal include: 1. The alleged error of the trial court in upholding a verdict, the effect of which was to hold the Brotherhood liable for breach of a duty owed to Foust to represent him. 2. The alleged error of the court in failing to set aside the jury verdict granting, first, compensatory damages in the amount of $40,000, and, secondly, punitive damages in the amount of $75,000. 3. The alleged error of the court in allowing the case to be tried by a jury and in its having failed to grant a motion for directed verdict. 4. The error of the court in failing to dismiss the case because of the neglect of Foust to pursue and exhaust his administrative remedies. I. DID THE TRIAL COURT ERR IN ITS FORMULATION AND SUBMISSION TO THE JURY OF THE STANDARDS WHICH IT DEEMED APPLICABLE? The court in its charge to the jury explained the plaintiffs theory of recovery as having arisen from his wrongful discharge on February 3, 1971, by the Union Pacific Railroad for having failed to file for a continued leave of absence. The court explained that under Rule 21 of the Collective Bargaining Agreement between the Union and the Union Pacific Railroad Company, a notice of grievance was required to be filed within 60 days of the date that the grievance occurred, the grievance here being the alleged unlawful discharge. Plaintiff’s contention was explained as the Union’s failure to file the grievance within the 60-day period, notwithstanding his request within the 60-day period and resulting in denial by the Board of Adjustment (which functions under the Railway Labor Act). The court further said that the allegation of plaintiff was that the Union was guilty of gross nonfeasance and hostile discrimination in arbitrarily and capriciously refusing to process the plaintiff’s grievance and in refusing to file it timely. The issues for the jury to determine were, first, whether the defendant Union was obliged to represent the plaintiff at grievance procedures with the Union Pacific; second, whether failure to represent breached a duty owed the plaintiff to represent him fairly in grievance procedures; third, whether the Union was guilty of gross nonfeasance, hostile discrimination and arbitrary and capricious failure to process the grievance and, finally, whether plaintiff was damaged by this failure. The jury was also told that it must ignore the wrongful discharge by the Union Pacific Company as a source of damage; that a claim against the Brotherhood for breach of a duty of fair representation was a separate and distinct claim from his wrongful discharge at the hands of Union Pacific. Emphasis was placed on the need for the jury to find, in order for the plaintiff to recover, that the action of the Union caused damage to him independent of any action which the Union Pacific may have taken. The jury was told that the essential legal standard which the evidence had to satisfy was arbitrariness and capriciousness of the Union; that a union may not arbitrarily ignore a meritorious grievance or process it in a perfunctory manner. Arbitrary and capricious were said to be synonymous and were defined as an act done without adequate principle or an act not done according to reason and judgment. Arbitrary and capricious were defined as requiring judgment on the basis of whether the act complained of is reasonable or unreasonable under the circumstances. Bad faith was described as implying a breach of faith. It would seem that the source of the Union’s obligation to represent the member of the Union arises under the Railway Labor Act, 45 U.S.C. § 151 et seq., plus the Collective Bargaining Agreement between the Union and the Union Pacific. Sections (1) and (3)(c) of Rule 21 recognize the right of representatives of organizations to file and prosecute claims and grievances for and on behalf of the employee they represent. From the fact that the Union is exclusive bargaining representative under the Railway Labor Act, and from the recognition further of the union in the Collective Bargaining Agreement, the case law as to the duty of the unions to fairly represent the employees has emerged. The Supreme Court considered the scope of the duty in Vaca v. Sipes, 386 U.S. 171, 87 S.Ct. 903, 17 L.Ed.2d 842 (1967). There a worker challenged the union’s decision not to appeal his grievance to arbitration. The Supreme Court held that there was no breach of duty by the union in thus exercising its discretion; that it had the right to make an evaluation of the merits of the grievance and to make a decision as to whether it was worthy of an appeal. But, at the same time, the Court fully recognized that the union could have violated its duty to the claimant had it ignored the worker’s complaint or if it had processed the grievance in a perfunctory manner. In giving its charge the trial court adhered to the decision and language of Vaca. The Union seeks recognition of a more narrow standard that was enunciated by the Supreme Court in Amalgamated Ass’n of Motor Coach Employees v. Lockridge, 403 U.S. 274, 91 S.Ct. 1909, 29 L.Ed.2d 473 (1971). The Court in that case spoke of the necessity for showing evidence of fraud, deceitful action or dishonest conduct. See 403 U.S. at 299, 91 S.Ct. 1909. It also said that there must be evidence of discrimination which is intentional, severe and unrelated to legitimate union objectives. See 403 U.S. at 301, 91 S.Ct. 1909. Subsequently, in Hines v. Anchor Motor Freight, Inc., 424 U.S. 554, 96 S.Ct. 1048, 47 L.Ed.2d 231 (1976), the Supreme Court quoted with approval its prior discussion contained in Vaca. In Hines, the plaintiffs had been discharged for dishonesty and subsequently discovered evidence that showed they had probably been innocent. The allegation by them was that the union had failed to adequately investigate the charges and had presented no favorable evidence at arbitration. The Court cited Vaca, stating that the union cannot ignore a meritorious grievance or process it in a perfunctory manner. It ruled that the allegation contained in Hines stated a claim for breach of duty of fair representation, noting, however, that “arbitrary” conduct calls for more than “mere errors in judgment.” 424 U.S. at 571, 96 S.Ct. 1048. In Reid v. International U., U.A.W., 479 F.2d 517 (10th Cir. 1973), cert. denied, 414 U.S. 1076, 94 S.Ct. 572, 38 L.Ed.2d 483 (1973), this court cited the language contained in both Vaca and Lockridge. In Woods v. North American Rockwell Corp., 480 F.2d 644 (10th Cir. 1973), we stated that the duty included an “obligation to avoid arbitrary conduct.” In the case at bar the violation of duty relied upon was the failure of the Union to act within the time provided in the Collective Bargaining Agreement. True, the time available to the Union was limited. This, however, does not excuse their having needless correspondence back and forth and insisting that they have an authorization from the plaintiff with respect to representation by the attorney who is seeking to get them to act. We are of the opinion that the court’s charge to the jury constituted a correct selection of standards and a proper statement of the applicable law as to the duty of fair representation. II. WAS THE EVIDENCE LEGALLY SUFFICIENT AND DID IT SUPPORT THE STANDARDS? The grievance was filed out of time, and it was because of this that the Board denied it. In Ruzicka v. General Motors Corp., 523 F.2d 306(6th Cir. 1975), evidence that the union inexplicably, without making a determination as to its merits allowed the deadline for taking the case to arbitration to lapse, was sufficient to support a verdict of breach of duty. In Griffin v. International U., U.A.W., 469 F.2d 181 (4th Cir. 1972), the court stated that a union could not refuse to process a grievance without reasons. The First Circuit in De Arroyo v. Sindicato de Trabajadores Packinghouse, 425 F.2d 281 (1st Cir.), cert. denied, 400 U.S. 877, 91 S.Ct. 117, 27 L.Ed.2d 114 (1970), held that the failure to investigate the merits of a grievance could be arbitrary conduct and a breach of a duty. In accord is Hughes v. International Bro. of Teamsters, Local 688, 554 F.2d 365 (9th Cir. 1977). In our opinion the evidence adduced as to the perfunctory manner of handling the claim was sufficient justification for the submission of the issue of breach of duty to the jury. The Union filed the grievance out of time and it was due to this that the Board denied it. The evidence, in addition to that just mentioned, showed that there had been an earlier effort on the part of Foust to file a claim for wages while he was attending physical therapy sessions. The Union apparently believed that this was cognizable under the Federal Employees’ Liability Act, but made little effort to clarify the matter. This serves to give character to the subsequent failure of the Union to pursue the claim in question despite the fact that it had full knowledge of the 60-day limit. At no time did Jones or Wisniski seek to contact Foust by telephone. Instead, despite the shortness of time, they insisted that Foust personally submit the claim to them. This message was contained in a letter prepared in Omaha, mailed to Rawlins and then mailed to Foust the day after the time for submitting a claim had passed. None of this was necessary. Ordinarily Jones would have been the person to handle a grievance, but Wisniski became a part of the machinery that was used and this delayed the ultimate filing. The jury could consider this as arbitrary, unreasonable and a breach of duty. III. DID THE TRIAL COURT ERR IN REFUSING TO DISMISS THE FOUST COMPLAINT BECAUSE OF FAILURE TO EXHAUST INTERNAL UNION REMEDIES? This contention rests on Article XXVII, Section 12 of the Union’s Constitution, which reads: Sec. 12. Any member who claims an injustice has been done him by any L.U. [local union] or trial board, or by any Railroad Council, may appeal to the I.V.P. any time within forty-five (45) days after the date of the action complained of. If the appeal is from an action of a railroad local union, or a Railroad Council, it must go to the I.V.P. in charge of railroad matters. The complaint is that no charge was filed by Foust with the International Vice President of the Union. The Constitution is not before us. The case of Imel v. Zohn Mfg. Co., 481 F.2d 181 (10th Cir. 1973), recognized that exhaustion of intra-union remedies is ordinarily required. There the local had refused to process plaintiff’s grievance. The Constitution specifically provided for an expedited appeal and required that this be followed before a member was free to sue the union. We there said: The by-passing of the carefully enunciated review measures, absent a clear and positive showing of futility, can only promote disharmony in the field of labor-management relations. 481 F.2d at 184. The cases hold that a prerequisite to the type of suit which is before us is that there be at least some effort to avail oneself of internal remedies. See, e. g., Harrison v. Chrysler Corp., 558 F.2d 1273 (7th Cir. 1977); Ruzicka v. General Motors Corp., 523 F.2d 306 (6th Cir. 1975); Mills v. Long I. R. Co., 515 F.2d 181 (2d Cir. 1975). The Supreme Court held in Glover v. St. Louis-S.F. Ry. Co., 393 U.S. 324, 89 S.Ct. 548, 21 L.Ed.2d 519 (1969), that a minority member who claimed racial discrimination was excused from the exhaustion requirement based on futility, where the evidence was insufficient that the internal remedies would prove adequate. See Retana v. Apt., Motel, Hotel & El. Op. U., 453 F.2d 1018 (9th Cir. 1972). The worker there was unable to speak English and had repeatedly sought union help without result. Perhaps this is another way of arriving at the con- elusion that it would be futile. There are other cases that hold that a showing of futility or inadequacy or likelihood of bias will excuse failure to exhaust. See Calagaz v. Calhoon, 309 F.2d 248, 259-60 (5th Cir. 1962); Patterson v. Bialystoker & Bikur Cholim, Inc., 81 C.C.H. Lab.Cas. ¶ 13,251 (S.D.N.Y.1977); Cefalo v. International U. of Dist. 50, U.M.W., 311 F.Supp. 946, 953 (D.D.C.1970). There is no evidence from which we could conclude that the appeal to the International Vice President in charge of railroad matters would have been availing. Finally,' considering that the present suit is for damages and not for reversal of a decision of a Union officer and has been tried and appealed, it would be a strange result to now say that it is defective because of failure to first appeal to the Vice President. Judging from the nature and character of this claim, there seems little likelihood that the Union would have acted in an effort to compensate Foust for the failure. Moreover, the Union did little to bring this question to the attention of the trial court. For these reasons, it does not loom large as a defense to a verdict following a complete trial. In reaching this conclusion, we are not denying the policy which favors making every effort to obtain a settlement of intra-union disputes. IV. DOES THE FACT THAT THE UNION WAS NOT THE SOLE AGENCY FOR PRESENTING GRIEVANCES ALTER THE EXISTENCE OF ITS DUTY? The Union argues that since Foust had the right under the Railway Labor Act and the Collective Bargaining Agreement to file the grievance himself, this undermines the existence of a duty on the part of the Union to initiate the grievance. However, Conley v. Gibson, 355 U.S. 41, 47, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957), held that this fact did not excuse the union’s racial discrimination in refusing to represent employees. The Supreme Court reasoned that the bargaining power of the union was much greater than that of an individual or a small group. Some courts have not allowed the union to make the employee’s right to assert his own grievance a defense where the employee has committed his grievance to the hands of the union and has relied on the union effort. See Harrison v. United Transport U., 530 F.2d 558 (4th Cir.), cert. denied, 425 U.S. 958, 96 S.Ct. 1739, 48 L.Ed.2d 203 (1976); Schum v. South Buffalo Ry. Co., 496 F.2d 328 (2d Cir. 1974); Browning v. General Motors Corp., Fisher Body Div., 387 F.Supp. 985 (S.D.Ohio 1974). Having undertaken to act affirmatively on behalf of Foust, the Union is precluded from escaping responsibility by asserting that Foust could or should have presented the grievance rather than depend on it. V. DID THE COURT CORRECTLY INSTRUCT THE JURY ON THE QUESTION OF CAUSATION? The court first told the jury that it was “to ignore any evidence relating to whether or not the plaintiff was wrongfully discharged from employment by the Union Pacific Railroad Company. The defendant Union and its representatives did not participate in any aspect of that decision and there is no charge in the Complaint involving the Union in regard to whether or not the Plaintiff had or had not observed the rules of the carrier which were stated as a basis for the termination of his employment by the railroad.” There is a dictum in Hines v. Anchor Motor Freight, Inc., 424 U.S. 554, 570, 96 S.Ct. 1048, 47 L.Ed.2d 231 (1976), which says that in an action against the employer and the union jointly wrongful discharge is an ingredient of the action. The case at bar was tried on the theory that wrongful discharge was not a necessary element. The union itself consented to the court’s instruction that the wrongful discharge suit and the fair representation action were distinct and separate, one against the railroad and one against the Union. Bearing in mind that this was not an action against both employer and Union, we view the trial court’s instruction as to the separateness of the claims to be valid. From a further instruction of the trial court this is very clear: You are also instructed that a claim by a former Union member against a Union for breach of its duty of fair representation is a separate and distinct claim which the member has and is apart from any right which the employee may have or may have had against his employer. Thus, if you find from a preponderance of the evidence that the actions of the Union have caused damage to the Plaintiff independent of any actions which the employer may have taken, you may award such damages as the evidence shows the Plaintiff incurred. The court was saying that in a suit against the employer the essence of it would be wrongful discharge. Here, as to the Union, the court told the jury that there must have been an injury independent of any action on the part of the employer. It is conceivable that wrongful discharge could be looked to in a fair representation suit against the Union alone. Where this is true an inference of wrongful discharge could be drawn from the circumstances surrounding the termination and the fact that he was terminated with loss of not only his job but his incidental rights, merely because he failed to specifically apply for an extension of his leave of absence. However, we need not and we do not reach this issue. We consider the trial court’s instruction on this to be appropriate considering the manner of trying and defending the cause. VI. WAS THE INSTRUCTION ON THE MEASURE OF DAMAGE PROPER? The claim for compensatory damage was $75,000 for lost wages and benefits from the date of discharge to September 1973, and the court instructed the jury that the measure of damage to be considered included all of the salary and wages, overtime pay, vacation pay, insurance, seniority and fringe benefits which the plaintiff would have received during the period he would have been working for the railroad company. The verdict was $40,000 and it is contended that this was excessive; that conceding that it would be liable for lost wages, etc. if there were proof of such damages, there was not sufficient evidence. There was no objection by the Union to the instruction given on the measure of damage. About the only tangible evidence in the record is for lost wages, which would be based on his continuing to have his old job. Although he testified as to loss of seniority together with insurance and other fringe benefits, there was a lack of evidence as to the reasonable value of these items. He did testify as to loss of $1,000 for medical costs resulting from lost insurance. It is argued that he should not have damages based upon his pay at the old job because he would not have been performing it due to his injury. He had a disability which prevented him from performing his job as a radioman. No doubt he was unable to testify as to the wages he would receive had he retained his status and been given another job. The only standard that he had to offer was his pay that he had been receiving. Undoubtedly his loss of fringe benefits was worth something, but from the record we are not able to say what their worth was. Nor can we say that the jury’s conclusion was wrong. As to his having settled with the railroad for the injury under F.E.L.A., we do not view this as precluding a recovery for breach of duty of fair representation against another party. The next point advanced by the Unión is that the trial court erred in instructing the jury that they could award punitive damages in order to punish the wrongdoer for some extraordinary misconduct in order to serve as an example to others if they found that the Union had acted “maliciously, or wantonly, or oppressively.” This instruction was objected to, the basis being that the cause was not a proper one for exemplary damages. The Union relies on some language in Vaca, supra, 386 U.S. at 195, 87 S.Ct. 903, which says that under the circumstances of that case neither compensatory nor punitive damages were proper. Dicta in Deboles v. Trans World Airlines, Inc., 552 F.2d. 1005 (3d Cir. 1977), indicates that such damages are not recoverable. In Butler v. Local U. 823, Int. Bro. of Teamsters, etc., 514 F.2d 442 (8th Cir. 1975), the Local’s conduct was not regarded as the type “of outrageous or extraordinary conduct for which extraordinary remedies are needed.” The opinion continued that it amounted to the commonly encountered policy of favoring one group of members over another. The Eighth Circuit expressed the view that in order to have exemplary damages, there had to be express malice. The Butler court also mentioned that the federal courts should fashion remedies under the labor statutes with a view to achieving a goal of industrial peace.

11710284-30313

BRYSON, Circuit Judge. Following a trial, the United States District Court for the Southern District of Texas issued an injunction prohibiting Additive Controls & Measurement Systems, Inc., (Ad-Con) from selling certain positive displacement flowmeters that were determined to infringe Flowdata’s United States Patent No. 4,815,318. Appellants Galen M. Cotton, Jack D. Harshman, and Truflo Instrumentation, Inc., (Truflo) were subsequently determined to be in contempt of that injunction and were assessed civil contempt penalties in the amount of Flowdata’s damages and attorney fees. We affirm the district court’s contempt findings with respect to Cotton and Truflo, but reverse the portion of the court’s order holding Harshman in contempt. I At one time, AdCon and Flowdata were competitors in the market for positive displacement flowmeters, which are used to measure the flow of liquids. Following a trial, AdCon was found to have willfully infringed Flowdata’s patent and engaged in unfair competition. The district court subsequently entered an injunction barring AdCon from further sales of its infringing meter or any colorable imitations. Shortly after the injunction was issued in August 1993, Flowdata began investigating sales of a redesigned positive displacement flowmeter by AdCon’s president and majority stockholder, Galen Cotton. Flowdata requested that the district court institute contempt proceedings to determine whether the new meter was being marketed in violation of the injunction. Ultimately, Cotton and the other two appellants, Harshman and Truflo, were found to be in contempt of the injunction for their roles in developing and marketing the new flowmeter. The sequence of events preceding the contempt findings is complicated and requires some additional explanation. In February 1994, the district court held a three-day show-cause hearing with testimony from Cotton and experts for both AdCon and Flowda-ta. The testimony adduced at the hearing established that Cotton had designed the new flowmeter during the pendency of the patent infringement suit and had enlisted Harshman to develop the engineering drawings for the new meter. Cotton then participated in forming two companies, Truflo and TruGear, Inc., to produce and manufacture the new meters, which were to be marketed as “TruGear meters.” Cotton maintained a majority interest in Truflo, with Harshman receiving a 10% share for his efforts. Neither Harshman nor Truflo participated in the February 1994 contempt proceeding. Following the February 1994 hearing, the district court concluded that the TruGear meters were merely colorable variations of the infringing AdCon meter and held Cotton in contempt of the 1998 injunction. In an order issued in October 1994, Harshman, Truflo, and several other non-parties were enjoined from disposing of inventory of the TruGear meter and ordered to show cause why they should not be held in contempt for actively participating with Cotton in violating the court’s injunction. The part of the court’s order enjoining the non-parties was later vacated by this court in Additive Controls & Measurement Systems, Inc. v. Flowdata, Inc., 96 F.3d 1390, 40 U.S.P.Q.2d 1106 (Fed.Cir.1996). The show cause hearing was held in March 1995. The non-parties, including Harshman and Truflo, appeared and presented evidence regarding the extent of their participation with Cotton in designing and selling the Tru-Gear meter. In September 1997, the district court issued an order dismissing several non-parties, including TruGear, Inc., from the contempt action but finding that Harshman and Truflo had actively participated with Cotton in violating the injunction. Harsh-man and Truflo were made jointly and severally liable with Cotton for Flowdata’s damages and attorney fees, an amount in excess of $350,000. This appeal followed. II The first issue in this appeal is whether it was permissible for the district court to try issues relating to the TruGear meter in a contempt proceeding. Appellants argue that the contempt findings in this case must be vacated because the contempt proceeding should never have been convened. Instead, according to appellants, Flowdata should have been required to litigate its claims regarding the TruGear meter in a separate infringement action. We review the district court’s decision to proceed via a contempt healing for abuse of discretion. See KSM Fastening Sys., Inc. v. H.A. Jones Co., 776 F.2d 1522, 1530, 227 U.S.P.Q. 676, 682 (Fed.Cir.1985). Before entering a finding of contempt of an injunction in a patent infringement case, a district court must address two separate questions. The first is whether a contempt hearing is an appropriate forum in which to determine whether a redesigned device inflinges, or whether the issue of infringement should be resolved in a separate infringement action. See KSM, 776 F.2d at 1530-32, 227 U.S.P.Q. at 682-84. That decision turns on a comparison between the original infringing product and the redesigned device. If the differences are such that “substantial open issues” of infringement are raised by the new device, then contempt proceedings are inappropriate. Id. at 1532, 776 F.2d 1522, 227 U.S.P.Q. at 683-84. If contempt proceedings are appropriate, the second question the district court must resolve is whether the new accused device infringes the claims of the patent. See id. at 1528-30, 776 F.2d 1522, 227 U.S.P.Q. at 680-82. Within those general constraints, the district court has broad discretion to determine how best to enforce its injunctive decrees. Id. at 1532, 776 F.2d 1522, 227 U.S.P.Q. at 684. The district court in this case recognized its responsibility to compare the TruGear meter both to the original AdCon meter and to the patent claims. Following the testimony of Flowdata’s expert, the court denied Cotton’s motion to dismiss the contempt proceedings. Subsequently, after considering all the evidence, the court issued an opinion characterizing the TruGear meter as a mere colorable variation of the AdCon meter. In the same opinion, the court compared the TruGear meter to the patent claims and found infringement. Although our cáse law suggests that the need for expert testimony counsels against the use of contempt proceedings to try infringement, the district court satisfied the procedural requirements of KSM by separately analyzing the questions whether contempt proceedings were appropriate and whether the redesigned device infringed the patent. On the merits, the district court did not abuse its discretion in finding that the TruGear meter raised no substantial open questions of infringement and infringed the claims of Flowdata’s patent. The TruGear meter differs from the AdCon meter principally by including a ball-bearing sleeve and by using different-sized rotors to measure flow. In addition, the main chamber of the TruGear meter is round rather than oval-shaped. The court found that those differences did not raise a substantial new question of infringement because the configuration of the main chamber and the relative size of the two rotors were not elements of the pertinent patent claim, and because the evidence at the hearing suggested that the bearings in the TruGear meter were not necessary for its operation and were included merely in an attempt to disguise the actual operation of the device. The appellants argued that the preamble to the pertinent claim of Flowdata’s patent referred to the claimed meter as “bearingless,” and that the TruGear meter did not infringe because it was not “bearing-less.” The district court, however, concluded that the term “bearingless” in the preamble was not a limitation of the claim. That question of claim construction was a new issue in the case, because in the original infringement trial AdCon had stipulated that its flowmeter met every limitation of Flowdata’s patent. The presence of a new issue, however — even a new issue of claim construction — does not necessarily require that a separate infringement action be brought to determine whether the accused device infringes the patent in suit. Contempt proceedings are appropriate as long as the new issue does not raise a substantial question of infringement. In this instance, the district court found that the issue of the proper construction of the term “bearingless” in Flowdata’s claim did not give rise to a substantial question of infringement. The court’s conclusion in that regard was supported by evidence at the hearing that the term “bearingless,” as used in the patent, simply meant that bearings were not necessary for the operation of the claimed meter. Under the circumstances, it was therefore permissible for the court to resolve the claim construction issue in the course of the contempt proceedings and to conclude that the sale of the TruGear meter violated the injunction and infringed Flowda-ta’s patent. Appellants also argue that the contempt proceeding was inappropriate because AdCon did not contest infringement or the validity of Flowdata’s patent in the underlying action. For that reason, the appellants contend that they are not subject to issue preclusion on those issues and that “substantial open questions” of infringement and validity necessarily remain, which cannot properly be addressed in a contempt proceeding. The judgment against AdCon, however, established for purposes of this litigation that Flowdata’s patent was valid and that the AdCon meter infringed the patent. In a contempt proceeding to enforce the injunction entered as a part of that judgment, the only available defense for anyone bound by the injunction was that the TruGear meter did not infringe (or that it was more than a colorable variation of the first meter, thus requiring that the issue of infringement be resolved through a separate infringement action). Validity and infringement by the original device were not open to challenge. See KSM, 776 F.2d at 1529, 227 U.S.P.Q. at 681. Thus, the fact that AdCon did not contest infringement at the original trial did not bar the district court from concluding that there were no substantial open issues of infringement and that it was appropriate to proceed by way of contempt. Finally, Cotton argues that because he had secured a patent on the TruGear device, there were necessarily “substantial open issues” presented that were not appropriate for resolution in a contempt proceeding. We agree that in some instances a showing that a redesign has resulted in the issuance of a patent would be sufficient to require a separate lawsuit to litigate any potential infringement by the redesigned device. The file history of Cotton’s patent, however, shows that neither the original Ad-Con meter nor the Flowdata patent was submitted to the patent examiner. In fact, only two references, patents from 1968 and 1976, were cited as prior art as a result of the examiner’s own search. Under those circumstances, the fact that the TruGear meter design was patented does not demonstrate that the redesigned meter was more than colorably different from the AdCon meter, Ill Appellants next contend that the injunction entered by the district court did not cover their activities with respect to the TruGear meter. Flowdata’s suit was brought against AdCon, and AdCon was the only entity named in the district court’s August 1998 injunction. Appellants argue that the injunction therefore reaches only conduct by Ad-Con or by others acting in concert with Ad-Con. Because all parties agree that AdCon has been inactive since the entry of the injunction and has no interest in the TruGear meter, appellants conclude that they cannot be held in contempt. In an earlier appeal in this case, we addressed the basic rules concerning enjoining non-parties. See Additive Controls & Measurement Sys., Inc. v. Flowdata, Inc., 96 F.3d 1390, 40 U.S.P.Q.2d 1106 (Fed.Cir.1996). This appeal, by contrast, involves holding non-parties in contempt of an injunction. The two are quite different. As a general matter, a court may not enjoin a non-party that has not appeared before it to have its rights legally adjudicated. See Chase Nat’l Bank v. City of Norwalk, 291 U.S. 431, 436-37, 54 S.Ct. 475, 78 L.Ed. 894 (1934). Non-parties may be held in contempt, however, if they “either abet the defendant, or [are] legally identified with him.” Alemite Mfg. Corp. v. Staff, 42 F.2d 832, 833 (2d Cir.1930). That common-law principle is reflected in the text of Rule 65(d), Fed. R. Civ. Proe., which states that an injunction is binding on parties and “their officers, agents, servants, employees, and attorneys, and upon those persons in active concert and participation with them who receive actual notice of the order by personal service or otherwise.” As the Supreme Court has stated, the effect of an injunction on non-parties “depends on an appraisal of [their] relations and behavior [with the enjoined party] and not upon mere construction of terms of the order.” Regal Knitwear Co. v. NLRB, 324 U.S. 9, 15, 65 S.Ct. 478, 89 L.Ed. 661 (1945). We therefore address the contempt orders entered against Cotton, Harshman, and Truflo individually. We conclude that while there is sufficient evidence to find Cotton and Truflo in contempt of the injunction, the contempt finding against Harshman must be reversed. A Cotton was held in contempt of the August 1993 injunction for his actions in developing and marketing the TruGear meter. The district court’s finding of contempt was predicated on its determination that Cotton was “legally identified” with AdCon and thus subject to the injunction even though he was not a named party to the suit. We review that decision and other subsidiary factual findings in contempt proceedings for clear error. See Travelhost, Inc. v. Blandford, 68 F.3d 958, 961 (5th Cir.1995). As an initial matter, it is clear that Cotton was bound by the injunction when it was entered against AdCon in August 1993, even though Cotton was not a named party to the underlying infringement suit. Rule 65(d) specifically names “officers” of a defendant as among those who are bound by an injunction, and there is a substantial body of ease law in support of that proposition. See Wilson v. United States, 221 U.S. 361, 376, 31 S.Ct. 538, 55 L.Ed. 771 (1911) (“A command to the corporation is in effect a command to those who are officially responsible for the conduct of its affairs.”); Reich v. Sea Sprite Boat Co., 50 F.3d 413, 417 (7th Cir.1995) (“An order issued to a corporation is identical to an order issued to its officers, for incorporeal abstractions act through agents.”). At the time the August 1993 injunction was issued, Cotton was the president of AdCon, and he has remained its majority shareholder. Although directed at AdCon, the injunction did not necessarily lapse with the cessation of AdCon as a working business. An injunction may survive the dissolution of the corporation at which it is directed and continue to bind any successor in interest to the original defendant. See Walling v. James V. Reuter, Inc., 321 U.S. 671, 674, 64 S.Ct. 826, 88 L.Ed. 1001 (1944) (injunction may be enforced “against those to whom the business may have been transferred, whether as a means of evading the judgment or for other reasons”); ICC v. Rio Grande Growers Coop., 564 F.2d 848, 849 (9th Cir.1977). Such a rule is necessary to prevent an enjoined defendant from “nullify[ing] a decree by carrying out prohibited acts through aiders and abettors, although they were not parties to the original proceeding.” Regal Knitwear, 324 U.S. at 14, 65 S.Ct. 478. Cotton asserts that once he resigned as an officer of AdCon and acted “independently” in developing the TruGear meter, the August 1993 injunction no longer regulated his conduct. Cotton is correct in asserting that an employee of an enjoined corporation, is usually not bound by an injunction after severing relations with the corporation. In Alemite Manufacturing Corp. v. Staff, 42 F.2d 832 (2d Cir.1930), for example, the court held that an injunction in a patent infringement ease entered against a corporation did not bind an employee who resigned from the company and committed infringing acts identical to those adjudicated in the original suit. The court’s rationale in Alemite, however, was that the employee acted independently after his resignation and was hot legally identified with the defendant corporation. Thus, Cotton’s reliance on Alemite is availing only if the district court erred in finding that he was legally identified with AdCon. The question whether a corporate officer is “legally identified” with a corporation is a case-specific inquiry. In general, an officer is legally identified with a corporation if the officer is “so identified in interest with those named in the decree that it would be reasonable to conclude that [his] rights and interests have been represented and adjudicated in the original injunction proceeding.” 11A Charles Alan Wright et al., Federal Practice and Procedure § 2956, at 340-41 (2d ed.1995); see also G. & C. Merriam Co. v. Webster Dictionary Co., 639 F.2d 29, 37 (1st Cir.1980) (officer is legally identified with the corporation if the officer “had such a key role in the corporation’s participation in the injunction proceedings that it can be fairly said that he has had his day in court in relation to the validity of the injunction”). Factors that may be pertinent to the inquiry are the officer’s position and responsibilities in the enjoined corporation, his participation in the litigation that preceded the entry of the injunction, and the degree of similarity between his activities in the old and new businesses. See G. & C. Merriam Co., 639 F.2d at 37-38. The district court made a number of factual findings relevant to its conclusion that Cotton was legally identified with AdCon. Cotton was the incorporator and sole shareholder of AdCon when it was formed. At all times Cotton owned at least 90% of AdCon’s stock. Cotton served as president of AdCon throughout the litigation with Flowdata, and he represented AdCon’s interests in that litigation. The district court also found that AdCon had operated out of Cotton’s home for some period of time, the same location from which Cotton started and operated Truflo. Cotton’s testimony indicated that the reason for forming Truflo to market the TruGear meter was that “AdCon was not in a position to obtain partners for [the] purpose of manufacturing anything.” The court also noted that Cotton’s work on the TruGear meter began while Cotton was still serving as Ad-Con’s president. Based on those findings, which Cotton does not dispute, we see no clear error in the district court’s conclusion that Cotton was legally identified with AdCon and therefore remained subject to contempt sanctions for violating the injunction even after resigning from his position as AdCon’s president. The factual context outlined above is similar to that described in Reich v. Sea Sprite Boat Co., 50 F.3d 413 (7th Cir.1995). In that case, a closely held corporation was enjoined by the Department of Labor from committing certain safety violations. Rather than comply, the corporation’s owner and president caused the corporation to cease operating and started a new corporation to continue the same activity. Id. at 417. The Seventh Circuit held that both the owner and the new corporation were bound by the injunction entered against the old corporation. In this action as well, Cotton’s legal identification with AdCon precluded him from acting independently in the field of flowmeters of the type subject to the injunction. Apart from asserting that he is not liable for contempt because he was not a party to the underlying action, Cotton also argues that previous mandates of this court and the district court show that the contempt finding is erroneous. We address those issues briefly- First, Cotton contends that the district court found him in contempt based on his actions “in active concert or participation” with AdCon, although AdCon has been dormant for years. If that were the basis for the contempt finding, we would agree; one cannot act in concert with an inactive corporation. Cotton’s liability, however, stems from the district court’s finding that he was legally identified with AdCon. Under that theory of liability, Cotton was bound by the injunction against AdCon just as if it had been directed to him personally. Cotton also argues that an opinion of this court, issued in a separate infringement action brought by Flowdata against Cotton personally, demonstrates that before being held in contempt Cotton was entitled to an opportunity to litigate the questions whether the AdCon meter infringed Flowdata’s patent and whether Flowdata’s patent was valid. In that opinion, we held that Cotton was not bound by the findings in the AdCon suit because the issues of infringement and validity had not been “actually litigated.” See Flowdata, Inc. v. Cotton, No. 95-1013, 62 F.3d 1430, 1995 WL 453390, slip op. at 4 (Fed.Cir. Jun. 5, 1995) (unpublished opinion). Issue preclusion, however, only determines what issues may or may not be raised in a separate proceeding. The findings concerning validity and infringement of Flowdata’s patent, were binding in the case in which they were entered, and the district court had the power to hold Cotton in contempt for violating the injunction entered in that case. Finally, Cotton argues that our previous opinion in this case addressing the power of a district court to enjoin non-parties somehow prohibits the district court from holding him in contémpt. See Additive Controls & Measurement Sys., Inc., 96 F.3d at 1390, 40 U.S.P.Q.2d at 1106. In that opinion, however, we simply stated that the district court could not enter an injunction restraining the independent conduct of non-parties who had not appeared before the court. Id. at 1397, 40 U.S.P.Q.2d at 1112. Here, Cotton has been held in contempt of an injunction that was lawfully entered and that bound him personally. Nothing in our prior opinion prevented the district court from taking that action if the facts so warranted, as they did in this case. B Harshman was also found in contempt for his actions taken with respect to the TruGear meter. Because Harshman had no relationship with AdCon, his contempt finding can be sustained only if he acted “in active concert and participation” with Cotton to violate the injunction. In view of the applicable requirements for finding active concert and participation in the Fifth Circuit, we conclude that the contempt sanctions against Harshman must be reversed. The general rule in civil contempt is that a party need not intend to violate an injunction to be found in contempt. See McComb v. Jacksonville Paper Co., 336 U.S. 187, 191-93, 69 S.Ct. 497, 93 L.Ed. 599 (1949). Non-parties are differently situated. Non-parties are subject to contempt sanctions if they act with an enjoined party to bring about a result forbidden by the injunction, see Regal Knitwear, 324 U.S. at 14, 65 S.Ct. 478; Chase Nat’l Bank, 291 U.S. at 436-37, 54 S.Ct. 475, but only if they are aware of the injunction and know that their acts violate the injunction, see Waffenschmidt v. MacKay, 763 F.2d 711, 723-26, 726 (5th Cir.1985) (“Although good faith is.irrelevant as a defense to a civil contempt order, good faith is relevant to whether [a non-party] aided or abetted [an enjoined party] in dissipating the funds with knowledge that it was violating the court’s orders.”). Harshman argues that because he did not work with AdCon during the period the injunction was in effect, he cannot be hable for acting in active concert and participation with an enjoined party. That assertion is incorrect, because Harshman dealt with Cotton, and Cotton was subject to the injunction by virtue of his legal identification with AdCon. Harshman’s contention is more properly directed at the scienter requirement for acting in active concert and participation. For Harshman to be aware that he was acting in violation of the injunction, he would have to be aware both that his acts were proscribed and that Cotton was bound by the injunction. In determining that Harshman had acted knowingly and in concert with Cotton to violate the injunction, the district court relied on Harshman’s course of conduct throughout this extended litigation. Harshman testified as an expert witness for AdCon at the first trial for a minimal fee. Harshman also produced the engineering drawings for the Tru-Gear meter, working from a prototype developed by Cotton. As partial compensation for his work on the drawings, Harshman received a 10% interest in Truflo. He also served as Truflo’s director of engineering. Finally, Harshman accepted a $25,000 payment for the drawings on July 12, 1994, the day that the court issued its first injunction against the TruGear meter. Despite the deference we accord to the district court in light of that court’s familiarity with this extended litigation, we do not believe that the evidence summarized above supports the court’s conclusion that Harshman knowingly acted in concert with Cotton to violate the injunction, particularly in light of the timing of the injunction and the evidence regarding when Harshman learned of it. Although the injunction issued in August 1993, Harshman did not receive actual notice of the injunction until December 29, 1993. Because actual notice is a requirement for contempt based on active concert and participation with an enjoined party, only those acts of Harshman that took place after December 29, 1993, can serve as a basis for contempt. Evidence at the March 1995 contempt hearing established that all of the drawings that Harshman produced for the TruGear meter, with the possible exception of a three-inch diameter meter that was never manufactured, were done before Harsh-man received notice of the injunction. Similarly, Harshman’s service to AdCon as an expert witness and his long association with Cotton do not establish contempt of the court’s order. At most, that evidence tended to show that Harshman was aware that Cotton was legally identified with AdCon. Other evidence adduced at the contempt hearing further suggests that Harshman did not act in knowing violation of the injunction. Harshman testified that when he learned of the injunction, he questioned both Cotton and a patent attorney as to whether the TruGear meter was affected by the injunction. Both assured Harshman that the meter was not covered by Flowdata’s patent and did not violate the injunction. Although those opinions turned out to be incorrect, that evidence would tend to indicate that Harshman did not knowingly violate the injunction. The only acts that can be ascribed to Harshman after he learned of the AdCon injunction are his receipt of the $25,000 payment and his occasional contacts with TruGear, Inc., the company that made the TruGear meters, to discuss manufacturing difficulties. Harshman’s acceptance of the $25,000 does not suggest knowing complicity with Cotton in view of the large amount of time Harshman spent preparing the drawings, and Flowdata does not argue that Harshman was aware of the court’s order enjoining the TruGear meter when Harsh-man accepted that money. Finally, there was nothing about Harshman's acts of providing advice to the manufacturer that would indicate that he acted with knowledge that his conduct violated the injunction. We therefore reverse that aspect of the district court’s order holding Harshman in contempt. C Truflo was held in contempt of the August 1993 injunction on a theory of successor liability. Following the March 1995 contempt hearing, the district court found that Cotton had formed Truflo as a means of evading the court’s injunction against AdCon, and that Truflo was therefore acting in active concert and participation with Cotton to avoid the injunction. An injunction would be of little value if its proscriptions could be evaded by the expedient of forming another entity to carry on the enjoined activity. For that reason, courts have consistently held that “successors” are within the scope of an injunction entered against a corporation and may be held in contempt for its violation. See Golden State Bottling Co. v. NLRB, 414 U.S. 168, 179, 94 S.Ct. 414, 38 L.Ed.2d 388 (1973); Regal Knitwear, 324 U.S. at 14, 65 S.Ct. 478; Rockwell Graphic Sys., Inc. v. DEV Indus., Inc., 91 F.3d 914, 919-20, 39 U.S.P.Q.2d 1580, 1584 (7th Cir.1996). Truflo argues that it cannot be a successor to AdCon because it inherited none of AdCon’s assets and as such would not have been regarded as a successor corporation under Texas law. That argument misses the mark, however, because the question of the extent to which a federal injunction applies to non-parties is governed by Federal Rule of Civil Procedure 65(d), not by state law. Prior to the adoption of the Rules of Civil Procedure, federal courts applied general principles of equity, or federal common law, to determine the scope of an injunction. See, e.g., Ex parte Lennon, 166 U.S. 548, 554-57, 17 S.Ct. 658, 41 L.Ed. 1110 (1897) (injunction bound non-party employee of enjoined corporation); Alemite Mfg. Corp. v. Staff, 42 F.2d 832, 833 (2d Cir.1930) (injunction did not cover employee who left enjoined employer); ICC v. Western N.Y. & P.R. Co., 82 F. 192, 194-95 (W.D.Pa.1897) (injunction entered by ICC order bound successors to enjoined railroads). Rule 65(d) codified the pre-rules precedents as to what constitutes privity, see 11A Wright et al., supra, § 2956, at 350; Regal Knitwear, 324 U.S. at 14, 65 S.Ct. 478, and courts have continued to look to federal law in determining the reach of federal injunctions under Rule 65(d), see Golden State Bottling Co., 414 U.S. at 179-80, 94 S.Ct. 414 (applying Rule 65(d) to enforce an NLRB order against a corporation that would not be considered a successor to debts and liabilities under state law); Vacco v. Operation Rescue Nat’l, 80 F.3d 64, 70 (2d Cir.1996) (finding successor liability without reference to state law). We therefore reject the argument that Texas corporate law governs the question whether Truflo is a successor to AdCon for purposes of deciding if Truflo is subject to the district court’s injunction.

4206684-16874

Opinion for the court filed by Circuit Judge MOORE. Circuit Judge GAJARSA concurs-in-part and dissents-in-part. MOORE, Circuit Judge. In this spent nuclear fuel (SNF) case, the United States appeals two narrow issues underlying the Court of Federal Claims’ award of damages to Dominion Nuclear Connecticut, Inc. (Dominion) for partial breach of contract. First, the government appeals the trial court’s holding that the Assignment of Claims Act does not prohibit the assignment of existing contract claims to Dominion. Because the Nuclear Waste Policy Act (NWPA), 42 U.S.C. § 10222, allows such assignments, we affirm the court’s holding on this issue. Second, the government appeals the trial court’s denial of discovery into benefits accruing to Dominion from the government’s failure to perform. Because the one-time fee that Dominion will owe when the government begins accepting SNF is not yet due, the government has no basis for its proposed discovery. We therefore affirm on this second issue as well. Background The general factual background surrounding the SNF cases appears in the trial court’s opinions and in earlier opinions by this court. See Neb. Pub. Power Dist. v. United States, 590 F.3d 1357, 1359 (Fed.Cir.2010) (en banc); Carolina Power & Light Co. v. United States, 573 F.3d 1271, 1273 (Fed.Cir.2009); Dominion Res., Inc. v. United States, 77 Fed.Cl. 151 (2007); Dominion Res., Inc. v. United States, 84 Fed.Cl. 259 (2008). We recount here only the facts pertinent to this appeal. The NWPA authorizes the United States Department of Energy (DOE) to enter into contracts with utility companies for the disposal of the utilities’ high-level nuclear waste and spent nuclear fuel (SNF). 42 U.S.C. § 10222(a). By law, the Nuclear Regulatory Commission cannot renew the license of any utility that has not entered into such a contract with the DOE. 42 U.S.C. § 10222(b)(1)(A). Using notice and comment rulemaking, the DOE promulgated a Standard Contract, codified at 10 C.F.R. § 961.11, which contains the material terms of its agreements with the utilities. 48 Fed.Reg. 16590-01 (Apr. 18, 1983). Under the Standard Contract, the DOE was to accept delivery of the SNF no later than January 31, 1998. The DOE partially breached the Standard Contracts it entered into with the nuclear utilities because it has yet to accept SNF from the utilities. See Carolina Power, 573 F.3d at 1273. It is unknown when DOE will perform under the Standard Contracts, and the utilities in this case and others seek mitigation damages incurred in storing the SNF. Discussion Assignment of Claims In 1983, Dominion’s predecessor, Northeast Utilities, executed three Standard Contracts for the disposal of SNF from its three nuclear power plants at the Millstone Power Station near New London, Connecticut. When Northeast Utilities sold Millstone to Dominion in 2001, it also assigned the three Standard Contracts to Dominion. Dominion, 84 Fed.Cl. at 261. The assignment stated that Northeast transferred to Dominion, along with title to the SNF, “all rights of the Sellers ... under the DOE Standard Contracts (including all rights to any claims of Sellers related to DOE defaults thereunder).” J.A. 1613. In the instant suit, Dominion claimed $52.0 million in interim storage costs, including $12.1 million incurred by Northeast prior to Dominion’s acquisition of the Millstone facility. Dominion, 84 Fed.Cl. at 263, 285. The Court of Federal Claims determined that approximately $200,000 of the pre-acquisition damages lacked sufficient evidentiary support and another $1 million was not recoverable because Dominion was unable to demonstrate that the costs incurred were caused by the government’s breach. Id. at 284-85. After also disallowing some of the claimed post-acquisition damages, the trial court awarded Dominion approximately $42.7 million, of which $10.9 million was incurred prior to Dominion’s acquisition of Millstone. Id. at 263; Appellee’s Br. 2. At issue here is the pre-acquisition portion of the damages awarded to Dominion. The government does not dispute Dominion’s entitlement to the interim storage costs for the SNF which it incurred after it acquired Millstone. The government also does not dispute its responsibility for interim storage costs for the SNF following the breach and up until Dominion’s acquisition of Millstone (the $10.9 million). The government’s argument on appeal, however, is that Dominion is not entitled to sue the government for the $10.9 million incurred by Northeast Utilities for storing the SNF. Moreover, the government does not dispute that pursuant to the contract in which Northeast Utilities sold Millstone to Dominion, both parties clearly intended for the sale to include the transfer of the claim against the government for the preacquisition interim storage fees. Rather the government argues that Northeast Utilities was not permitted to transfer its claim against the government for interim storage fees — that such a transfer is barred by the Assignment of Claims Act, Pub.L. No. 97-258, § 1, 96 Stat. 976 (codified at 31 U.S.C. § 3727) (Claims Act). The Claims Act generally prohibits the assignment of a claim against the government until “after [the] claim is allowed, the amount of the claim is decided, and a warrant for payment of the claim has been issued.” 31 U.S.C. § 3727. A similar statute, 41 U.S.C. § 15 (Contracts Act), generally prohibits the assignment of contracts. The government may waive these restrictions. Tuftco Corp. v. United States, 614 F.2d 740, 745 (Ct.Cl.1980). At trial, the government argued that the NWPA waives the provisions of the Contracts Act but not those of the Claims Act, thus preventing the transfer of any claim for pre-assignment damages from Northeast Utilities to Dominion. Dominion, 84 Fed.Cl. at 286. The government also argued that pursuant to Ginsberg v. Austin, 968 F.2d 1198, 1199 (Fed.Cir.1992), Congress must, but did not, expressly waive the Claims Act as to existing breach of contract claims. 84 Fed.Cl. at 286. The trial court disagreed, ruling that the NWPA provides a statutory waiver to the Claims Act and that the agreement assigning the Standard Contracts to Dominion specifically included the right to assert an existing breach of contract claim. Id. at 286. We review the CFC’s statutory interpretation and legal conclusions de novo and its factual findings for clear error. Heisig v. United States, 719 F.2d 1153, 1158 (Fed.Cir.1983). We begin our interpretation with the statutory language. Consumer Prod. Safety Comm’n v. GTE Sylvania, Inc., 447 U.S. 102, 108, 100 S.Ct. 2051, 64 L.Ed.2d 766 (1980). The relevant portion of the NWPA states: “The rights and duties of a party to a contract entered into under this section may be assignable with transfer of title to the spent nuclear fuel or high-level radioactive waste involved.” 42 U.S.C. § 10222(b)(3). After notice and comment rulemaking, the DOE adopted similar language in the Standard Contract: “The rights and duties of the Purchaser may be assignable with transfer of title to the SNF” with 90 days notice to the government. 10 C.F.R. § 961.11, Art. XIV. As it did at trial, the government argues on appeal that Congress waived the Contracts Act but not the Claims Act by stating in the NWPA that “[t]he rights and duties of a party to a contract” are assignable. Relying on Ginsberg, the government argues that the Claims Act requires a specific, express waiver for existing claims, and asserts that the NWPA does not provide one. The government also asserts that Congress’ use of the word “contract” but not “claim” in the NWPA draws a distinction between the assignment of an existing contract and the assignment of an existing claim for damages, and because the Claims Act and the Contracts Act are separate statutes, assignments of contracts and assignments of claims must be treated differently. Citing Tuftco, 614 F.2d at 744, the government argues that “the conceptual difference” between the statutes is that the Claims Act “pertains to claims for work already done” and the Contract Act “is more concerned with continuing obligations.” Thus, according to the government, the NWPA allows the assignment of “continuing rights and duties” under the contract, but not “assignment of claims that accrued prior to contract assignment.” The issue before us is whether the language which permits assignment of “the rights and duties of a party to a contract” includes the right to assign existing damages stemming from a breach of contract claim. Does this language allow the transfer of the damages claim for breach along with the transfer of the contract? We conclude that it does. The statutory language is broad and allows for transfer of not just the contract, but transfer of “the rights and duties of a party to a contract.” One of the rights of a party to a contract is the right to bring a claim for damages resulting from breach. The government’s reading of the NWPA modifies its plain language in one of two ways: it either reads into the NWPA the word continuing (i.e., only continuing rights and duties may be assigned); or it reads out “the rights and duties of a party” (i.e., only a contract may be assigned). The “rights and duties of a party to a contract” encompass not just the party’s continuing rights and duties under the contract, but also the party’s existing right to enforce the contract for an ongoing breach and to collect damages that have been incurred. See, e.g., Restatement (Second) of Contracts § 346 (“The injured party has a right to damages for any breach by a party against whom the contract is enforceable....”). Although the Claims Act and the Contracts Act are separate statutes, the Tuftco court recognized that the “concerns of the two statutes and the legal concepts involved in their applicability are the same.” Tuftco, 614 F.2d at 744 n. 4. The plain language of the NWPA provision states that all rights of a party to a contract are assignable. In this case, it is undisputed that in its transfer of Millstone, Northeast Utilities intended to assign its claim for interim storage fees. We see no reason to read a limitation into the text of the NWPA regarding claims for damages for an existing, ongoing partial breach. While it is certainly true that the bare assignment of a contract does not transfer all accrued claims, here, Congress’ intent is manifest in the plain language of the NWPA: a party to the Standard Contract may assign its rights. This includes the party’s right to collect damages incurred due to an existing, ongoing breach. Ginsberg, a case decided under state property laws pertaining to real property is not to the contrary. Ginsburg recites no rer quirement that the transfer of an existing breach of contract cause of action requires a separate, specific, express designation of the claim in the assigning document. On the contrary, Ginsberg states that a contract assignment may “specifically or impliedly designate” accrued causes of action. 968 F.2d at 1201. We conclude Congress permitted just such a designation in the NWPA. The government further argues that our conclusion subverts the purpose of the Claims Act, which “allow[s] the government to deal solely with the original contractor,” protects the government’s ability to defend itself by ensuring availability of evidence, and reduces the possibility of multiple payments of claims. As an initial matter, these policy arguments do not trump the plain language of the statute. Moreover, these policy concerns are not implicated here. This is not a case where there is any confusion over whether the parties intended to transfer the right to sue for pre-acquisition interim storage fees — it is undisputed that they did. A party to a standard contract cannot transfer its rights and duties to another party without also transferring title to the SNF. Hence, the party who is suing for interim storage fees is suing for all interim storage fees. Moreover, the plaintiff has the bur den to prove damages, and indeed, the trial court excluded a portion of Dominion’s claimed damages as unsupported. 84 Fed.Cl. at 284. Finally, the government does not assert that it was unable to access any needed information through discovery. The government does not appear to have suffered any harm from the consolidation of the interim storage fee claim with a single party. Northeast Utilities and Dominion complied with the requirements of the Standard Contracts and the NWPA when they executed the purchase agreement, which assigned to Dominion along with title to the SNF, “all rights ... under the DOE Standard Contracts (including all rights to any claims of [Northeast Utilities] related to DOE defaults thereunder).” J.A. 1613. Accordingly, Dominion has the right to collect pre-assignment damages for the government’s ongoing partial breach of Dominion’s Standard Contracts. One-Time Fee Seeking to offset damages, the government also appeals the trial court’s dismissal of certain counterclaims and defenses. Specifically, the government asserts that because Dominion’s one-time fee is not yet payable because of the government’s breach, Dominion may have profited by having use of that money in the meantime. Thus, the government reasons, it is entitled to discovery into any economic benefit obtained by Dominion by deferring payment of the one-time fee until the government finally performs. Within two years of execution of a Standard Contract, a contracting utility is required to select one of three options for the payment of a one-time fee for the disposal of SNF generated before April 7, 1983: (a) Option 1 — The Purchaser’s financial obligation for said fuel shall be prorated evenly over forty (40) quarters____ (b) Option 2 — The Purchaser’s financial obligation shall be paid in the form of a single payment anytime prior to the first delivery ... and shall consist of the fee plus interest on the outstanding fee balance. Interest is to be calculated from April 7, 1983, to the date of the payment based upon the 13-week Treasury bill rate.... (c) Option 3 — The Purchaser’s financial obligation shall be paid prior to June 30, 1985, or prior to two (2) years after contract execution, whichever comes later.... Standard Contract, art. VIII.B.2. No onetime fee is payable for Millstone Unit Three because it did not generate any electricity prior to April 7, 1983. For Millstone Units One and Two, Northeast Utilities selected Option 2, and agreed to pay a total of $82.1 million prior to the DOE’s acceptance of its first delivery of SNF. The parties do not dispute that this onetime fee is not yet due because of the government’s breach. According to the government, Dominion (or its predecessor) would have paid the one-time fee by 1998 had the government timely performed under the Standard Contract. The government asserts that it should be allowed to investigate if Dominion has received any economic benefit from having the use of that money in the meantime by investing, financing other projects, or avoiding the need to obtain loans. The Court of Federal Claims disagreed, and noted that the “one-time fee is simply not yet due under the Standard Contract, and the parties have contracted for how much interest accrues in the interim.” 77 Fed. Cl. at 157. The court concluded that “[u]ntil the one-time fee becomes due, the government does not have a claim for early payment.” Id. Nonetheless, the government asserts on appeal that Dominion should not be put into a better position or receive a windfall because of the government’s breach. The government previously argued a variant of this theory before us in another SNF case. See Yankee Atomic Elec. Co. v. United States, 536 F.3d 1268, 1280 (Fed. Cir.2008). In that case, we found that the utility had no obligation to pay the onetime fee that was not yet due according to the terms of Option 2. Id. Our holding in Yankee Atomic forecloses the government’s arguments in this case. Because the injured utilities are not relieved by the government’s partial breach from their obligation to pay the fee with interest when it comes due, the government is not entitled to an offset for any damages awarded. Id. Indeed, in our analysis Yankee Atomic, we quoted the ease on appeal before us now. We stated that the Court of Federal Claims “correctly note[d]” that [The utilities] still have the SNF, the government still has the obligation to pick it up, and plaintiffs still have to pay the one-time fee when it becomes due. The only thing that is different from the contract scenario is that [the utilities’] claim to have been forced to absorb unnecessary interim storage costs. If the government reimburses such costs, it hardly puts plaintiffs in a better position. Yankee Atomic Elec. Co. v. United States, 536 F.3d 1268, 1281 (Fed.Cir.2008) (quoting 77 Fed.Cl. at 156).

4172983-23513

MEMORANDUM DECISION ROBERT D. MARTIN, Bankruptcy Judge. This unusual case asks a bankruptcy court to determine whether an assault (possibly a sexual assault or rape) and a wrongful death (possibly a murder) were the willful and intentional acts of the debt- or, and, whether claims arising from the injuries are dischargeable in the debtor’s bankruptcy. Because no liability for the alleged acts has yet been determined and no damages assessed, this opinion and the decision it explains is to some degree advisory. This court lacks the jurisdiction, or at least the power and authority, to quantify any obligation arising from the debtor’s acts. Those claims are determinations of state law alone. However, a determination that those claims are dischargeable would render any further pursuit of the claims a violation of the injunction under 11 U.S.C. § 524. The plaintiffs have alleged that the debt- or, as a host of an underage drinking party, and as a participant with others in a sexual assault and battery, willfully and maliciously injured Ashley Johnson, one of the under-aged drinkers at the party. The alleged victim did not survive an automobile accident which happened within minutes after she left the drinking party. The defense acknowledges that the claims and the evidence might support a finding of negligence but deny that the injuries to Ashley Johnson were willful or malicious. This matter was tried to the Court on December 6, 7 and 19, 2012; the plaintiffs were represented by Joseph F. Owens and Eliza M. Reyes and the defendant was represented by Vincent J. Guerrero and Jeffery D. Nordholm; the evidence has been closed; and the parties have made closing arguments; so, I make the following: FINDINGS OF FACT 1. Debtor Andrew J. Weihert filed a voluntary Chapter 7 petition on February 23, 2012. 2. Plaintiffs Patricia A. Johnson and Del Johnson filed a complaint against the debtor on May 24, 2012. The plaintiffs are the parents of Ashley Johnson. Then-claims arise out of the circumstances immediately preceding her death on the morning of July 17, 2010. Patricia John son filed both in her individual capacity and as the special administrator of the estate of Ashley A. Johnson, deceased. 3. Shortly after 2:00 a.m. on July 17, 2010, Ashley Johnson died in a single car rollover accident off of West Road in Wa-tertown, Wisconsin. 4. The relevant chain of events leading up to her death began in the afternoon of July 16,2010. 5. Ashley Johnson’s friend Michelle Mess learned around 3:00 p.m. on July 16 that the debtor was planning a party at his house that evening. It was arranged that Mess would drive Ashley Johnson to the party. The debtor had not previously met or known Ashley Johnson. 6. Mess had also agreed to drive Brett Hart and Jaime Malkowski to the party. She drove her red Dodge Neon to their residence around 6:00 p.m. to pick them up. 7. Mess took Hart and Malkowski back to her house to wait until Ashley was ready. Around this time, Ashley Johnson was at the beach near her house watching the sunset with Tyler Bostwick. 8. Ashley Johnson texted Mess when she was ready to be picked up. 9. With Hart and Malkowski in the car, Mess arrived at Ashley Johnson’s house, and Ashley got into Mess’s car. 10. The four of them drove back to Mess’s house to wait for further information regarding when the party would start. 11. Around this time, Mess was exchanging texts with Kyle Porzky, the debt- or’s cousin. Mess requested that Porzky and the debtor procure beer for her, offering to reimburse them for it. 12. Mess received the green light to go to the party around 8:30 p.m. 13. Mess drove Hart, Malkowski, and Ashley Johnson to the debtor’s house at N8890 West Road, Watertown, Wisconsin. They arrived around 9:00 p.m. 14. Mess, Hart, Malkowski, Ashley Johnson, the debtor, Porzky, and the final guest, Martin Hutchins, were the only seven persons who attended the party. 15. Samantha Johnson did not attend the party. 16. Shortly after her arrival, Mess paid the debtor for the beer he had purchased for her. 17. The seven partiers played beer pong and watched movies, including Joe Dirt and a home video of the debtor four-wheeling. 18. Both Mess and Ashley Johnson were underage, and both were drinking at the party. The debtor knew they were drinking, and he knew they were underage. 19. No persons are remembered by those present as having gone upstairs during the party. The debtor’s bedroom is located on the ground floor of his house. 20. Malkowski wanted to leave the party early because she was sick. At around 10:45 p.m., Mess left the party to drive Hart and Malkowski home. They arrived at Hart and Malkowski’s residence shortly after 11:00 p.m. 21. Ashley Johnson stayed behind at the party with Hutchins, Porzky, and the debtor. 22. At one point, Hutchins slapped Ashley Johnson’s bottom. The debtor told Hutchins that behavior was unacceptable. 23. After dropping off Hart and Mal-kowski at their residence, Mess returned to the party. 24. The remaining partiers continued to play beer pong and watch movies. 25. Around 1:30 a.m., Hutchins and Porzky told Mess that she was too drunk to drive and offered to drive her home. Mess refused their offers and continued to stay at the party. 26. Around 2:00 a.m., the debtor ended the party because he needed to wake up early that morning to get to his work milking cows. 27. Ashley Johnson left the party site in Mess’s red Neon, with Mess driving. 28. Mess was wearing her seat belt. Ashley Johnson was not wearing her seat belt. 29. The car approached a 90 degree turn on West Road at a speed too great for Mess to execute the turn. When the car hit the gravel on the inside part of the curve, it started rolling over. 30. Hutchins and Porzky were standing outside of the debtor’s house when they heard tires squeal. They jumped into their vehicles and drove slightly more than one-quarter mile to the accident scene. 31. When Mess’s car stopped rolling, it was on its side. The driver’s side window was on the grass, and the open passenger side window was facing the sky. 32. Mess turned the vehicle’s key to “off’ because she was worried about a fire starting, and then she climbed out of the car. 33. Hutchins and Porzky arrived at the scene and inquired where Ashley Johnson was. Mess told them that Ashley was still in the ear. 34. Hutchins jumped into the car and felt Ashley Johnson’s body for a pulse. 35. When he did not feel a pulse, Hutchins lifted Ashley Johnson’s body out of the car. 36. Hutchins and Porzky carried Ashley Johnson’s body away from the car and laid it on the grass. 37. Mess instructed Hutchins and Porzky to leave the accident scene so they would not get in trouble. Hutchins and Porzky insisted that Mess first call 911. After she had called 911, they both left the scene. 38. Mess attempted to perform CPR on Ashley Johnson until the police arrived. 39. Ashley Johnson’s body was transferred to Milwaukee in a “body bag” for examination. At the medical examination, Ashley Johnson’s body exhibited injuries consistent with rollover accidents. CONCLUSIONS OF LAW 1. This Court lacks jurisdiction to enter judgment determining the specific amount of debt owed to the plaintiffs or the extent of any damages suffered by the plaintiffs. 2. The only issue before this Court is whether any debt which might be owed to the plaintiffs is non-dischargeable by the debtor in his bankruptcy. 3. The plaintiffs have failed to meet the burden of proving by a preponderance of the evidence that the debtor caused willful and malicious injury under 11 U.S.C. § 523(a)(6) on both their first and second causes of action. 4. No battery or sexual assault of Ashley Johnson by the debtor has been proved. 5. No conspiracy to commit any battery or sexual assault of Ashley Johnson has been proved. 6. Any social host liability that the debtor may have under Wisconsin law does not rise to the level of willful and malicious injury in this case. DISCUSSION Section 157 of Title 28 specifically withholds jurisdiction for bankruptcy courts to liquidate personal injury and wrongful death claims. Under Section 157, bankruptcy courts have subject matter jurisdiction to hear “core proceedings.” 28 U.S.C. § 157(b)(1). Core proceedings include, but are not limited to ... allowance or disallowance of claims against the estate or exemptions from property of the estate, and estimation of claims or interests for the purposes of confirming a plan under chapter 11, 12, or 13 of title 11 but not the liquidation or estimation of contingent or unliquidated personal injury tort or wrongful death claims against the estate for purposes of distribution in a case under title 11. 28 U.S.C. § 157(b)(2)(B) (emphasis added). In this case, the alleged injuries constituted both personal injury and wrongful death claims. Since the debt is being held dischargeable, any determination of liability or damages would have to be for purposes of distribution in the bankruptcy case. Therefore, this Court does not have the jurisdiction to enter a judgment on liability or damages in this case. Even if the debt had been held non-dischargeable, this Court still would not have been able to enter a money judgment. Determination of liability and damages would no longer have been for purposes of distribution in the bankruptcy case, but under the reasoning of Stern v. Marshall, this Court lacks the constitutional authority to enter a money judgment for non-dischargeable debt. Stern v. Marshall, — U.S. -, 131 S.Ct. 2594, 180 L.Ed.2d 475 (2011). As bankruptcy scholar Douglas Baird explains in his article, Blue Collar Constitutional Law, the Supreme Court in Stem “distinguishes between administering the bankruptcy estate on the one hand and engaging in actions that are the province of a common law judge on the other.” Douglas G. Baird, Blue Collar Constitutional Law, 86 Am. Bankr. L.J. 3, 4-5 (2012). Liquidating a non-dischargeable debt is not necessary to administer the bankruptcy estate, and dis-chargeability can be determined independent of liquidation. This Court does have both the authority and the jurisdiction to determine dischargeability of any debt owed by the debtor to the plaintiffs. Bankruptcy courts have jurisdiction to make “determinations as to the dischargeability of particular debts,” 28 U.S.C. § 157(b)(2)(I), and “[d]etermining the scope of the debtor’s discharge is a fundamental part of the bankruptcy process.” In re Deitz, 469 B.R. 11, 20 (9th Cir. BAP 2012). Under the logic of Stem, since determining dis-chargeability is necessary to administer the bankruptcy estate, the bankruptcy court has the constitutional authority to enter final judgments on dischargeability. See Stern, 131 S.Ct. 2594. The plaintiffs conceded in argument that there were only three items of evidence which supported their claims. Those were the testimony of Samantha Johnson, the identification and condition of denim shorts worn by Ashley Johnson on the night in question, and a brown leather belt which was found in the vehicle by crime scene investigators. The belt was identified by Patricia Johnson as having belonged to and been worn by Ashley Johnson on the night in question. The remainder of the plaintiffs’ case depended on the impeachment of witnesses with stories inconsistent with Samantha Johnson’s testimony or with a hypothesis for the events not directly subject to evidence in the case. Samantha Johnson’s testimony was, in most significant parts, incredible. She claimed to have been at the underage drinking party but her Grandmother with whom she lived testified that she never left the house on the evening of July 16th or the morning of July 17, 2010. No other witness corroborated the testimony of Samantha Johnson and none testified that she was present at the party. In addition, Samantha Johnson was said to have changed her testimony. Indeed, the story of the events of the evening of July 16th and the morning of July 17th varied in significant detail from one telling to the next, such as first claiming the victim was struck by a baseball bat and later claiming that she was struck by a softball-sized rock. There were many similar inconsistencies between prior and later stories attributed to Samantha Johnson. Her credibility was further undercut by evidence of influence, both by oral persuasion and by exchange of money and gifts from Plaintiff, Patricia Johnson, which appeared to have shaped Samantha Johnson’s testimony. For these reasons, Samantha Johnson’s account of the events of July 16th and 17th is not credited. The denim shorts were on Ashley Johnson’s body when it was examined by the medical examiner. They were extensively stained by blood, especially in the area of the crotch and left leg hole. The button fastener at the waistband was missing and appeared to have been torn out of the fabric completely, leaving a hole which appeared to oppose the button hole. Several teeth of the zipper appeared to be missing or damaged. The plaintiffs have argued for adopting an inference that the damage and staining to the shorts is the result of a sexual assault. However, the medical examiner, whose experience is very extensive, testified that the location of blood stains on clothes which have remained on a victim transported in a body bag is not a reliable indicator of the location or nature of injuries to a body. This is because blood flows and pools in low spots as the bag is moved. In addition, there is no direct evidence of when or how the button was torn or the zipper damaged. The brown belt was even more remote to the plaintiffs’ allegations than the other two items of evidence. Patricia Johnson said she saw it in the belt loops of Ashley’s shorts just prior to Ashley’s departure in Mess’ car. No other witness placed the belt anywhere except the crime scene investigator who found it lying on the floor of Mess’ car after the accident, as was shown by a crime scene photo. Plaintiffs have argued that a close examination of the photo indicates that the belt was not functional as a belt when found and there is some appearance of the buckle being loosened or detached. But, the suggested inference that the belt was torn in an assault on Ashley Johnson and removed from her shorts to facilitate a sexual assault has no independent proof. It is equally likely that the belt was removed from the shorts at some time while Ashley Johnson was in the car and under no duress because the buckle failed or that the buckle failed during that removal. At the medical examination (autopsy), the examiner found no injury to Ashley Johnson’s genitalia or anus and no injuries indicative of resistance to an assault. An examination undertaken by Patricia Johnson of the shorts and panties found no evidence of sperm or semen. No examination was apparently made for DNA. So, neither the incredible testimony of Samantha Johnson nor the physical evidence sustains the plaintiffs’ allegations of sexual assault. Other allegations of assault, battery and murder depend wholly on the testimony of Samantha Johnson and have been traced to the anguished imagination of Ashley Johnson’s grieving mother. As part of their first claim, the plaintiffs also alleged that the debtor was part of a conspiracy to commit battery and assault. Under Wisconsin law, there is “no such thing as a civil action for conspiracy,” but “[t]here is an action for damages caused by acts pursuant to a conspiracy.” Radue v. Dill, 74 Wis.2d 239, 241, 246 N.W.2d 507, 509 (1976) (quoting Singer v. Singer, 245 Wis. 191, 195, 14 N.W.2d 43, 46 (1944)). In this case, no conspiracy or damages pursuant to a conspiracy were proved. The only evidence of the alleged conspiracy was the same as that already discussed: the shorts, the belt, and the incredible testimony of Samantha Johnson. To the extent that the plaintiffs alleged assault and battery, they alleged that the debtor acted in concert with other parties and hence was part of a conspiracy. Since the assault and battery were not proved, the conspiracy was not proved either. No additional evidence of any plan or scheme was offered. Turning to the plaintiffs’ second claim of social host liability, this case presented the complicated question of whether a claim based in negligence can ever be considered non-dischargeable as a willful and malicious injury. In Jendusa-Nicolai v. Larsen, the Seventh Circuit Court of Appeals reviewed the definitions of willful and malicious injury and noted that “courts are all over the lot in defining this phrase in section 523(a)(6).” Jendusa-Nicolai v. Larsen, 677 F.3d 320, 322 (7th Cir.2012). But the Court of Appeals also stated that it felt the variation in definitions is a “pseudo-conflict among circuits” of “different legal definitions of the same statutory language that probably don’t generate different outcomes.” Jendusa-Nicolai, 677 F.3d at 322-23. In attempting to reconcile these variations, the Court of Appeals held that “whatever the semantic confusion, we imagine that all courts would agree that a willful and malicious injury, precluding discharge in bankruptcy of the debt created by the injury, is one that the injurer inflicted knowing he had no legal justification and either desiring to inflict the injury or knowing it was highly likely to result from his act.” Id. at 324. Generally, negligence and recklessness do not constitute willful and malicious injury. In Kawaauhau v. Geiger, the Supreme Court held that “debts arising from recklessly or negligently inflicted injuries do not fall within the compass of § 523(a)(6).” Kawaauhau v. Geiger, 523 U.S. 57, 64, 118 S.Ct. 974, 140 L.Ed.2d 90 (1998). In Kawaauhau, the bankruptcy court had concluded that the doctor’s treatment fell so far below the appropriate standard of care that it was willful and malicious, but the Supreme Court held that “nondischargeability takes a deliberate or intentional injury, not merely a deliberate or intentional act that leads to injury.” Id. at 61, 118 S.Ct. 974. Instead, willful and malicious injury naturally overlaps with intentional torts. As the Supreme Court explained in Kawaauhau, “the (a)(6) formulation triggers in the lawyer’s mind the category ‘intentional torts,’ as distinguished from negligent or reckless torts” because “[ijntentional torts generally require that the actor intend the con sequences of an act, not simply the act itself.” Kawaauhau, 523 U.S. at 61-62, 118 S.Ct. 974 (internal quotations omitted). However, the overlap is not exact. Not all intentional torts involve an intent to cause injury. Jendusa-Nicolai, 677 F.3d at 322. For example, “libel can be committed by someone who believes, though negligently or even recklessly, that his libelous statement is privileged because it’s true; such a debt is therefore dischargeable.” Id. (citing Wheeler v. Laudani, 783 F.2d 610, 615 (6th Cir.1986)). That leaves the question of whether there exists a small category of negligence cases that could constitute willful and malicious injury. Here, the plaintiffs’ second claim was for social host liability, a claim based in negligence. See Wis. Stat. § 125.085(4)(b) (“Subsection (2) [providing immunity from civil liability for social hosts that provide alcohol] does not apply if the provider knew or should have known that the underage person was under the legal drinking age and if the alcohol beverages provided to the underage person were a substantial factor in causing injury to a 3rd party.”). Assuming that the debt- or were found to have social host liability — based on his providing alcohol to Mess, knowing she was underage, and the alcohol being a substantial factor in the injury to Ashley Johnson — could this claim rise to the level of willful and malicious injury? Whether the intent or knowledge element can ever be attached to a negligence claim to make it rise to the level of willful and malicious injury, the plaintiffs failed to prove intent or knowledge here. The plaintiffs failed to show that the debtor either desired to inflict the injuries that Ashley Johnson suffered in the car crash or that he knew her injuries were highly likely to occur. When the debtor ended his party around 2:00 a.m. that morning, the scenario that ultimately played out was only one of many possibilities. Mess could have changed her mind about accepting a ride from Porzky or Hutchins. Ashley Johnson could have asked to get a ride home with one of them instead of with Mess. Mess and Ashley could have stood around talking or waiting in the car for Mess to sober up. Mess could even have driven safely while intoxicated, or Ashley Johnson may not have been injured if she had worn her seat belt. When the debtor ended his party that morning, the car accident was a possibility, but at that point in time, it was not an outcome that was “highly likely to occur.” Rule 11 Sanctions On October 3, 2012, the debtor brought a motion for sanctions under Federal Rule of Bankruptcy Procedure 9011 against plaintiffs and plaintiffs’ counsel. Fed. R. Bankr.P. 9011. The debtor argued that plaintiffs presented a pleading and later advocated allegations and factual contentions in that pleading for which there could never be evidentiary support. A final hearing was held on the motion for sanctions on December 12, 2012, and the matter was taken under advisement. At the time of the hearing, the debtor objected to plaintiffs’ Exhibits 2, 5, and 6.1 have determined that the exhibits in question are relevant and no other evidentiary objections are applicable. Therefore, the exhibits in question are received into evidence. Federal Rule of Bankruptcy Procedure 9011 authorizes a bankruptcy court to impose sanctions on attorneys or unrepresented parties. Rule 9011 provides: By presenting to the court (whether by signing, filing, submitting, or later advocating) a petition, pleading, written motion, or other paper, an attorney or unrepresented party is certifying that to the best of the person’s knowledge, information, and belief, formed after an inquiry reasonable under the circumstances ... (3) the allegations and other factual contentions have evidentiary support or, if specifically so identified, are likely to have evidentiary support after a reasonable opportunity for further investigation or discovery ... Fed. R. Bankr.P. 9011(b). Rule 9011 is the “bankruptcy counterpart of Federal Rule of Civil Procedure 11.” Collier on Bankruptcy § 9011.02. “Because Rule 9011 conforms to Civil Rule 9011, precedents that have been and will be developed under the latter will be of significant assistance in interpreting the former.” Id. The Seventh Circuit Court of Appeals has identified several factors that are relevant in determining whether a reasonable inquiry was conducted under Rule 11 and therefore under Rule 9011: To measure the reasonableness of a party’s inquiry into the factual bases of its claims, we look to a number of factors including: “whether the signer of the documents had sufficient time for investigation; the extent to which the attorney had to rely on his or her client for the factual foundation underlying the pleading, motion or other paper; whether the case was accepted from another attorney; the complexity of the facts and the attorney’s ability to do a sufficient pre-filing investigation; and whether discovery would have been beneficial to the development of the underlying facts.” Brown v. Federation of State Medical Bds. of the United States, 830 F.2d 1429, 1435 (7th Cir.1987).

6134546-19603

Opinion Carman, Judge: Plaintiff, Mitsubishi Heavy Industries (MHI), moves for judgment upon the agency record pursuant to Rule 56.1 of this Court. Plaintiff contests certain aspects of the Department of Commerce’s (Commerce) final results in Certain Internal-Combustion, Industrial Forklift Trucks from Japan, Final Results of Antidumping Duty Administrative Review, 57 Fed. Reg. 3,167 (1992) (Final Determination). Plaintiff seeks to have the Court remand the matter to Com merce. The Court has jurisdiction over this action pursuant to 28 U.S.C. § 1581(c) (1988). Background Commerce published an antidumping duty order covering certain internal-combustion forklift trucks from Japan on June 7, 1988, and a notice of an initiation of administrative review of the antidumping duty order on July 25, 1989. See Antidumping Duty Order and Amendment to Final Determination of Sales at Less Than Fair Value; Certain Industrial Internal-Combustion Forklift Trucks from Japan, 53 Fed. Reg. 20,882 (1988); Initiation of Antidumping and Countervailing Duty Administrative Reviews, 54 Fed. Reg. 30,915 (1989) (Initiation). The review covered the period of November 24, 1987 through May 31, 1989. Initiation, 54 Fed. Reg. 30,915. Commerce sent MHI a questionnaire on August 4, 1989, requesting information on MHI’s corporate structure and sales data of forklift trucks in the home market and United States. R.Doc. 24. MHI stated it sold forklift trucks directly to Mitsubishi Motors Corporation (MMC) and MHI dealers, and made its sales to the U.S. through trading companies. Conf. Doc. 14 at 245. According to MHI, “[b]oth types of dealers operate under the same dealership agreement, except the agreement with MHI dealers has an additional article providing advice and counsel by MHI. Also, as explained below, MHI dealers receive special rebates and terms of payment.” Id. MHI argued in its response Commerce “should only consider sales to MMC dealers because all MMC dealers are treated equally and are treated differently than MHI dealers.” Id. at 248. MHI therefore, submitted data pertaining to its sales to MMC dealers, but no information regarding MHI dealer sales to unrelated customers. MHI also failed to report approximately 30% of U.S. sales, arguing these sales had been liquidated by the U.S. Customs Service. Conf. Doc. 14; Conf. Doc 95. In response to petitioners’ below cost allegations, on March 20, 1990, Commerce requested MHI provide information on sales by MHI dealers to unrelated buyers or show that sales from MHI to MHI dealers were arm’s-length transactions. R.Doc. 176. Commerce also asked MHI to correct prior deficiencies including submitting MHI dealer sales to unrelated customers in Japan in order to demonstrate whether MHI sales to MHI dealers were arm’s-length transactions. Id. MHI subsequently submitted a response, but refused to submit data on sales between MHI dealers and end users. R.Doc. 187 at 1595. MHI claimed the requested information was not relevant to the proceeding “regardless of whether MHI’s sales to MHI dealers are or are not considered arms-length transactions. ” Id. Plaintiff further stated it would “be extremely burdensome if not impossible for MHI to obtain information from its related dealers on their sales.” Id. at 1597. After Commerce requested information relevant to its change in the model match selection process and made additional requests for MHI dealers sales to end users, MHI submitted its supplemental responses. See R.Doc. 208; R.Doc. 214; R.Doc. 222. It failed, however, to report sales for allegedly liquidated entries and again refused to submit MHI dealer sales to end users. R.Doc. 222 at 2,111. MHI continued to refuse to supply the required data despite requests from Commerce in several letters and conferences. See R.Doc. 248; R.Doc. 250; R.Doc. 256; R.Doc. 272. Commerce advised MHI that failure to report all MHI dealer sales to end users could result in the use of BIA. R.Doc. 272. MHI finally agreed to provide the data if it were granted a 45-day extension of time which, according to MHI, would be necessary to “undertake the enormous task of compiling this information.” R.Doc. 278 at 337-38. MHI, however, stated that Commerce must determine whether sales between MHI dealers and end users would be used in computing foreign market value before MHI would submit such information. Id. On October 16, 1990, the day after the due date for MHI’s supplemental questionnaire, Commerce personnel met with MHI representatives to discuss MHI’s request for an extension of time. R.Doc. 287. During this meeting, Commerce stated it needed the MHI dealer to end users sales information and MHI responded that Commerce should not examine such sales. Id. At the conclusion of the meeting, Commerce denied MHI’s request for an extension of time. R.Doc. 284. In its denial letter, Commerce pointed out that MHI had over one year to obtain the MHI dealer’s end-user sales and more than six months to gather the cost of production data for the MHI sales to related MHI dealers. Id. Shortly after Commerce denied MHI’s request for an extension of time, MHI wrote Commerce to protest the denial and to reiterate its contention that MHI dealer sales to end users were irrelevant to the investigation. R.Doc. 285. In addition, in contrast to previous statements, MHI claimed it could not supply MHI dealers sales to end users data because it is not possible to obtain from these dealers the information necessary to respond fully to a questionnaire from the Department * * *. [A] s a practical matter MHI is unable to provide these data in a form sufficient for purposes of calculation of foreign market value. As we all have agreed, it would have been preferable to provide these data and then discuss their applicability, but this could not be done. Id. at 385. On November 1, 1990, petitioners sent Commerce a letter arguing BIA should be used in calculatingMHI’s dumping margin R.Doc. 298. In response to petitioners’ letter, MHI submitted a letter with attachments to Commerce. Commerce, however, rejected the submission, citing 19 C.F.R. § 353.31(b)(2) (1990)’s prohibition against unsolicited questionnaire responses. R.Doc. 320. MHI sent additional letters in which it argued Commerce could not properly use or request information pertaining to MHI dealer sales to end users under its regulations. R.Doc. 324 at 1,135-38; R.Doc. 325 at 1,154. Additionally, MHI maintained even if BIA were proper, Commerce should use constructed value as BIA for MHI dealer sales to end users in order to calculate foreign market value. R.Doc. 325 at 1,154. Commerce published the preliminary results of its review on May 23, 1991. Certain Internal-Combustion, Industrial Forklift Trucks From Japan; Preliminary Results of Antidumping Duty Administrative Review, 56 Fed. Reg. 23,675 (1991). MHI requested Commerce conduct a public hearing, and on July 12, 1991, after MHI and petitioners submitted hearing briefs, Commerce had a hearing on its preliminary determination. R.Doc. 446. On August 7, 1991, Commerce rejected material contained in MHI’s hearing briefs due to the presence of new and unsolicited factual information. R.Doc. 458. Commerce published the final results of its administrative review on January 28, 1992. The final results affirmed Commerce’s preliminary determination to use best information available (BIA) and calculated MHI’s dumping margin to be 39.15%. Final Determination, 57 Fed. Reg. at 3,184. Contentions of the Parties MHI contends MHI’s decision to use BIA to calculate foreign market value and U.S. price for MHI’s sales was not in accordance with law. MHI argues Commerce was unjustified in its demand for information regarding sales between MHI dealers and end users in the home market and data on those U.S. sales which Customs had liquidated. Plaintiff claims there was substantial evidence on the record demonstrating that all sales by MHI to MHI dealers in the home market were arm’s-length sales. Plaintiff maintains the statutory and regulatory framework permit, but do not require, Commerce to use sales to related parties. According to MHI, Commerce’s calculation of foreign market value should have been based on sales by MHI to MMC and MHI dealers. Additionally, MHI argues Commerce should not have resorted to BIA even if the MHI sales to MHI dealers were not arm’s-length, because (1) Commerce would not have used the requested information in its calculations and (2) the information did not exist. MHI maintains Commerce’s choice of BIA was not in accordance with law. If the Court holds Commerce properly used BIA, MHI argues that Commerce should not have used the “all others” rate. Instead, according to MHI, Commerce should have used the evidence on the record and the results of the review wherever possible. Defendant maintains its final determination is based on substantial evidence on the record and is otherwise in accordance with law. According to Commerce, it properly requested data on sales by MHI dealers to end users because the information was necessary to calculate foreign market value. Similarly, Commerce argues it properly required MHI to provide data on all U.S. sales, including liquidated entries, because Commerce could use the data to determine the estimated antidumping duty deposit for future entries pursuant to 19 U.S.C. § 1675(a)(2) (1988). Commerce contends it properly decided to use BIA after MHI impeded the review by (1) failing to provide MHI dealer sales to end users; (2) reversing its position concerning the arm’s-length nature of its sales to MHI dealers; and (3) failing to provide information on U.S. sales which Customs had liquidated. Moreover, Commerce argues it was well within its discretion in choosing as BIAMHI’s rate from the original less than fair value (LTFV) investigation. Standard of Review In an action challenging Commerce’s final determination, this Court must decide whether Commerce’s determination is supported by substantial evidence on the record and is otherwise in accordance with law. 19 U.S.C. § 1516a(b)(1)(B) (1988). “Substantial evidence is something more than a ‘mere scintilla,’ and must be enough reasonably to support a conclusion.” Ceramica Regiomontana S.A. v. United States, 10 CIT 399, 405, 636 F. Supp. 961, 966 (1986), aff’d, 5 Fed. Cir. (T) 77, 810 F.2d 1137 (1987) (citations omitted). The Court must accord substantial weight to the agency’s interpretation of the statute it administers. American Lamb Co. v. United States, 4 Fed. Cir. (T) 47, 54, 785 F.2d 994, 1001 (1986) (citations omitted). “An agency’s ‘interpretation of the statute need not be the only reasonable interpretation or the one which the court views as the most reasonable.’” ICC Indus, Inc. v. United States, 5 Fed. Cir. (T) 78, 85, 812 F.2d 694, 699 (1987) (emphasis in original) (citation omitted). Where “the statute is silent or ambiguous with respect to the specific issue, the question for the court is whether the agency’s answer is based on a permissible construction of the statute.” Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 843 (1984). The agency, however, must not “contravene or ignore the intent of the legislature or the guiding purpose of the statute.” Ceramica Regiomontana, 10 CIT at 405, 636 F. Supp. at 966 (citations omitted). Discussion A. Foreign Market Value: Pursuant to 19 U.S.C. § 1675(a)(2)(A) (1988), Commerce must determine “the foreign market value and United States price of each entry of merchandise subject to the antidumping duty order and included within that determination.” In order to make this determination, Commerce must ascertain, among other things, whether sales to related parties are at arm’s-length. See 19 U.S.C. § 1677b(a)(3) (1988). MHI informed Commerce in its November 20, 1989 response that its sales to MHI dealers were not arm’s-length. Conf Doc. 14. MHI stated there are two types of dealers in Japan: MHI dealers and MMC dealers. According to MHI all dealers receive the same gross prices, but the dealer agreements differ in that MHI dealers have an article in their agreements concerning counselling by MHI on their operations. Also, the net prices differ by dealer type because MHI dealers receive special discounts and rebates and special terms of payment. Id. at 245. When sales to related parties are not arm’s-length transactions, Commerce is permitted to base foreign market value upon the sales price to the first unrelated party. See 19 U.S.C. § 1677b(a)(3); 19 C.F.R. § 353.45 (1990). Commerce, therefore, requested information from MHI regarding sales from its related dealers to end users. Despite Commerce’s granting MHI’s requests for extensions of time in order to obtain the end user sales data, MHI never provided the information. Instead, MHI reversed its position concerning the arm’s-length nature of its sales to MHI dealers, but failed to carry its burden of proof demonstrating the sales to related parties were at arm’s-length. Throughout the investigation, MHI continually objected both verbally and in writing to Commerce’s request for sales data between MHI dealers and end users. MHI unilaterally decided that such data was irrelevant to the investigation. In a letter dated October 10, 1990, MHI informed Commerce that it would provide the data only if Commerce granted it an extension of time of 45 days. MHI explained that it needed the extension because MHI does not have sales information, including prices and adjustments, for sales by MHI dealers. It must ask each dealer to collect this information * * *. Nonetheless if there is a reasonable basis for the Department requiring this information, MHI will, with the dealers, undertake the enormous task of compiling this information. However, it will take between 30 and 45 days for this information to be compiled * * *. [T]he information will likely be provided to the Department before December 1, 1990 * * *. R.Doc. 278 at 337-38. After Commerce denied its request for an extension of time, MHI submitted a letter which indicated a reversal in MHI’s position concerning its ability to provide the data: MHI is unable to supply data on sales by MHI dealers to end users * * *. [I]t is not possible to obtain from these dealers the information necessary to respond fully to a questionnaire from the Department. Moreover, the recordkeeping practice of the dealers make [sic] verification of any data provided by them doubtful. Thus, as outlined above, while we do not believe these data are legally necessary for calculation of foreign market value, as a practical matter MHI is unable to provide these data in a form sufficient for purposes of calculation of foreign market value. R.Doc. 285 at 385. Thus, just as MHI changed its position on whether MHI’s sales to MHI dealers were arm’s-length, it changed its position on whether it was able to provide the requested information. Commerce granted MHI three extensions of time and sent MHI several deficiency letters before denying MHI’s request for an extension of time on October 16, 1990. See, e.g., R.Doc. 125 at 266; R.Doc. 129 at 386; R.Doc. 130 at 390, R.Doc. 211 at 1975; Conf. Doc 88. Thus, Commerce provided MHI with a more than adequate amount of time in which to supply the requested information. Furthermore, the Court finds no merit in MHI’s claim that the information did not exist. Commerce established at verification that the information did exist and was available. See Conf. Doc. 111 at 2,824-25. The cited document indicates certain information, that appears to be of the type requested by Commerce, was provided in a report to the company president. MHI contends Commerce was not authorized under the law and regulations to request data on sales by MHI dealers since MHI sold “to” rather than “through” these dealers. According to MHI the use of BIA would be inappropriate because the requested data would not be used to calculate foreign market value under Commerce’s model matching test and level of trade regulation and was not necessary for the below cost test. The Court does not address the issue MHI raises regarding whether MHI sales were “to” rather than “through” MHI dealers. Because MHI failed to provide Commerce with the requested information, Commerce was unable to determine whether in fact MHI sales to its related dealers were within the regulatory scheme of 19 C.F.R. § 353.45(a) or (b). Review of the administrative record reveals a pattern similar to that found in Ansaldo Componenti: unresponsive, insufficient, and untimely submissions in response to repeated attempts by Commerce to elicit information relevant to the underlying reviews. Ansaldo Componenti, S.p.A. v. United States, 10 CIT 28, 36, 628 F. Supp. 198, 205 (1986). The Ansaldo Court pointed with disapproval to Ansaldo’s unilateral determination regarding the necessity of information requested by Commerce. Of equal concern to the Court is plaintiffs propensity to draw conclusions of both factual and legal significance on matters properly within Commerce’s domain. The administrative record discloses several instances in which Ansaldo chose not to submit the information requested because Ansaldo had concluded such information could not serve as a basis for Commerce’s administrative review * * *. Such conclusions, reached unilaterally with no foundation in statute or administrative practice, are inherently flawed. It is Commerce, not the respondent, that determines what information is to be provided for an administrative review. Id. at 37, 628 F. Supp. at 205. The Ansaldo Court concluded that Commerce’s use of BIA was justified by Ansaldo’s failure to furnish the requested information. Id. at 38, 628 F. Supp. at 206. MHI argues Ansaldo does not apply to the instant case because MHI cooperated to the best of its ability and was not “persistently untimely. ” The Court disagrees with MHI. Commerce repeatedly requested information on sales by MHI’s related dealers to the first unrelated customers. See, e.g., R.Doc. 176; R.Doc. 256; R.Doc. 250, R.Doc. 272. Rather than provide the required data, MHI filed submissions explaining why it did not need to and was allegedly unable to submit the requested information. See, e.g., R.Doc. 187; R.Doc. 201; R.Doc. 238; R.Doc. 245. Additionally, MHI made unilateral decisions concerning the necessity of information requested by Commerce just as Ansaldo did. As the Court pointed out in Ansaldo, “the consequence of failing to provide adequate and timely information is to leave Commerce with no alternative but to proceed with its review relying upon the best information available” Ansaldo, 10 CIT at 38, 628 F. Supp. at 206. The Court holds Commerce properly (1) determined MHI’s sales to MHI dealers were not arm’s-length; (2) requested information concerning MHI dealer sales to end users; and (3) resorted to BIA. B. U.S. Sales: Commerce may gather information on liquidated entries of subject imports to calculate accurately the U.S. price of the merchandise under review and deposit rate for future entries. 19 U.S.C. § 1675(a)(2). Pursuant to 19 U.S.C. § 1675(a)(2), Commerce requested information from MHI on “all U.S. sales of forklift trucks within the scope of the an-tidumping duty order for the review period.” R.Doc. 176 at 979 (emphasis in original). Plaintiff failed to submit its liquidated sales information, thus preventing Commerce from determining whether inclusion of these entries was necessary to accurately establish estimated future deposit rates and U.S. price. See Final Determination, 57 Fed. Reg. at 3,182.

1852464-9232

JOHN R. GIBSON, Senior Circuit Judge. Dwight Wharton-El appeals from denial of his petition for a habeas corpus writ under 28 U.S.C. § 2254 (1988). Wharton-El was convicted of robbing the Ponderosa Steakhouse in Dubuque, Iowa, and the nearby Burger King Restaurant within a three hour period. Wharton-El repeats the arguments made in the district court , namely, that he was denied his Sixth Amendment right to a fair trial and his Fourteenth Amendment due process right as a result of the following: (1) joinder of the two robbery charges; (2) imposition of consecutive sentences for the two robberies; (3) failure to allege use of a firearm in the trial information; (4) failure to require a special jury interrogatory regarding use of a firearm; (5) systematic exclusion of African Americans from the venire; and (6) ineffective assistance of counsel, particularly relating to the jury selection process. We affirm the denial of the writ. Wharton-El argues that numerous trial errors violated both his Sixth Amendment right to a fair trial and his Fourteenth Amendment right to due process. The Iowa state courts affirmed Wharton-El’s convictions and denied post-conviction relief. On direct appeal, Wharton-El raised only state law objections regarding the failure to allow separate trials for the two robberies, the abuse of discretion in sentencing, and other sentencing errors. However, in Wharton-El’s brief supporting his subsequent motion for post-conviction relief, he alleged that his “rights of Due Process and Equal Protection as provided by the United States and Iowa Constitutions were violated in the trial and sentencing proceedings.” Further, in his pro se brief in resistance to his appellate counsel’s motion to withdraw, Wharton-El alleged violations of federal law, the Fourteenth Amendment and due process. In dismissing Wharton-El’s appeal as frivolous, the Iowa Supreme Court considered “the motion to withdraw and' brief in support, applicant’s resistance, and the trial court record.” Wharton v. State, No. 88-1600 (Iowa S.Ct. June 6, 1989). Thus, Wharton-El fairly presented to the Iowa courts the substance of his habeas claim as required by Anderson v. Harless, 459 U.S. 4, 6, 103 S.Ct. 276, 277, 74 L.Ed.2d 3 (1982) (per curiam) (citations omitted); see also Thomas v. Wyrick, 622 F.2d 411, 413 (8th Cir.1980). After considering these issues on the merits, we are convinced that there was no constitutional error. As discussed above, Wharton-El argues constitutional error based on the following: (1) failure to sever the robbery charges; (2) imposition of consecutive sentences; (3) failure to allege use of a firearm in trial information; (4) failure to require a special jury interrogatory regarding use of a firearm; (5) systematic exclusion of African-Americans from venire; and (6) ineffective assistance of counsel. To obtain habeas relief for failure to sever, Wharton-El must show that “the failure to grant severance rendered the trial ‘fundamentally unfair.’ ” Hollins v. Department of Corrections, 969 F.2d 606, 608 (8th Cir.1992). Wharton-El argues that the failure to grant severance prejudiced him because the evidence supporting the conviction in the Burger King robbery was stronger than the evidence supporting the conviction in the Ponderosa robbery. However, the state appellate court held that the two robberies were part of a common scheme or plan. State v. Wharton, No. 84-1661, 388 N.W.2d 676 (Table) (Iowa Ct.App. Dec. 18, 1985). This finding is presumed correct under section 2254(d). Further, the trial court instructed the jury to determine Wharton-El’s guilt for each count separately. Wharton, No. 84-1661, slip op. at 4. Taken together, the finding of a common scheme or plan and the cautionary instruction indicate that the failure to grant severance did not render Wharton-El’s trial fundamentally unfair. Next, Wharton-El argues that the trial court abused its sentencing discretion by imposing consecutive sentences and that this abuse violated his due process rights. Iowa law allows the trial judge to impose consecutive sentences when the defendant is convicted of two or more offenses, Iowa Code § 901.8 (1993); here, the trial judge did just that. To obtain habeas relief for sentencing error when the sentence imposed falls within statutory guidelines, Wharton-El must show: (1) “a clear and convincing case of abuse of discretion;” or (2) “a patent violation of a constitutional guarantee.” United States v. Garcia, 785 F.2d 214, 228 (8th Cir.) (quoting Orner v. United States, 578 F.2d 1276, 1280 (8th Cir.1978)), cert. denied, 475 U.S. 1143, 106 S.Ct. 1797, 90 L.Ed.2d 342 (1986). The state appellate court stated that, in sentencing Wharton-El, the trial court reviewed his background, the nature of his offenses, and his chances for rehabilitation. Wharton, No. 84-1661, slip op. at 6. We consider this to be neither an abuse of discretion nor a patent violation of any constitutional guarantee. Wharton-El next alleges due process violations in that (1) the trial information did not allege the mandatory minimum sentence for use of a firearm under Iowa Code section 902.7; and (2) the trial court did not submit a special interrogatory to the jury regarding firearm use. These claims are meritless. Section 902.7 “relates to sentene-ing and not to elements of the crime,” State v. Wharton, No. 15716, slip op. at 1 (Iowa Dist.Ct. Sept. 30, 1988). To be sentenced under the five-year mandatory minimum of section 902.7, the trial information must contain an allegation of firearm use, and the court must submit a special interrogatory to the jury. Iowa R.Crim.P. 6(6). Here, however, the defendant was not sentenced under the section 902.7 mandatory minimum; instead, he received the mandatory minimum under section 902.11. Iowa Code § 902.11 (1993) (formerly Iowa Code § 906.5) (prior forcible felon must serve a minimum of one-half of the maximum term of the current sentence). Since the mandatory minimum for prior forcible felons is longer, the shorter mandatory minimum for firearm use is implicitly subsumed when, as here, both could apply. See Iowa v. Burgs, 479 N.W.2d 323, 324 (Iowa 1992). Further, the state appellate court concluded that “the trial court did not sentence defendant to consecutive twenty-five year sentences because a five-year mandatory minimum was not available. Rather, the court sentenced defendant to the consecutive sentences because the trial court felt defendant deserved this amount of punishment.” Wharton, No. 84-1661, slip op. at 7. We conclude that this was neither an abuse of discretion nor patently violative of any constitutional guarantee. Wharton-El further alleges that “the cumulative effect of these departures from Iowa’s due process requirements resulted in a denial to [Wharton-El] of fundamental fairness, in violation of the Sixth and Fourteenth Amendments.” We reject cumulative error as a basis for habeas relief. Girtman v. Lockhart, 942 F.2d 468, 475 (8th Cir.1991); Scott v. Jones, 915 F.2d 1188, 1191 (8th Cir. 1990), cert. denied, 499 U.S. 978, 111 S.Ct. 1626, 113 L.Ed.2d 723 (1991). “[E]ach habeas claim must stand or fall on its own.” Scott, 915 F.2d at 1191. Accordingly, we affirm the district court’s denial of habeas relief on these grounds. Wharton-El next argues that the jury selection procedures totally excluded African-Americans from the venire, in violation of the Sixth Amendment as applied to the states through the Fourteenth Amendment. Wharton-El showed no evidence of systematic exclusion of African-Americans; he relies simply on the absence of African-Americans from the venire. The Sixth Amendment guarantees a criminal jury composed of a fair cross-section of the community. United States v. Garcia, 991 F.2d 489, 491 (8th Cir.1993). To establish a violation of this guarantee, Wharton-El must show: (1) that African-Americans are a “distinctive group in the community;” (2) that the representation of African-Americans in jury pools is not “fair and reasonable in relation to the number of [African-Americans] in the community;” and (3) that “this underrepresentation is due to systematic exclusion of [African-Americans] in the jury-selection process.” Duren v. Missouri, 439 U.S. 357, 364, 99 S.Ct. 664, 668, 58 L.Ed.2d 579 (1979); Floyd v. Garrison, 996 F.2d 947, 949 (8th Cir.1993). Although Wharton-El can establish the first element, Garcia, 991 F.2d at 491, he has failed to meet either the second or third element of the Duren test. Specifically, Wharton-El presented no reliable evidence of either the percentage of African-Americans in Dubuque County or of the percentage of African-Americans in Dubuque County jury pools. Wharton-El has shown only that no more than one African-American served on a jury in Dubuque County in the eighteen months before his trial; he has not shown that this is out of line with the percentage of African-Americans in Dubuque County. Further, Wharton-El has not produced any evidence that the alleged underrepresentation is due to a systematic exclusion of African-Americans from Dubuque jury pools. See United States v. Womack, 985 F.2d 395, 397 (8th Cir.1993), cert. denied, — U.S. —, 114 S.Ct. 276, 126 L.Ed.2d 227 (1993).

5315383-15261

MEMORANDUM DOOLING, District Judge. Plaintiff has sued for infringement-of its patent (Dangelmajer, U. S. Patent No. 2,643,983) on a composition of matter useful in compression molding of buttons and other articles in which a “mother-of-pearl” appearance of light reflected from depth (“integral sheen”) is-desired. It has been concluded that plaintiff’s patent is invalid and that defendants’ practice did not infringe. Separate findings of fact and conclusions of law have been made. For many reasons, in the period since-the start of World War II plastic buttons (and other articles) have supplemented and, indeed, in some considerable part, displaced articles, such as “pearl buttons,” historically made from natural shell. High polymer chemistry supplied the starting materials (usually polymerizable and often cross-linkable substances such as polyesters and styrene) from which buttons (and other articles) could be “compression molded”; that is, the starting material could be flowed into multi-cavitied molding dies and the dies pressed between the opposing heated platens of a molding press. For that molding procedure thermosetting polymerizable substances were valuable, that is, substances that, under heat, pass through successive stages of increasing viscosity, gelation and, finally, hard-cure as their chain-form molecules lengthen, by addition or condensation linkages, and, by cross-linkage, form three dimensional molecular structures of great size. A practical polymer chemistry and matching set of compression molding techniques for the large scale low cost manufacture of plastic buttons antedated Dangelmajer’s invention. While Dangelmajer’s patent discusses the chemistry of his starting mixture, his invention lies elsewhere. He specifies thermosetting unsaturated polyester resin mixed with an ethylenically unsaturated monomer (such as styrene), and the choice may well be excellent; there is no suggestion that Dangelmajer’s choice of polymerizable substances, and of compression molding, was an inventive choice among the known useful materials and methods; the theory of the claim of patentable novelty is that plaintiff’s invention deals effectively with a peculiar intractibility evinced by the known materials and methods: they did not acquire pearlescence readily. Otherwise satisfactory plastic buttons (and other articles) did not automatically evince the integral sheen or “pearlescence” of “mother-of-pearl.” They could be made clear or pigmented. To produce integral sheen or pearlescence, it had long been known, required the dispersion in depth through clear hardened plastic of tiny light-reflecting bodies the light-reflecting faces or facets of which would lie parallel with that surface of the button (or other article) which met the eye. One useful class of light-reflecting “lamellae” was fish scales (sold as “pearl essence”); if fish scale is perfectly oriented in, for example, a button, the button will have pearlesence, or integral sheen if its flat surfaces are viewed but, looked at from its edge, the same button will seem clear and colorless; the explanation is that if nearly all the flat fish scales are oriented with their flat sides parallel to the flat surfaces of the button, there are few or no lamellae to reflect light to and through the edges of the buttons. If fish scales or other lamellae are randomly dispersed throughout the body of a plastic article, it is not pearlescent but whitish. So much was known. It was known, too, or at least, it was assumed, that orienting lamellae was intimately related to “flow” in polymerizable materials (Paisseau, French patent No. 570,208 of 1924; Fields U. S. patent No. 2,168,331 of 1939; Clewell U. S. patent No. 2,265,-226 of 1941; Gertzog U. S. patent No. 2,-311,533 of 1943); Dangelmajer starts from the proposition that orientation could be secured by certain sorts of timely mechanical operations on the polymerizable mass (see his patent Col. 1, 1.52 to Col. 2, 1.5). Throughout the prosecution of his patent Dangelmajer reiterated to the Patent Office that he was eliminating resort to special mechanical procedures for getting the desired orientation of lamellae. Dangelmajer’s contribution can be summed up in one word with special emphasis on its first syllable: pre-polymerize. He discovered that if the thermosetting mixture was polymerized as near as possible to, but still short of, the point of gelation (yet remaining, although highly viscous, miscible with non-polymerized starting material) and then, and only then, was compression molded, pearlescent buttons were produced directly, without any mechanical manipulation or operation other than that inseparable from and implicit in the flow mechanics of conventional compression molding. The key claim of Dangelmajer’s patent was on the mixture of the chosen thermosetting polymers with a polymerization catalyst and lamellae, “said mixture being in the range of maximum viscosity before gelation, but still homogeneously miscible with non-polymerized starting material.” The quoted words are the critical ones, for they identify a state of the mixture as that which gives it its functionally novel quality. Claim 3 is on products made from the patented composition. Claim 2 (not here involved) is — essen tially — on the composition with an added polymerization inhibitor — to give the composition of Claim 1 “shelf life.” The basic claim, then, is on a familiar polymerizable mixture at a functionally critical point of polymerization. Compare, however, Application of Jones, 33 C.C.P.A. 1005, 154 F.2d 688, 1946. The precise point of the invention is that at that very point (or range) and only at that functionally critical point (or range) is the polymerizable mixture the long sought directly-moldable starting material for compression molding pearlescent buttons and other articles. Dangelmajer does not say that the perfect orientation will occur if the buttons are “cured” without heat and pressure; he does not say that the flow of the mix in the mold under the heavy, hot pressure of the press platens is not the very thing that causes the desired orientation; what Dangelmajer does say is that pearleseent material can be directly pressed out without doing anything more than simply compression-molding an otherwise proper mix if that mix is prepolymerized to the high range of viscosity that he describes. He is not concerned with the cause of the effect, with whether it is due to flow mechanics or arises from some mystery of high polymer molecular dimensionality; his concern is with the result, that it has certain reproducibility, great manufacturing advantages, and — as he contends — unobvious novelty. Defendant Brofman in making its pearleseent buttons used a mixture that responds precisely to Dangelmajer’s claim except that at the time defendant poured the mixture into its compression-molding dies, the mixture was not prepolymerized to a point just short of gelation. But defendants’ molding dies were hot — as molding dies conventionally are. In the time it took to prepare the filled die for insertion in the press, and in the further time in the press preceding gelation and cure, the mixture of defendant necessarily polymerized to (and past) the maximum viscosity preceding gelation in which the mix remained miscible with non-polymerized starting material. Indeed, any thermosetting moldable plastic mixture necessarily does that. Hence, defendant argues, if defendant infringes, the claim must be invalid, since all compression molding of conventional thermosetting “plastic” mixtures would equally infringe. Defendant argues that even if “un-pre-polymerized” starting material were deliberately used as direct-molding material, the patent would nevertheless be infringed because in the molding die at some point of time the starting mixture inevitably becomes the precise composition of the patent. Hence, defendant concludes, either defendant does not infringe or the claim is invalid as embracing conventional uses of long known non-infringing materials. A special difficulty of analysis here is in the form of Claim 1. The mixture is not a novel union of constituents but was familiar when Dangelmajer made his invention. It is the familiar mixture at a certain range of viscosity (and, therefore, of polymerization) that is claimed, and it is claimed “for” use in the particular process of “compression molding.” Since it is true that every thermosetting mixture that is compression molded to a hard cure passes through the indicated viscosity range, the claim cannot be read that broadly. A pair of tests that Dangelmajer presented to the Patent Office establishes that. In one test the starting mix was polymerized to a very high viscosity, then cooled (with polymerization arrested) to room temperature and then compression molded in three minutes at about 248° F. to yield a perfectly pearleseent product. In a second test the same starting mix was directly compression molded in three minutes at the same molding temperature and no pearlescenee resulted. Yet in the broadest sense both starting materials necessarily passed through the critical pre-gel stage. Claim 1 must therefore be read in a sense that restricts it to the teaching of the patent, which is that the polymerization to the significant pre-gel range of viscosity is a pre-polymerization, and is not simply a transitory stage in that polymerization which occurs during and as a part of the ordinary procedures of compression molding. “Pre” means, then, before entering on the steps properly integral to compression molding. Claim 1 may seem to be converted into a process claim by such a reading, but the words of the claim, read against the specification and the file history, admit of the restricted meaning and do not genuinely support any broader reading. Cf. Graham v. John Deere Co., 1966, 383 U.S. 1, 33, 86 S.Ct. 684, 15 L.Ed.2d 545. If the claim is in essence a process claim, that may be an unimportant formal matter if, though cast as a product claim, it delimits the invention precisely. Cf. Risdon Iron and Locomotive Works v. Medart, 1895, 158 U.S. 68, 72-74, 15 S.Ct. 745, 39 L.Ed. 899. The effect of the reading in the present case is necessarily to acquit defendant of infringement. The evidence does not support the interpretation that defendant departed from accepted compression molding techniques. Defendant used a ready-made liquid mixture of thermosetting, unsaturated liquid polyester resin with an unsaturated liquid compound having an ethylenic linkage (Laminae 4120); it added the polymerization catalyst recommended by the maker of the Laminae 4120; and it added pearl essence. It poured the mixture directly to heated molding dies, as is customary, and from that point to the closing of the press, about one and a half minutes later, three separate steps were quickly performed: the mix was rolled (or “combed”) into the die cavities with a roller, the die was thrust into a vacuum chamber to de-bubble it, and then the die face was rolled again. After that the die was hand carried to a press, inserted, and the press was closed. The die stayed in the press (the platens of which were at 225° to 250° F.) for about two minutes. The defendant’s procedure did not employ the pre-polymerized product of the patent, or covertly use prepolymerization in the sense of the patent by substituting an exaggerated residence time in the molding dies for an overt prepolymerization stage. Defendant’s practice did not seem to vary in essentials from the molding practice plaintiff uses. Plaintiff, working with prepolymerized material, goes through the equivalent of a combing stage and then closes the press and cures the mix. Dangelmajer, in his specification, (Col. 3, 11.19-21) noted that, “If necessary, gas bubbles are removed by suction,” after prepolymerization and before molding, indicating that it is an unremarkable practice. The critical point is time. The starting material, used with the particular catalyst specified for it, and used to make relatively thin sections such as buttons, gels so quickly and cures so rapidly that it is somewhat difficult to see how to proceed in any other way than that which defendant used short of introducing a special step of arrested polymerization. To do that, and have a store of prepolymerized material at hand connotes a different production line from defendant’s as evidently plaintiff’s must be. The difference in the two methods, in the absence of evidence that defendant’s method is a calculatedly covert use of the implied method of the patent, is the difference between practice under the patent and avoidance of it. It is not that absence of a will to infringe or of consciousness of infringement can make a difference. It is rather that if Dangelmajer did not bring to the art as something new a directly moldable plastic mix that produced pearlescent articles on simple compression molding, he brought nothing. If the compression molding art as known produced pearlescent articles with an already known mixture and without any separable stage of prepolymerization, the art already had what Dangelmajer professed to bring to it. Defendant practiced only what was old. Analysis of his practice discloses necessarily that the progress of polymerization is divisible between what precedes and what follows the state of maximum viscosity before gelation. The conclusion is not, however, that defendant infringes but that the claim is invalid if it embraces defendant’s practice. • The claim of the patent is self-destructive unless it delineates a product that has identity and industrial utility rather than seizes upon a transitory condition that must occur in any polymerization to ultimate cure of the basic constituents of the claimed composition. The result is to disclose a more fundamental weakness of Claim 1. It becomes apparent that it does not mark an unobvious advance over the prior art notwithstanding that it is not identically disclosed in any earlier patent or publication. The known use of hot molding dies and quick curing polymers (see, e. g., Ellis, No. 2,255,313, p. 3, col. 2, 11.17-30, 50-53), taken with the general acceptance of the idea that flow-in-the-mold is significant in securing orientation of light reflecting lamellae (see, e. g., Gertzog, No. 2,311,533, p. 2, col. 1, 11.11-15, 41-48) requires the conclusion that the teaching of Dangelmajer, to the extent that it goes, was either actually known and practised in high-speed compression molding of buttons and other thin sections from such polyester resin mixtures as Laminae, or was in the grasp of persons having ordinary skill in the art. Dangelmajer’s teaching is by its nature flexible and elusive, and when it comes into such close correspondence with preexisting practice as the present case discloses, the novelty of the invention dissolves, and it becomes a statement of a condition precedent to the occurrence of a certain effect and not a discovery of a new and unobvious method of (or product for) producing the effect. Dangelmajer’s teaching, although it commits itself to no theory of the reason for the effect, is necessarily addressed (as defendant’s experience shows) to known occurrences.

608460-11433

HEALEY, District Judge. This is an action for trade mark infringement with a prayer for an injunction and for damages as provided for by Section 96 of Title 15, United States Code Annotated. This court has jurisdiction of this action under Section 97 of Title 15, United States Code Annotated. Before trial the parties submitted a stipulation containing a “list of exhibits” and a “statement of facts”. The parties agreed and stipulated that the exhibits identified in the list of exhibits should be offered in evidence without objection by either party except on the question of the relevancy or materiality of any of them. It was also agreed and stipulated that the matters set forth in the statement of facts be presumed to be true and not subject to objection by either party except on the question of the relevancy or materiality of any such fact to the present action. At the trial before this court on December 20, 1946, the exhibits mentioned in the “List of Exhibits” and other evidence were introduced and the court heard the arguments of counsel. I find the facts to be as follows: The.plaintiff, Pro-phy-lac-tic Brush Company, a Delaware corporation, having a usual place of business in Northampton, Massachusetts, has been in the business of making and selling toothbrushes, hairbrushes and various toilet and dresser sets since prior to 1901. The defendant, Jordan Marsh Company, is a Massachusetts corporation operating a department store in Boston, Massachusetts. An issue of the Boston Herald published March 14, 1946, contained an advertisement by Jordan Marsh Company advertising certain articles or commodities. A section of this advertisement was devoted to an illustration of a toilet set showing a hairbrush, mirror and comb and entitled “ ‘Gemlite’ Vanity Set”. Below this was the following description: “Beauty for your dressing table * * * beauty for you with this sparkling, crystal clear vanity set of ‘Gemlite’ plastic. Pretty pastel design of frolicking cherubs is inset in the back of the nylon-bristle hair-brush and round, full-view mirror. You’ll find the practically unbreakable comb made for everyday use, too * * * a perfect combination of beauty and practicability. Pink, blue or white. 15.00 (non-taxable)” On March 15, 1946, Jordan Marsh Company sold the boxed dresser set which is in evidence as plaintiff’s exhibit (4). This exhibit consists of a hairbrush, a mirror and a comb, and was sold at the retail price of $15. On the box in which these articles were enclosed, was a gummed label rectangular in shape, 3 inches long and 1 inch wide, bearing the words Gemlite Dresser Set in one line, in printed blue type. The hairbrush is of clear plastic material with a white decorative cloisonne insert embellished by a cherubic design on the back. The nylon bristles are set in wood which in turn is set in the plastic frame. There is no trade mark or label on the hairbrush. The round mirror is set in a clear plastic frame with the same white decorative cloisonne work insert as the hairbrush on the back. Stuck on the glass mirror is a gem-shaped blue paper label with silver-colored edging. Printed on this label in silver-color are the words “Gem” and “Lite” placed one above the other. Below the word “Lite” are the words “Trade Mark”, and below those words are “Gemloid Products N. Y.”, one under the other. The comb is of clear plastic material, on one end of which appears the word Gemlite in small letters. This dresser set was purchased by Jordan Marsh Company from Gemloid Corporation of New York, the manufacturer. Gemloid Corporation has agreed to indemnify Jordan Marsh Company for any loss that may be sustained as a result of its sale of Gem-lite Dresser Sets and has provided Jordan Mai'sh Company with the exhibits which have been introduced in evidence by the defendant. Jordan Marsh Company is relying in part on rights asserted to reside in Gemloid Corporation in its defense to this action. On April 5, 1940, Pro-phy-lac-tic used the word “Jewelite” as a trade mark stamped on hairbrushes which were sold in interstate commerce. This use has continued ever since. It applied for registration of its trade mark “Jewelite” on hairbrushes on May 2, 1940, and registration was granted by the Commissioner of Patents on October 22, 1940. It applied for registration of “Jewelite” in separate script on hairbrush and comb sets and toilet and dresser sets on May 27, 1943, and registration was granted on this application November 7, 1944. The plaintiff has used the trade mark Jewelite on hairbrushes in interstate and foreign commerce continuously since April 5, 1940; on Hairbrush and Comb sets continuously since August 15, 1940; on mirrors and on Dresser Sets continuously since January 2, 1941, and on Toilet sets since June 16, 1941. In each case the trade mark was placed on the goods and on boxes containing them. In practically all the advertisements of plaintiff’s products which are exhibits in this case, the word Pro-phy-lactic appears in a prominent manner with the word Jewelite in such a way as to identify the plaintiff’s Jewelite products with the manufacturer’s trade name of Pro-phylac-tic. There is a hairbrush and comb manufactured by the plaintiff in evidence (Defendant’s Exhibit EE). The plaintiff’s hairbrush is a crystal clear plastic with nylon bristles set directly into the frame. There is no decorative insert on the back. On the handle is impressed in script in one line the words “Pro-phy-lac-tic Jewelite”. The comb is of the same material and prominently on the middle of the frame is impressed the same label in the same manner. For the year 1940, Pro-phy-lac-tic spent $38,608.50 in advertising its “Jewelite” products, and by the end of 1944, had spent a total therefor of $648,215.01. During the year 1940, sales of “Jewelite” products amounted to $314,055.31, and by the end of 1944 totaled $6,103,402.25. The plaintiff greatly expanded its plant and equipment to meet the demand for its Jewelite line of goods. Gemloid Corporation, incorporated in 1931, was in 1934 making mirrors with decorative inserts on the back made of cloisonne finish material referred to by Gemloid as its “Gemlike” material, and was selling them to dealers in the toiletries trade. The mirrors did not bear any trade mark when shipped by Gemloid. Between 1934 and 1939, Gemloid sold sheets of decorative material which it called its “Gem-like”, “Gemloid” and “Enameloid” displays. This decorative material was sold to manufacturers of mirrors, hairbrushes, and the like. Gemloid has registered as its trade mark the words “Gemlike”, “Gemloid”, “GemGlo” and “Gem-Cote”. On January 2,1939, Gemloid Corporation shipped unlined plastic ring boxes to Wolfsheim & Sachs, Buffalo, New York containing the marking '“Gem Lite” in two words, one above the other within a gemshaped figure. At various dates, Gemloid Corporation subsequently used the name “Gemlite” on other plastic creations as follows: March 8, 1940, on plastic clock cases; May 13, 1940, on empty plastic powder containers; June 10, 1940, on plastic parts of lamps. On February 19, 1940, Gemloid applied for registration of “Gem Lite” as a trade mark on “plastics in class k, Raw or partly prepared materials”, alleging the use of the mark in interstate commerce since September 6, 1939. This registration was granted December 9, 1941. Although Gemloid Corporation used the word “Gemlite” prior to the use by the plaintiff of the word “Jewelite”, the plaintiff’s use of the word “Jewelite” on toilet sets preceded the use by the Gemloid Corporation of the word “Gemlite” on toilet sets. Gemloid Corporation’s trade mark registration #392,064 for “Gemlite” did not cover completely manufactured toilet sets, but only plastic castings used for molding parts of toilet sets among other specified articles. The plaintiff’s trade mark registration No. 410,035 for “Jewelite” did cover completely manufactured toilet sets made of or backed with plastic material. Discussion The plaintiff’s action arises under Section 96 of Title 15, United States Code Annotated which is as follows: “Any person who shall, without the consent of the owner thereof, reproduce, counterfeit, copy, or colorably imitate any such [registered) trade-mark and affix the same to merchandise of substantially the same descriptive properties as those set forth in the registration, * *■ * and shall use, * * * such reproduction, counterfeit, copy, or colorable imitation in commerce among the several States, * * * shall be liable to an action for damages therefor at the suit of the owner thereof * * * ”. The plaintiff does not contend that Gemloid Corporations mark “Gemlite” is a reproduction, counterfeit or copy of the registered trade mark “Jewelite”, but contends that the mark “Gemlite” is a colorable imitation of the registered mark “Jewelite”. Assuming, therefore, without deciding, that the plaintiff’s use of the trade mark “Jewelite” on completed toilet sets preceded the use by Gemloid Corporation of the mark “Gemlite” on completed toilet sets, and that the manufacture and sale of completed toilet sets was not a natural expansion of the business of Gemloid Corporation, the sole question to be determined is whether or not the words “Jewelite” and “Gemlite” have caused or are likely to cause consumer confusion as to the source of the merchandise. Dwinell-Wright Co. v. National Fruit Product Co. Inc., 1 Cir., 140 F.2d 618; Industrial Rayon Corporation v. Dutchess Underwear Corporation, 2 Cir., 92 F.2d 33; Seven Up Company v. Cheer Up Sales Company, 8 Cir., 148 F.2d 909. In this case, there is no evidence of' actual consumer confusion. Plaintiff bases its case on the likelihood of such confusion. It has been held that when the issue of a colorable imitation of a trade mark is presented and “no evidence of actual instances of confusion in the purchase of goods is introduced, the test of deceptive similarity is whether ordinary purchasers, buying under the usual conditions in the trade and exercising ordinary care would likely be induced to purchase the article to which the accused trade-mark is affixed, believing it to be the plaintiff’s article.” Seven Up Company v. Cheer Up Sales Company, 8 Cir., 148 F.2d 909, 911. Or as stated in this Circuit, “the basic test of trade-mark infringement is whether the goods of the alleged infringer would be supposed by the kind of people who purchase them to emanate from the same source as the goods of the complaint-ant.” Dwinell-Wright Co. v. National Fruit Product Co., 1 Cir., 140 F.2d 618, 622. In the present instance, both the toilet sets made by the plaintiff and those made by Gemloid Corporation are similar in that they are made of a plastic material. They are both sold in department stores, probably at the same or adjacent counters in the same department. They are both in relatively the same price class . There, however, the similarity ends, except insofar as the trade names are similar. The decorative cloisonne inserts in the mirror and hairbrush of the “Gemlite” set distinguish that set in appearance from the clear plastic of the “Jewelite” mirror .and hairbrush. The sole question to be determined is whether or not the terms “Jewelite” and “Gemlite” are so confusingly similar as to cause prospective purchasers of toilet sets to purchase “Gemlite” sets under the impression that they are buying goods manufactured by Pro-phy-lac-tic.

1088730-14152

MEMORANDUM DECISION AND ORDER GRANTING DEFENDANT STATE OF NEW YORK DEPARTMENT OF HEALTH’S MOTION TO DISMISS PAUL G. HYMAN, Jr., Bankruptcy Judge. THIS MATTER came before the Court on June 7, 2002 upon the State of New York Department of Health’s (the “Defendant”) Motion to Dismiss (the “Motion to Dismiss”). On August 16, 2002, John Raymond Levin (the “Debtor”) filed a Memorandum of Law in Opposition to the Motion to Dismiss (the “Response”). Having carefully reviewed the Motion to Dismiss and the Response thereto, the Court hereby enters the following findings of fact and conclusions of law. FINDINGS OF FACT On May 4, 1999, the Debtor filed a voluntary petition for relief under Chapter 7 of the Bankruptcy Code. The Debtor received his discharge on August 19, 1999. The Defendant, however, was never listed as a creditor on the Debtor’s bankruptcy schedules and did not file a proof of claim in the Debtor’s case. A review of the Motion to Dismiss and the Response reveals that sometime after February of 2002, the Defendant commenced a state court proceeding against the Debtor on account of alleged fraudulent pre-petition conduct committed by the Debtor. On March 15, 2002, the Debtor filed a Motion to Reopen Case to Add the Omitted Creditor. In reopening a case to add an omitted creditor, Local Rule 5010-1(B) requires the Debtor to submit a proposed order conforming to the Local Form Order Reopening Case to Add Omitted Creditor, and to file an adversary proceeding within fifteen days to determine whether the omitted debt is dischargeable. The Debt- or complied with the Local Rules and submitted the appropriate form order. On April 22, 2002, the Court granted the Debtor’s Motion to Reopen. On May 7, 2002 the Debtor filed a Complaint to Determine Dischargeability of Debt pursuant to Federal Rule of Bankruptcy Procedure 7001. On June 7, 2002, the Defendant filed the Motion to Dismiss. In the Motion to Dismiss, the Defendant asserts that it did not have notice of the Debtor’s bankruptcy. Moreover, the Defendant argues that the current action is barred by sovereign immunity vis-á-vis the Eleventh Amendment of the United States Constitution. In the Response, the Debtor argues that he was unaware of any claim by the Defendant and that the relief sought in the Adversary Proceeding is not barred by sovereign immunity. The Debtor asserts that the Court has jurisdiction to determine the dischargeability of the omitted debt. Furthermore, the Debtor argues that a finding that this Case is barred by sovereign immunity would “fly in the face of the fundamental purpose of the Bankruptcy Code and would effectively render a nullity the concept of a fresh start.” The Debtor is not seeking a monetary judgment against the Defendant in this Adversary Proceeding but merely seeking a determination that the Defendant’s prepetition claim has been discharged; a debt that presumably would have been discharged if properly listed in the Debtor’s Schedules in the first place. This appears to be a case of first impression in this district. CONCLUSIONS OF LAW The Court has jurisdiction over this matter pursuant to 28 U.S.C. § 1334(b). This is a core proceeding under 28 U.S.C. § 157(b)(2)©. Federal Rule of Civil Procedure 12(h)(3), made applicable to bankruptcy proceedings by Federal Rule of Bankruptcy Procedure 7012, provides: “Whenever it appears by suggestion of the parties or otherwise that the court lacks jurisdiction of the subject matter, the court shall dismiss the action.” Fed.R.Civ.P. 12(h)(3). A motion under this rule may be made at any time, and if the court lacks subject matter jurisdiction, the suit must be dismissed. See Sewell v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 94 F.3d 1514, 1518 (11th Cir.1996). When a party asserts Eleventh Amendment sovereign immunity, it claims that the court lacks subject matter jurisdiction. See Demery v. Kupperman, 735 F.2d 1139, 1149 n. 8 (9th Cir.1984). In deciding a motion to dismiss for lack of subject matter jurisdiction, the complaint and any inferences which may be drawn therefrom are to be viewed in the light most favorable to the plaintiff. Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 40 L.Ed.2d 90 (1974). Although the facts presented in the complaint must be taken as true, the burden of proof on a Rule 12(b)(1) motion is on the party asserting jurisdiction. Thomson v. Gaskill, 315 U.S. 442, 446, 62 S.Ct. 673, 86 L.Ed. 951 (1942). The Eleventh Amendment states that “[t]he Judicial Power of the United States shall not be construed to extend to any suit in law or equity, commenced or prosecuted against one of the United States by Citizens of another State, or by Citizens or Subjects of any Foreign State.” U.S. Const. amend. XI. The primary safeguard of the Eleventh Amendment prevents nonconsenting States from being sued in federal court by private individuals. Kimel v. Florida Bd. of Regents, 528 U.S. 62, 73, 120 S.Ct. 631, 145 L.Ed.2d 522 (2000). This immunity is likewise afforded to a State’s agencies, which are considered to be arms of the State. See Puerto Rico Aqueduct and Sewer Auth. v. Metcalf & Eddy, Inc., 506 U.S. 139, 144, 113 S.Ct. 684, 121 L.Ed.2d 605 (1993). The filing of a suit against a State generally triggers Eleventh Amendment immunity. In this district, an adversary proceeding, which summons the State to appear in federal court, is considered to be a suit for the purposes of sovereign immunity. See Bakst v. New Jersey (In re Ross), 234 B.R. 199, 202-03 (Bankr. S.D.Fla.1999). In the context of dischargeability litigation, Congress attempted to override a State’s sovereignty by enacting 11 U.S.C. § 106. Section 106 provides in pertinent part: (a) Notwithstanding an assertion of sovereign immunity, sovereign immunity is abrogated as to a governmental unit to the extent set forth in this section with respect to the following: (1) Sections 105, 106 ... 523 of this title. (2) The court may hear and determine any issue arising with respect to the application of such sections to governmental units. 11 U.S.C. § 106(a). In Seminole Tribe of Florida v. Florida, 517 U.S. 44, 116 S.Ct. 1114, 134 L.Ed.2d 252 (1996), the Supreme Court held that “[t]he Eleventh Amendment restricts the judicial power under Article III, and Article I cannot be used to circumvent the constitutional limitations placed upon federal jurisdiction.” Id. at 72-73, 116 S.Ct. 1114. It is “inescapably clear” that Congress cannot abrogate states’ immunity pursuant to its Article I powers. MCI Telecomm. Corp. v. Illinois Bell Tel. Co., 222 F.3d 323, 338 (7th Cir. 2000). Consistent with the Supreme Court’s holding in Seminole Tribe, this Court joins those other courts which have held that Section 106(a) is an invalid attempt to abrogate the States’ protections under the Eleventh Amendment. See Department of Transp. & Dev. v. PNL Asset Mgmt. Co., LLC (In re Fernandez), 123 F.3d 241, 244 (5th Cir.1997); Schlossberg v. Maryland (In re Creative Goldsmiths of Washington, D.C., Inc.), 119 F.3d 1140, 1145-47 (4th Cir.1997); Venable v. Acosta (In re Venable), 280 B.R. 916, 918-19 (Bankr.M.D.Fla.2002). Based on the foregoing, it appears that this Adversary Proceeding must be dismissed since it is a suit (with service of a summons and compulsory process) filed against a State agency. In making this ruling, the Court disagrees with the Debt- or’s assertion that such a ruling deprives a debtor from receiving a fresh start. The Court notes the existence of several remedies available to a debtor seeking to discharge a non-listed debt owed to a State. First, the Court notes that the Debtor was free to remove the pending state court litigation to federal court pursuant to 28 U.S.C. § 1452(a). 28 U.S.C. § 1452(a) states that: A party may remove any claim or cause of action in a civil action other than a proceeding before the United States Tax Court or a civil action by a governmental unit to enforce such governmental unit’s police or regulatory power, to the district court for the district where such civil action is pending, if such district court has jurisdiction of such claim or cause of action under section 1334 of this title. 28 U.S.C. § 1452(a). Moreover, “the majority of courts faced with bankruptcy removal find the applications for removal may be made in the bankruptcy court since the reference to ‘district court’ in 28 U.S.C. § 1452(a) encompasses the bankruptcy courts.” In re Boyer, 108 B.R. 19, 24 (Bankr.N.D.N.Y.1988). Once removed, the Debtor could have then asserted his discharge in bankruptcy as an affirmative defense to the Defendant’s action. In the present case, however, it appears that the Debtor has missed his window of opportunity to remove the state court proceeding. Federal Rule of Bankruptcy Procedure 9027(a)(3) provides: If a case under the Code is pending when a claim or cause of action is asserted in another court, a notice of removal may be filed with the clerk only within the shorter of (A) 30 days after receipt, through service or otherwise, of a copy of the initial pleading setting forth the claim or cause of action sought to be removed or (B) 30 days after receipt of the summons if the initial pleading has been filed with the court but not served with the summons. Fed.R.Bankr.P. 9027(a)(3). It appears that the state court litigation was initiated shortly after February of 2002, a fortiori the Debtor can no longer remove the pending state court action. Secondly, the Court believes it is necessary to point out that state courts have concurrent jurisdiction with the bankruptcy court to determine the discharge-ability of most debts under section 523 of the Code. See Cummings v. Cummings, 244 F.3d 1263, 1267 (11th Cir.2001); McQuade v. McQuade (In re McQuade), 232 B.R. 810, 813 n. 1 (Bankr.M.D.Fla. 1999); In re Crowder, 37 B.R. 53, 55 (Bankr.S.D.Fla.1984). This Court’s exclusive jurisdiction with respect to the determination of dischargeability of debts through bankruptcy is restricted to those debts specified in §§ 523(a)(2), (4), or (6). The debt in question here is excepted from discharge, if at all, under § 523(a)(3)(A). Therefore, the dischargeability of the debt in question may be determined by either the bankruptcy court or the appropriate state court. It should be noted that “when concurrent jurisdiction lies in a nonbankruptcy court, a debtor may invoke any defenses provided by the bankruptcy code.” Jordon v. Norfolk State Univ. (In re Jordon), 275 B.R. 755, 762 (Bankr.W.D.Va.2002). In the case sub judice, the Debtor is free to argue to the state court that the debt owed to the Defendant has been discharged, absent a showing of “fraud or intentional design.” Samuel v. Baitcher (In re Baitcher), 781 F.2d 1529, 1534 (11th Cir.1986). Thirdly, as discussed supra, the Debtor filed a Motion to Reopen this Case in order to seek a determination that the Defendant’s claim had been discharged. The Court granted the Debtor’s Motion, and pursuant to Local Rule 5010-1(B) the Debtor filed the instant adversary proceeding. In retrospect, it may not have been necessary for the Debtor to file an adversary proceeding. The Court may have been able to determine whether or not the Defendant’s debt was discharged within the Debtor’s Motion to Reopen. At first blush, such a motion seems contrary to this Court’s Local Rules, as well as Federal Rule of Bankruptcy Procedure 7001. However, the United States Court of Appeals for the Fourth Circuit has held that such a determination can be made within a motion to reopen pursuant to § 350(b) of the Bankruptcy Code. Virginia v. Collins (In re Collins), 173 F.3d 924, 929 (4th Cir.1999). In Collins, the Commonwealth of Virginia obtained a pre-petition judgment against the debtor. The debtor filed a petition under Chapter 7 and listed Virginia’s judgment. Virginia did not file a proof of claim, nor did it object when the court released the debtor from all dis-chargeable debts. Some years later, however, Virginia sued to garnish the debtor’s wages to collect on its judgment. The debtor moved to reopen the bankruptcy case to determine if the debt was dis-chargeable (the request for declaratory relief was included within the motion to reopen). The Fourth Circuit held that the motion to reopen and the determination that the debt was discharged was not a suit against a State because although Virginia was mailed a copy of the motion, it was not named as a defendant in an adversary proceeding or served with compulsory process. Collins, 173 F.3d at 929-30. Moreover, the court found that an adversary proceeding was not required to reopen the case because the “bankruptcy court’s power to reopen flows from its jurisdiction over debtors and their estates.” Id. at 929. Although the Rules of Bankruptcy Procedure seem to indicate that an adversary proceeding has to be filed, here the Eleventh Amendment operates as a bar to debtors receiving the relief necessary to provide them with a “fresh start” under the Code. In the instant case, the clash between the doctrine of sovereign immunity and Rule 7001 would operate to prevent the Debtor from prosecuting his adversary proceeding, and discharging a debt which presumably would have been discharged if properly listed in the first place. As this Court has stated in the past, when construing the operation of two statutes, the court shall “construe [the] statutes as to avoid an unreasonable or absurd result.” In re Garcia, 276 B.R. 699, 704 (Bankr. S.D.Fla.2002). Denying a debtor the opportunity to discharge a debt, which would have been discharged if properly scheduled does result in an absurd result under the Bankruptcy Code. Accordingly, the Court finds that in situations where sovereign immunity prohibits the imposition of an adversary proceeding to discharge a debt under § 523(a)(3), the Court shall give deference to substance over form, and therefore the better approach may be for the Debtor to seek a determination that the Defendant’s claim was discharged within the motion to reopen. A fortiori, the present Adversary Proceeding shall be dismissed without prejudice to the Debtor filing an amended motion to reopen.

10534549-4106

WOLLMAN, Circuit Judge. Edward G. Mackinaw appeals the district court’s affirmance of the Secretary of Health and Human Services’ denial of his applications for disability insurance benefits and supplemental security, income benefits. Specifically, Mackinaw objects to the Administrative Law Judge’s finding, without considering the testimony of a vocational expert, that Mackinaw was able to engage in gainful activity. We reverse and remand. Mackinaw applied in 1985 for disability insurance benefits under 42 U.S.C. §§ 401-483 and supplemental security income benefits under 42 U.S.C. §§ 1381-1383. The Department of Health and Human Services considered his applications and denied benefits. On August 27, 1986, an AU heard and denied Mackinaw’s claims. After the Appeals Council of the Social Security Administration denied Mackinaw’s request for review, Mackinaw appealed to the District Court for the Eastern District of Missouri. The district court granted the Secretary’s motion for summary judgment, and this appeal followed. Mackinaw has suffered from ulcerative colitis since 1969. He underwent a total colectomy at that time and had an ileosto-my placed. The ileostomy bag, which Mackinaw must empty several times a day, collects diarrhea and blood. His rectum is closed, but it bleeds when he is under physical strain. Mackinaw was last employed for Common Community Betterment Federation (CCBF), where he repaired houses. In June of 1984, CCBF laid off Mackinaw. CCBF provided no reason for its action, but Mackinaw believes it was because he was required to go to a filling station during the day to empty his ileostomy bag. Mackinaw applied for benefits in 1985 because of hemorrhaging in his rectum and ileostomy stump and arthritis in his muscles. Mackinaw testified that he bleeds from the rectum when he squats and from both the rectum and ileostomy stump when he lifts objects. He must empty the ileos-tomy bag approximately ten times during the day and must awake every two hours during the night to empty it. Mackinaw also testified that he has arthritis in the muscles of his back and upper extremities. This precludes him from walking beyond three blocks, standing for longer than half an hour, and sitting for more than one hour. The AU found that Mackinaw was credible and that he had testified candidly. The AU found that Mackinaw was incapable of performing his past relevant work. He then noted that the burden shifted to the Secretary to show by a preponderance of the evidence that Mackinaw is capable of doing other work. See McCoy v. Schweiker, 683 F.2d 1138, 1147 (8th Cir.1982) (en banc). The AU determined that Mackinaw could perform sedentary work, that he was a “younger person,” and that he had a limited education. The AU then consulted the Medical-Vocational Guidelines (Guidelines) set forth in 20 C.F.R. Part 404, app. 2 and concluded that Mackinaw was not disabled. The difficulty with this application of the Guidelines is that Mackinaw has certain exceptions to his ability to perform sedentary work. Sedentary work is defined as involving sitting and no more than ten pounds of lifting, although a certain amount of standing and walking is often necessary. Id. Mackinaw, however, is unable to walk beyond three blocks, stand for longer than half an hour, or sit for more than one hour. In addition, he experiences abdominal and rectal pain and bleeding if he squats or bends. In these ways, Mackinaw’s characteristics differ from the Guidelines’ description of sedentary work capabilities. Moreover, the impairment resulting from the frequent need to maintain the ileostomy bag night and day constitutes a characteristic that differs from those set forth in the Guidelines. Where the claimant’s relevant characteristics differ in any material respect from those characteristics contemplated by the Guidelines, the Guidelines may not be applied. * * * Instead, the Secretary must produce expert vocational testimony or other similar evidence to establish that there are jobs available in the national economy for a person with the claimant’s characteristics.

3144265-11135

McGOHEY, District Judge. The petitioner is serving two concurrent New York State sentences of fifteen to twenty years which were imposed, respectively, in January 1962 by Hon. Mitchell D. Schweitzer in the former Court of General Sessions, New York County, and in March 1962 by Hon. Hyman Barshay in the former County Court of Kings County. In each instance Wilson was charged with robbery in the first degree and in each, having pleaded guilty of robbery in the second degree, was sentenced as a second offender after admitting that in 1955 he had been convicted of a felony in Ohio. Only the New York County conviction is attacked here. The extensive pro se petition states (p. 26): “There are five constitutional issues here: 1. Was petitioner denied the right to a speedy trial? 2. Was petitioner coerced into accepting a plea? 3. Was petitioner capable of acting as own counsel mentally and did counsel appointed by court to assist perform his proper and sworn duty? 4. Was petitioner deprived of counsel at sentence? 5. Was petitioner denied due process of law?” For the reasons that follow the petition is denied. While the Attorney General has raised no question about exhaustion of state remedies, it is by no means clear that these have been exhausted as to the first issue.* The contention implicit in that, however, is so clearly without factual support, as will later appear, that it should be disposed of in this proceeding without remand for further state litigation. Wilson also has an additional federal claim not asserted here, as to which some state remedies still may be available. Nevertheless an evidentiary hearing was held at which Wilson, appearing pro se, testified and examined witnesses. The first issue requires little discussion. Wilson was named in two indictments filed in New York County on December 1, 1960. He was then in custody in Kings County awaiting trial. A mistrial occurred there some time in September 1961 and shortly thereafter, on October 5, 1961, Wilson was arraigned in New York County on its charges. Whether he had earlier notice of these does not appear. He declined the arraigning court’s offer to assign counsel and insisted on representing himself which, as the transcript of the proceeding shows, he did with some sophistication. He did not then complain about the time gap between indictment and arraignment and pleaded not guilty to each indictment. He was brought to trial on both before Justice Schweitzer about six weeks later. Meanwhile there had been two adjournments; one on October 19 because of a co-defendant’s absence and one on October 26 because of Wilson’s, at some proceeding in Kings County. He made no complaint about delay either on October 19 or later when he appeared before Justice Schweitzer. Clearly there was no lack of speed after arraignment and the preceding delay was certainly not unreasonable in view of the prosecution during that period, of the earlier filed charges in Kings County. In any event, there is not a shred of evidence that Wilson was in any way prejudiced by it. The first issue, therefore, is answered in the negative. The remaining issues arise from the proceedings before Justice Schweitzer. Each indictment charged Wilson with a separate armed robbery of the House hold Finance Corporation office at 16 East 42 Street in New York County; one on February 5, 1960, and one on October 7, 1960. The presentation of evidence commenced on November 20, 1961, at which time Wilson had counsel appointed by Justice Schweitzer. The prosecutor in his opening statement told the jury the evidence would show that on February 5, 1960, Wilson, at gun point, had forced Assistant Manager Douglas Brown to open Household’s safe from which Wilson then took $4,500; and that Brown immediately recognized Wilson on October 7, 1960, when, having again forced Brown at gun point to open the safe, Wilson took about $4700. Brown was the first prosecution witness. He had just given his name and address when defense counsel requested a recess which was granted. In the jury’s absence and after a conference at the bench, Wilson withdrew both of the not guilty pleas he had entered on October 5, 1961, and pleaded guilty of second degree robbery under the first count of the indictment which charged the February 5, 1960 robbery, “to cover all other counts of both indictments.” A presentence report was ordered and sentence was adjourned to January 8, 1962. It revealed that Wilson had a history of psychiatric treatment. He was examined on December 26, 1961 by Dr. Emanuel Messinger, Psychiatrist in Charge of the court’s psychiatric clinic. His report to Justice Schweitzer dated December 27, 1961 stated that Wilson was “without psychosis at this time” and was not considered “psychiatrically abnormal in a legal sense.” Defense counsel did not appear on January 8 and an adjournment was granted by Justice Schweitzer. Later, however, this was cancelled and the sentencing proceeding went forward without defense counsel. Wilson, exercising his right of allocution, said he had “no reason for judgment not being pronounced” and continued: “Your Honor, I committed the robbery and no promises were made to me when I took the plea from you [sic], but at least when I committed this robbery, I had enough respect of the people, I didn’t take anything from them, and there was six women in there and about eight men and I never even tied their hands, or anything. “The District Attorney here, even told the jury that, and I ask for clemency a little bit for trying to be a gentleman, even though I was a robber.” Wilson claims that although when the guilty plea was entered he said, as he did just before sentence, that no promises had been made to him as to the sentence he would receive, this was not true and that in fact he had been led to believe he would be sentenced to no more than ten years and that a concurrent sentence of the same length would be imposed if he pleaded guilty in Kings County. The transcript of the November 20 proceeding shows that prior to his change of plea, at Justice Schweitzer’s suggestion the Kings County prosecutor had arranged that if Wilson pleaded guilty to second degree robbery there his sentence would be both coextensive and concurrent with New York’s. That commitment as we now know was kept. The transcript reveals no commitment by Justice Schweitzer as to the sentence he would impose. These precise claims respecting sentence were the subject of Wilson’s first coram nobis motion and were rejected by Justice Irwin D. Davidson of the New York Supreme Court after a hearing held on December 16 and 17, 1964. Wilson was represented there by an attorney other than the one assigned by Justice Schweitzer. Besides Wilson, Justice Davidson heard Dr. Messinger, George Sena, Esq., Wilson’s counsel before Justice Schweitzer, and the latter Justice Davidson denied the motion for the reasons set forth in an opinion which having been dictated from the bench, appears in the hearing transcript. The petitioner had a full and fair evidentiary hearing before Justice Davidson whose findings are fully supported by the evidence adduced before him. Nothing to the contrary was introduced at the instant hearing. Accordingly, Justice Davidson’s findings are accepted here. The petition alleges (p. 3) that a detective questioned Wilson about the New York County robberies while he was in jail in Kings County and again when he was brought to New York County for arraignment, both times in the absence of his counsel appointed by the Kings County court. He does not complain that anything he said to the detective was improperly received in evidence against him. Indeed he could hardly do so since his guilty plea rendered unnecessary the introduction of any evidence. Instead, he argued here that in opening to the jury the New York prosecutor stated, as indeed he did, that the detective would testify to admissions made to him by Wilson; and that fear of the introduction of such “improperly” obtained damaging evidence was what moved him to change his plea. This obvious afterthought is rejected. If anything other than the hope of leniency which in fact he successfully negotiated “moved” him, it was surely the actual presence of Mr. Brown and the likely presence of many of the other eye-witnesses to the two robberies. In any event, no federal question arises. It is not claimed that Wilson asked for his counsel before talking to the detective or that he was coerced or tricked by him. Neither Escobedo v. Illinois nor Miranda v. Arizona is applicable since Wilson’s trial occurred long before June 22, 1964. The petition is denied and the writ is dismissed. So ordered. . Initially, for that reason, this court dismissed the petition on the authority of McNally v. Hill, 293 T’.S. 131, 55 S.Ct. 24, 79 L.Ed. 238 (1934) and refused a certificate of probable cause. The petitioner’s pro se motion in the Second Circuit Court of Appeals for such a certificate was denied and the matter was remanded for reconsideration in the light of Peyton v. Rowe, 391 F.S. 54, SS S.Ct. 1549, 20 L.Ed.2d 426 (1968) which, after this court’s dismissal, overruled McNally. . The judgment of conviction and an order entered on Jan. 22, 1965, which denied, after a hearing, a coram nobis motion based on substantially the same claims asserted here except the first, were severally affirmed by the Appellate Division, First Department on June 8, 1965. People v. Wilson, 260 N.Y.S.2d 1018. Neither the record nor the briefs on that appeal were produced here and we have not been advised whether the question of trial delay was considered. Also it does not appear whether leave to appeal to the Court of Appeals was sought and denied. The Fnited States Supreme Court denied certiorari, 383 F.S. 930, 86 S.Ct. 939, 15 L.Ed.2d 849 (I960). . Roberts v. La Yallee, 389 U.S. 40, 43, 88 S.Ct. 194, 19 L.Ed.2d 41 (1967). . Wilson recently made a second coram nobis motion in New York County claiming, apparently for the first time, that his Ohio conviction was obtained in violation of his right to counsel. The motion was denied and it has not been shown that all state remedies respecting that claim have been exhausted. . United States ex rel. Levy v. McMann. 394 F.2d 402 (2d Cir. 1968) ; United States ex rel. Sniffcn v. Follette, 393 F.2d 726 (2d Cir. 1968). . At this court’s request a firm of highly competent lawyers consented to represent Wilson. They were relieved by the court after he “dismissed” them because he disapproved their proposed strategy. Legal Aid counsel was then assigned and although Wilson disapproved this also, at the court’s direction a highly qualified member of that staff sat with him at the hearing in order to assist and advise him if necessary. Wilson did not consult him. . The allegation in the petition (p. 3) that Wilson’s trip from Kings County to New York County was “against his will,” raises no federal question. The allegation on the same page that he was questioned in the absence of counsel will be considered later. . Instant hearing, Resp. Ex. A. . Id., Resp. Ex. B. . Id., Resp. Ex. C.

11680624-20477

MEMORANDUM OPINION AND ORDER DISMISSING PETITIONER’S AMENDED PETITION FOR WRIT OF HABEAS CORPUS WITH PREJUDICE QUACKENBUSH, Senior District Judge. BEFORE THE COURT is Petitioner Olaf Karr’s Amended Petition for Writ of Habeas Corpus, heard without oral argument on October 6, 1998. Petitioner/Defendant is proceeding pro se. Assistant United States Attorney Thomas 0. Rice represents Respondent/Plaintiff. Having reviewed the record, and being fully advised in this matter, IT IS HEREBY ORDERED that Petitioner’s Amended Petition for Writ of Habeas Corpus is DISMISSED WITH PREJUDICE for the following reasons. BACKGROUND The complex background of this case illustrates well the problems associated with a Defendant’s right to collaterally attack a pri- or criminal conviction by way of habeas corpus, the interrelationship between the various habeas corpus statutes, as well as the collateral consequences of sentences enhanced by previous convictions and expired sentences.. On June 12,1991, Oluf Karr pleaded guilty in this court, to a felon in possession of a firearm charge in violation of 18 U.S.C. § 922(g)(1). The Presentenee Report prepared by the Probation Office confirmed that Mr. Karr had previously been convicted and sentenced for (1) first degree armed robbery, following a jury trial in the California Superi- or Court for Contra Costa County on March 31, 1966; (2) first degree armed robbery, following a guilty plea in the California Superior Court for San Joaquin County on April 11, 1966; (3) a second first degree armed robbery, following a guilty plea in the California Superior Court for San Joaquin County on April 11, 1966; and (4) conspiracy to smuggle heroin in the United States District Court for the Northern District of California on October 11,1978. On August 23, 1991, the court imposed a sentence of 15 years in prison as an “armed career criminal” pursuant to 18 U.S.C. § 924(e)(1). Section 924(e)(1) provides that anyone convicted of being a felon in possession of a firearm with three previous convictions by any court for a violent felony or a serious drug offense “shall be imprisoned not less than 15 years.” In June 1993, Mr. Karr filed a Petition for Reduction of Sentence arguing that his current conviction for possession of a firearm by a felon was not a crime of violence and therefore, he should not have been sentenced as a “career offender” pursuant to U.S.S.G. § 4B1. This petition was denied because Mr. Karr was not sentenced pursuant to U.S.S.G. § 4B1, but rather was sentenced pursuant to 18 U.S.C. § 924(e). On May 10, 1995, Mr. Karr filed a Petition for Writ of Habeas Corpus in the Northern District of California, challenging his March 31, 1966 conviction of first degree armed robbery, a claim he had exhausted in the state courts. The District Court for the Northern District of California treated the Petition as a Petition under 28 U .S.C. § 2255 challenging his federal sentence, which he was serving at the time, and transferred the petition to this sentencing court. Mr. Karr then filed an Amended Petition for Writ of Habeas Corpus arguing that both the March 31,1966 conviction for first degree armed robbery and one of the April 11, 1966 convictions for first degree armed robbery were unconstitutional in that his guilty pleas were not voluntarily and intelligently made, and that his attorney provided ineffective assistance of counsel. On July 30, 1966, the court dismissed Mr. Karr’s Amended Petition Without Prejudice for failure to exhaust his state remedies as to the April 11, 1996 conviction, as required by the holding in Rose v. Lundy, 455 U.S. 509, 102 S.Ct. 1198, 71 L.Ed.2d 379 (1982). On September 26,1996, Mr. Karr moved to reopen his amended habeas petition, and the court denied the motion on March 24, 1997. Mr. Karr then pursued an appeal to the Ninth Circuit Court of Appeals of the Order Denying the Motion to Reopen. The Ninth Circuit remanded the case to this court for a decision either granting or denying a certificate of appealability. On June 24, 1997, this court denied a certificate of appealability, and on October 10, 1997, the Ninth Circuit also denied a certificate of appealability. On May 14, 1998, Mr. Karr filed a Motion to Lift Stay on Amended Petition for Writ of Habeas Corpus. However, Mr. Karr’s petition was never stayed, rather it was dismissed without prejudice for failure to exhaust state remedies. By Order dated August 24, 1998, the court treated Mr. Karr’s motion as a renewed Motion to Reopen the Amended Petition, Mr. Karr having now exhausted his state court remedies. The court granted the Motion to Reopen the Amended Petition. The court directed the Government to respond to Petitioner’s Amended Petition, and directed Mr. Karr to serve and file his reply on or before October 2, 1998. The Government timely filed its response. Rather than filing a reply, Mr. Karr has now filed a Motion for Order to Stay Proceedings (Ct.Rec.87); Motion for Relief from Judgment pursuant to Rule 60(b) of the Federal Rules of Civil Procedure (Ct.Rec.88); Motion for Leave to Amend (Ct.Rec.89); and yet another Amended Petition for Writ of Habe-as Corpus (Ct.Rec.90), challenging still another expired state court conviction. All of these motions are HEREBY DENIED, as the court finds it does not have subject matter jurisdiction over any challenge to state convictions with expired sentences used to enhance Mr. Karr’s federal sentence. DISCUSSION Mr. Karr is challenging the constitutional validity of convictions in California state courts 32 years ago, with sentences long ago expired, which were used to enhance Mr. Karr’s federal sentence. The court is satisfied that it does not have subject matter jurisdiction over these claims or any other challenges to the expired state convictions, absent a claim that Mr. Karr was convicted without the opportunity to be represented by an attorney. The Government contends that Mr. Karr’s petition should be dismissed for several reasons including (1) Petitioner Karr has not met the prerequisites of Rule 59 or Rule 60 to reopen his petition; (2) Mr. Karr has procedurally defaulted his claims; (3) the Ninth Circuit has not decided whether a prisoner can collaterally challenge the validity of a prior conviction used for federal sentencing enhancement, other than a claim pursuant to Gideon v. Wainwright, 372 U.S. 335, 83 S.Ct. 792, 9 L.Ed.2d 799 (1963); and (4) the Petition should be dismissed on the merits. This court is satisfied that Mr. Karr cannot collaterally attack the validity of his prior convictions used to enhance his federal sentence, other than a Gideon claim, which he does not have. Therefore, Mr. Karr’s Petition must be dismissed because this court lacks subject matter jurisdiction, making the other asserted reasons for dismissing the Petition moot. To begin with, while there are statutes providing the means for a prisoner to collaterally challenge both state court convictions and federal convictions, it is clear that there is no statute which specifically authorizes the collateral challenge to the validity of state court convictions which have completely expired and are used to enhance a federal sentence. 28 U.S.C. § 2241 provides that “[t]he writ of habeas corpus shall not extend to a prisoner unless [h]e is in custody in violation of the Constitution or laws or treaties of the United States.” 28 U.S.C. § 2254 is the means by which a prisoner “in custody pursuant to the judgment of a State court” may challenge the state conviction. 28 U.S.C. § 2255, on the other hand provides the vehicle for challenging a federal conviction and sentence. It provides that a prisoner in custody under sentence of a court, claiming the right to be released upon the ground that the sentence was imposed in violation of the Constitution or laws of the United States may move the court which imposed the sentence to vacate, set aside, or correct the sentence. The “in custody” language of all the habe-as corpus statutes has been the subject of numerous Supreme Court and Ninth Circuit decisions. No Supreme Court decision directly addresses the issue currently before this court, and opinions of panels of the Ninth Circuit have ruled inconsistently on the question. The most recent Ninth Circuit case on the subject leaves this question still unanswered in this circuit. See Allen v. State of Oregon, 153 F.3d 1046 (9th Cir.1998), discussed infra. In the early ease of Peyton v. Rowe, 391 U.S. 54, 88 S.Ct. 1549, 20 L.Ed.2d 426 (1968), the Supreme Court held that the governing federal prescription permits prisoners incarcerated under consecutive state-court sentences to apply for federal habeas relief from sentences they had not yet begun to serve. The petitioner was serving the first of two consecutive state-court sentences and was challenging the second conviction the sentence for which he had not yet begun to serve. The Court stated that, for purposes of habeas relief, consecutive sentences should be treated as a continuous series. Twenty years later, in Cook v. Maleng, 847 F.2d 616, (9th Cir.1988), the Petitioner filed a petition for habeas relief, challenging a 1958 state-court conviction which had expired by its terms in 1978. Cook filed a petition under § 2254 in 1985, while serving a federal sentence. Cook was scheduled to return to state custody at the end of his federal sentence to begin serving a sentence stemming from a 1978 state court conviction. The Ninth Circuit held that “because Cook’s 1958 conviction lengthened his subsequent 1978 state court sentence, Cook was ‘still in custody’ for the purposes of a habeas attack on the 1958 conviction.” The Supreme Court granted certiorari and in Maleng v. Cook, 490 U.S. 488, 492, 109 S.Ct. 1923, 104 L.Ed.2d 540 (1989), held that the potential use of a conviction to enhance a sentence for subsequent offenses did not suffice to render a person “in custody” within the meaning of the habeas statute. “[Olnce the sentence imposed for a conviction has completely expired, the collateral consequences of [a subsequent state court] conviction are not themselves sufficient to render an individual ‘in custody’ for the purposes of a habeas attack upon [the previous state court’s judgment]”. The Maleng Court commented that tó allow such a challenge “would read the ‘in custody’ requirement out of the statute.” However, the Court left open the possibility that a conviction underlying an expired sentence might be subject to challenge in a collateral attack upon the subsequent sentence that the expired sentence was used to enhance. Id. at 492, 109 S.Ct. 1923. Then, in 1990, the Ninth Circuit decided the case of Feldman v. Perrill, 902 F.2d 1445 (9th Cir.1990). The court applied Maleng in construing a federal prisoner’s pro se § 2254 petition under 18 U.S.C. § 2241 to the United States Parole Commission’s (USPC) calculation of his eligibility for parole. The Ninth Circuit explained that “we have jurisdiction to entertain [Feldman’s] petition only by construing it as an attack on his federal sentence.” In remanding the petition to the district court, the panel stated that if the district court concluded that the USPC had relied on the challenged state conviction in calculating Feldman’s parole eligibility, then the district court “shall consider and resolve Feldman’s claim that the challenged conviction was improper.” Feldman, 902 F.2d at 1449. Subsequently in Custis v. United States, 511 U.S. 485, 114 S.Ct. 1732, 128 L.Ed.2d 517 (1994), the Supreme Court held that a defendant has no constitutional right to attack collaterally during sentencing the validity of a prior conviction used to enhance a federal sentence, except in cases where the prior conviction was obtained in violation of the Sixth Amendment right to counsel pursuant to Gideon v. Wainwright, 372 U.S. 335, 83 S.Ct. 792, 9 L.Ed.2d 799 (1963). Custis, at 493-97, 114 S.Ct. 1732. Then, in Garlotte v. Fordice, 515 U.S. 39, 115 S.Ct. 1948, 132 L.Ed.2d 36 (1995), the petitioner was serving the second of consecutive state-court sentences and was challenging the first conviction, the sentence for which he had already served. The Court distinguished Maleng. “Unlike the habeas petitioner in Maleng, Garlotte is serving consecutive sentences.” Garlotte at 45, 115 S.Ct. 1948. The Court relied on the reasoning of Peyton v. Rowe, supra, 391 U.S. 54, 88 S.Ct. 1549, 20 L.Ed.2d 426, holding that a series of consecutive sentences is to be treated as a “continuous stream,” so that a habeas corpus petitioner “remains in custody under all of his sentences until all are served.” Id. at 41, .115 S.Ct. 1948. Following The Supreme Court decision in Custis, questions have arisen at the Ninth Circuit as to the scope of the holding in Feldman. Panel decisions have been inconsistent. Compare Contreras v. Schiltgen, 151 F.3d 906 (9th Cir.1998) and Clawson v. United States, 52 F.3d 806 (9th Cir.1995) with Brock v. Weston, 31 F.3d 887 (9th Cir.1994) and United States v. Price, 51 F.3d 175 (9th Cir.1995). The court in Contreras v. Schiltgen, 151 F.3d 906 (9th Cir.1998) read Custis “to bar federal habeas review of the validity of a prior conviction used for federal sentencing enhancement unless the petitioner raises a Gideon claim” and concluded that Feldman’s “reach has clearly been narrowed by Custis.” The Ninth Circuit explained that Garlotte applies only when the petitioner is still in the custody of the same sovereign responsible for the challenged conviction. Likewise in Clawson v. United States, 52 F.3d 806 (9th Cir.1995), cert. denied, 516 U.S. 897, 116 S.Ct. 252, 133 L.Ed.2d 177 (1995) the court relied on the Court’s holding in Custis to deny a motion for habeas corpus relief under 18 U.S.C. § 2255 challenging the improper use of a non-final state conviction for federal sentence enhancement purposes. To the contrary, in Brock v. Weston, 31 F.3d 887 (9th Cir.1994), the court explained that the Custis Court’s constitutional holding was limited to collateral attacks at sentencing hearings. The Custis Court’s constitutional holding was “... clearly premised on the fact that collateral attacks based on other defects [aside from the denial of the Sixth Amendment right to counsel] may be heard on habeas review.” Likewise, in United States v. Price, the court read Custis to hold “that defendants who wish to challenge the validity of prior convictions to be used for sentence enhancement have the constitutional right to do so only through habeas corpus.” The panels in Brock and Price thus limited the Custis holding as barring collateral attacks at the time of sentencing. Most recently in Allen v. State of Oregon, supra, 153 F.3d 1046, the Ninth Circuit recognized this problem of inconsistent holdings. The Petitioner in Allen, filed a petition for writ of habeas corpus challenging the constitutional validity of his four state misdemean- or convictions, while he was incarcerated in federal prison pursuant to a sentence enhanced by his previous state convictions. Allen had been released from state custody directly into federal custody. Allen argued that he was still in custody under the expired state sentences for habeas corpus purposes, since he was serving a federal sentence “enhanced” by the allegedly invalid state convictions, just as Mr. Karr argues here. Mr. Allen, like Mr. Karr, was no longer in state custody, and therefore could not rely on Gar-lotte. The Allen court did note that the Supreme Court has “interpreted the statutory language in 28 U.S.C. § 2255 requiring that a habeas corpus petitioner be ‘in custody1 as requiring that the petitioner be in custody under the conviction or sentence under attack at that time his petition is filed” citing Maleng v. Cook, 490 U.S. 488, 490-91, 109 S.Ct. 1923, 104 L.Ed.2d 540 (1989). However, the Allen court also stated: We do not need to resolve these questions here because our reliance on Feld-man is limited to its holding that courts should construe pro se habeas corpus petitions attacking convictions for which the petitioner is no longer in custody as challenges to the petitioner’s current federal sentence, as enhanced by the allegedly invalid prior conviction. We express no opinion as to whether Custis limits Allen’s ability to challenge his prior state convictions in an attack on his current federal sentence as enhanced. Id. (emphasis added). This court has from the beginning treated Mr. Karr’s habeas corpus petition challenging his prior convictions as an attack on his federal sentence as enhanced, pursuant to Feldman. However, this court must now go further and determine whether it has subject matter jurisdiction of Mr. Karr’s collateral challenge to an expired state court conviction. Looking at the Supreme Court and Ninth Circuit cases in more depth, the court concludes it does not have such jurisdiction for the following reasons. In Cook v. Maleng, 847 F.2d 616 (9th Cir.1988), the federal prisoner brought a ha-beas corpus petition alleging that his prior, expired conviction had been illegally used to enhance both his current federal and consecutive state sentences. The District Court dismissed the petition. The Ninth Circuit reversed and remanded. The Ninth Circuit broadly construed the “in custody” requirement, holding that the collateral consequences of an expired conviction might suffice to render a prisoner “in custody” for purposes of attacking the conviction. The Supreme Court granted certiorari, and in Maleng v. Cook, 490 U.S. 488, 109 S.Ct. 1923, 104 L.Ed.2d 540 (1989) affirmed, but adopted a far more limited construction of the “in custody” requirement. In Cook, there were three pertinent, sentences: a 1958 state sentence that Cook had completed serving; a 1976 federal sentence that Cook was presently serving; and a 1978 state sentence that Cook had not yet begun to serve. The 1958 conviction had been used to enhance both the federal sentence he was currently serving and the 1978 sentence he had not yet begun to serve. The State had placed a detainer with the federal authorities to ensure that at the conclusion of Cook’s federal sentence, he would be returned to the state authorities to begin serving his 1978 state sentence. Cook’s habeas petition listed the 1958 state conviction as the conviction under attack. The Ninth Circuit held that although the 1958 sentence had expired, collateral consequences remained — i.e. the 1958 conviction had been used to enhance Cook’s 1978 sentence, and that the collateral consequence rendered Cook sufficiently “in custody” to attack his 1958 conviction. The Supreme Court disagreed, holding that collateral consequences do not satisfy the “in custody” requirement. However, the Court did not dismiss the petition for lack of subject matter jurisdiction. Rather, it liberally construed the pro se petition as an attack on the 1978 state conviction, as enhanced by the allegedly illegal 1958 state conviction. The Court found that Cook was “in custody” under the 1978 conviction under Peyton v. Rowe, 391 U.S. 54, 88 S.Ct. 1549, 20 L.Ed.2d 426 (1968). We express no view on the extent to which the 1958 conviction itself may be subject to challenge in the attack upon the 1978 sentences which it was used to enhance. Maleng, supra, 490 U.S. at 492, 109 S.Ct. 1923. In Feldman v. Perrill, 902 F.2d 1445 (9th Cir.1990), Feldman had twice been convicted of criminal offenses. In 1976, he pleaded guilty to an offense in California state court, and he was convicted by a jury of another offense in federal court in 1984. In 1986, while incarcerated for his federal conviction, Feldman filed a petition for writ of habeas corpus in federal district court pursuant to 28 U.S.C. § 2254 alleging that the 1976 conviction was unconstitutional because it was based on a guilty plea that he had been incompetent to enter. , Following the Ninth Circuit decision in Maleng, supra, Feldman instituted a second petition pursuant to 28 U.S.C. § 2255 attacking his federal sentence, arguing that it had been improperly enhanced due to the sentencing judge’s reliance on the allegedly invalid state conviction. The district court denied both petitions. On appeal, the Ninth Circuit found the case indistinguishable from Maleng, “Like the Court in Maleng, we are obliged to construe the pro se petition as an attack on petitioner’s current federal sentence as enhanced.... We therefore have jurisdiction to entertain the petition under 28 U.S.C. § 2241(c).”

6122259-5648

OPINION EMIL F. GOLDHABER, Chief Judge: The essence of this dispute is whether we should grant a creditor’s motion to dismiss a complaint filed by the trustee in which the trustee seeks an injunction barring that creditor from continuing with a state court suit, although it appears that we previously approved a settlement of the dispute at issue. For the reasons expressed below, we conclude that the complaint should not be dismissed. Viewing the facts in the light most favorable to the trustee, as we must, on the defendants’ motion to dismiss, we find the facts of this case as follows: The debtor filed a petition for reorganization under chapter 11 of the Bankruptcy Code (“the Code”) and shortly thereafter a trustee was appointed. As collateral for a loan the trustee granted a mortgage on a parcel of realty located in Baltimore, Maryland, to Irving G. Alter and certain other defendants (hereinafter known as the “Alter Group”). After the sale a water pipe on the premises broke, causing significant damage. Wishing to resolve the question of liability from the water damage, the trustee on behalf of the estate and the Alter Group signed a stipulation which released the estate and the trustee from further liability on that matter. After notice of the stipulation was disseminated to creditors, we approved the compromise. For reasons undisclosed in the record, the Alter Group has filed suit against the trustee in Maryland state court claiming a right to damages from the water damage. The trustee then commenced an action in this court seeking (1) declaratory relief that the trustee was released from liability underlying the Maryland suit through the stipulation and (2) injunctive relief barring the Alter Group from pursuing the Maryland litigation. In lieu of answering the trustee’s complaint, the Alter Group filed a motion for dismissal of the complaint under Bankruptcy Rule 7012. Before discussing the merits of the action before us, we first set forth the basis of our jurisdiction to hear the matter under the Bankruptcy Amendments and Federal Judgeship Act of 1984 (“the 1984 Act”). That statute amended 28 U.S.C. § 157 which provides, inter alia, that bankruptcy judges may enter final orders on all core proceedings, such as “(A) matters concerning the administration of the estate; (B) allowance or disallowance of claims against the estate ... [and] (0) other proceedings affecting the liquidation of the assets of the estate or the adjustment of the debtor-creditor ... relationship_” § 157(b)(2). The essence of the controversy at bench is the scope of a stipulation approved by us which fixed the size of the administrative claim against the estate. We hold that § 157(b)(2)(A), (2)(B) and (2)(0) each provides us with an independent basis for resolving the matter at hand. See also, Franklin Computer Corp. v. Harry Strauss & Sons, Inc. (In Re Franklin Computer). 50 B.R. 620 (Bankr.E.D.Pa.1985); Heaven Sent Ltd. v. Centennial Ins. Co. (In Re Heaven Sent Ltd.), 50 B.R. 636 (Bankr.E.D.Pa.1985); Alloy Metal Wire Works, Inc. v. Assoc. Screw and Manu. Co. (In Re Alloy Metal Works, Inc.), 52 B.R. 39 (Bankr.E.D.Pa.1985); In Re Paolino, 53 B.R. 399 (Bankr.E.D.Pa.1985). In the action at bench the Alter Group has instituted suit in Maryland state court against the trustee under the general grant of authority found at 28 U.S.C. 959(a), which states: § 959. Trustees and receivers suable; management; State law (a) Trustees, receivers or managers of any property, including debtors in possession, may be sued, without leave of the court appointing them, with respect to any of their acts or transactions in carrying on business connected with such property. Such actions shall be subject to the general equity power of such court so far as the same may be necessary to the ends of justice, but this shall not deprive a litigant of his right to trial by jury. 28 U.S.C. § 959(a). Since the cause of action arose postpetition and is not against property of the estate, the automatic stay does not bar such an action. 11 U.S.C. § 362(a). As his first basis for relief the trustee requests that we enjoin the members of the Alter Group and the remaining defendants from pursuing the litigation in state court against the trustee and to award costs and attorneys’ fees to the trustee for expenses in defending against the allegedly wrongful state court suit. In response to the trustee’s request, the Alter Group contends that this court cannot enjoin a pending state court action due to 28 U.S.C. § 2283 which states: § 2283. Stay of State court proceedings A court of the United States may not grant an injunction to stay proceedings in a State court except as expressly authorized by Act of Congress, or where necessary in aid of its jurisdiction, or to protect or effectuate its judgments. 28 U.S.C. § 2283 (the Anti-Injunction Act). The Code, however, is an “expressly authorized” exception to § 2283. Davis v. Sheldon, 691 F.2d 176, 177-78 (3d Cir.1982); S.Rep. No. 989, 95th Cong., 2d Sess., reprinted in 1978 U.S.Code Cong. & Ad. News 5787, 5815. Prior to 1948, the Anti-Injunction Act contained only one exception, for “cases where such injunction may be authorized by any law relating to proceedings in bankruptcy.” Judicial Code § 265, 36 Stat. 1162. In 1948, this passage was expanded to cover all statutory exceptions. See Reviser’s Comments to 28 U.S.C. § 2283, 1948 U.S.Code Cong. & Ad. News Special Compilation of Legislative History of Revision of Title 28, 80th Cong., 2d Sess. 1910. Therefore, under proper circumstances, a bankruptcy court may is sue an injunction to prevent a state prosecution.

3758898-4132

ORDER STAHL, District Judge. In this action, plaintiff Neal Lerer pursues reimbursement for a sewer betterment assessment he became obliged to pay when he purchased real estate located in the town of Hudson, New Hampshire, on September 25, 1987. He argues that, under the terms of the Seller’s Affidavit and Indemnity Agreement, defendant Ultra Scan, Inc. (the seller) and defendants James Frisone and James Frisone, Jr. (the owners of the property prior to Ultra Scan) owe him the portion of the assessment that can be ascribed to the period before his ownership. Plaintiff has calculated this amount to be $17,047.00. Plaintiff also seeks relief pursuant to New Hampshire’s consumer protection act (“the Act”), New Hampshire Revised Statutes Annotated (“RSA”) Chapter 358-A:l et seq., alleging that defendants both willfully and intentionally misrepresented the existence of the outstanding sewer assessment and willfully failed to remit payment. Since RSA 358-A:10 allows for the recovery of treble damages in consumer protection actions, plaintiff claims that he is entitled to $51,141.00. Plaintiff contends that this Court has jurisdiction to hear this case under 28 U.S.C. § 1332 since he is a Massachusetts resident, the defendants are New Hampshire residents, and the amount in controversy exceeds $50,000. Defendants dispute that the amount in controversy exceeds $50,000 and have filed a motion to dismiss for lack of subject matter jurisdiction under authority of Fed.R.Civ.P. 12(b)(1). 1. Discussion It is apparent from the face of the complaint that the amount in controversy in this action only exceeds $50,000 through application of the treble damages provision of RSA 358-A:10. It is the defendants’ contention that plaintiff’s claims under the Act must fail and that the instant action therefore must be dismissed for failure to meet the requisite jurisdictional amount. The Court agrees. a. Willful and. Intentional Misrepresentation Plaintiff claims that defendants’ failure to disclose the existence of the sewer betterment assessment at the time of the sale is actionable under RSA 358-A. However, RSA 358-A:3 exempts certain transactions from the liability imposed by the Act. Of relevance here is exemption IY-a: The following transactions shall be exempt from the provisions of this chapter: IV-a: Transactions entered into more than 2 years prior to the complaint; provided, however, that this section shall not ban the introduction of evidence of unfair trade practices and deceptive acts prior to the 2 year period in any action under this chapter[.] As noted above, the sale in controversy was consummated on September 25, 1987. Plaintiff’s complaint was filed on September 25, 1990, three years to the day after the transaction in question. Thus, plaintiff’s claim of willful and intentional misrepresentation under the consumer protection act is precluded by the statute of limitations. b. Failure to Remit Plaintiff also argues that defendants’ repeated refusals to settle this dispute and to remit payment constitute actionable “transactions” under RSA 358-A. As support for this proposition, plaintiff cites WVG v. Pacific Ins. Co., 707 F.Supp. 70 (D.N.H.1986). That case is inapposite. In WVG, the court held that insurance companies, although subject to regulation under New Hampshire law, may be found liable for violations of the Act. Although WVG recognizes that insurers may be held liable under the Act for unfairly refusing to settle a claim, the Court finds nothing in that case to suggest that any party’s refusal to remit payment in settlement of a contract dispute implicates the Act. The Court therefore declines to extend this authority as plaintiff urges. The First Circuit repeatedly has warned that “litigants who reject a state forum in order to bring suit in federal court cannot expect that new trails will be blazed.” Ryan v. Royal Ins. Co. of America, 916 F.2d 731, 744 (1st Cir.1990) (citations omitted). Mindful of this admonition, the Court finds that defendants’ refusals to meet plaintiff’s payment demands do not provide a cause of action under RSA 358-A. 2. Conclusion

9096795-19516

RHESA HAWKINS BARKSDALE, Circuit Judge: For this interlocutory appeal from in-junctive and other relief awarded parents of a child, pursuant to the Individuals with Disabilities Education Act (IDEA), 20 U.S.C. § 1400 et seq., primarily at issue is whether, consistent with the IDEA, a school system has the right to select a centralized location for providing services to a hearing-impaired child, notwithstanding the child’s parents’ request that services be provided instead at his neighborhood school (site-selection issue). The summary judgment and concomitant order granting the injunction and other relief are VACATED; judgment is RENDERED for Defendants on the site-selection issue; and this matter is REMANDED. I. Dylan White (Dylan), a hearing-impaired student, identified and qualified under the IDEA as disabled, attends school in Ascension Parish, Louisiana. Under the IDEA, he is qualified for special education and related services by Ascension Parish Schools (Ascension). Dylan uses a cochlear implant in one ear and a hearing aid in the other to receive sound input. He does not require communication assistance outside of the classroom environment, but uses a person — a cued speech transliterator — to assist him in processing spoken information in class. (A cued speech transliterator does not translate from spoken language to a sign language, but supplements lip-reading and residual or assisted hearing by hand and finger motions to distinguish between elements of speech that would otherwise appear identical.) Ascension provides a system through which certain services are provided at centralized school sites. For hearing-impaired students who need cued speech transliterators, Ascension provides those services at three centralized schools (a primary school, a middle school, and a high school). These centralized schools are regular education campuses, and hearing-impaired students are “mainstreamed” (educated in regular classrooms). (Deaf students who use American Sign Language attend neighborhood, rather than centralized, schools.) Dylan attends one of the centralized schools, Gonzales Primary, and has done so since he began attending Ascension schools. It is undisputed that Dylan has achieved substantial academic benefit and success at the centralized school. In May 2000, when Dylan was in the second grade, the annual, IDEA-required conference for his individualized education program (IEP) was held. Dylan’s parents requested his transfer from the centralized school to his neighborhood school, Dutch-town Primary, along with his transliterator (provided by Ascension). Gonzales Primary, the centralized school, is approximately five miles further from Dylan’s home than the neighborhood school. Dylan’s parents felt that transferring him to his neighborhood school would enhance his social development, including allowing him to attend school with neighborhood children. Lengthy discussions were held at the IEP conference between the Whites and other IEP committee members regarding the school site selection. Ascension refused the transfer request pursuant to its policy of centralizing the cued speech program and because it believed Dylan was being provided an appropriate education at the centralized school. The Whites requested an administrative due process hearing. After an evidentiary hearing, including live testimony, the hearing officer addressed whether Ascension “can determine placement for a hearing impaired child excluding parental input” and ruled in favor of Ascension. The Whites appealed the decision to a three-judge administrative panel, which affirmed. The Whites then filed this action, seeking review of the administrative decision, as well as asserting violations of the IDEA, 20 U.S.C. § 1400 et seq.; the Americans with Disabilities Act (ADA), 42 U.S.C. § 12101 et seq.; the Rehabilitation Act (Section 504), 29 U.S.C. § 794; 42 U.S.C. § 1983; and various state laws. The parties stipulated that the dispute was essentially a legal issue and filed cross motions for summary judgment. Under the stipulation, the only issue was whether the School Board has the right to select the school that a student shall attend. In March 2002, after oral argument, the district court granted summary judgment in favor of the Whites; it subsequently entered a declaratory judgment and injunction ordering, inter alia, that Dylan be assigned to his neighborhood school, along with his transliterator. Other claims remain pending in district court. II. For this 28 U.S.C. § 1292(a)(1) interlocutory appeal from the injunctive relief, Ascension insists it fully complied with the IDEA. The Whites respond that the Act was violated because: they were not allowed input into the site determination; and, in any event, the IDEA contemplates neighborhood school site selection. They also maintain that Dylan’s placement at the centralized school violates state law. As noted, the injunction was rendered pursuant to a summary judgment. Such judgments are reviewed de novo. E.g., Amburgey v. Corhart Refractories Corp., Inc., 936 F.2d 805, 809 (5th Cir.1991). A summary judgment is proper when, viewing the evidence in the light most favorable to the non-movant, “ ‘there is no genuine issue as to any material fact and ... the moving party is entitled to a judgment as a matter of law ”. Id. (quoting Fed. R. Civ. P. 56(c)). Our role under the IDEA is purposefully limited. Congress left the choice of educational policies and methods where it properly belongs — in the hands of state and local school officials. Our task is not to second guess state and local policy decisions; rather it is the narrow one of determining whether state and local school officials have complied with the Act. Flour Bluff Indep. Sch. Dist. v. Katherine M., 91 F.3d 689, 693 (5th Cir.1996) (quotation omitted), cert. denied, 519 U.S. 1111, 117 S.Ct. 948, 136 L.Ed.2d 836 (1997). Moreover, the IDEA creates a presumption in favor of a school system’s educational plan, placing the burden of proof on the party challenging it. E.g., Teague Indep. Sch. Dist. v. Todd L., 999 F.2d 127, 132 (5th Cir.1993). The Whites frame the issue as whether, under the IDEA and state law, the school board may, at its sole discretion, reject placement in the school the child would attend if not disabled and the school closest to the student’s home (the neighborhood school) without parental involvement in that decision and where the IEP can be feasibly and appropriately implemented there. However, the school district did not stipulate (at least in district court) that no parental input was allowed on the issue of school selection. (In the administrative hearing, however, the issue was framed as: “Whether [Ascension] can determine placement for a hearing impaired child excluding parental input ”. (Emphasis added.)) Nor does such a stipulation fit the evidence: Dylan’s mother testified before the hearing officer that, “[d]uring the IEP meeting!,] we discussed at length [Dylan’s] going to Dutch Town [the neighborhood school] and why this had to continue for him to be at Gonzales Primary [the centralized school]”. The Whites, in essence, ask us to do one of two things: (1) render an advisory opinion based on a situation that is not before us (parents not given opportunity to offer any input concerning school selection); or (2) as the district court apparently did, equate giving input with dictating the outcome. Of course, we cannot render advisory opinions. Moreover, as discussed infra, we reject the assertion that parents are denied input into a decision if their position is not adopted. Although Ascension and the Whites dispute whether there was “input”, there is no genuine issue of material fact. Indeed, the parties do not dispute any facts, but instead dispute what constitutes the requisite parental input under the IDEA. Thus, based upon the input described by Mrs. White (discussions at the IEP meeting), we will address the question that is before us in this case: whether the school district violated the IDEA in assigning Dylan to a centralized school, notwithstanding his parents’ request that he be assigned to his neighborhood school. A. Ascension first asserts that the IDEA was not violated. The IDEA governs the rights and responsibilities of students who are qualified as disabled under the provisions of the Act. It requires that States provide disabled children with a “free appropriate public education” (FAPE). See 20 U.S.C. § 1412(a)(1). The cornerstone of the IDEA is the IEP, which is produced by a team that includes: the child’s parents or guardian; a qualified representative of the local education agency who is knowledgeable about, inter alia, the resources of the school district; a regular education teacher of the child; a special education teacher of the child; other individuals at the discretion of the agency or the parent; and, where appropriate, the child. 20 U.S.C. § 1414(d)(1)(B). The written IEP specifies the program of benefits to which the student is entitled in order to receive a FAPE. Once a child’s educational program is determined, the school must attempt to place the child in the “least restrictive environment” (LRE) (e.g., as best it can, it must educate the child among not disabled children). 20 U.S.C. § 1412(a)(5); 34 C.F.R. § 300.500-300.556. When an action is brought under the IDEA, or the appropriateness of an IEP challenged, our inquiry is two-fold: (1) whether “the [IEP] developed through the Act’s procedures [is] reasonably calculated to enable the child to receive educational benefits”; and (2) whether the school district has “complied with the procedures set forth in the [IDEA]”. Board of Educ. v. Rowley, 458 U.S. 176, 206-07, 102 S.Ct. 3034, 73 L.Ed.2d 690 (1982). “If these requirements are met, the State has complied with the obligations imposed by Congress and the courts can require no more.” Id. at 207, 102 S.Ct. 3034. 1. Of course, a primary purpose of the IDEA is to ensure that disabled children receive a FAPE. See 20 U.S.C. § 1412(a). A school satisfies that requirement by providing personalized instruction with sufficient support services to permit the child to benefit educationally from that instruction. Such instruction and services must be provided at public expense, must meet the State’s educational standards, must approximate the grade levels used in the State’s regular education, and must comport with the child’s IEP. In addition, the IEP, and therefore the personalized instruction, should be formulated in accordance with the requirements of the Act and ... should be reasonably calculated to enable the child to achieve passing marks and advance from grade to grade. Rowley, 458 U.S. at 203-04, 102 S.Ct. 3034. A FAPE need not .maximize the child’s potential; it must guarantee “a basic floor of opportunity”. Cypress-Fairbanks Indep. Sch. Dist. v. Michael F., 118 F.3d 245, 248 (5th Cir.1997) (quotation omitted). Under this prong of Rowley, the focus of our inquiry is on academic achievement; and, while the IDEA requires the school to provide services to allow the child the requisite basic floor of opportunity, it does not require the school to make special accommodations at the parent’s request (no matter how well intentioned), particularly where the request is not related to helping the child achieve academic potential. As noted, it is undis puted that Dylan was succeeding academically at the centralized school; thus, his IEP clearly met the requirements of FAPE. It is also undisputed that the parents’ request that Dylan attend his neighborhood school was primarily social — they wanted him to be able to attend school with other neighborhood children; this concern is beyond the scope of the “educational benefit” inquiry courts make under the IDEA. 2. Regarding whether the IDEA’S procedural requirements were followed, as stated, the Whites first assert that they were improperly denied input into the site selection. They also maintain the decision otherwise contravened the IDEA. a. As noted, the IDEA requires that the parents be part of the team that creates the IEP and determines the educational placement of the child, 20 U.S.C. § 1414(d)(1)(B); and the IEP is to include location, 20 U.S.C. § 1414(d)(l)(A)(vi) (IEP must include the projected date for the beginning of services and their anticipated frequency, location, and duration). Additionally, 20 U.S.C. § 1414(f) requires the local education agency to ensure that the parents are members of any group that makes decisions on educational placement. These statutory provisions do not, however, explicitly require parental participation in site selection. “Educational placement”, as used in the IDEA, means educational program — not the particular institution where that program is implemented. E.g., Sherri A.D. v. Kirby, 975 F.2d 198 (5th Cir.1992) (“educational placement” not a place, but a program of services); Weil v. Board of Elem. & Secondary Educ., 931 F.2d 1069 (5th Cir.1991) (transfer of child to another school was not a change in “educational placement”). Thus, contrary to the Whites’ position, that parents must be involved in determining “educational placement” does not necessarily mean they must be involved in site selection. Moreover, that the parents are part of the IEP team and that the IEP must include location is not dispositive. The provision that requires the IEP to specify the location is primarily administrative; it requires the IEP to include such technical details as the projected date for the beginning of services, their anticipated frequency, and their duration. See 20 U.S.C. § 1414(d)(l)(A)(vi). The Whites also rely on the IDEA’S implementing regulations. 34 C.F.R. § 300.552 provides: In determining the educational placement of a child with a disability ... each public agency shall ensure that— (a) The placement decision— (1) Is made by a group of persons, including the parents, and other persons knowledgeable about the child, the meaning of the evaluation data, and the placement options; and (2) Is made in conformity with the LRE provisions... (b) The child’s placement— (1) Is determined at least annually; (2) Is based on the child’s IEP; and (3) Is as close as possible to the child’s home; (c) Unless the IEP of a child with a disability requires some other arrangement, the child is educated in the school that he or she would attend if nondisa-bled .... The Whites note that “placement” in 34 C.F.R. § 300.552 appears to have a broader meaning than just educational program (thus, the requirement that “placement” be based on the IEP, which contains the edu cational program, along with other requirements) and to relate in some way to location (thus, the reference to distance from the child’s home). Ascension responds that “placement” does not mean a particular school, but means a setting (such as regular classes, special education classes, special schools, home instruction, or hospital or institution-based instruction). It cites 34 C.F.R. § 300.551, which describes “placement” options as such. This is the better view. In any event, even assuming arguendo that the regulations contemplate a parental right to provide input into the location of services, the facts are undisputed that the Whites did so as part of the IEP team that discussed location at length and that ultimately selected the centralized site. To accept the Whites’ view of “input” would grant parents a veto power over IEP teams’ site selection decisions. Congress could have included that power in the IDEA; it did not do so. The right to provide meaningful input is simply not the right to dictate an outcome and obviously cannot be measured by such. See, e.g., Blackmon v. Springfield R-XII Sch. Dist., 198 F.3d 648, 656 (8th Cir.1999) (where no “serious hamper[ing]” of parent’s opportunity to participate in the formulation process, IDEA requirement of meaningful parental input satisfied notwithstanding that parent’s desired program not selected); Lachman v. Illinois St. Bd. of Educ., 852 F.2d 290, 297 (7th Cir.) (“[P]arents, no matter how well-motivated, do not have a right under [the IDEA] to compel a school district to provide a specific program or employ a specific methodology in providing for the education of their handicapped child”.), cert. denied, 488 U.S. 925, 109 S.Ct. 308, 102 L.Ed.2d 327 (1988). Absent any evidence of bad faith exclusion of the parents or refusal to listen to or consider the Whites’ input, Ascension met IDEA requirements with respect to parental input. In short, on this record, Ascension complied with this procedural component. b. The question then becomes whether Ascension was otherwise required by the IDEA to defer to the Whites’ wishes that their son be transferred, along with his support services, to the neighborhood school. The Whites point to two main provisions that they contend support neighborhood school selection: (1) the child’s placement is determined at least annually, is based on the child’s IEP, and is as close as possible to the child’s home, 34 C.F.R. § 300.552(b) (emphasis added); and (2) unless the IEP requires some other arrangement, the child is educated in the school that he or she would attend if not disabled, 34 C.F.R. § 300.552(c). Regarding these provisions, their qualifying language is critical. 34 C.F.R. § 300.552(b) only requires that the student be educated as close as possible to the child’s home. 34 C.F.R. § 300.552(c) specifies that the child is educated in the school he would attend if not disabled unless the IEP requires some other arrangement. Here, it was not possible for Dylan to be placed in his neighborhood school because the services he required are provided only at the centralized location, and his IEP thus requires another arrangement. Of course, as the "Whites point out, neighborhood placement is not possible and the IEP requires another arrangement only because Ascension has elected to provide services at a centralized location. This is a permissible policy choice under the IDEA. Schools have significant authority to determine the school site for providing IDEA services. State agencies are afforded much discretion in determining which school a student is to attend ... The regulations, not the statute, provide only that the child be educated “as close as possible to the child’s home.” However, this is mprely one of many factors for the district to take into account in determining the student’s proper placement. It must be emphasized that the proximity preference or factor is not a presumption that a disabled student attend his or her neighborhood school. Flour Bluff, 91 F.3d at 693-94 (emphasis added). In Flour Bluff, a deaf child’s parents objected to her attending a centralized program rather than her neighborhood school. Our court held in favor of the school: IDEA expressly authorizes school districts to utilize regional day schools such as the one at issue here, and we think the importance of these regional programs is obvious. Undoubtedly there are a limited number of interpreters, speech pathologists with backgrounds in deaf education, and deaf education teachers; and by allocating these limited resources to regional programs, the state is better able to provide for its disabled children. Additionally, by placing these educators at regional centers, those centers are better able to provide further training for those educators and make substitutions for absent educators. Id. at 694 (citations omitted).

4195952-10664

PER CURIAM: Jesse Ausbin Brown appeals his 240-month sentence for possession of child pornography, in violation of 18 U.S.C. § 2252(a)(5)(B). On appeal, Mr. Brown contends that his sentence was procedurally and substantively unreasonable because the district court based the sentence, in part, on a finding that he had failed to accept responsibility. For the reasons that follow, we affirm. I In 1992, Mr. Brown was convicted in the Western District of South Dakota on two counts of sexual abuse of a child and was sentenced to 235 months. On September 17, 2008 Mr. Brown was released from prison and began serving a four-year term of supervised release in the Western Dis trict of South Dakota. His supervised release was scheduled to terminate on September 16, 2012. Four days after the expiration of Mr. Brown’s term of supervised release, September 20, 2012, the police in Winter Garden, Florida, received a complaint regarding a man who was attempting to lure young children into his car. The police pulled over Mr. Brown in his vehicle and discovered that he was a convicted sex offender who had not registered in the State of Florida. Mr. Brown was subsequently arrested and convicted for failure to register as a sex offender. After that arrest, Mr. Brown’s car was sold and the purchaser found a smart-phone belonging to Mr. Brown hidden in the car. An investigation revealed that the phone contained approximately 1,050 pornographic images of children between infancy to roughly 10 years of age. These images all showed the sexual abuse/exploitation of children. Mr. Brown admitted to FBI agents that he used the phone to connect to the internet, that he had hidden the phone in his car, that it contained numerous images of child pornography, and that he had collected child pornography from 2009 until he was arrested in 2012. He also told the agents that he would masturbate while looking at the images and did this to keep from acting out physically against children. Pursuant to a one-count indictment, Mr. Brown was charged with possession of child pornography and pled guilty. At the plea hearing, Mr. Brown was asked to describe what he had done and he said, “I guess I stumbled into it.... I mean I stumbled into some sites and ... I just downloaded the pictures.” D.E. 66 at 14. He agreed that he had known what he was doing was wrong. He also agreed with the government’s stated factual basis for the plea, and the district court accepted his plea. Pursuant to the advisory sentencing guidelines, Mr. Brown’s base offense level was 18. He received several enhancements: a two-level enhancement because the material involved minors under the age of 12; a four-level enhancement because the material portrayed sadistic or masochistic conduct or other depictions of violence; a five-level enhancement for engaging in a pattern of activity involving the sexual exploitation of a minor; a two-level enhancement because he used a computer or interactive service for the possession, transmission, receipt, or for accessing with intent to view the material; and a five-level enhancement because the offense involved over 600 images. His base offense level was decreased by three levels for acceptance of responsibility, which resulted in a total offense level of 33. Mr. Brown had six criminal history points — three points for his federal sexual abuse of a child conviction in South Dakota and three points for his failure to register as a sex offender conviction in Florida— which resulted in a criminal history category of III. Based on a total offense level of 33, and a criminal history category of III, Mr. Brown’s advisory sentencing guideline, range was 168 to 210 months imprisonment. At sentencing, the district court adopted the PSI and defense counsel asked the district court to sentence Mr. Brown at the low end of the suggested guideline range because of his advanced age, 62, and his essential confinement to a wheelchair. The government argued for a sentence at the high end of the guideline range due to the severity of the crime, the large number of images of victims between the ages of five and eight, Mr. Brown’s history, and the protection of the public. The government also argued that the “timeline [was] particularly troubling,” given that Mr. Brown had previously sexually abused two young girls, and upon release from prison for that offense, collected child pornography for, in his own words, a “crutch to prevent [himself] from acting out.” D.E. 58 at 9. In his allocution, Mr. Brown stated that he had received “permission to have pornography from his sex offender program. Id. at 10. He also stated that he “had no physical or sexual drive whatsoever” because of the amount of time he spent working. Id. Mr. Brown also said, “[a]nd the pictures, I never even saw the pictures like I tried to explain this to the FBI agent that, you know, the phone was in the car, and I accept that, you know. But I’m not evil. I really am not, ma'am. I’m not that evil.” Id. The district court imposed a 240-month sentence. It stated that it had reviewed the PSI, considered the advisory guidelines, and the 18 U.S.C. § 3558(a) factors, and had found “that the sentence imposed [was] sufficient but not greater than necessary to comply with the statutory purposes of sentencing.” Id. at 10, 15. Though the district court had adopted the PSI, which credited Mr. Brown with a three-level deduction for acceptance of responsibility, part of the court’s explanation for the variance was that Mr. Brown had not really admitted his culpability. The court explained that: The Court feels that a maximum sentence permitted in this case, which is 240 months, is necessary to protect the public in this ease. The defendant has 18 prior convictions, one of which is for sexual abuse of a child, another for failure to register as a sex offender. The need to deter the defendant’s criminal conduct and protect the public should take precedence in this case. The Court also notes that the defendant has demonstrated really no acceptance of responsibility for his actions. So the Court feels that a sentence within the statutory maximum is appropriate. Id. at 15. Mr. Brown objected to the sentence as unreasonable, arguing that the district court did not consider his age and health. Mr. Brown further argued that the underlying offense for sexual abuse, which was a contact offense, had a guideline range of 235 months, which was lower than the non-contact offense at issue before the court. The court explained that the guideline range increased as an offender had more convictions, and clarified that “[t]he [c]ourt feels that the guideline, as I have stated, is not sufficient to protect the public in this particular case. The [c]ourt did consider [Mr. Brown’s] age and physical condition, but the need to protect the .public is so overwhelming when we’re talking about children.” Id. at 16. Mr. Brown now appeals, arguing that the 240-month statutory maximum sentence imposed by the district court was both procedurally and substantively unreasonable. Mr. Brown contends that the sentence was procedurally unreasonable because it was based, in part, on an erroneous conclusion of the district court that he did not accept responsibility. He also contends that the sentence was substantively unreasonable because the district court committed a clear error in judgment when it considered Mr. Brown’s purported lack of remorse in varying upward from the advisory guideline range and imposing the statutory maximum sentence. II We review the reasonableness of a sentencing decision for abuse of discretion. See Gall v. United States, 552 U.S. 38, 41, 128 S.Ct. 586, 169 L.Ed.2d 445 (2007), We first look to ensure that the district court committed no significant procedural errors. See United States v. Beckles, 565 F.3d 832, 845 (11th Cir.2009). A significant procedural error includes “failing to calculate (or improperly calculating) the Guideline range, treating the Guidelines as mandatory, failing to consider the § 3553(a) factors, selecting a sentence based on clearly erroneous facts, or failing to adequately explain the chosen sentence — including an explanation for any deviation from the Guidelines range.” Gall, 552 U.S. at 51, 128 S.Ct. 586. Abuse of discretion can be found when the district judge “(1) fails to afford consideration to relevant factors that merited significant weight, (2) gives significant weight to an improper or irrelevant factor, or (3) commits a clear error of judgment.” United States v. Brown, 772 F.3d 1262, 1266 (11th Cir.2014) (citing United States v. Irey, 612 F.3d 1160, 1189 (11th Cir.2010)(en banc)). A “defendant bears the burden of clearly demonstrating acceptance of responsibility and must present more than just a guilty plea. Although a guilty plea can constitute significant evidence of acceptance of responsibility, it may be outweighed by conduct of the defendant inconsistent with an acceptance of responsibility.” United States v, Moriarty, 429 F.3d 1012, 1023 (11th Cir.2005) (citing U.S.S.G. § 3E1.1 comment, (n.3)). Mr. Brown contends that the district court procedurally erred by basing the sentence, in part, on the clearly erroneous finding that he had not demonstrated an acceptance of responsibility. We disagree, despite his guilty plea, Mr. Brown did not met his burden, and the district court did not clearly err in concluding that he had not demonstrated acceptance of responsibility. His equivocal statements that he “stumblfed]” upon approximately 1,050 pornographic images of children, that he “never even saw the pictures,” and that he had permission to have pornography and yet no sex drive could reasonably be found to constitute a denial of the acceptance of responsibility. At sentencing, the only thing. Mr. Brown accepted responsibility for was having the phone in the car. “If the district court did not procedurally err, then we consider the substantive reasonableness of the sentence imposed under an abuse-of-discretion standard, based on the totality of the circumstances.” Beckles, 565 F.3d at 845 (quotations omitted). “The party challenging the sentence bears the. burden of establishing [that] the sentence is unreasonable in light of the record and factors in 18 U.S.C. § 3553(a).” Brown, 772 F.3d at 1266. The relevant § 3553(a) factors include (1) the nature and circumstances of the crime as well as the history and characteristics of the defendant; (2) the need to reflect the seriousness of the crime, to promote respect for the law, and to provide just punishment for the crime; (3) the need for deterrence; and (4) the need to protect the public.

1246835-15913

MARIS, Circuit Judge. This case presents the question whether Section 12 of the Reasonable Rents Act of Puerto Rico- is valid in so far as it denies to the owner of a building used for business, commercial or industrial purposes the right to maintain an action, of unlawful detainer against his tenant in order to recover possession of the building for the purpose of withdrawing it from the rental market and devoting it to his own use. The act was approved on April 25, 1946, and its provisions with respect to buildings and premises devoted to business, commercial and industrial purposes were put into force on July 17, 1946 by resolution of the Executive -Council of Puerto Rico pursuant to authority conferred upon the Council by Section 27 of the act. On April 28, 1947 the. plaintiff acquired 'by purchase premises No. 59 Dr. Veve Street in the urban portion of the Municipality of Bayamon. The property consisted of a lot on which a two. story business building was erected and on the date of purchase its ground floor was rented under a lease contract for an unspecified term to the defendant as a commercial establishment at a rental of $125 a month. On February 9, 1948 the plaintiff wrote to the defendant terminating the lease contract on February 29, 1948. The defendant, however, refused to vacate the premises and the plaintiff filed a complaint in a civil action of unlawful detainer in the District Court for the Judicial District of Bayamon. The defendant moved to dismiss the plaintiff’s complaint on the ground that it did not state a cause of action of unlawful detainer, relying upon Section 12 of the Reasonable Rents Act which prohibited the 'bringing of an action of unlawful detainer except in the cases specified in the act, of which this was not one. The District Court granted the motion to dismiss and on appeal the Supreme Court of Puerto Rico, one justice dissenting, affirmed the ■judgment, holding that the Reasonable Rents Act prohibited the ¡bringing of the action and that in so doing the act did not infringe the plaintiff’s constitutional rights. The ¡plaintiff thereupon brought the case here by appeal. Since it involves the validity of Section 12 of the Reasonable- Rents Act under the ¡Constitution and the Organic •Act we have -jurisdiction under Title 28 U.S.C.A. § 1293. ■As the declarations of policy set out in Section 1 disclose, the Reasonable Rents Act was- passed by the Legislature of •Puerto Rico tó deal with the public emergency arising from the inadequate supply of dwelling houses and business buildings in the island. The basic purpose of the act was to prevent landlords from obtaining unfair, unreasonable and oppressive rents which the serious shortage made it possible for them to exact. It sought to accomplish this purpose by freezing rents at the level which .prevailed on October 1, 11)42, granting to the Administrator provided for by the act the power in individual cases to change this basic maximum rent to such reasonable rent as might'be appropriate under the standards established in the act. Briefly summarized seption 12 of the act, as originally enacted, provided that during the existence of the .emergency and as long as the tenant pays the basic rent pr, the reasonable rent fixed by the Administrator, as the case .may be, the landlord may not prosecute an action. of i unlawful detainer against the tenant to recover possession of .the rented premises even .though the term of the lease contract has expired, except in the following cases specified-in the section, namely: (a) when the tenant fails to pay the rent; (b) when 'the tenant uses the rented premises for illegal or immoral purposes without the landlord’s’ knowledge; (c) when' the tenant sublets the property without the authority of the landlord; (d) when the landlord desires in good faith to recover the .premises in order to demolish them with the intention of constructing a new ¡building; (e) when the tenant causes malicious or considerable negligent damage to the leased property, and (f), in the case of a dwelling not habitually used for rent, when the landlord seeks in good faith to recover possession of it for his immediate personal use as a place of residence. It will be seen that none of these exceptions applies to the plaintiff’s case. Section 12, therefore, barred the prosecution of his suit if its provisions as applied to him were valid. Section 15 of the act provides that every -person acquiring a leased property shall be subject to the terms of the act and shall not claim any rights other than those therein established for 'the original owner. The defendant asserted in its motion to dismiss the complaint that since the plaintiff had acquired the property in question after the Reasonable Rents Act became effective ■he was restricted by the provisions of Section 15 to the, rights which the act gives an owner and might not, therefore, contest the validity of those restrictions. The Supreme Court, however, held that the -plaintiff has standing to assail the constitutionality of the act and we agree with its view in this respect. Essentially the same question -has arisen as to the standing of a purchaser-of real estate to attack the constitutionality of a previously enacted zoning ordinance .applicable to his land and his right to do so has been upheld in numerous cases upon the ground that he stands in the place of his grantor and, therefore, normally has the same right to attack the ordinance which his grantor had. We, therefore, turn to the consideration of the con stitutional questions wliicli the plaintiff raises. At the outset we may eliminate a number oi questions which he does not raise. He concedes withthe Legislature of Puerto Rico Act. the same power as the legislature of a state to regulate the renting business and to fix maximum rents, this being within the police power conferred upon busiLegislature by the Organic Act.® He Legisconcedes that the Legislature has the recoverexpiraregulate and control actions for unlawful detainer as an incident to the control of maximum rents. Likewise he concedes that the Legislature may exercise these powers with respect not only to housing accom-exbut to premises dedicated to busi- . , , . , . pro* ness, commercial and industrial uses as „ Ill. . ... ■ T well. Ills sole contention Fla. that the Legis- , , m . tv i_ < , .. lature of Puerto U.S. has exceeded its pow- , ,, , , er m .prohibiting a landlord from recover-7,. , , • mg possession of his property L.the expira- ,. , , , , , Em.App. 1944, , , tion of the term of a lease contract when he , . . . , desires in good faith to do so m order to ... , ., , . , . withdraw the property from the rental mar- . , , , . .. , ,. , . ket and devote it to his own use as objecbusiness establishment. The plaintiff strongly urges that in so doing by Section 12 of the. Reasonable Rents Act the Legislature has been guilty of an arbitrary and unreasonable exercise of its police power which has, deprived him of his property without due process of law and which has amounted to the taking of his property without just cómpensation in violation of the Fifth Amendment to the Constitution and of Section 2 of the Organic Act. We think that this conten*i°n mui>t he sustained, Undoubtedly, as the plaintiff concedes, the Legislature had the right in view of the public emergency brought about by the shortage in dwellings and accombuildings to regulate the rents charged by landlords for properties of that kind in powrental market. In carrying out this o'bjective it had the right to adopt such measures as- it thought marso long as they busia reasonable to the end sought to be achieved and were neither arbitrary nor discriminatory. In this connection it was within . , . the power of the Legislature to regulate the 1 , „ , & & procedure for the eviction of tenants and r recovery of possession by landlords m Feld.... . , . . of the fact that such procedure might be . , availed of by landlords, to circumvent the Reasonable J .... maximum rent ceilings which it was the . , _ . , purpose of the Legislature conlme „ „r ..... . pose. We think that it was the purpose of .,7. » Section 12 of the Reasonable Rents Act , . , , , . thus to implement the enforcement of the rent ceilings the act. We, therefore, do not have to consider whether the Legislature might under the police power, impose such absolute prohibitions against eviction as are here impose. an act designed to stabilize in an emergency the possession' of ‘ leased premises by the tenant occupants. powin the act before us the Legislature sought to .prohibit a landlord who in good faith desires to do so to withdraw his property wholly from the rental market in order to devote it to his own .personal use it went beyond the .bounds of the police power and adopted an expedient which did not have any reasonable relation to the establishment and maintenance of the rent ceilings which it was the object of the Reasonable Rents Act to accomplish. It is true that the Legislature might impose reasonable regulations with respect to the recovery of possession by such landlords in order to prevent evictions which might tend to defeat the object of the act. But we think that it was beyond its power in enacting the Reasonable Rents Act absolutely to prohibit them from recovering .possession of their properties from tenants the terms of whose lease contracts had expired when they desired possession solely 'for their own use and not for the purpose of rereriting to another tenant. Such legislative prohibition would appear to be ■ so arbitrary in relation to the object sought to be attained by the act as to amount to a deprivation of the landlord’s property without due process of law. Moreover the effect of Section 12 is to compel such a landlord to dedicate his property indefinitely to the rental market and to prevent him, except with the consent of his tenant, from having the use of it himself. For the Legislature to compel the plaintiff against his will to keep his property in the rental market and to prevent him from using it in his own personal business for the duration of the emergency would appear to be a “taking” of the property for which just, compensation has not been provided. It is significant to observe that in order to avoid these very objections the Congress of the United States in enacting the Emergency Price Control Act of 1942 provided in Section 4(d) that “Nothing in this Act shall be construed to require any person to sell any commodity or to offer any accommodations for rent.” Likewise similar provision was made in the Housing and Rent Act of, 1947, as amended by the Acts of 1948 and 1949. We hold, therefore, that Section 12 of the Reasonable Rents Act of 1946 violates the Fifth Amendment to the Constitution and Section 2 of the Organic Act to the extent that it prohibits a landlord from prosecuting an action of unlawful detainer against a tenant the term of.whose lease contract has expired when the landlord desires in good faith to recover the leased premises for the purpose of withdrawing them from the rental market and devoting them to his own use. The case must accordingly go back to the District Court for the reinstatement and further consideration of the plaintiff’s complaint. One further matter should be mentioned, however. By the Act of May 14, 1948, the six exceptions formerly appearing in Section 12 were transferred to and two additional exceptions were added to a new Section 12-A which had been added to the Reasonable Rents Act by an act of 1947. One of the new exceptions to the ban of Section 12 which was thus added was subsection 7 which provides that whenever a lessor needs for himself, in good faith, commercial or business premises leased to a tenant he may institute unlawful detainer proceedings if, inter alia, he acquired the property prior to the date of effectiveness of the Reasonable Rents Act and the premises were leased for a fixed period. The plaintiff asserts, however, that this new exception does not afford him relief and the Supreme Court of Puerto Rico acquiesced in that view. The plaintiff would appear to be right as to this on two grounds. One is that in spite of an ambiguity in date which appears in the new statute it appears that he did not acquire the property in question until after the effective date of the act. The other is that it appears that the defendant’s lease , is not for a fixed period. However, the applicability of this new exception will be for the District -Court to determine upon remand. In any event the plaintiff may not be -denied relief solely by virtue of the bar of Section. 12 of the Reasonable Rents Act if he establishes to the satisfaction of the -court that the term of the lease contract has ended and that he intends in good faith to withdraw the property from the rental market -and to devote it to his own personal business. The judgment of the Supreme Court of Puerto Rico will be reversed and the cause will be remanded to that Court for further proceedings not inconsistent with this opinion; the appellant to recover costs on appeal. . Act of April 25, 1946, No. 464, Laws of Puerto Rico 1946, p. 1326. . There seems to have been some confusion with respect to the date of taking effect of these provisions. Tn the Act of May 14, 1948, No. 201, Laws of Puerto Rico 1948, p. 574, which amended sections 6, 12 and 12-A of the Reasonable Rents Act, the date of effectiveness is given in subsection 7a of amended Section 12-A as July 17, 1947. The plaintiff asserts that this was an error and he has furnished this court with, a copy of a resolution of the Executive Council, certified by its secretary, declaring the provisions in question to be effective on and after 12:01 A.M. of July 17, 1946. We take judicial notice of the date. . - Puerto Rico - . . We .need not refer at this, point to the additional exceptions added by the. Act of -May 14, 1948, No. 201, which transferred all the exceptions from Section 12 to a new section 12-A, which had been added by-the Act of May 14, 1947, •No. 424, Laws of Puerto Rico 1947, p. 862, since they will be discussed later in this opinion. . Ignaciunas v. Risley, 1923, 98 N.J.L. 712, 719, 121 A. 783, 786; Continental Oil Co. v. City of Twin Falls, 1930, 49 Idaho 89, 286 P. 353, 356; Forbes v. Hubbard, 1932, 348 Ill. 166, 180 N.E. 767, 771; Harmon v. City of Peoria, 1940, 373 Ill. 594, 27 N.E.2d 525, 529; City of Miami Beach v. Ocean & Inland Co., 1941, 146 Ha. 145, 200 So. 402, 403. . Act of March 2, 1917, c. 145, 39 Stat. 951, 48 U.S.C.A. § 731 et seq. . Block v. Hirsh, 1921, 256 U.S. 135, 41 S.Ct. 458, 65 L.Ed. 865, 16 A.L.R. 165; Marcus Brown Holding Co. v. Feld-man, 1921, 256 U.S. 170, 171, 41 S.Ct. 465, 65 L.Ed. 877. . Nebbia v. People of State of New York, 1934, 291 U.S. 502, 54 S.Ct. 505, 78 L. Ed 910 89 ALR 1469 . See Taylor v. Bowles, Em.App.1944, 145 F.2d 833, construing the Emergency Price Control Act of 1912, 50 U.S.C.A. Appendix, § 901 et seq. The Reasonable' Rents Act -was designed to continue in Puerto Rico the policies and purpose of the Emergency Price Control Act as to rents. Thus in the Statement of Moíivfis “ Section 1 th« act it M sald: n 13 purpof5e of thls Act to supplement the provisions m regard to rents of the Emergency Price Control Act of 1942, enacted by Congress on January 20, 1942, as applied to Puerto Rico, with the same policies and the same purpose of preventing speculation in ^nts- in su<* aspeete of the r«ntal problem as are of public interest m Puert0 Hico> an(i aro not covered by the Federal Act, such as the lease of houses and buildings used for businesses and commercial and industrial purposes.” Laws of Puerto Rico, 1946, No. 464, at page 1330. . See Woods v. Durr, 3 Cir., 1948, 170 F.2d 976. . Act of January 30, 1942, c. 26, Title I, § 4 (d), 56 Stat. 28, 50 U.S.C.A.Appendix, § 904 (d).

11143986-9281

MEMORANDUM OPINION AND ORDER ALESIA, District Judge. Before the court is Spiros Stamelos’s (“Dr.Stamelos”) motion to dismiss the third party complaint of Northwest Illinois Regional Commuter Railroad Corporation, d/b/a Metra (“Metra”). For the following reasons, the court grants Dr. Stamelos’s motion to dismiss. I. BACKGROUND A. Facts On January 14, 1997, Willie E. Mooney (“Mooney”), a sheet metal worker employed by Metra, sustained a back injury when a co-worker moved a train under which Mooney was working. Because of this back injury, Mooney sought treatment from Dr. Stamelos. Dr. Stamelos determined that Mooney required lumbar surgery, and on April 21, 1997, Dr. Stamelos performed surgery on Mooney. On May 2, 1997, Mooney contacted Dr. Stamelos, complaining of pain, and an examination revealed several problems, including a postoperative fibrosis and disc herniation. X-rays showed a small metallic thread-like object in an area of the nerve root. Dr. Stamelos recommended additional surgery. On May 17,1997, subsequent surgery by Dr. Stamelos revealed a thread of cotto-noid incorporated into the hematoma scar tissue in the area of the nerve root. In June 1997, postoperative complications required Dr. Stamelos to hospitalize Mooney for treatment of subcuticular drainage from the surgical site. A September 1997 MRI showed L4-5 discitis and early development of a left L4 abscess. Simply put, a foreign object used during surgery was left inside Mooney, causing further medical complications and aggravating his back injury. B. Procedural History Based on the foregoing, Mooney filed a complaint against Metra, pursuant to the Federal Employers’ Liability Act (“FELA”), 45 U.S.C. § 51-60, for compensation for his injury. Mooney opted not to sue Dr. Stamelos. The original complaint was filed in this court. However, both parties consented to have their case transferred to a magistrate judge. On July 30, 1998, this case was reassigned to Magistrate Judge Ashman, pursuant to Federal Rule of Civil Procedure 73 and Local Rule 1.72. FED. R. CIV. P. 73; LOC. R. 1.72. On January 14, 2000, the parties informed Magistrate Judge Ashman that they settled the case. However, rather than dismissing the case, the court granted Metra’s unopposed motion to file a third-party medical negligence complaint against Dr. Stamelos for contribution under Illinois law. Metra filed its third-party complaint on June 30, 2000, five months after settlement of the original FELA claim. In its third-party complaint, Metra relies upon the state common-law right of contribution among joint tortfeasors found in the Illinois Contribution Act, 740 ILCS 100/1.01, et seq., and asserts federal supplemental jurisdiction over its medical negligence claim against Dr. Stamelos. On December 8, 2000, Magistrate Judge Ashman returned the case to this court. On January 18, 2001, this court dismissed Mooney’s original complaint against Metra with prejudice, as all matters in controversy were settled. Now before the court is Dr. Stamelos’s motion to dismiss Metra’s third-party complaint for lack of subject matter jurisdiction. II. DISCUSSION This court had jurisdiction over Mooney’s FELA claim under the federal question statute, 28 U.S.C. § 1331, which grants federal district courts original jurisdiction over cases “arising under the Constitution, laws, or treaties of the United States.” 28 U.S.C. § 1331. Metra alleges supplemental jurisdiction over its state law medical negligence claim against Dr. Stamelos. Supplemental jurisdiction is codified in '28 U.S.C. § 1367(a), which extends the jurisdiction of federal district courts to all claims that are so related to the claim within the court’s original jurisdiction that they form part of the same case or controversy within the meaning of Article III of the Constitution. See City of Chicago v. Int’l College of Surgeons, 522 U.S. 156, 164, 118 S.Ct. 523, 139 L.Ed.2d 525 (1997) (citing 28 U.S.C. § 1367). Although § 1367(a) authorizes federal courts to exercise supplemental jurisdiction over state law claims, this does not mean that federal courts must exercise jurisdiction in all cases. See Int’l College of Surgeons, 522 U.S. at 172, 118 S.Ct. 523. Rather, supplemental jurisdiction is “a doctrine of discretion, not of plaintiffs right....” Id. District courts can decline to exercise jurisdiction over supplemental state law claims for a number of valid reasons and should “deal with cases involving [supplemental] claims in the manner that best serves the principles of economy, convenience, fairness and comity which underlie the [supplemental] jurisdiction doctrine.” Id. While there are “unusual cases in which the balance of factors to be considered under the [supplemental] jurisdiction doctrine — judicial economy, convenience, fairness and comity — will point to federal decision of the state-law claims on the merits,” the district judge is given broad power in determining whether such circumstances apply and, thus, whether it is appropriate to retain jurisdiction over the state law claims. Kennedy v. Schoenberg, Fisher & Newman, Ltd., 140 F.3d 716, 727-28 (7th Cir.1998). Furthermore, “[s]o long as an arguable balance of the above mentioned factors points in the direction of the district court’s discretionary determination whether or not to exercise jurisdiction, that decision, being discretionary, will not be disturbed.” Timm v. Mead Corp., 32 F.3d 273, 277 (7th Cir.1994). In fact, the district court’s discretion to relinquish supplemental jurisdiction is “almost unreviewable,” especially when all federal claims have been dropped from the case before trial and only state law claims remain. Kennedy, 140 F.3d at 728 (quoting Huffman v. Hains, 865 F.2d 920, 923 (7th Cir.1989)). “At that point, respect for the state’s interést in applying its own law, along with the state court’s greater expertise in applying state law, become paramount concerns.” Id. In fact, in cases involving complex or novel issues of state law, it may be an abuse of discretion for a court to retain jurisdiction after the federal issue is disposed of at trial or even on appeal. See United States v. Zima, 766 F.2d 1153, 1158 (7th Cir.1985) (internal citations omitted). Section 1367(c)(3) specifically provides that district courts may decline to exercise supplemental jurisdiction where “the court has dismissed all claims over which it has original jurisdiction.” See Kennedy, 140 F.3d at 727 (quoting 28 U.S.C. § 1367(c)(3)). In fact, “it is the well-established law of this circuit that the usual practice is to dismiss without prejudice state supplemental claims whenever all federal claims have been dismissed prior to trial.” Groce v. Eli Lilly & Co., 193 F.3d 496, 501 (7th Cir.1999). This case is precisely the situation described in § 1367(c)(3). 28 U.S.C. § 1367(c)(3). The only claim giving rise to federal jurisdiction in the first instance, Mooney’s FELA claim, has been settled and subsequently dismissed. Upon settlement of the FELA claim in January 2000, the sole initial basis for the assertion of federal jurisdiction evaporated, and the only remaining dispute involves a state law medical negligence claim for which discovery has not even begun. Because the FELA claims were settled and dismissed, federal jurisdiction over this suit is based entirely upon the supplemental jurisdiction statute. That statute provides that a district court “may decline to exercise supplemental jurisdiction” over supplemental state law claims if the court has dismissed all claims over which it has original jurisdiction. 28 U.S.C. § 1367(c)(3). Therefore, it is within this court’s discretion whether to proceed with the remaining third-party claim or dismiss it. To make this determination, the court must balance the factors of judicial economy, convenience, fairness and comity. See Int’l College of Surgeons, 522 U.S. at 172. Metra states conclusively that judicial economy, convenience and fairness weigh in favor of the exercise of federal jurisdiction over its state law claims. Nevertheless, it fails to provide any rationale supporting this conclusory statement, and there is nothing in the record or in Metra’s motion to support its argument. Judicial economy is not served by this court’s retention of jurisdiction. The parties stated in court on January 18, 2001 that they have not yet undertaken any discovery on the state law claim, and— because Magistrate Judge Ashman presided over this case virtually from its inception, and for nearly two and a half years leading up to the settlement of the original claim — this court is unfamiliar with the facts of the case. Further, besides briefing this motion to dismiss, virtually no judicial resources have been committed to the state law claims in this case. At this point, the burden of the state law claims would be the same for a federal as for a state court, and there would be no substantial duplication of effort if the state law claims were tried in the state court. See Wright v. Assoc. Ins. Cos., 29 F.3d 1244, 1251 (7th Cir.1994) (holding that the district court should have relinquished jurisdiction over state law claim when the federal claims were dismissed and there was very little federal judicial investment in the state law claims).

11685645-28324

MEMORANDUM OPINION HEARTFIELD, District Judge. Pending before the court are motions to dismiss and for summary judgment filed by plaintiffs and defendants. This memorandum opinion addresses the issues raised in all of the pending motions before the court, specifically: (1) the indemnity agreements between plaintiff and defendants and those between the defendants, (2) choice of law and interpretation of the standard under which liability is to be addressed, and (3) accrual of a CERCLA cause of action. Factual Background and Procedural History During the 1920’s, ARCO constructed a refinery facility in Port Arthur, Texas. In 1968 the facility was sold by ARCO to BP and Sohio. In May 1973, BP Oil Company entered into an Agreement for Sale of Assets with Fina, Inc. under the terms of which BP sold the refinery facility to Fina. The agreement expressly provided that it is binding upon the parties and their respective successors and assigns, thus the agreement is, binding upon Fina Oil and Chemical Company as Fina’s successor in interest. The 1973 agreement contained an indemnity clause that is at the heart of this case— whether or not CERCLA liability attaches to conduct that occurred prior to the sale of the facility; when the cause of action “accrued;” and whether the cause of action for recovery can be brought more than 20 years later, despite the express language of the indemnity agreement. Interestingly, the prior agreement between BP and ARCO contained virtually identical indemnity language, which raises the issue of “circuitous indemnity obligations.” ARCO and BP have stipulated that BP is the successor in interest to ARCO, and that any obligation to Indemnify ARCO belongs to BP, pursuant to the agreement between BP and ARCO. Fina contends that in 1990, almost 17 years after the purchase of the facility, it conducted an environmental site assessment and discovered areas in the facility where hazardous wastes were generated, treated, stored, or disposed of, causing Fina to incur response costs under CERCLA and to perform certain corrective actions and further investigations. Fina contends that the hazardous conditions were generated during the respective ownerships of ARCO, BP, and Sohio. The defendants contend that liability for the hazardous conditions, if any, is nullified by the indemnity agreements in the contracts for sale, specifically as between ARCO and BP, and later between BP and Fina. Defendants further contend that plaintiff knew or should have known of the waste management practices of the refinery, and of the areas of the refinery which plaintiff claims to have later discovered were hazardous waste areas at the time that the refinery facility was purchased, or at the very latest, at least nine years prior to bringing this lawsuit. Fina seeks to recover costs of environmental clean-up under state and federal law, and brings this cause of action under several statutes, including: the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA); the Resource Conservation Recovery Act (RCRA); the Texas Solid Waste Act (TSWDA); and the Texas Water Code (TWC). Summary Judgment Standard Summary judgment is to be granted where “the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” Fed.R.Civ.P. 56(e). “The mere existence of a factual dispute does not by itself preclude the granting of a summary judgment. ‘[T]he requirement is that there be no genuine issue of material fact.’” St. Amant v. Benoit, 806 F.2d 1294, 1296 (5th Cir.1987) (quoting Anderson v. Liberty Lobby, 477 U.S. 242, 247-48, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986)). A factual dispute is “material” if “its resolution in favor of one party might affect the outcome of the lawsuit under governing law.” Texas Manufactured Hous. Ass’n. Inc. v. City of Nederland, 101 F.3d 1095, 1099 (5th Cir.1996), cert. denied, — U.S., -, 117 S.Ct. 2497, 138 L.Ed.2d 1003 (1997). “There is no genuine issue of material fact if the evidence is such that, drawing all reasonable inferences in favor of the nonmovant ... a reasonable jury could not return a verdict in his favor.” Atkinson v. Denton Pub. Co., 84 F.3d 144, 148 (5th Cir.1996). The movant carries, the burden of showing that there is no genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). “After the movant has presented a properly supported motion for summary judgment, the burden shifts to the nomnov-ing party to show with ‘significant probative evidence’ that there exists a genuine issue of material fact.” Texas Manufactured Housing Ass’n, supra at 1099 (quoting Conkling v. Turner, 18 F.3d 1285, 1295 (5th Cir.1994)). Discussion 1. Indemnity Agreements a. In General and in the CERCLA Context Defendants argue that the following portion of the 1973 sales agreement between BP, Sohio (SPL) and American Petrofina, precludes Fina from recovering clean-up costs: Fina shall indemnify, defend and hold harmless BP and SPL against all claims, actions, demands, losses or liabilities arising from the use or the operation of the Assets or arising under or relating to any lease, contract, license or other agreement assigned to or assumed by Fina or a subsidiary of Fina and accruing from and after closing. According to defendants, Fina’s claims come within this language because the statutes under which they arise, CERCLA, RCRA, TSWDA and TWC, were all enacted subsequent to the consummation of the 1973 sales agreement. This contention rests on the belief that the term “accrue,” the root of “accruing,” refers to the time when a legal right comes into existence. Fina responds that “accrue” means “completion] of the factual predicates or actions leading to subsequent liability.” Under this reading, the misconduct for which Fina seeks remuneration, having occurred before 1973, may be a target of a cost recovery action. Defendants seem willing, at least for the sake of their argument for summary judgment, to make two concessions. First, they accept that pre-enactment conduct is covered by the CERCLA, RCRA, TSWDA and TWC provisions under which Fina sues. Second, they stipulate that they qualify as successor corporations, as that concept is understood in the CERCLA context. See United States v. Lang, 864 F.Supp. 610, 612-13 (E.D.Tex.1994) (CERCLA ease). They implicitly assume that CERCLA’s successor liability rule extends to claims brought under the RCRA, TSWDA and TWC. While CERCLA does not permit the avoidance of liability vis-a-vis the government, CERCLA specifically recognizes the enforceability of indemnification agreements which allocate environmental liability among responsible parties. A party may also contract to indemnify another for environmental liability even though CERCLA was not in existence at the time of contracting. Joslyn Manufacturing Co. v. Koppers Company, Inc., 40 F.3d 750 (5th Cir.1994), citing Kerr-McGee Chem. Corp. v. Lefton Iron & Metal Co., 14 F.3d 321, 327 (7th Cir.1994). In Joslyn, the Fifth Circuit held that the broad language of the indemnification agreement evinced a strong intent by the parties for indemnification for all liability arising in connection with the occupancy or use of the contracted for property. Joslyn, at 754. The indemnification agreement was intended to cover all forms of liability, including liability arising under CERCLA, even though environmental liability under CERCLA was not specifically contemplated at the time of contracting. Id. at 754-55. b. Express Negligence and Express Strict Liability The “express negligence” and “express strict liability” doctrines are inapplicable to the indemnity provisions in both the ARCO/BP indemnity provision and the BP/ Fina indemnity provision. The “express negligence” rule states that contract provisions purporting to indemnify the indemnitee against its own negligence are enforceable, so long as the intent is expressed in specific terms within the contract’s four corners Ethyl Corp. v. Daniel Constr., 725 S.W.2d 705 (Tex.1987). This rule has been extended to indemnification clauses purporting to indemnify the indemnitee against its own strict liability. Houston Lighting and Power Co. v. Atchison, Topeka, & Santa Fe R.R. Co., 890 S.W.2d 455 (Tex.1994). This rule is applied to ensure that indemnitors do not become liable for unexpected liabilities. This doctrine is inapplicable in this case because it is generally applied only in cases where the parties enter into an indemnity agreement which attempts to relieve a party of it liability in advance for future actions. Dresser Industries, Inc. v. Page Petroleum Inc., 853 S.W.2d 505, 507 (Tex.1993) (emphasis added). In Dresser, the court applied the “fair notice requirement” to indemnity agreements and releases only when such exculpatory agreements were utilized to relieve a party of liability for its own negligence in advance. Id. at 508 (emphasis added). Two years later, the Texas Supreme Court emphasized that the holding in Dresser was explicitly limited to releases and indemnity clauses in which one party exculpates itself from its own future negligence. Green Int’l Inc. v. Solis, 951 S.W.2d 384, 387 (Tex.1996). In this case, the indemnity provisions did not purport to apply to future acts, but divided the liability between the parties as of the date of closing — the defendants to be responsible for liability accruing before closing and plaintiff being responsible for that which accrued after closing. The parties clearly established a “bright line” for the transfer of all rights, duties, and obligations, including liabilities. The indemnity agreements were provisions of sales agreements, which were carefully drafted by sophisticated businessmen, international oil companies, and corporate attorneys. The parties were familiar with the custom and practices of the industry and bargained for and agreed to the terms of the indemnity provisions. Experience of the parties is a factor to be considered in determining whether exculpatory provisions should be enforced. Green, supra at 387. In this context, the intent of the parties is clear, and application of express negligence and express strict liability doctrines would serve to invalidate the intent of the parties. 2. Choice-of-Law a. As Affecting Indemnity Agreements A party can agree to indemnify another for liability based on activity occurring prior to enactment of CERCLA. See Joslyn, supra. It can do so through a contract that “is either specific enough to include CERCLA liability or general enough to include any and all environmental liability which would, naturally, include subsequent CERCLA claims.” Aluminum Co. of Am. v. Beazer E., Inc., 124 F.3d 551, 565 (3d Cir.1997). State law resolves disputes over whether or not a contract’s indemnification provision evinces either characteristic, unless its application conflicts with CERCLA or one of its objectives. See Fisher Dev. Co. v. Boise Cascade Corp., 37 F.3d 104, 108-09 (3d Cir.1994). The choice-of-law rules of the state in which suit has been brought establish which state’s law governs. See Landry v. A-Able Bonding, Inc., 75 F.3d 200, 205 n. 7 (5th Cir.1996). If the applicable state law fails to resolve the interpretive issue at hand, then the court must, as prescribed by Erie Railway, predict how the state’s supreme court would rule. See Federal Dep. Ins. Corp. v. Abraham, 137 F.3d 264, 268 (5th Cir.1998). The court must base its forecast on (1) lower state court decisions, (2) dicta by the state’s supreme court, (3) the general rule on the question, (4) the rulings of courts of other states to which the state’s courts look when formulating substantive law, and (5) other available sources, such as legal commentaries. Absent evidence to the contrary, it presumes that the state’s supreme court would adopt the prevailing rule if called upon to do so. See Jackson v. Johns-Manville Sales Corp., 781 F.2d 394, 397-98 (5th Cir.) (en banc), cert. denied, 478 U.S. 1022, 106 S.Ct. 3339, 92 L.Ed.2d 743 (1986). Texas’ choice-of-law rules determine under which state’s law structures analysis of the sales contract. See Landry, supra. In Texas, the law of the state with the most significant relationship to the particular substantive issue is applied, except in those contract cases in which the parties have agreed to a valid choice-of-law clause. See Duncan v. Cessna Aircraft Co., 665 S.W.2d 414, 421 (Tex.1984). A choice-of-law clause is valid “unless (1) the contract bears no reasonable relation to the chosen state or (2) the law of the chosen state violates a fundamental public policy of Texas.” Exxon Corp. v. Burglin, 4 F.3d 1294, 1298 (5th Cir.1993) (citing DeSantis v. Wackenhut Corp., 793 S.W.2d 670, 677 (Tex.1990), cert. denied, 498 U.S. 1048, 111 S.Ct. 755, 112 L.Ed.2d 775 (1991)). “In analyzing whether a fundamental policy is offended ..., the focus is on whether the law in question is part of state policy so fundamental that the courts of the state will refuse to enforce an agreement contrary to that law, despite the parties’ original intentions, and even though the agreement would be enforceable in another state connected with the transaction.” DeSantis, 793 S.W.2d at 680. “[Application of the law of another state is not contrary to fundamental policy of the forum merely because it leads to a different result than would obtain under the forum’s law.” Id. The 1973 sales agreement between BP and Fina calls for it to be “construed and governed under the laws of the State of Delaware.” If this choice-of-law provision satisfies Texas’ test for validity, then Delaware law governs disposition of the dispute between the BP defendants and Fina. If it fails to do so, then Texas law applies and the analysis of the contract mirrors that of the earlier sales agreement between BP, SPL and ARCO. Delaware courts interpret contracts as a whole. Gertrude L.Q. v. Stephen P.Q., 466 A.2d 1213, 1217 (Del.1983). All provisions are given effect, and a construction rendering any provision illusory or meaningless is avoided. See Seabreak Homeowners Ass’n, Inc. v. Gresser, 517 A.2d 263, 268 (Del.Ch.1986), aff'd, 538 A.2d 1113 (Del.1988); see also Sonitrol Holding Co. v. Marceau Investissements, 607 A.2d 1177, 1184 (Del.1992) (“The cardinal rule of contract construction is that, where possible, a court should give effect to all contract provisions.”). In other words, the court must “consider the entire instrument and attempt to reconcile all of its provisions ‘in order to determine the meaning intended to be given to any portion of it.’” Wood v. Coastal States Gas Corp., 401 A.2d 932, 937 (Del.1979). Delaware courts assign contractual language its plain and ordinary meaning. Gertrude L.Q., 466 A.2d at 1217. Un less a contract evinces ambiguity, its plain meaning controls. See Eagle Indus., Inc. v. De Vilbiss Health Care, Inc., 702 A.2d 1228, 1232 (Del.1997). In this situation, “extrinsic evidence may not be used to interpret the intent of the parties, to vary the terms of the parties, or to create ambiguity.” Id. However, “[t]here may be occasions were it is appropriate for the ... court to consider some undisputed background facts to place the contractual provision in its historical setting without violating this principle.” Id. n. 7 A contract evinces ambiguity “only when the provisions in controversy are reasonably or fairly susceptible of different interpretations or may have two or more different meanings.” Rhone-Poulenc v. American Motorists, Inc., 616 A.2d 1192, 1196 (Del.1992). Ambiguity fails to pervade “where the court can determine the meaning of a contract ‘without any other guide than a knowledge of the simple facts on which, from the nature of language in general, its meaning depends.’ ” Id. A court must refrain from “tortur[ing] contractual terms to impart ambiguity where ordinary meaning leaves no room for uncertainty. The true test is not what the parties to the contract intended it to mean, but what a reasonable person in the position of the parties would have thought it to mean.” Id. The parol evidence rule governs reliance on extrinsic evidence to discern an ambiguous contract’s meaning. See Pellaton v. Bank of N.Y., 592 A.2d 473, 478 (Del.1991); see also Citadel Holding Corp. v. Roven, 603 A.2d 818, 822 (Del.1992) (“Only when there are ambiguities may a court look to collateral circumstances.”). Under that principle of contract law, “relevant extrinsic evidence is that which reveals the parties’ intent at the time they entered into the contract.” Eagle Indus., 702 A.2d at 1233 n. 10. So “backward-looking evidence gathered after the time of contracting is not usually helpful.” Id. Application of Delaware law sustains the BP defendants’ interpretation of the Fina indemnity provision. The Fina indemnity provision’s unambiguous terms are broad enough to encompass CERCLA claims against BP and its successors. b. As Affecting Liability Under CERCLA Fina maintains that the BP defendants may receive no recovery because the indemnity provision fails to satisfy the clear and unequivocal rule, which Delaware follows. The rule enables a party to secure indemnification for its own negligence only via “crystal clear and unequivocal” contractual language (clear and unequivocal rule). See State v. Interstate Amiesite Corp., 297 A.2d 41, 44 (Del.1972). Fina posits that the rule should extend to misconduct for which a party is strictly hable, such as that covered by CERCLA. Compare Resp at 13-14 with In re Bell Petroleum Servs., Inc., 3 F.3d 889, 897 (5th Cir.1993). This, argument proves unavailing, even if the clear and unequivocal rule reaches the strict liability context. Although Dela ware courts have never expressly done so, they would recognize the clear and unequivocal rule as limited to future acts, given the apparently wide recognition of such a temporal constraint. Compare 41 Am.Jur.2d Indemnity § 8 (1995 & Supp.1997) (“a contract may validly provide for the indemnification of one against, or relieve him from liability for, his own future actions of negligence as long as the indemnity against the results of the negligence is unequivocally clear in the contract”) and 57A Am.Jur. Negligence § 51 (1989 & Supp.1997) (“it is now the prevailing rule that a contract may validly provide for the indemnification of one against, or relieve him from liability for, his own future acts of negligence, provided the indemnity against such negligence is made unequivally clear in the contract”) with Johns-Manville, 781 F.2d at 397-98. This limitation of the clear and unequivocal rule to prospective activity results in BP’s operation of the plant, prior to the closing of the 1973 sales agreement, falling outside of the rule’s reach. 3. Accrual of Cause of Action under CERCLA The BP defendants’ conception of “$ccrue” comports with that term’s plain, ordinary meaning: “to come into existence as an enforceable claim,” Webster’s New Third International Dictionary 13 (1967) [hereinafter Webster’s] (def.l); accord Random House Unabridged Dictionary 13 (2d ed.1993) [hereinafter Random House ] (“to become a present and enforceable right or demand”), see also Black’s Law Dictionary 20-21 (6th ed.1990) [hereinafter Black’s ] (“to arise, to happen, to come into force or existence; to vest ... ”) (“A cause of action ‘accrues’ when a suit may be maintained thereon....”). This circumstance establishes the Fina indemnity provision as placing on Fina responsibility for indemnifying BP for “all” future claims. Causes of action under CERCLA qualify as future claims because CERCLA was enacted in 1980, see United States v. Bestfoods, - U.S. -, -, 118 S.Ct. 1876, 1881-82, 141 L.Ed.2d 43, No. 97-454, 1998 WL 292076, at *3 (1998), after the 1973 sales agreement between BP and Fina was executed. See FMC Corp. v. Northern Pump Co., 668 F.Supp. 1285, 1292 (D.Minn.1987), appeal dismissed, 871 F.2d 1091 (8th Cir.1988). Fina contends that the BP defendants’ reading of “accrue” renders meaningless the indemnity provision in the 1973 sales agreement. Further, Fina contends that the provision, as BP defines “accrued” imposes liability on BP for “all contamination.” This argument lacks merit. The BP indemnity provision obligates BP to indemnify Fina for claims that the law (either common or statutory) recognized as viable before the closing of the 1973 sales agreement. Indeed, Fina’s negligence claim against the BP defendants illustrates this duty. See infra n. 9; cf. BP Defs.’ Reply Fina’s Resp. BP’s Mot.Summ.J. at 7 (“if a third party, e.g., an employee or customer of the Refinery, sued Fina based upon a cause of action that accrued prior to closing of the Agreement, e.g., a personal injury or breach of contract claim, BP would be required to indemnify Fina.”). Fina argues that “accrued” evinces ambiguity because of the parties’ disagreement over the word’s meaning. This circumstance, it contends, permits consideration of facts establishing the correctness of its interpretation of the 1973 sales agreement. The mere dispute between the parties over the definition of “accrue” fails to create ambiguity. The unambiguous language of the Fina in demnity provision, indeed, settles that word’s meaning. See Rhone-Poulenc, 616 A.2d at 1196. As such, no resort to parol evidence, which is what Fina offers to bolster its position, may occur. See Citadel Holding, 603 A.2d at 823. Fina’s conception of “accrue,” unlike that of the BP defendants, clashes with the imperative to give effect to all contract provisions. Its construes “acerue” as synonymous with “accrued,” see Resp. at 16 (citing North Shore Gas Co. v. Salomon, Inc., 963 F.Supp. 694, 701 n. 4 (N.D.Ill.1997)) (discussing phrase “accrued or existing”), which means, among other things, “occurred,” Black’s, supra. That reading makes the provision of the 1973 sales agreement, in which BP promises to indemnify Fina, meaningless. If “accrue,” as Fina sees it, refers to all conduct by BP prior to the closing in 1973, regardless of legal actionability at that time, then the- modifying phrase “prior to Closing and arising from the use or operation of the Assets” becomes unnecessary. See Sea-break, 517 A.2d at 268. Likewise, Fina’s conception of “accrue” makes the Fina indemnity provision redundant. Applying its interpretation to that section, Fina would only indemnify BP for claims based on conduct by BP “from and after closing.” But once closing occurs, BP no longer owns the plant; it cannot “use or operat[e] ... the” plant nor be a party “to any lease, contract, license or other agreement assigned to or assumed by Fina or a subsidiary of Fina.” Consequently, BP can never engage in activity subject to a claim that Fina must indemnify. This reading of the Fina indemnity provision simply restates what the BP indemnity provision explicitly and affirmatively declares: BP will assume legal responsibility for all claims based on its activity while plant owner. A claim accrues when the holder of that claim has a right to file suit to protect his interest or to recover damages. A party cannot protect an interest it does not have; thus, a claim relating to real property cannot accrue until the claim holder owns the property and has an interest to protect. See Ferguson v. Johnston, 320 S.W.2d 906, 911 (Tex.Civ.App.-Texarkana 1959, writ ref'd n.r.e.); Hensley v. Conway, 29 S.W.2d 416 (Tex.Civ.App.—Eastland 1930, no writ). In this case, Fins is asserting claims for contribution, which could not have accrued until the underlying demands were made against Fina — many years after the refinery facility was sold to Fina by B.P. Additionally, a cause of action cannot accrue before the statute authorizing the cause of action is enacted. See Levin Metals Corp. v. Parr-Richmond Terminal Co., 817 F.2d 1448 (9th Cir.1987). Both ownership of the property and the passage of the statute authorizing recovery occurred long after closing — the “bright line” which defined and directed the course of liability. The unambiguous language of the Fina indemnity provision requires Fina to indemnify the BP defendants for CERCLA and other claims, and likewise the indemnity provision between BP and ARCO require the indemnity to pass through to ARCO as well. Conclusion The indemnity agreements are valid, and limit liability of the BP defendants to those actions which accrued prior to the closing of sale in 1973. BP agreed to indemnify its predecessor in interest, ARCO; therefore, the indemnity becomes a circuitous obligation and passes through from Fina to BP and finally to ARCO. See footnote 5, supra. Plaintiffs cause of action did not accrue until at least the passage of CERCLA. Even though the parties did not contemplate CERCLA in 1973, the shifting of liabilities through the indemnity agreement is valid and enforceable, whether under Delaware or Texas law, even in the environmental cleanup context of CERCLA actions. There being no genuine issues of material fact as related to this Memorandum Opinion, defendants . are entitled to judgment as a matter of law. An order and final judgment shall be entered in accordance with this Memorandum Opinion. ORDER ON MEMORANDUM OPINION The Defendant’s motions for summary judgment (Docs. 55, 56, and 80) are GRANTED. All other motions not previously ruled on, or specifically ruled on by this judgment, are hereby DENIED. The court will enter a separate final judgment in accordance with the Memorandum Opinion and order. . The following motions are pending before the court as of the date of this Memorandum Opinion: (1) Plaintiff's Motion for Summary Judgment on the Issue of CERCLA Liability (Doc 78 and 79); (2) Defendant ARCO’s Motion for Summary Judgment as to cross-claim against BP (Doc 56); (3) Defendant BP and Sohio’s Motion for Summary Judgment (Doc 55 and 80) and joinder in the motion by defendant ARCO (Doc 82); (4) Defendant BP and Sohio's Partial Motion to Dismiss (Doc 52 and 73); and (5) Defendant ARCO’s Partial Motion to Dismiss (Doc 53 and 74). . The court does not address the issues of statute of limitations and CERCLA liability, raised by the parties in their various motions and briefs. There are factual issues in dispute as to whether, or when, any removal or remedial actions occurred and what activities on the part of plaintiff constitutes removal or remedial actions as they impart limitations questions. Likewise there are factual issues in dispute as to whether a "release” occurred at the facility, one of the elements required to attach liability for a CERCLA claim. . Although the maps and plats attached to the contract identify separate pieces or units that constituted the facility, it was sold as a whole, not as separate units of production. . At the time of the BP/Fina sale in 1973, Fina's predecessor, American Petrofina, Inc. conveyed the facility to Amdel, Inc. and Amdel Pipeline, Inc. Then, in 1977 the Amdel companies conveyed the plant to the predecessor of Fina Oil and Chemical Company, American Petrofina Company of Texas. . Such obligations have been held to extinguish plaintiff's cause of action. See, e.g., Starcraft Co. v. C.J. Heck Co. of Texas, Inc., 748 F.2d 982, 989 (5th Cir.1984), citing Phillips Pipe Line Co. v. McKown, 580 S.W.2d 435, 440 (Tex.Civ.App.—Tyler 1979, writ ref'd n.r.e.); Panhandle Gravel Co. v. Wilson, 248 S.W.2d 779, 785 (Tex.Civ.App.—Amarillo 1952, no writ). . Stipulation filed of record June 9, 1997. . Defendants refer to the attachments to the contract for sale, which included various maps and plats of the refinery facility, one of which depicted the areas in question as "sludge basins.” At least two Fina employees testified by deposition that these areas were known as waste or sludge dumps dating back to at least 1955, and particularly in the 1970's after Fina purchased the facility. Defendants also refer to letters sent in 1989 by Fina's Senior Attorney, Jim Veach, to an in-house attorney for BP which specifically referred to the alleged contamination at the refinery facility and Fina's reports to the Texas Water Commission relating to the contamination Fina had discovered.

4090530-27056

MEMORANDUM OPINION AND ORDER ON PLAINTIFF-INTERVE-NOR’S MOTION FOR RECONSIDERATION AND PLAINTIFFS’ MOTION FOR MODIFICATION OF TERMS OF INJUNCTIVE RELIEF [Documents 665 and 672] ANTHONY W. ISHII, Chief Judge. In its memorandum opinion and order filed January 16, 2007, the court enjoined the “State of California and/or any of its political subdivisions and agencies:” from the enforcement of any provision of California Health and Safety Code, section 43018.5(b)(1), such injunction to remain in effect until the earlier of such time as [Environmental Protection Agency (“EPA”) ] may issue a waiver of federal preemption to the State of California or the time Congress may pass, and the President may sign into law, legislation permitting California to carry out such regulation. Doc. # 606 at 23 (hereinafter, the “January 16 Order”). The court’s memorandum opinion and order filed December 11, 2007, and refiled as corrected on March 26, 2008, (the “March 26 Order”) granted motions for summary judgment by defendant State of California (“Defendant”) and defendant intervenors, Sierra Club, et al. (“Defendant-intervenors”) as to the remaining claims in this case and left the injunction established by the January 16 Order undisturbed. As of the present time, EPA has not granted a waiver of federal preemption, nor has Congress passed any legislation that would allow California to implement the fuel economy provisions of California Health and Safety Code section 43018.5(b)(1) (hereinafter the “AB1493 regulations”). Now before the court are two motions, one by Plaintiff-intervenor, Association of International Automobile Manufacturers (“AIAM”) and the other by plaintiffs Central Valley Chrysler-Jeep, et al. (“Plaintiffs”), that together request the court modify the scope of injunctive relief granted by the January 16 Order and re-visit its interpretation of the preemptive force of the Clean Air Act. For the reasons that follow, the court will deny the motions. FACTUAL BACKGROUND AND PROCEDURAL HISTORY AIAM filed its motion to modify the scope of the injunction and to re-interpret the preemptive language of section 209 of the Clean Air Act, 42 U.S.C. § 7543, on April 4, 2008. Doc. # 665. Opposition to AIAM’s motion was filed on April 25, 2008, and AIAM’s reply was filed on May 5, 2008. Plaintiffs filed their motion to modify injunctive relief on April 28, 2008. Defendant and Defendant-intervenors filed their opposition on May 23, 2008. Plaintiffs filed their corrected reply on June 12, 2008. The court vacated the scheduled hearing date of May 12, 2008, set a further briefing schedule, and took the matter under submission as of June 9, 2008. The focus of both AIAM’s and Plaintiffs’ motions is an executive order promulgated by California Air Resources Board (“CARB”) that Plaintiffs and AIM contend constitute an attempt by CARB to enforce the AB 1493 regulations (the “Executive Order”). The Executive Order, as provided by AIAM in their moving brief, states as follows in pertinent part: A January 16, 2007 Order currently enjoins the Executive Officer from enforcing any provision of California Health and Safety Code section 43018.5(b)(1) concerning certification to the requirements for 2009 and subsequent model passenger cars, light duty trucks and medium-duty vehicles adopted pursuant to AB 1493. (Document 606, Case No. 1:04-CV-06663-AWI-GSA, U.S. Dist. CT. E. Dist. Of CA (Fresno Div.)). If said injunction ceases to be in effect, the manufacturer will have 45 days from the ARB notifícation to demonstrate compliance with AB 1493 requirements, including determination of the greenhouse gas values for the test group listed in this Executive Order. Nothing in this Executive Order is intended to constitute enforcement of any requirement under AB 1493 for 2009 model year vehicles. Doc. # 665 at 4:10-4:16 (emphasis provided by AIAM). LEGAL STANDARD AIAM’s contends, in part, that section 209(a) of the Clean Air Act, which generally preempts state regulation of motor vehicle emissions, should be interpreted as being disjunctive from the provisions of 209(b) of the Clean Air Act, which provides that EPA may grant a waiver of federal preemption for automotive emissions standards developed by California. Because the court did not adopt this interpretation of section 209 of the Clean Air Act in either the January 16 or the March 26 Orders, the court construes AIAM’s request for re-interpretation of the Clean Air Act as a motion for reconsideration pursuant to Rule 60(b) of the Federal Rules of Civil Procedure. Rule 60(b) permits a district court to relieve a party from a final order or judgment on grounds of: “(1) mistake, inadvertence, surprise, or excusable neglect; (3) fraud ... of an adverse party, ... or (6) any other reason justifying relief from the operation of the judgment.” The motion for reconsideration must be made within a reasonable time, in any event “not more than one year after the judgment, order, or proceeding was entered or taken.” Id. Motions to reconsider are committed to the discretion of the trial court. Combs v. Nick Garin Trucking, 825 F.2d 437, 441 (D.C.Cir.1987); Rodgers v. Watt, 722 F.2d 456, 460 (9th Cir.1983) (en banc). To succeed, a party must set forth facts or law of a strongly convincing nature to induce the court to reverse its prior decision. See, e.g., Kern-Tulare Water Dist. v. City of Bakersfield, 634 F.Supp. 656, 665 (E.D.Cal.1986), aff'd in part and rev’d in part on other grounds, 828 F.2d 514 (9th Cir.1987), cert. denied, 486 U.S. 1015, 108 S.Ct. 1752, 100 L.Ed.2d 214 (1988). AIAM and Plaintiffs also request that the court exercise its power to modify the existing injunction. A court’s authority to modify the terms of injunctive relief is inherent, A & M Records, Inc. v. Napster, Inc., 284 F.3d 1091, 1098 (9th Cir.2002), being derived both from the court’s powers in equity and from Rule 60(b). Earth Island Inst. v. S. California Edison, 166 F.Supp.2d 1304, 1309 (S.D.Cal.2001). A court has discretionary power to modify an injunction when changing circumstances, or a better appreciation of the facts in light of experience indicate existing injunctive orders are not well adapted to the purpose for which they were made. Id.; see also System Federation No. 91 v. Wright, 364 U.S. 642, 647-648, 81 S.Ct. 368, 5 L.Ed.2d 349 (1961). DISCUSSION I. Re-interpretation of Section 209 of the Clean Air Act Section 209(a) of the Clean Air Act provides as follows, in pertinent part: No state or political subdivision shall adopt or attempt to enforce any standard relating to the control of emissions from new motor vehicles or new motor vehicle engines subject to this part. 42 U.S.C. § 7543(a). Section 209(b) provides, in pertinent part: (1) The Administrator shall, after notice and opportunity for public hearing, waive application of this section to any State which has adopted standards (other than crankcase emission standards) for the control of emissions from new motor vehicles or new motor vehicle engines prior to March 30, 1966, if the State determines that the State standards will be, in the aggregate, at least as protective of public health and welfare as applicable Federal standards. No such waiver shall be granted if the Administrator finds that— ¶ .... ¶ (C) such State standards and accompanying enforcement procedures are not consistent with section 7521(a) of this title (2) If each State standard is at least as stringent as the comparable applicable Federal standard, such State standard shall be deemed to be at least as protective of health and welfare as such Federal standards for purposes of paragraph (1). (3) In the case of any new motor vehicle or new motor vehicle engine to which State Standards apply pursuant to a waiver granted under paragraph (1), compliance with such State standards shall be treated as compliance with applicable Federal standards for purposes of this subchapter. 42 U.S.C. § 7543(b) (italics added). “In statutory interpretation, courts must adhere to the plain language of a statute unless ‘literal application of a statute will produce a result demonstrably at odds with the intentions of its drafters.’ [Citation.]” Resolution Trust Corp. v. Bayside Developers, 43 F.3d 1230, 1236 (9th Cir.1994). AIAM contends that the disjunctive wording in section 209(a), providing that no “political subdivision shall adopt or attempt to enforce any standard” means that “adopting a regulation and enforcing it are two statutorily, and indeed conceptually, different government activities and must be treated as such by courts.” Doc. #665 at 7: 8-9. AIAM contends that because the word “or” indicates disjunction between the two categories of adoption and enforcement, the doing of either by a state violates the terms of section 209(a). See Zorich v. Long Beach Fire Dept., 118 F.3d 682, 684-685 (9th Cir.1997) (“or” rather than “and” shows intent to apply statutory provision to each category listed so long as congressional intent is not defeated). It is not necessary to resort to the cannons of statutory interpretation to see the flaw in AIAM’s argument. The use of the word “or” in section 209 indicates a disjunction between the two verbs on either side of the word “or;” those verbs being “adopt” and “attempt to enforce.” There is absolutely no support for the proposition that, because the word “or” is used to indicate a disjunction between two verbs in subsection 209(a), that the provisions of the entire subsection are somehow dis-joined from the provisions of any other subsection, including subsection 209(b). The meaning and purpose of subsection 209(b) is plain on its face — it constitutes an exception to the preemptive force of section 209(a). Subsection 209(b) provides that where California (the only state that fits the qualifying description of having regulated prior to March 30, 1966), has adopted a regulation of motor vehicle engine emissions, those regulations shall be granted a waiver from the preemptive force of subsection 209(a) if the specified requirements are met. Although section 209(a) may prohibit a state from adopting or attempting to enforce “any standard relating to the control of emissions from new motor vehicles,” that prohibition simply does not apply where California adopts regulations under the terms and conditions specified by section 209(b). There is absolutely rule of statutory construction that does what AIAM invites the court to do; that is, to invalidate the exception because the rule contains the word “or.” AIAM contends its interpretation of the interplay between subsections 209(a) and 209(b) of the Clean Air Act must prevail because that interpretation does not negate congressional intent. This is simply not the case. Without any support for the proposition, AIAM contends that it was Congress’s intent to prevent the sort of harm that AIAM alleges the automobile manufacturers will suffer — being burdened with the dilemma of whether to invest in carbon dioxide reducing technology or risk being out of compliance with standards that may or may not be granted waiver of preemption sometime in the future. Whether or not Congress actually had that intent, it is indisputable that the plain language of subsection 209(b) provides an exception to subsection 209(a) that allows California to adopt automobile emissions regulations and submit same to EPA for their consideration. AIAM cannot escape the fact that their interpretation of the interplay between subsections 209(a) and 209(b) would require that courts thwart the clearly stated intent of Congress to allow California to adopt regulations under subsection 209(b) that would be granted waiver from the application of subsection 209(a) if the statutory prerequisites are met. The court will decline AIAM’s invitation to interpret the provisions of subsection 209(a) of the Clean Air Act as disjunctive from the provisions of subsection 209(b) because the interpretation requested is without support in law, logic, or grammar. II. Scope of Injunctive Relief Both Plaintiffs and AIAM contend that the Executive Order quoted above constitutes an attempt by CARB to enforce the terms of the AB 1493 regulations even though a waiver of federal preemption has been denied by EPA. In addition, Plaintiffs contend that EPA’s denial of California’s request for waiver of federal preemption constitutes a change in circumstances such that the injunctive relief previously granted by the court should be modified to prevent California’s attempt to enforce the AB 1493 regulations. A. The Executive Order Does Not Attempt Enforcement of the AB 1493 Regulations Plaintiffs and AIAM contend that the Executive Order is an impermissible attempt to enforce the AB 1493 regulations because it requires proof of compliance from manufacturers within 45 days of notification by CARB following the grant of waiver of federal preemption by EPA. Plaintiffs contention derives from the undisputed fact that compliance with substantially more stringent carbon dioxide emissions standards requires a multi-year period of research and development before necessary changes can be made at the level of the production line. Plaintiffs contend the need for a multi-year development period means that manufacturers will be forced into the unpalatable Hobson’s choice of undertaking substantial current investment to meet standards they believe may never be imposed or to forego current investment and be caught in non-compliance if and when the standards are granted waiver of preemption. Plaintiffs contend that EPA’s determination of whether proposed California Regulations allow sufficient lead time to implement the changes necessary uses the state’s final adoption of their AB 1493 regulations as the starting point for the EPA’s determination of sufficient lead time for purposes of 42 U.S.C. § 7521(a)(2). Thus, they argue, the clock for compliance with the terms of AB 1493 began to run in 2004, when California adopted the AB 1493 regulations, rather than at some future time when EPA may grant the waiver of federal preemption. Defendant does not dispute this contention and evidence offered by Defendant supports the contention. See California State Motor Vehicle Pollution Control Standards; Waiver of Federal Preemption; Decision of the Administrator (Medium-duty Waiver); 59 Fed.Reg. 48625 (Sept 22, 1994) and supporting Decision Document Excerpt; Exhibit 1 to Defendant’s Request for Judicial Notice, Doc. # 670-3 (hereinafter the “Decision Document”) at 39 (holding that the “lead time clock” starts when California “adopts” the regulations). From these undisputed facts, Plaintiffs contend that CARB’s Executive Order announcing its intent to enforce the AB 1493 regulations if and when EPA grants a waiver of federal preemption without committing to the provision of further lead time is tantamount to enforcement of the AB 1493 regulations. Plaintiffs content CARB’s stated intent to enforce the AB 1493 regulations presents the manufacturers with a Hobson’s choice that requires manufacturers to investing now to comply with regulations that may never be promulgated so that they are not caught at some later time out of compliance with regulations whose lead time is inadequate by the time the regulations are finally put into effect. The court disagrees with Plaintiffs characterization of CARB’s Executive Order. CARB’s Executive Order does not, on its face, invoke the provisions of AB 1493 or impose any present restriction on manufacturers’ ability to market automobiles that are not in compliance with the emissions regulations of AB 1493 in California. The Executive Order, to the extent it has been quoted by Plaintiffs, merely states what has been assumed, or should have been assumed by the parties all along— California intends to enforce its AB 1493 regulations if and when it can. In its January 16 Order, the court enjoined California or any of its political subdivisions from enforcement of the provisions of AB 1493 until such time as EPA may grant a waiver of federal preemption or the legislature may pass and the President sign a law otherwise permitting enforcement of the AB 1493 regulations. The court’s January 16 order acknowledged that CARB would be able to enforce the AB 1493 regulations so far as the Clean Air Act is concerned if and when a waiver of federal preemption is granted. EPA to this point has refused to grant the waiver. So far as the Clean Air Act is concerned, CARB is in no more or less of a position to enforce its AB 1493 regulations now than it was at the time the January 16 Order was filed. While it is true that the court’s March 26 Order made the imposition of the AB 1493 regulations more of a present possibility by holding that those regulations were not preempted by the Energy Policy Conservation Act (“EPCA”) or by the foreign policy of the United States, the preemptive effect of the Clean Air Act on the AB 1493 regulations remains the same. CARB’s Executive Order changes absolutely nothing. Characterizations of CARB’s Executive Order aside, the substance of Plaintiffs contentions with regard to CARB’s Executive Order are no different, qualitatively or quantitatively, from their contentions with regard to the scope of the injunctive relief offered by the January 16 Order. Plaintiffs’ and AIAM’s basic contention is that the court should broaden the scope of the injunctive relief so that the manufactures are not subjected to the Hobson’s choice of unnecessary research and development or risk of regulatory noncompliance. The court will next undertake examination of Plaintiffs’ and AIAM’s arguments with respect to the scope of the court’s injunctive orders with the understanding that CARB’s Executive Order is a non-issue in that discussion. B. Changing Circumstance and the January 16 Injunctive Order As previously noted, changing circumstance justifies a court’s reexamination of previously-issued injunctive orders. Earth Island Inst., 166 F.Supp.2d at 1309. Plaintiffs and AIAM allege two circumstances have changed since the court issued its injunctive relief in the January 16 Order. First, Plaintiffs contend that CARB’s Executive Order, to the extent quoted above, constitutes a changed circumstance. The court has examined and rejected that contention. Second, Plaintiffs and AIAM contend that the fact EPA has rejected California’s request for waiver of federal preemption with respect to its AB 1493 regulations is a changed circumstance warranting re-examination of the injunctive orders. This contention is similarly not persuasive. While it is certainly true that the Administrator has issued a rejection of California’s application for waiver of federal preemption, the rejection cannot be considered final where California has made clear its intent to appeal the decision and the DC Circuit has not made any determination of the validity of EPA’s rejection as yet. Indeed, if the decision of the EPA were final, there would be no point in the instant motions because the January 16 injunction against enforcement by California would remain in effect. The fact that Plaintiffs and AIAM have moved to enlarge the scope of the court’s injunctive relief in light of EPA’s action on California’s waiver request is implicit recognition that EPA’s rejection of California’s request for waiver remains very much a contested issue that is subject to reversal either by EPA or by judicial review or by legislative action at sometime in the future. While EPA’s refusal to grant California its request waiver of federal preemption is an event of sorts in California’s effort to enforce its AB 1493 regulations, it does not represent a change of circumstances that would compel reexamination of this court’s injunctive relief granted in the January 16 Order. At the time the January 16 Order was filed, California had not been granted a waiver of federal preemption. That remains the case as of this writing. Plaintiffs are not entitled to a revision of the injunctive relief granted by this court on a theory of changing circumstances. C. Equitable Considerations and the Scope of Injunctive Relief The remainder of Plaintiffs’ arguments concerning the scope of relief granted by the January 16 Order focus on the inequity Plaintiff-manufacturers claim they face in confronting the Hobson’s choice of committing financial resources to compliance with regulations that may never be implemented, but will place non-compliant manufacturers at a significant disadvantage if they ever are implemented. In its January 16 Order, the court held: Plaintiffs’ concerns with respect to the lead time necessary for regulatory compliance, as expressed in their opposition to the Plaintiffs’ instant motion for summary judgment, cannot be redressed by the court because the FAC does not request the court to mandate some particular lead time for compliance should an EPA waiver become effective and does not offer any legal basis for altering the California legislation to require such a mandate. January 16 Order at 10:9-13. The court further opined in its order that discretion to make the determination of adequate lead time was vested in EPA by the terms of the Clean Air Act and there is no legal support for the contention this court has authority to modify or circumscribe the authority vested in EPA by the Clean Air Act. Plaintiffs contend that the court was erroneous to the extent it opined that EPA has authority to modify or determine lead times for the enforcement of new stan dards adopted by California. As Plaintiffs put it, EPA is without “plenary authority to modify a California regulation in the manner suggested by Defendant.” Combining this assertion with the undisputed fact that the starting point for the running of the lead-time clock is the date of final adoption of the regulation by California, Plaintiffs assert that EPA is not able to address inequities that may arise from the eventual grant of a waiver of federal preemption where, as here, the waiver may occur át a time well after a substantial part of the lead time has run. From this, Plaintiffs contend that it is this court that must prevent an inequitable outcome by expanding the scope of injunctive relief so that the Plaintiff auto manufacturers are not unfairly burdened. For purposes of Plaintiffs’ motions under consideration here, the court need not make a determination of whether EPA can, in fact, make adjustments to the lead time provided by California’s AB 1493 regulations. In its January 16 Order, the court observed: ... whatever California may seek to impose by way of enforcement dates, the fact is that the final decision with respect to the establishment of reasonable enforcement dates rests with EPA’s discretion. EPA is not a party to this case, and this court consequently has no authority to impose limits on EPA’s exercise of discretion, should it choose to exercise that discretion at some time in the future. January 16 Order, Doc. # 606, at 10:10-14. The court’s observation derives from the statutory structure of the waiver process. The waiver provisions of the Clean Air Act provide that a waiver of federal preemption shall be granted if, inter alia, the Administrator [i.e., the Director of the EPA] finds that the proposed regulations and enforcement procedures are not inconsistent “with section 7521(a) of this title.” 42 U.S.C. § 7543(b)(1)(C). Section 7521(a)(2) provides that: Any regulation prescribed under paragraph (1) of this subsection (and any revision thereof) shall take effect after such period as the Administrator finds necessary to permit the development and application of the requisite technology, giving appropriate consideration to the cost of compliance within such period. Id. (italics added). Thus, Congress has allocated the determination of what lead-time is required to implement a given regulation to the Administrator [Director of the EPA] in the first instance, not the courts. Defendant and Defendant-intervenors contend, and the court has agreed, that the issue of determination of the required lead time for implementation of changes necessary to comply with the AB 1493 regulations has been committed to the EPA, not the courts. Defendant disputes Plaintiffs’ contention that EPA lacks power to adjust the starting point for the running of any time limits for compliance imposed by the AB 1493 regulations. Defendants cite Green Mountain Chrysler Plymouth Dodge Jeep v. Crombie, 508 F.Supp.2d 295, 349 (D.Vt.2007), to illustrate their point that EPA may, if it finds the statutory lead-time insufficient, delay implementation of the waiver in order to provide adequate lead time. Defendants also al lege in their opposition, somewhat in passing, that experts for Plaintiff automobile manufacturers are currently capable of complying with the near-term standards set by the AB 1943 regulations. In their reply, Plaintiffs seize upon Defendant’s allegation that compliance with the near-term standards set by the AB 1493 regulations is not possible and that injunctive relief is necessary to avert future economic harm. Plaintiffs devote a good deal of effort and a great deal of documentation to show that, should EPA grant a waiver of federal preemption now, there is no reasonable possibility that the Plaintiff auto manufacturers will be able to comply with the AB 1493 regulations within the time limits that began to run when California adopted the regulations. Plaintiffs look to this court to supply protection against what they perceive as the possibility of exposure to economic harm from noncompliance with a regulatory regime whose requirements they are unprepared to meet. In requesting this court modify the scope of injunctive relief granted by the January 16 Order, Plaintiffs and AIAM fundamentally misperceive the purpose of the court’s injunction. The court’s purpose in granting the injunction was to prevent California from enforcing the terms of their AB 1493 regulations so long as such enforcement is unlawful under the Clean Air Act, nothing more. While the court is mindful of the concerns raised by Plaintiff automobile manufacturers in their motion, it is not this court’s role to assure that they will have sufficient time to actually implement the required changes if and when the waiver of federal preemption is granted. This court is not empowered to make the necessary determination of how much lead time is necessary where Congress has clearly and unequivocally delegated that determination to EPA. To the extent it is Plaintiffs’ contention that the court has jurisdiction to preemptively override any possible future determination by EPA as to the appropriate lead-time, Plaintiffs have not provided adequate legal support for that contention. However, even if the court was empowered to address the equitable concerns raised by Plaintiffs by expanding the scope of the injunctive relief, Plaintiffs have failed to demonstrate any entitlement to equitable relief from the application of California’s AB 1493 regulations.

3601871-15549

MEMORANDUM BONSAL, District Judge. In his petition for a writ of habeas corpus as originally filed in the Northern District of New York, petitioner sought relief on the ground that he was the subject of a coerced confession prior to his plea of guilty of murder in the second degree. After his petition was denied in the Northern District without a hearing, petitioner appealed to the Second Circuit Court of Appeals and, in an affidavit accompanying his brief, sought relief on the additional ground that his assigned counsel in the State Court proceeding was incompetent. The Court of Appeals reversed the District Court’s determination, 408 F.2d 48 (2d Cir. 1968), and directed that a hearing be accorded petitioner on both grounds. The Supreme Court granted certiorari, 396 U.S. 813, 90 S.Ct. 65, 24 L.Ed.2d 67 (1969), and by decision reported at 397 U.S. 759, 90 S.Ct. 1441, 25 L.Ed.2d 763 (1969) remanded the proceedings to the Court of Appeals for further consideration in the light of its determination that the issue of a coerced confession could not be raised in a petition for a writ of habeas corpus when followed by a voluntary plea of guilty. On April 12, 1971, the Court of Appeals “ordered that the case is remanded to the United States District Court for the Southern District of New York for a hearing on the issue of whether the petitioner was represented by incompetent counsel at the time of his guilty plea.” The Court of Appeals further ordered that Harry C. Batchelder, Jr., Esq. “be assigned as counsel to represent the petitioner at the hearing in the District Court.” Pursuant to the direction of the Court of Appeals, a hearing was held on July 1, 1971, at which Mr. Batchelder represented the petitioner and Brenda Soloff, Esq., represented the respondent. Petitioner testified on his own behalf and the respondent called petitioner’s assigned lawyer in the State Court proceeding, Alfred I. Rosner, Esq. In accordance with the direction of the Court of Appeals, the sole issue as to which evidence was taken at the hearing was whether the petitioner was represented by incompetent counsel at the time of his guilty plea. The Court of Appeals summarized petitioner’s allegations as to the representation of Mr. Rosner as follows: “Appellant states in this affidavit that after indictment for first degree murder (1) Alfred Rosner, Esq., was assigned to represent him; (2) that Mr. Rosner came to see him the last week of June or the first week of July 1963; (3) that his entire visit ‘lasted approximately 10 minutes’; (4) that although Mr. Rosner asked what happened, he ‘did not take any notes’; (5) that ‘He [Mr. Rosner] told me [appellant] that he would get paid the same amount of money for representing me [appellant] regardless of the outcome’; (6) that ‘He [Mr. Rosner] did not mention what he intended to do to help me [appellant] or prepare my case’; (7) that the next time (July 22, 1963) he saw Mr. Rosner after the first visit in jail was when appellant wag taken to the courtroom; (8) that three or four minutes before the proceeding began, Mr. Rosner told appellant that he should change his not guilty plea to a plea of guilty of second degree murder; (9) that appellant protested that he was not guilty, that the confession was taken because of fear and physical beatings but that Mr. Rosner said that it was not the proper time to bring up the confession and that a guilty plea would save his life and ‘then I [appellant] could later explain by a writ of habeas corpus how my confession had been beaten out of me’; (10) that Mr. Rosner said that ‘the District Attorney, Mr. Hogan, was an extremely tough man and that he would be in court later’; (11) that Mr. Rosner told appellant that ‘the confession would in all probability get me [appellant] the electric chair and that he could attack the confession later without risking his life; that these were the motivating reasons for the change of plea, and that T [appellant] did not plead guilty because I had committed the crime.’ ” 408 F.2d at 50. In his testimony at the hearing held before me, in addition to making substantially the same allegations with respect to Mr. Rosner as he had made in his affidavit, petitioner alleged that Mr. Rosner did not explain the penalties which he might receive other than the electric chair, that Mr. Rosner did not ask him whether he could establish an alibi, and that Mr. Rosner never read him his confession. Mr. Rosner then took the stand and in effect denied each of the allegations made by the petitioner. Mr. Rosner testified that he was admitted to the New York bar in 1928 and thereafter was admitted to the bars of the Southern and Eastern Districts, the Court of Appeals of the Second Circuit, and the United States Supreme Court; that he had handled numerous criminal cases, including murder cases (91); that on April 19,1963, he was appointed by Mr. Justice Schweitzer to represent the petitioner in association with Mr. William P. McCooe; and that on April 20 he read the indictment in which petitioner was accused of two first degree murder counts, one involving the killing of his sister and one involving the killing of his brother-in-law. On that day, he was informed that petitioner was in Bellevue Hospital, and Mr. Rosner made copies of the Felony Court complaint and of defendant's extensive prior criminal record. Pleading, scheduled for April 24, was adjourned to May 9, again to May 29, and again to June 14 as petitioner was still at Bellevue Hospital (93). Mr. Rosner testified that during this period he researched the issue of insanity and the then new Section 1045-a of the Penal Law, McKinney’s Consol.Laws, c. 40, providing for a two-stage murder trial. On June 20, he received a copy of the medical report from Bellevue, which he reviewed with his son, who is a doctor, and also researched medical books suggested to him by his son. Mr. Rosner testified that on June 24 he interviewed the defendant at the Tombs and that the interview lasted from 1:00 o’clock to 2:35 p. m. (94); that he made notes during the course of his interview’ and the next day, June 25, reduced these notes to a memorandum (95). On June 27, petitioner appeared for pleading and pled not guilty, with a specification of insanity. Mr. Rosner testified that he advised the petitioner to do this so as to protect his rights (95), pursuant to Section 336 of the Code of Criminal Procedure. On July 22, 1963, before Mr. Justice Postel, petitioner, represented by Mr. Rosner and Mr. McCooe, pled guilty to murder in the second degree under the first count of the indictment, to cover all counts of the indictment. Mr. Rosner testified that prior to petitioner’s plea, with petitioner’s permission, he plea-bargained with Assistant District Attorney McKeever; that Mr. McKeever initially offered to accept a plea of guilty to murder in the first degree on both counts of the indictment, which would have subjected petitioner to a sentence of life imprisonment, but that after conferences with Mr. Justice Postel and the chief of the Homicide Bureau of the District Attorney’s office, Mr. Herman, petitioner was allowed to plead guilty to murder in the second degree on count one of the indictment, to cover the whole indictment which would subject him to a sentence of not less than twenty years to life. Mr. Rosner stated that before petitioner pled guilty, he and Mr. McCooe explained the plea bargain to him and that petitioner found it acceptable. (96, et seq.) Mr. Rosner also testified that, prior to petitioner’s plea of guilty, he compared the question and answer statement which petitioner had made to Mr. Mc-Keever (the alleged coerced confession) with the statement petitioner gave him on June 24, 1963 in the Tombs, and found both were substantially the same (99), with the exception that petitioner had told him that he killed his brother-in-law first, while he told Mr. McKeever that he killed his sister first. (106) Mr. Rosner testified that he visited petitioner in the Tombs on July 30, 1963 from 11:50 to 1:25 to prepare for sentencing, and that he received a letter from petitioner following the visit. (101). On October 9, 1963, petitioner was sentenced to a term of 30 years to life. The court finds that petitioner’s testimony at the hearing was strongly motivated by his interest and that his recollection of the events as to which he testified was affected by this interest. The excellent cross examination by Mrs. Soloff brought out many inconsistencies in petitioner’s testimony. Petitioner’s lack of credibility was most vividly manifested when in response to Mrs. Soloff’s question of whether or not he had moved to withdraw his guilty plea, which in fact he had not done, petitioner said: “[D]uring the course of my stay in state prison I’ve written so many writs that it’s hard for me to remember just everything that was in the petition.” (72) On the other hand, Mr. Rosner’s testimony was well documented and he showed himself to be a lawyer of considerable criminal experience. Obviously Mr. Rosner was seeking through plea-bargaining, to avoid the possibility of petitioner’s being sentenced to the electric chair, which could have happened if petitioner went to trial and was convicted of first degree murder. It should be mentioned in passing, although it is not germane to this proceeding, that nothing was brought out at the hearing which would indicate that petitioner’s confession on the day of the murder was coerced or induced by a physical beating. Petitioner conceded he had no injuries but alleged that his glasses were broken at some point. Finally, there is no evidence that the petitioner at any time protested that he was not guilty of the crimes charged. On the contrary, he admitted the crimes to the police and he admitted them to Mr. Rosner on the occasion of his interview in the Tombs. Therefore, the court finds that petitioner has proved none of the allegations of incompetency of counsel which he raised in his affidavit accompanying his brief to the Court of Appeals, which allegations were summarized by the Court of Appeals at 408 F.2d at 50. In his memorandum filed after the hearing, petitioner’s present counsel, Mr. Batchelder, asserts a new ground not previously put forward, viz., that Mr. Rosner was incompetent in not following up the Bellevue report by obtaining the services of a competent psychiatrist to determine whether or not petitioner was sane at the time he committed the murders. The Bellevue report, dated June 16, 1963, states that the petitioner “related the events surrounding the offense in a clear, coherent fashion, although with meager detail”. In summary, the report states: “This patient, with a history of three felonies, has spent approximately one-third of his life in confinement. During the most recent stay in the community he seems to have worked regularly and resorted to alcohol in a binge-like pattern. He seems to be a rather detached, aloof personality prone to harbor resentment who resorts to projective mechanisms and alcohol under stress. His difficulty in expressing hostility is felt to have contributed to the build up and explosive outburst of aggression. There is a striking indifference and resignation concerning the present offense, without distortion of psychotic degree.” The impression of the doctors at Bellevue was that petitioner was “Without Psychosis, Schizoid Personality with Sociopathic and Paranoid Features.” The report concludes that petitioner “is not in such a state of idiocy, imbecility or insanity as to be incapable of understanding the charge, indictment, proceedings, or of making his defense.” Petitioner’s new ground for attaching the competency of Mr. Rosner’s representation is supported by the affidavit of Dr. Jay Katz, an Adjunct Professor of Law and Psychiatry at Yale University. Dr. Katz, who did not testify at the hearing, based on his examination of the Bellevue report draws the following conclusions : a. The Bellevue report is defective in that it makes no mention of the petitioner’s mental condition at the time of the commission of the offense for which he was charged, to wit, two counts of murder in the first degree; b. The report’s conclusion that the petitioner has a “Schizoid Personality with Sociopathic and Paranoid Features” was sufficiently serious to have warranted further psychiatric investigation as to the petitioner’s mental capacity at the time of the commission of the offense; c. The statement in the report that “[djetailed testing revealed deficits consistent with organic impairment” certainly warranted further medical investigation, including an electroencephalogram and neurological tests. The report is devoid of information as to whether these were accomplished; ■ d. Such further investigation might well have revealed that the petitioner was legally insane, under the M’Naghten test, at the time of the commission of the offense; and e. The discussion of this report by the petitioner's lawyer with a physician who was neither a psychiatrist nor a psychologist and the reading of medical books by the attorney and the brief conversations between the attorney and the petitioner could not in this case constitute a sufficient medical and psychiatric investigation upon which a sound judgment on the validity of an insanity defense could be made. It is noted that petitioner’s claim that Mr. Rosner inadequately explored an insanity defense, which is at odds with petitioner’s prior claim that he did not commit the murders, is here raised for the first time after this long proceeding has passed through the Northern District, the Court of Appeals, the Supreme Court, back to the Court of Appeals, and then to this court. If there is to be any certainty at all in the criminal law, the time must come when a halt is called on new grounds to support a petition for habeas corpus. This is particularly true where the charges are founded upon incompetence of counsel, which charges must necessarily be based on hindsight. As pointed out in Allen v. VanCantfort, 436 F.2d 625, 630 (1st Cir. 1971): “. . .we note that it has been uniformly held that effectiveness of counsel is not to be judged by hindsight, Brubaker v. Dickson, 310 F.2d 30, 37 (9th Cir. 1962), cert. denied, 372 U.S. 978, 83 S.Ct. 1110, 10 L.Ed. 2d 143 (1963), and that the appropriate test is whether counsel’s actions were so incompetent as to shock the conscience of the reviewing court. United States ex rel. Boucher v. Reincke, 341 F.2d 977, 982 (2d Cir. 1965). Accord, Bruce v. United States, 126 U.S.App.D.C. 336, 379 F.2d 113 (1967); Turner v. Maryland, 303 F.2d 507 (4th Cir. 1962).” The record indicates that Mr. Rosner’s strategy was not to make insanity the issue; rather, his purpose for raising the defense of insanity was to improve his position in the plea-bargaining process. Had petitioner gone to trial on two counts of first degree murder with a defense of insanity, which would have entailed at least tacit admission by him of the crime, and the details of these two shocking murders been described to a jury, there would have been a very good chance that the jury would nevertheless have found petitioner guilty of murder in the first degree. It is obvious that Mr. Rosner, with the full cooperation of the petitioner, was seeking to, and did, avoid this eventuality through the plea-bargaining process. In view of petitioner’s substantial prior criminal record, it appears that Mr. Rosner was eminently successful’ in the bargain he made.

5728443-25817

MEMORANDUM AND ORDER HUYETT, District Judge. This is a class action brought under Fed.R.Civ.P. 23(b)(3) to recover pension benefits under certain collective bargaining agreements. The parties have submitted a proposed settlement for Court approval pursuant to Fed.R.Civ.P. 23(e). In addition, class counsel have petitioned for attorneys’ fees. We have decided that the fee matter should be considered prior to submission of the proposed settlement to the class members so that the class members will have an opportunity to consider the net recovery they may expect from the litigation. Any final resolution of the fee question is contingent upon approval of the settlement as proposed and will be subject to any comments made by class members at the hearing on the reasonableness of the settlement. The class, separated into three subclasses, was approved in Memorandum and Order of September 22, 1977. Plaintiffs’ counsel have entered into private fee agreements with 220 of the 305 class members. The private fee agreements provided for a 20% contingent fee on the individual class members’ recovery. Some of the plaintiffs were offered fixed fee arrangements as an alternative to the contingent fee agreement, but only 16 class members elected that arrangement. Plaintiffs’ counsel contend that the contingent fee agreements should fix the standard for compensation in this case. The estimated present value of the settlement, if approved, is $1,423,438.00. Thus, if the fee agreements are enforced and a 20% fee is imposed upon the unrepresented class members, plaintiffs’ counsel will be entitled to total compensation of $284,687.60. We have grave reservations about an award of a fee of that magnitude in this case. We do not for a moment suggest that the contingent fee agreements were obtained by any impropriety. Plaintiffs’ counsel had represented class members in other matters prior to this case and many class members were familiar with counsel. However, this does not compel the conclusion that the fee agreements should be approved. “The Court is not questioning the good faith of counsel. It does raise a question of equity — whether the Court can, in good conscience, enforce a contract made with class members, who more likely than not, lack the sophistication, experience and education to act understanding^ and deal with their attorneys on an equal basis at arm’s length.” Kiser v. Miller, 364 F.Supp. 1311, 1319 (D.C.D.C.1973), aff’d in part and remanded in part sub nom. Pete v. United Mine Workers of America Welfare and Retirement Fund, 170 U.S.App.D.C. 437, 517 F.2d 1267 (1974). Clearly we have the power to review the contingent fee agreements to assure their reasonableness in all respects. This authority stems from two sources. First, “[i]n its supervisory power over the members of its bar, a court has jurisdiction of certain activities of such members, including the charges of contingent fees.” Schlesinger v. Teitelbaum, 475 F.2d 137, 141 (3d Cir.) cert, denied, 414 U.S. 1111, 94 S.Ct. 840, 38 L.Ed.2d 738 (1973); see Elder v. Metropolitan Freight Carriers, Inc., 543 F.2d 513, 518 (3d Cir. 1976). Second, because this is a class action, and in settlement of a class action pursuant to Fed.R. Civ.P. 23(e), the court possesses control over all monies which compose the settlement fund including those that may be awarded as fees. Magana v. Platzer Shipyard, Inc., 74 F.R.D. 61 (S.D.Tex. 1977). Having determined that we shall scrutinize the fee agreements, we now turn to a consideration of the factors to be considered in weighing the reasonableness of the agreements. The level of the fee in this case, i. e., 20%, is not per se unreasonable. See Entin v. Barg, 412 F.Supp. 508 (E.D.Pa. 1976); Dorfman v. First Boston Co., 70 F.R.D. 366 (E.D.Pa.1976). However, two other factors convince us that the fee agreements should not be enforced. First, the fee agreements were entered into with unsophisticated individuals who may not have been aware of the impact of their decision. This case is not Philadelphia Electric Co. v. Anaconda American Brass Co., 47 F.R.D. 557 (E.D.Pa.1969) where Judge Fullam approved contingent fee agreements entered into by clients who “were responsible governmental entities and substantial enterprises, for the most part represented by their own counsel.” Id. at 559. The plaintiffs bear more resemblance to those in Kiser v. Miller, supra. In Kiser, the court refused to enforce fee agreements between counsel and class members because, inter alia, there was no showing that the class members possessed sufficient sophistication to negotiate with counsel nor was there any suggestion that the class members had consulted independent counsel about the standard of fees. 364 F.Supp. at 1319. These same considerations concern us here. Second, there is a vast discrepancy between the award counsel would receive under the fee agreements and the fee as computed under the standards of Lindy Bros. Builders, Inc. of Phila. v. American Radiator & Standard Sanitary Corp., 487 F.2d 161 (3d Cir. 1973) (Lindy I) and Lindy Bros. Builders, Inc. of Phila. v. American Radiator Sanitary Corp., 540 F.2d 102 (3d Cir. 1976) (Lindy II). As stated before, plaintiffs’ counsel would receive $284,687.60 under the criterion set by the fee arrangements. Our calculation of a reasonable attorneys’ fee following the guidelines of Lindy would result in a lodestar of approximately $46,000 and a total award of approximately $92,000 at this point. Thus, if we were to enforce the contingent fee agreements and impose a fee of 20% on the unrepresented class members, counsel would recover more than six times the lodestar and more than the three times the reasonable fee as computed in accordance with Lindy. On the facts of this case, absent a showing that the clients were sophisticated commercial persons who were aware of the consequences of their decisions, we find this fee excessive and refuse to award compensation to counsel based upon the contingent fee agreements. Rather, a reasonable fee will be awarded following the dictates of Lindy. Lindy instructs us that the first step in computing a reasonable attorney’s fee involves a consideration of counsels’ hourly rates and the total time spent on the case. This computation will provide the lodestar which may be adjusted up or down by considering the contingent nature of the case or the quality of work provided by counsel. In making our lodestar determination, we find that the hourly rates submitted by counsel are reasonable considering the background and experience of the attorneys. Further, we accept as reasonable counsels’ submission of total hours worked. We find these submissions reasonable with respect to both the total hours worked and the hours expended in each category and step of the litigation. Based upon these findings, we compute the lodestar to be $46,358.00. We believe that several factors justify an increase in the lodestar figure. First with respect to the contingency factor discussed at length in Lindy II, 540 F.2d at 117, we note that plaintiffs faced difficult liability and damage problems on the claims of two of the subclasses. The actuarial funding provisions of the post-1969 collective bargaining agreements raise substantial questions about defendant’s contribution obligation and the extent of that obligation. These liability and damage hurdles were heightened by the term of the collective bargaining agreement giving the defendant termination rights. This provision raised the question of the nature of the defendant’s liabilities following termination of the collective bargaining agreement and exhaustion of the funds which defendant had contributed previously. Finally, at the outset of this litigation, plaintiffs’ counsel were faced with the prospect of prolonged litigation against experienced and most able counsel retained by a client of considerable resources. Plaintiffs’ counsel must have entered this litigation with the expectation that substantial expenditures of time might be necessary to secure a recovery. Second, with respect to the quality factor, due weight must be given to the reasonably expeditious manner in which counsel have pursued their clients’ interests. As noted in Lindy II, id. at 118, the court should be conscious of “rewarding the use of efficient methods to expedite the case and penalizing the use of methods the predominant use of which was to delay or obstruct the proceedings.” Further, “[qjuality in this sense includes efficiency. If the attorney achieves good results with a minimum time expenditure, the total award may be increased to reflect efficiency and benefit to the client.” Prandini v. National Tea Co., 557 F.2d 1015, 1019-20 (3d Cir. 1977). The speedy resolution of the dispute by settlement inures to the benefit of the pensioners because plaintiffs’ counsel minimized the hours spent and assured that the proceeds will be distributed to class members as soon as possible. Finally, we think that the monetary benefit conferred upon the class by the settlement is very favorable. We conclude that the contingency and quality considerations warrant a doubling of the lodestar in this case. We note finally that the fees that we have computed do not constitute the final fees to be awarded upon approval of the settlement. Plaintiffs’ counsel estimate that an additional 40 hours will be required to secure approval of the settlement and manage distribution of the proceeds. Notice to the class members should inform the class members of the fees as computed in this Memorandum and contain an estimate of what further fees will be necessary before this litigation will be terminated. ON MOTION FOR RECONSIDERATION Plaintiffs’ counsel have moved for reconsideration of our Order and Memorandum of November 17, 1977. For the reasons that follow, we decline to alter our earlier position, and the motion is denied. Earlier we permitted these consolidated actions to proceed as a class action under Fed.R.Civ.Proc. 23(b)(3) seeking to recover pension benefits under collective bargaining agreements. Plaintiffs’ counsel have submitted a proposed settlement and a petition for attorney’s fees for court approval pursuant to Fed.R.Civ.Proc. 23(e). In our Memorandum of November 17, 1977, we declined to enforce the contingent fee agreements between plaintiffs’ counsel and their clients as part of the settlement. In lieu of the contingent fee agreements, we computed a fee in accordance with Lindy Bros. Builders, Inc. of Phila. v. American Radiator & Standard Sanitary Corp., 487 F.2d 161 (3d Cir. 1973) (Lindy I) and Lindy Bros. Builders, Inc. of Phila. v. American Radiator & Standard Sanitary Corp., 540 F.2d 102 (3d Cir. 1976) (Lindy II). We ordered that the Lindy fee be distributed assuming approval of the proposed settlement in the final chapter of these actions. Counsel for plaintiffs do not contest the court’s authority to review contingent fee agreements. See Magana v. Platzer Shipyard, Inc., 74 F.R.D. 61, 73-74 (S.D.Tex. 1977) , citing Developments in the Law— Class Actions, 89 Harv.L.Rev., 1318, 1607 (1976). However, they argue that we exceeded the proper scope of inquiry in the manner in which we examined the contin gent fee agreements. Specifically, counsel state that we erred in considering the “vast discrepancy between the award counsel would receive under the fee agreements and the fee as computed under the standards” of the Lindy cases. Dunn v. H. K. Porter Co. and Zecoski v. H. K. Porter Co., Nos. 76-1000 and 76-2105, at 4 (E.D.Pa., filed November 17, 1977). Counsel contend that the only two factors we should have considered were any overreaching in securing the agreements and the reasonableness of the percentage agreed upon between counsel and their clients. In support of their position, counsel for plaintiffs point to the Manual for Complex Litigation which provides: “The contingent fee contract is to be judged separate and apart from attorney’s fees from the settlement or recovery fund and by the sole canon of reasonableness.” Manual for Complex Litigation, § 1.47(b)(2) Attorney’s Fees under Contingent Fee Contracts, reprinted in 1 Moore’s Federal Practice Part 1 at 85. Counsel’s position overlooks two factors. First, we did apply the standard of reasonableness in evaluating the fee agreements. We stated: “Clearly we have the power to review the contingent fee agreements to assure their reasonableness in all respects.” Dunn v. H. K. Porter, supra at 3; see Magana v. Platzer, supra, 74 F.R.D. at 77. The fee as computed under Lindy was simply one factor used to measure reasonableness. The use of the Lindy fee as one standard to evaluate the reasonableness of the contingent fee is not precluded by the Manual. Our earlier Memorandum does not state that the contingent fee agreement is unreasonable merely because it exceeds the Lindy fee. It should be clear that we are not requiring that the contingent fee be identical to a Lindy fee. This case might have been resolved differently had the contingent fees only amounted to twice the Lindy fee. However, if the contingent fee agreement results in a fee three times that warranted by the Lindy factors, this discrepancy must be a substantial consideration in evaluating the reasonableness of the terms of the fee agreement. Plaintiffs’ argument also overlooks the unique position of the court in this context. On the one hand, the court is entrusted with the special responsibility of protecting the class and supervising the settlement; on the other hand, the court proceeds ex parte without the benefit of the adversary process because it is not the duty of the defendant to contest the legal fees to be distributed from a common fund. Prandini v. National Tea Co., 557 F.2d 1015, 1019 (3d Cir. 1977). As one court stated: This Court is fully aware that the attorneys’ fees awarded does not meet counsel’s full request ... It must be remembered, however, that the Court alone is the protector of the interests of the absent claimants whose substantive interests are here at stake and who are unrepresented except by the very lawyers who are seeking compensation. Pollard v. United States, 69 F.R.D. 646, 651 (M.D.Ala.1976). Also, it should be emphasized: Rule 23 F.R.Civ.P. “place[s] the court in the role of a third party to the compromise or guardian of the absent parties . The absence or silence of [class members] does not relieve the judge of his duty and, in fact, adds to his responsibility.” Illinois v. Harpers & Row Publishers, Inc., 55 F.R.D. 221, 223 (N.D.I11.1972), quoting Norman v. McKee, 290 F.Supp. 29, 32 (N.D. Cal.1968), aff’d, 431 F.2d 769 (9th Cir. 1970). To fulfill its special fiduciary responsibility as protector of the class members’ interests, the court should be permitted access to all reasonable standards to measure attorney’s fees. Since the Lindy computation is the only objective device available to the court, its use should not be discouraged. Therefore, we conclude that we did not err in considering the Lindy fee in assessing the reasonableness of the fee agreements. Plaintiffs’ counsel also contend that use of the Lindy analysis in this context will encourage counsel to inflate their hours in an attempt to justify contingent fees. However, this contention fails to account for the weight placed upon the efficiency factor in the Lindy equation. See Prandini v. National Tea Co., supra, 557 F.2d at 1019-20. Once the lodestar is computed, the efficiency element may be used to increase or decrease the award. This factor is significant because our evaluation of the reasonableness of the agreements was based upon their relation to the total Lindy fee rather than just the “lodestar”. Indeed, in this case, a substantial ingredient in computing counsel fees was the reasonably expeditious manner in which this case was pursued up until settlement. Any benefit that counsel might seek by inflating hours is offset by the weight accorded the efficiency factor. The same argument would also apply to the contingency factor. Magana v. Platzer Shipyard, Inc., supra, 74 F.R.D. at 75-76. Counsel might argue that the 20% fee in this case was necessary to justify the risk in undertaking this case. However, this element is fully recognized and considered in the Lindy computation. Lindy II, supra, 540 F.2d at 117. It might be further argued that the contingent fee agreements are necessary to encourage counsel to undertake representation in cases such as this since counsel would desire to assure a certain rate of compensation if some recovery was secured. We do not doubt that fees are necessary to attract capable counsel and we do not intend to discourage representation in cases which involve some risk. Manual for Complex Litigation, supra at 78 and n. 127. On the other hand, reasonable fees, taking into account the contingent nature of the litigation, are all that are necessary to attract counsel. While “windfall” fees would certainly draw counsel, the court must also consider the interests of the class members whose grievance generated the fund in the first instance. See City of Detroit v. Grinned Corp., 495 F.2d 448, 469-70 (2d Cir. 1974). At some point, the policy of attracting counsel by awarding fees encroaches upon the class members’ right to recovery. Especially where the recovery is pension benefits, we cannot lcse sight of the fact that it is the class members’ fund and not the attorneys’. See Kiser v. Miller, 364 F.Supp. 1311, 1318 (D.D.C.1973), aff’d in part and remanded in part sub nom. Pete v. United Mine Workers of America Welfare & Retirement Fund, 517 F.2d 1267 (D.C.Cir. 1974). In this case, it should not be forgotten that although the contingent fees have not been enforced, counsel have been awarded more than $100,000 for approximately 800 hours of work. We think this fee sufficiently attractive to induce capable counsel to undertake representation in future cases similar to this. In our earlier Memorandum, we placed substantial weight upon the Kiser court’s recognition that contingent fee agreements in class actions must be scrutinized when dealing with unsophisticated class members. Dunn v. H. K. Porter, supra at 3-4, citing Kiser v. Miller, supra. Counsel contends that the miners’ impoverished status distinguishes the plaintiffs in Kiser from the hourly workers making up the class here. We do not agree that the scope of the Kiser decision is limited to one occupation. Counsel have not informed us of any material difference between the ability of the miners in Kiser and the plaintiffs here to make an informed decision about the reasonableness of a contingent fee in a class action. Therefore, we will hold to our reliance upon the Kiser case. In our earlier decision, we mentioned that sixteen of the class members had entered into “fixed fee” agreements with counsel. Dunn v. H. K. Porter, supra at 2. These agreements are actually a combination fixed fee and contingent arrangement since they obligated the client to pay $200 at the initiation of the suit and an additional $200 if the suit were successful. See Exhibit P-3. The question has arisen how to treat these agreements in computing the total fee discussed in the earlier Memorandum. Since these fees are at least partially contingent fees, our prior analysis applies to them. However, there exists a difference between these fees and the 20% fee. Since the $400 fee does not approach three times the Lindy fee computed in our earlier Memorandum we find it reasonable and therefore enforceable. We realize that this leads to a result by which those who paid $200 in the beginning with no guarantee of recovery end up paying more than those who took no risk by entering total contingent fee agreements. See Lindy I, supra, 487 F.2d at 168. However, each fee arrangement must be scrutinized separately. If one form of agreement is unreasonable, this does not render the alternative agreements excessive. See Lindy II, supra, 540 F.2d at 120 n. 14. Because the “fixed fee” agreements are reasonable, we will enforce them in full. We must also consider the agreement between defendant and plaintiffs’ counsel obligating the defendant to pay $50,000 directly to plaintiffs’ counsel as part of the settlement. Agreements of this sort are not to be encouraged since they may “leave the unfortunate impression that defendants are buying themselves out of a lawsuit by direct compensation to plaintiffs’ counsel”. Jamison v. Butcher & Sherrerd, 68 F.R.D. 479, 484 (E.D.Pa.1975). However, we need not consider the validity of this aspect of the case since the reasonable fee we have computed exceeds $50,000. It would be an empty command to require the defendant to pay this sum into the fund only to have to withdraw it immediately to pay counsel fees. If the fee as we compute it is distributed upon approval of the settlement, the $50,000 may be paid in accordance with the agreement between defendant and counsel for plaintiffs. We do note that since the $50,000 constitutes a portion of the total settlement fund for the benefit of the class members, this payment should be credited to the total fee awarded to counsel. Dunn v. H. K. Porter, supra at 2 n. 3. Finally, we must modify footnote 4 of our earlier Memorandum to correct the hours logged by counsel. The new totals are as follows: Rate Hours Total Jerome E. Bogutz $100 123.9 $12,390.00 Warren L. Soffian $ 60 363.9 $21,834.00 Richard S. Hoffman $ 60 242.95 $14,557.00 Alan Schnoll $ 50 68.4 $ 3,420.00 This modification results in a lodestar figure of $52,221.00. In accordance with the doubling discussion in our earlier Memorandum this computes to a total fee of $104,-442.00 at this point. We find these hours, as modified, are reasonable, and we accept the breakdown of these hours which is contained in Exhibit “A” to the Supplemental Affidavit in Support of Counsel Fees. . The defendant has not contested the validity of the contingent fee agreements that plaintiffs’ counsel have entered into with their clients. Thus, our scrutiny of these agreements at this stage of the case places us in the unfortunate stance of being “deprived of adversarial presentations”. Prandini v. National Tea Co., 557 F.2d 1015, 1021 (3d Cir. 1977). However, particularly in this case, where a disavowal of the contingent fee agreements will have a substantial impact upon the net amount received by class members, it is important that the attorneys’ fee question be considered now. This procedure allows the class members to make an informed decision on whether to object to the settlement. Prandini does not counsel otherwise since that case involved statutorily authorized attorney’s fees paid directly by the defendant whereas here we are concerned with the award of fees out of a common fund. . The following subclasses were approved: a. those individuals who attained retirement age and retired from service with H. K. Porter prior to the effective date of the collective bargaining agreement entered into at the Quaker Rubber Works, Inc.— Feb. 1969; b. those persons who attained retirement age and retired after Feb. 19, 1969 and before January 1, 1966, and c. those persons with sufficient age and service who, as of the date of their termination with H. K. Porter, qualified for benefits when they would have reached 65 and who were not receiving pensions as of January 1, 1976. . The fee agreements were divided among the three subclasses as follows: Total Fee No Members Agreements Agreement Pre 1969 Class 41 34 7 Post 1969 160 131 29 Deferred Vested 104 55 49 TOTAL 305 220 85 . Plaintiffs’ counsel contend that the contingent fee in this case will amount to only 16% because the defendant has agreed to pay plaintiffs’ attorneys $50,000.00 which plaintiffs’ attorneys have offered to credit to the amount due from their clients. This contention fails to account for the proposition that there is, “in reality, only one fund for both the class and the attorneys’ fees.” Prandini v. National Tea Co., supra at 1020. Presumably, this $50,000.00 would have been included in the total fund if it had not been earmarked for the attorneys’ fees. Thus, we reject plaintiffs’ counsels’ position and will consider the contingent fee at the 20% level. . We approve the following hourly rates and hours expended on this litigation: In computing the fees, we have subtracted the hours that counsel have devoted in pursuit of their attorneys’ fees. Lindy II, supra at 111. We do not think that the upsetting of the contingent fee agreements places the fee petition in this case on a different footing from that in Lindy II. Further, this case does not fall within any of the questions left open in Lindy II. Id. & n. 8. . Counsel have entered into 20% contingent fee agreements with 220 of the 305 class members. “Fixed fee” agreements were executed by 16 class members. The remaining 69 class members are unrepresented. Counsel for plaintiffs have argued that 20% should also establish the fee measure for the unrepresented class members. Counsel contend that any standard less than 20% would be unfair to those who entered into fee agreements. Since the contingent fee agreements have been rejected, we need not reach the issue of whether fairness requires unrepresented members to be charged the same fees as represented members. See Illinois v. Harper & Row Publishers, Inc., 55 F.R.D. 221, 223-24 (N.D.Ill.1972). . Our computation of the fee also assumes that the settlement is accepted by all the class members who are unrepresented or who entered contingent fee agreements. If this assumption proves wrong and any class member chooses to opt out of the settlement, an adjustment to the settlement fund will be necessary. This would necessitate a similar adjustment to the fee computation.

11837755-21948

KENDALL, District Judge: Carol Burns appeals the district court’s decision granting summary judgment to the Harris County Bail Bond Board on Burns’s claims that the Board had violated her constitutional rights to due process and equal protection in its refusal to renew her licenses. We affirm the judgment of the district court. I. BACKGROUND This ease arises out of the defendant/ap-pellee Harris County Bail Bond Board’s (“the Board”) decisions not to renew the bail bondsman’s property license and agent license of plaintifiyappellant Carol Burns (“Burns”). Pursuant to the Texas Bail Bond Act, Tex.Civ.St.Ann. art. 2372p-3, the Board supervises and regulates all phases of the bail bonding business in Harris County. No person may act as a bail bondsman in Harris County without a license issued by the Board. Bail Bond Act § 3(a)(1). The ten members of the Board, designated by statute, are: a,district and a county court judge having jurisdiction over criminal matters, a justice of the peace, the presiding judge of the City of Houston’s municipal court, the county judge or a member of the commissioners court designated by the county judge, the district attorney, the county sheriff, the district clerk, the. county treasurer, and a licensed bail bondsman elected by other licensees. Bail Bond Act § 5(b). The Board meets once each month to govern the execu tion of bail bonds in Harris County. Bail Bond Act § 5(d). At issue are Burns’s bail bondsman (property) license and agent license. The statute requires that a property bondsman post collateral with the county to secure bonds written on the license. Bail Bond Act § 6(f). A property bondsman may write bonds that total 10 times the amount of collateral. When that limit is reached, the bondsman’s ability to write bonds must be temporarily suspended by the Board, without prior notice or hearing, until the value of the collateral is increased or the value of the outstanding bonds is decreased. Bail Bond Act § 10(f). The Board must revoke the license with prior notice or hearing if the licensee fails to pay any final judgment connected with the licensee’s bonding business within 30 days and there is insufficient collateral to satisfy the final judgment. Bail Bond Act § 9(b). In 1987 Burns applied to the Board for, and was granted, a bail bond license. This license expires 24 months after the date of its issuance unless an application for renewal is granted by the Board. Bail Bond Act § 8(a). The Board renewed Burns’s bail bond license in March 1989 and March 1991. In December 1991 the Board issued the International Fidelity Insurance Company (“IFIC”) a license to write bail bonds in Harris County, with Burns as IFIC’s agent on the license. The agent’s license subjects the insurance company’s rather than the agent’s assets to liability to the State for bond forfeiture. On March 10, 1993, Burns appeared before the Board at its regular monthly meeting seeking the renewal of her bad bond license, which was to expire on March 21, 1993. During the hearing, Burns conceded that she lived in Austin and only traveled to Harris County every two weeks to attend to the business of her bail bond company, she had faded to list in her application one of her contract employees, she faded to list her husband as an employee despite the fact that he handled many of the matters in the Houston office, and she had' never dealt with certified mad containing information about final judgments and had no idea how those documents were handled. Burns’s husband, John Burns, had been a licensed bad bondsman in Harris County for a number of years, but lost his license when he accumulated $479,000 in outstanding judgments that he owes to Harris County. See Harris County Bail Bond Bd. v. Burns, 881 S.W.2d 61, 64 (Tex.App.—Houston [14th Dist.] 1994, writ denied) (“The facts presented by the Board did suggest that [Burns] had little involvement with her business and that John Burns for all practical purposes was operating under his wife’s license.”). Assistant City Attorneys Grace Loya and Robert Miklos and City Assistant Chief Clerk Mark Muellerweiss testified that Burns owed the City of Houston more than $45,000 in outstanding bond forfeiture judgments, and that Burns and her husband had known about them for more than a year but made no effort to resolve them. Board chairman Sheriff Johnny Klevenhagen noted that Burns’s license had been automatically suspended three days before that for exceeding her ratios by some $36,000. Upon motion to renew Burns’s license, there were three votes for and three votes against. Chairman Klevenhagen postponed Board action on Burns’s renewal until the end of the meeting so that Burns could negotiate a payment schedule with the City. After a break, the Board again voted three to three on the motion to renew Burns’s license, and the motion failed for want of a majority. Burns knew at that time that her license would not be renewed after its expiration a few days later. On March 11, 1993, Burns requested a copy of the transcript of the meeting from the Harris County District Clerk. By letter dated March 25, 1993, the Clerk informed Burns that an opinion had been requested from the Texas Attorney General as to whether the transcript of the March 10, 1993 meeting was exempt from disclosure, so that the Clerk could not release the transcript to Burns at that time. In the meantime, on March 14, 1993, Burns filed suit in Harris County District Court to appeal the Board’s decision as provided by the Texas Bail Bond Act. On July 12, 1993 a trial de novo was conducted in the 127th Judicial District Court of Harris County by Judge Sharolyn Wood. On August 6, 1993, Judge Wood ordered Burns’s renewal application be approved and her bail bond license be reinstated retroactive to March 21, 1993. Burns resumed -writing bail bonds on her license. The Board timely filed a notice of appeal from this decision. On December 8, 1993 Burns appeared before the Bail Board concerning the renewal of her IFIC agent license. Burns was represented by counsel at this hearing. The Board determined that her application contained several deficiencies, such as the omission of a collateral log, which pursuant to the Bail Bond Act must be submitted to the Board for inspection prior to renewal of a license. Bail Bond Act § 4(b). The Board did not vote on Burns’s renewal application for the agent license that day, but postponed further action until the application’s deficiencies were remedied. Chairman Klevenhagen noted that the Board cannot act on an application that does not meet the statutory requirements. Burns never again submitted an application to the Board for the agent license, and it expired on December 21, 1993. On June 14, 1994, the Texas Court of Appeals, Fourteenth District, reversed Judge Wood’s order that Burns’s bail bond license be renewed. The Court of Appeals held that the district court abused its discretion in granting Burns a license because at the time of trial Burns had an unpaid final judgment of $5,000 on a bond forfeiture which was more than 30 days old and was on appeal without a supersedeas bond. The Court of Appeals concluded that Burns was in violation of section 9(b)(6) of the Bail Bond Act and that her application for renewal was properly denied by the Board. The Texas Supreme Court denied Burns’s application for writ of error on February 8, 1995, and Burns filed a motion for rehearing. While that motion was pending before the Texas Supreme Court, on March 8, 1995 the Board considered Burns’s application for a new bail bond license. During the hearing, Burns and her lawyer were asked questions regarding whether the property she pledged as collateral was community or separate property. They could provide no proof that the property was Burns’s separate property, as required by section 6(a)(4)(E) of the Bail Bond Act. The Board denied Burns’s application for a new license by a 5-2 vote. Burns had also applied to the Board to renew her previous bail bond license, but the Board chairman removed consideration of the renewal from the agenda because the Board maintained she had no license to renew. On March 15, 1995, Burns filed suit against the Bail Board in the 11th Judicial District Court of Harris County, appealing the Board’s decision to deny her application for a new license at the March 1995 meeting. The suit also alleged that the Board had violated her constitutional rights pursuant to 42 U.S.C. § 1983. The Board timely removed the suit to the U.S. District Court for the Southern District of Texas. The district court bifurcated the case and remanded the state law claims, retaining the claims pursuant to § 1983. The issues remanded to state court were resolved on summary judgment against Burns, and that case is now on appeal. As for the claims in federal court, by Order entered July 25, 1996, the district court granted the Board’s motion to dismiss and for summary judgment. The district court converted the motion to dismiss into a motion for summary judgment after Burns submitted numerous exhibits outside the pleadings in her response. Burns has appealed the district court’s decision to grant summary judgment for the Board on all of her claims. II. STANDARD OF REVIEW When matters outside the pleadings are presented to and not excluded by the district court, the district court must convert a motion to dismiss into a motion for summary judgment. Fed.R.Civ.P. 12(b); Flores v. Sullivan, 945 F.2d 109, 110 n. 3 (5th Cir.1991). The district court properly converted the Board’s motion in this case. We review the granting of summary judgment de novo, applying the same criteria used by the district court. Texas Medical Ass’n v. Aetna Life Ins. Co., 80 F.3d 153, 156 (5th Cir.1996). Summary judgment is proper when the pleadings and evidence illustrate that no genuine issue exists as to any material fact and that the movant is entitled to judgment or partial judgment as a matter of law. Fed.R.Civ.P. 56(c); Slaughter v. Southern Talc Co., 949 F.2d 167, 170 (5th Cir.1991). When a movant properly supports his motion with competent evidence and demonstrated the absence of a genuine issue of material fact, the burden then shifts to the nonmovant to show that the entry of summary judgment is inappropriate. Duckett v. City of Cedar Park, 950 F.2d 272, 276 (5th Cir.1992). Factual controversies are resolved in favor of the nonmovant, but only when both parties have submitted evidence of contradictory facts, thus creating an actual controversy. Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir.1994) (en banc). In the absence of any proof, however, the Court does not assume that the nonmovant could or would prove the necessary facts. Id. III. DISCUSSION The issues Burns submits on appeal fall into three basic categories: 1) Burns’s specific challenges to the Board’s decisions of March 10, 1993, December 8, 1993, and March 8, 1995, 2) Burns’s general challenges to the Board’s decisions, and 3) the issue of the Board’s absolute immunity. l.A. Issues Specific to the March 10,1993 Meeting Burns challenges on several grounds the granting of summary judgment as to the March 10, 1993 meeting in which the Board denied the renewal of her bail bond license. Burns asserts that she was denied due process because the Board allowed presentation of charges of misconduct of which she had no notice, allowed unsworn and undocumented testimony to be considered, and denied renewal of her license by a tie vote. Burns also claims that the Board violated her rights to due process by refusing her access to the record of the March 10, 1993 meeting. Finally, Burns asserts that the Board violated her right to equal protection when it claimed that she was not entitled to license renewal because of a final judgment on a bond forfeiture on appeal, although it has renewed the licenses of other bondsmen in the same situation. The district court determined that all of Burns’s claims with regard to the March 10, 1993 hearing were barred by the statute of limitations. The applicable statute of limitations is the forum state’s general personal injury limitations period, which is two years. The cause of action would have accrued under federal law when the plaintiff knows or has reason to know of the injury that is the basis of the action. Since Burns filed suit on March 14,1995, claims regarding any activity that occurred prior to March 14, 1993 are barred by the statute of limitations. Although Burns concedes that the two year statute of limitations applies, she argues that the statute of limitations does not ran until all of the elements of the claim are in place, so that her cause of action did not accrue until March 21, 1993, the date her license to write bail bonds expired. Burns contends that actual injury is a necessary element of a claim, and that her legal injury was the denial of a property right without due process. Although the “without due process” component occurred on March 10,1993, the denial of the property right did not occur until March 21,1993. We conclude that the district court correctly applied the law in determining that Burns’s claims regarding the March 10, 1993 Board meeting are barred by the statute of limitations. As no federal statute of limitations exists for § 1983 actions, federal courts defer to the forum state’s general personal injury limitations period. Owens v. Okure, 488 U.S. 235, 249-50, 109 S.Ct. 573, 581-82, 102 L.Ed.2d 594 (1989); Flores v. Cameron County, Tex., 92 F.3d 258, 271 (5th Cir.1996). In Texas, the applicable period is two years. Tex.Civ.Prac. & Rem.Code § 16.003(a). Although Texas law governs the limitations period, federal law governs when a cause of action accrues. Jackson v. Johnson, 950 F.2d 263, 265 (5th Cir.1992); Piotrowski v. City of Houston, 51 F.3d 512, 516 n. 10 (5th Cir.1995). Under federal law, a cause of action accrues “when the plaintiff knows or has reason to know of the injury which is the basis of the action.” Burrell v. Newsome, 883 F.2d 416, 418 (5th Cir.1989); Gartrell v. Gaylor, 981 F.2d 254, 257 (5th Cir.1993). We affirmed the district court in Brossette v. City of Baton Rouge, 837 F.Supp. 759, 762 (M.D.La.1993), aff'd, 29 F.3d 623 (5th Cir.), cert. denied, 513 U.S. 971, 115 S.Ct. 443,130 L.Ed.2d 353 (1994), wherein the district court held that the plaintiffs § 1983 cause of action for suspension of his liquor license accrued on the day he received notice of the suspension. Identical circumstances are presented here. Burns cannot salvage her time-barred claims by contending that they did not accrue until she actually lost her bail bond license eleven days after the Board meeting. Burns was present at the March 10, 1993 Board meeting and was put on notice that day that her license would not be renewed. All of her claims concerning this Board meeting arise from the Board’s rejection of her renewal application on March 10, 1993, not from the expiration of her license by operation of law on March 21, 1993. Burns’s claims were not timely filed, and the district court properly dismissed them. l.B. Issues Specific to the December 8, 1993 Meeting Burns challenges the granting of summary judgment in favor of the Board with respect to the Board’s December 8,1993 meeting, when it postponed a vote on the renewal of Burns’s license to act as an agent for IFIC. Burns contends that the Board violated her due process rights when it refused to allow her a hearing on her renewal application for the agent’s license, and that she received no proper notice before her property right to this license was withdrawn. In addition, Burns argues that as a matter of law she was not required to appeal to state court the Board’s refusal to allow her a hearing, because any appeal to the state court would have not remedied the due process violations committed by the Board, as there is no remedy for the amount of time she was out of business. The district court determined that, as Burns never appealed the Board’s decision to table the consideration of her IFIC agent license renewal application, Burns did not exhaust her administrative remedies. Burns cannot argue that her due process rights were violated when she skipped an available state remedy. The district court noted that if, as Burns argued, she did not have standing to appeal the Board’s decision, she certainly would not have standing to assert a civil rights claim based on that decision. We conclude that the district court correctly granted summary judgment for the Board on Burns’s claims concerning the December 8, 1993 Board meeting. Despite the Board’s invitation to do so, Burns never subsequently appeared before the Board to seek approval of a corrected IFIC agent license application. In addition, Burns chose not to exercise her right to appeal the Board’s decision to table a vote on her application. The Texas Bail Bond Act provides that an appeal may be taken from an adverse decision by the Board within 30 days by filing a petition in district court in the county in which the license is issued or refused. The appeal is by trial de novo, and the Board’s decision has full force and effect pending the determination of the appeal. Bail Bond Act § 11. Burns was unquestionably familiar with this appellate process, as by December 8,1993 she had already appealed the Board’s decision of March 10, 1993 denying the renewal of her bail bond license. As the district court noted, a plaintiff cannot argue that her due process rights have been violated when she has failed to utilize the state remedies available to her. Myrick v. City of Dallas, 810 F.2d 1382, 1388 (5th Cir.1987); Browning v. City of Odessa, 990 F.2d 842, 845 n. 7 (5th Cir.1993). l.C. Issue Specific to the March 8, 1995 Meeting Finally, Burns challenges the granting of summary judgment with respect to the Board’s March 8,1995 meeting, claiming that the Board violated Burns’s rights to due process when it refused to consider her application to renew her bail bond license. The district court found no due process violation in the Board’s refusal to consider Burns’s application. Burns had applied to renew her license on the basis of Judge Wood’s 1993 decision to reinstate the license. That decision had already been reversed on appeal by the Texas Court of Appeals, the writ of eiror had been denied by the Texas Supreme Court, and all that remained of the appeals process was a decision by the Texas Supreme Court on whether or not to grant a rehearing. The district court noted that the Board’s March 10, 1993 rejection of her license renewal application had full force and effect pending the determination of Burns’s appeal. Bail Bond Act § 11. Burns contends that she had a property right in the bail bond license because once Judge Wood had tried her appeal of the Board’s decision and issued the license, the Board’s decision had no further effect. We find Burns’s claim to be contrary to the plain language of the Bail Bond Act. Burns had no property interest in a bail bond license on March 8, 1995 — she had no valid license on that date. By that time, the Court of Appeals for the Fourteenth District had reversed Judge Wood’s reinstatement of Burns’s license, Harris County Bail Bond Bd. v. Burns, 881 S.W.2d at 64, and the Texas Supreme Court had denied a writ of error. The only potential circumstance that could abrogate the full force and effect of the Board’s decision would be the grant of a rehearing and subsequent reversal by the Texas Supreme Court, a circumstance which was a long shot at best and indeed never occurred. The fact that Burns previously held a property license (which had expired some two years earlier) is insufficient to create a property interest entitled to due process protection in March 1995. Smith v. Travis County Bail Bond Bd., 559 S.W.2d 693, 694 (Tex.Civ.App.—Austin 1977, no writ) (applicant whose license had expired had no property right subject to protection because he had no claim of entitlement to a bail bond license). 2. General Challenges to the Board’s Decisions Burns also challenges the granting of summary judgment for the Board on several general grounds. Burns contends that the Board violated her rights by participating in a conspiracy to put her out of business for illegal motivations. Burns asserts that the Board is liable for actions of its individual members when the actions of those members represent action by the Board. Burns also asserts that the notice that a meeting will be held and publication of a statute are inadequate notice that a property right will be taken away. The district court held that the Board can only be held liable for the acts committed by the entity as a whole, and only for actions taken in its monthly meetings. The separate actions of individual members of the Board are insufficient to bind the Board as a governmental entity. Thus, Burns’s allegations of conspiracy and other wrongdoing by a few members as individuals do not give rise to a viable claim under § 1983. As for the claim of inadequate notice, the district court concluded that Burns was afforded adequate and timely notice of the Board hearings in compliance with due process standard's. Burns contends that three unnamed individual members of the Board conspired to put her out of business because her husband owed a substantial amount in bond forfeiture judgments incurred on his license. She contends that the Board is indeed liable for the actions of its individual members (conspiracy, failure to provide her with a transcript, notifying the state court of appeals that Burns had a final judgment on a bond forfeiture on appeal) when those actions represent actions by the Board. Finally, Burns argues that notice that a meeting will be held and publication of a statute are inadequate notice in this case that a property right will be taken because the Board could provide more specific notice.

10538533-6730

SPENCER, District Judge: This is an appeal from the district court’s determination that appellant should be civilly committed pursuant to Title 18 U.S.C. § 4246(a). We agree and affirm. I. Craig 0. Copley, appellant, was indicted on August 24,1988 in the Northern District of New York on two counts of mailing threatening communications to the president and on one count of threatening the life of the president. Copley was arraigned on August 31, 1988. At this hearing, the United States moved to have Copley committed pursuant to 18 U.S.C. § 4241 for the purpose of evaluating his competency to stand trial. Copley was evaluated at the United States Medical Center for Federal Prisoners in Springfield, Missouri. On October 4, 1988, the Warden at Springfield informed the court that it was the opinion of the staff at Springfield that Copley was mentally incompetent to stand trial. The district court thereafter also concluded that Copley was mentally incompetent to stand trial. On December 14, 1988 Copley was committed to Springfield for a four month evaluation period. After the four month evaluation period, Dr. David F. Mrad reported to the court that in his opinion, Copley was not then suffering from a mental disease or defect that would render him incompetent to stand trial. A second competency hearing was held on May 31, 1989, at which time Copley was found competent to stand trial. The case against Copley was prepared for trial but on July 28, 1989, the court granted the United States’ motion for a second psychiatric evaluation of Copley under 18 U.S.C. § 4242. Subsequently, the parties worked out a tentative plea agreement but on August 4, 1989 Copley withdrew his consent and the United States renewed its motion for a second evaluation of Copley. Copley was sent to the United States Medical Center for Federal Prisoners in Butner, North Carolina for an evaluation of his competency to stand trial and his competency at the time of the alleged crime. On November 15, 1989, the warden at FCI-Butner notified the court that Copley was competent to stand trial but that at the time of the alleged offense, he was unable to appreciate the nature and the quality or wrongfulness of his actions. The warden at FCI-Butner filed a Certificate of Mental Disease or Defect and Dangerousness with the District Court for the Eastern District of North Carolina on January 24, 1990. The warden stated that it was the institution’s opinion that Copley’s release would present a substantial threat to others. The warden requested that Copley be incarcerated under 18 U.S.C. § 4246. At this point, the United States changed tactics and decided to seek the civil commitment of Copley under 18 U.S.C. § 4246. The District Court for the Eastern District of North Carolina was informed that the pending charges against Copley in the federal District Court for the Northern District of New York were going to be dismissed. On March 27, 1990 the District Court for the Northern District of New York filed an order dismissing the charges against Copley solely for reasons related to his medical condition. Copley filed a motion to rescind the dismissal of the charges pending against him. A hearing to determine if Copley should be civilly committed was scheduled but it was postponed so that Copley could make a motion to dismiss the proceedings against him for lack of subject matter jurisdiction. Copley during this period sent the Assistant United States Attorney three letters in which he urged the United States to move forward with the 18 U.S.C. § 4246 hearing. On May 18, 1990, the United States’ motion to reschedule Copley’s commitment hearing was granted. The case reached its conclusion in the district court on June 18, 1990 when the district court found by clear and convincing evidence that Copley should be committed to the custody of the Attorney General under 18 U.S.C. § 4246. Copley appeals this determination. This Court is asked to address two issues. First, did Copley have a right to a competency hearing pursuant to 18 U.S.C. §§ 4241 and 4247 after the charges against him had been dismissed? Second, did the district court under 18 U.S.C. § 4246 have the subject matter jurisdiction to commit Copley to the custody of the Attorney General? After considering the record in this case, the applicable law, and hearing oral arguments, we find that the district court's determination was correct, and we affirm. II. Copley argues because the warden of FCI-Butner filed a certificate with the New York district court stating that Copley was competent to stand trial, he is entitled to a hearing to determine his competency no matter what procedural posture his case has taken. Copley misreads 18 U.S.C. § 4241(e). The purpose of this statute is to determine if a defendant is competent to stand trial. If there are no pending charges against the defendant, there is no need to determine his competency to stand trial. Accordingly this court dismisses Copley’s first argument. III. On January 24, 1990, the warden at FCI-Butner filed a Certificate of Mental Disease or Defect and Dangerousness with the United States District Court for the Northern District of North Carolina. Two months later, on March 27, 1990, the District Court for the Northern District of New York dismissed all charges against Copley. Copley argues that the Eastern District of North Carolina did not have the subject matter jurisdiction to commit him under 18 U.S.C. § 4246 because the pending charges were not dismissed before the Certificate of Mental Disease or Defect and Dangerousness was filed. The procedural requirements a court must follow when committing a person for a mental defect are provided in 18 U.S.C. § 4246(a). This section provides: [I]f the director of a facility m which a person is hospitalized certifies that a person ... against whom all criminal charges have been dismissed solely for reasons related to the mental condition of the person, is presently suffering from a mental disease or defect as a result of which his release would create a substantial risk of bodily injury to another person or serious damage to property of another, and that suitable arrangements for State custody and care of the person are not available, he shall transmit the certificate to the clerk of the court for the district in which the person is confined. The clerk shall send a copy of the certificate to the person, and to the attorney for the Government.... The court shall order a hearing to determine whether the person is presently suffering from a mental disease or defect as a result of which his release would create a substantial risk of bodily injury to another person or serious damage to property of another....

1658855-29491

CAMPBELL, District Judge. This is a suit in equity brought by the plaintiffs against the defendants to restrain the alleged infringement of patent No. 1,113,149, issued by the United States Patent Office to Edwin H. Armstrong, for wireless receiving system, October 6, 1914. The plaintiff Westinghouse Electric & Manufacturing Company is the owner of the patent, and the plaintiff Radio Corporation of America is a licensee thereunder. The suit has been discontinued as to the defendant Royal-Eastern Electrical Supply Company. The patent in suit was sustained as valid and of primary importance in Armstrong & Westinghouse Electric & Manufacturing Co. v. De Forest Radio Telephone & Telegraph Co., in the District Court of the Southern District of Now York, 279 F. 445, which was affirmed by the Circuit Court of Appeals, Second Circuit, 280 F. 584. The defendant Amsco Products, Inc., by answer denied the validity of the patent in suit as well as infringement. The claims of the patent relied upon in the suit at bar are Nos. 9, 15, and 16, which were among those adjudicated valid in the prior litigation, and read as follows: “9. An audion wireless receiving system having a wing circuit interlinked with a resonant grid circuit upon which the receiving oscillations are impressed, and an inductance through which the current in the wing circuit flows, the grid circuit including connections for making effective upon that circuit the potential variations resulting from a change of current in the wing circuit.” “15. An audion wireless receiving system having a wing circuit interlinked with a resonant grid circuit upon which the received oscillations are impressed, and means supplementing the coupling of the audion to facilitate transfer of energy from the wing circuit to the grid circuit, whereby the effect upon the grid of high frequency pulsations in the wing circuit is increased. “16. An audion wireless receiving system having a resonant wing circuit interlinked with a resonant grid circuit upon which the received oscillations are impressed, and means supplementing the coupling of the audion to facilitate transfer of energy from the wing circuit to the grid circuit, whereby the effect upon the grid of high frequency pulsations in the wing circuit is increased.” The defendant Amseo Products, Inc., make and sell radio receiving sets termed Melco-Supreme tuned radio frequency receivers, which are alleged in the bill of complaint in the action at bar to be infringements. On the trial and in the brief submitted on behalf of the defendant, the validity of the patent in suit is admitted, but infringement thereof is strenuously denied. The invention of the patent in suit and its object can best be described in the words of the patentee as found in the specifications : “The present invention relates to improvements in the arrangement and connections of electrical apparatus at the receiving station of a wireless system, and particular ly a system of this kind in which a so-called ‘audion’ is used as the Hertzian wave detector; the object being to amplify the effect of the received waves upon the current in the telephone or other receiving circuit, to increase the loudness and definition of the sounds in the telephone or. other receiver, whereby more reliable communication may be established, or a greater distance of transmission becomes possible. To this end I have modified and improved upon the arrangement of the receiving circuits in a manner which will appear fully from the following description taken in connection with the accompanying drawings: As a preliminary, it is to lie noted that my improved arrangement corresponds with the ordinary arrangement of circuits in connection with an audion detector to the extent that it comprises two interlinked circuits; a tuned receiving circuit .in which the audion grid is included, and which will be hereinafter referred to as the ‘tuned grid circuit,’ and a circuit including a battery or other source of direct current and the ‘wing’ of the audion, and which will be hereinafter referred to as the ‘wing circuit.’ As is usual, the two circuits are interlinked by connecting the hot filament of the audion to the point of junction of the tuned grid'circuit and the wing circuit.' I depart, however, from the ’customary arrarigement of these circuits in. a manner which may, for convenience of description, be classified by analysis under three heads: Firstly, the provision of means, or the arrangement of the apparatus, to impart resonance to the wing circuit so that it is capable of sustaining' oscillations corresponding to the oscillations in the tuned grid circuit; secondly, the provision of means supplementing the-electrostatic coupling of the audiop to facilitate - the transfer of energy from the wing circuit'to the grid circuit, thereby reinforcing the high frequency oscillations in the grid circuit; and, thirdly, the introduction into the wing circuit oBan inductance through which the direct current of the wing circuit flows, and which is so related to the grid circuit that the maintaining electromotive force across the terminals of the inductance, due to reduction of the direct current, is effective in' the tuned-grid circuit to increase the grid charge, and consequently to further reduce the current in the wing circuit and in the telephones. By a further extension of -this idea, the effect of the maintaining electromotive force upon tH© grid current may be augmented by the use of a transformer in a manner which will be understood from the following de-' scription.” The invention of Armstrong is based on his discovery that in the plate circuit of the audion there appeared, or could be made to appear, in substantial quantities, noDonly the audio frequency changes of the current which operated the telephone, but also radio frequency current of the extremely high frequencies of the waves and agreeing in frequency with the arriving ■ waves and the frequency of the current in the grid circuit. The Circuit Court of Appeals said: “The Armstrong invention consists in applying the variations in the current, which are of radio frequency, in such manner as to transfer energy back into the grid circuit. This was a wholly novel idea.” The Armstrong invention comprises the utilization of radio frequency energy in the plate circuit of the vacuum tube, to amplify the oscillation in the grid circuit of the tube by a feed-back action which is so arranged as to augment and sustain the oseillations in the input circuit. , The means proposed by Armstrong for accomplishing this feed-back, i. e., means supplementing the electrostatic coupling of the audion, with which we are concerned in the suit at bar, is referred t'o by him at line 51, page 1, of the patent, “to impart, resonance to the wing circuit”; that is, to tune the wing circuit. There already was tuning in the grid circuit, but his proposal of tuning the wing circuit, in which every one before that had thought there was nothing but audio frequency current, was novel. Feed-back by means of tuning the >plate circuit appears in the arrangement of Fig., 1 (inductance L’) and condenser C3, Fig. 2 (inductance L’), Fig. 3 (inductance L’), and Fig. 5 (inductance L’). In Fig. 3 it is the only means of accomplishing feed-back. In Fig. 3 the natural frequency of the plate circuit is varied by means of the inductance L’, with the result that as radio frequency energy in the plate circuit is built up by reasonanee, a negative charge in the grid will be accompanied by an increase in the potential of the plate, as pointed out'in. the specifications, page 2, line 90. This tuning of the plate circuit in the demonstrations made before me effected an increase in distinctness and loudness as the plate circuit was tuned to approach the oscillation point. This circuit may be used as a heterodyne receiver by increasing the-feedback to the point where the self-oscillations are generated. This was also pointed out by the Circuit Court of Appeals as follows: “If the regenerative or feed-back coupling is sufficient to transfer enough energy from the plate circnit to the grid circuit, the energy released from the battery in the plate circuit will be greater than the entire loss of energy in the system of circuits, whereupon continuous independent electrical oscillations will persist in the system, irrespective of the oscillations which may be impressed thereon from the antenna and the audion in the regenerative feed-back circuit becomes a,n independent genera Lor of continuous oscillations.” When the audion is oscillating, the currents so generated may heterodyne or beat, with the received oscillations. Thereby beat currents of audible frequency may be observed as whistles. These self-heterodyne whistles are characteristic of feed-back. > Fig. 3 of the patent in suit, which is the figure taken for comparison with the defendant’s circuit, corresponds to the old, simple audion circuit except for this new feed-back effect that Armstrong secured in this arrangement by tuning the plate circuit by means of a variometer or inductance coil V. When this inductance is utilized in the plate circuit, it causes the potential of the plate or wing W to vary by reason of tile radio frequency fluctuations in the plate circuit. In a three-element audion tube, that is, one containing three electrodes, a filament F, a grid £?, and a wing or plate W, there exists inherently an electrostatic capacity between any two of the electrodes, and notably between the grid and the plate. This inherent capacity was known to exist prior to the Armstrong invention, but he first discovered that the grid and plate could be utilized as a condenser, so that radio energy could be fed back from the plate circuit to the grid circuit through the lube when the plate circuit was tuned. The “electrostatic coupling” of the audion, as that term is used in the patent in suit, page 1, line 58, is the capacity between the plate and grid of the tube. In Fig. 3 of the patent in suit the moans supplementing- the electrostatic coupling of the audion to give the feed-back effect arc the coil L’ and possibly the condenser in shunt with the telephone receivers. Prior to Armstrong’s invention, January 31, 1913, there had been no disclosure in any publication including patents of a tuned plate circuit in a three-electrode audion, but he. disclosed and clearly described the use of a tuned plate circuit for accomplishing feed-back, as was stated by the Circuit Court of Appeals in the prior decision: “He tuned the plate circuit to radio frequency by inserting in the plate circuit such inductance and capacity as to make it responsive to the radio frequency waves. Then he found, not only that the radio frequency waves could be carried over into the plate circuit, but that they could be there amplified by the energy derived from the local battery in the plate circuit without change of frequency wave form and that they could be fed into the grid circuit, where they increased the potential variations on the grid and the operation continuously repeated itself, producing the feed-back regeneration which increased, normally the sensitiveness of the device and the loudness of the receiving signals.” Fig. 3 of the patent in suit employs only the tuned plate circuit, and the conception that by tuning the plate circuit the interna] coupling of the tube may he utilized for feed-back was entirely new with Armstrong. The patent in suit is not broadly for radio amplification. The claims cover radio frequency amplification by controlled and useful feed-back. The Melco-Supreme receivers com plained of as infringements of the Armstrong patent may be briefly described by reference to Amseo’s Chart 5, Defendant’s Exhibit Y, Plaintiffs’’Exhibit 14, ,In the Melco-Supreme receiver a plurality of circuits are arranged' in series or cascades employing four or five audion tubes, the first two tubes being employed as radio frequency amplifier tubes, that is, for amplification of the high or radio frequency energy, the third tube being employed for detection or rectification, and the fourth and also the fifth tube, if there be one, being utilized for amplifying the audio frequency energy; the antenna being connected to the first radio stage, and the telephone or loud speaker being connected to the last audio stage. The third or detector audion tube is not employed for rectification and amplification, as in the Armstrong circuit. There is no contention on the part of the plaintiffs that there is any infringement in the detector stage or in the audio frequency stages, but they do contend that the feed-back invention is utilized in the two radio frequency stages. No complaint is made by the plaintiffs of any casual, incidental, and uncontrollable feed-back or transfer of radio frequen'cy energy that there may be in the Melco set, from various parts of the circuits to other parts of the circuits, as they agree that so far as practicable such reactions are minimized. The plaintiffs do complain of, as an infringement, what they allege is the controlled and useful feed-back through the tube, from the plate circuit to the grid circuit of each of the first two tubes, the radio frequency stages, in the Melco receivers. The circuits in defendant’s receivers, reference being had to Plaintiffs’ Exhibits 13 and 14, are generally as follows: The antenna to ground circuit passing through a series condenser and the variometer marked T — l. This variometer or variable inductance coil, which in the set is controlled by the knob T — l, has across its terminals a small fixed condenser and is connected to the grid and filament of the tube No. 1. The output circuit extends from the plate of the tube through the primary coil P and the B battery back to the filament. The three coils GF, P and S above the designation- T-2 are all contained in the variotrahsformer which is controlled by a dial on the front of the set which is marked T-2. The coil P directly in series with the plate and B battery is inductively coupled ,to the coil B ¿which in this vario-transformer is a multiple variometer coil whose inductance and whose coupling to the coil P may be varied simultaneously by turning the con trolling dial of T-2. Across the secondary-coil of this vario-transformer T-2 is connected a small condenser as indicated and the grid and filament of the second tube which is marked No. 2. The coil marked OF in this first vario-transformer is placed in inductive relation to the two other coils. The compensating condenser 0-1 has its movable plate connected to the grid. The second tube has its tuned grid circuit including the coil 8 of the vario-transformer T-2. The output circuit of tube No. 2 extends from its plate through coil P of the variotransformer marked T-3 and back to the filament through the plate battery. This second vario-transformer has a counter feed-back coil connected through the variable compensating condenser 0-2, just as in the case of the first tube and the vario-transformer T-2. The vario-transformer T-3 also has across its secondary coil a condenser which is also across the grid and filament connections of the third tube. In the grid connection of this third tube there is a small fixed condenser and grid leak which is characteristic of such tube as a rectifier. The plate circuit of the third tube extends to the audio amplifier or directly to the telephone when it is desired to listen to the signals as reported there. The invention in the patent in suit is illustrated by an audion system in which there is detection, as well as the new contribution of Armstrong, namely, radio frequency amplification by feed-baek. In the Meleo-Supreme receiver the third or detector audion tube is not employed for rectification and amplification, as in the Armstrong circuit. The defendant contends that the Armstrong disclosure is wholly to the use and operation of an audion as a detector in its conjoint function of detection and amplification, the amplification being obtained by a feed-baek action. In other words, the defendant contends that the claims should be interpreted as though they read “an audion wireless receiving system functioning as a detector and having” certain elements. The patentee in describing the invention of the patent in suit says: “The present invention relates to improvements in the arrangement and connections of electrical apparatus at the receiving station of a wireless system, and particularly a system of this kind in which a so-cabed ‘audion’ is used as the Hertzian wave detector. * * * ” and again: “As a preliminary, it is to be noted that my improved arrangement corresponds with the ordinary arrangement of circuits in connection with an audion detector to the extent that it comprises two interlinked circuits; a tuned receiving circuit in which the audion grid is included, and which will bo hereinafter referred to as the ‘tuned grid circuit,’ and a circuit including a battery or other source of direct current and the ‘wing’ of the audion, and which will be hereinafter referred to as the ‘wing circuit.’ ” The audion referred to in the patent in suit is the three-electrode vacuum tube device invented by De Forest, and shown in his patent No. 879,532, of February 18, 1908. The drawings of the patent in suit show but one audion and do not show a separate detector. There is however, no mention made of a detector in the claims in suit Nos. 9, 15, and 16, which cover “an audion wireless receiving system having” certain elements. Therefore it appears that the only theory on which defendant contends for its interpretation is because the description of the invention in the patent is illustrated by an audion system in which there is detection, as well as the new contribution of Armstrong, namely, radio frequency amplification by feed-back. The patent in suit is for a valuable invention and should be liberally construed. Eibel Co. v. Paper Co., 261 U. S. 45, 43 S. Ct. 322, 67 L. Ed. 523; Tompkins-Hawley-Fuller Co. v. Holden (C. C. A.) 273 F. 424, 430. The function of detection was old. An audion system containing radio frequency amplification by feed-back, claimed in the patent in suit, is entirely new. There is nothing in the prior art (and defendant cites De Forest patents Nos. 841,387 and 879,532, French, Von Lieben, 13,726, and United States patent 1,038,910) which requires a limitation to combined radio frequency amplification and detection. Lyon Non-Skid Co. v. Edward V. Hartford, Inc. (D. C.) 247 F. 524, affirmed 250 F. 1021, 162 C. C. A. 664. In the simple audion arrangement of the prior art, as illustrated by the De Forest patent No. 879,532, the audion system had a tuned grid circuit, detected or rectified, and there was ah increase in the audio frequency components of the modulated currents, due to the relay action of the tube. The audio arrangement of Armstrong contains these functions, and Armstrong’s contribution was a wholly new function for radio apparatus, namely, radio frequency amplification, due in part to the relay action of the tube and due in part to feed-back. The patentee properly elaims in the elaims in suit apparatus adapted to perform the function of feed-back amplification of radio frequency energy. The specification does not limit the elaims, nor must the elaims have the detector lim.itati.Qn written in them,-because Armstrong did not describe a use of the invention in a receiving system in which a crystal detector was used, or in á transmitting system where there is no detection. A patent should not be restricted to the precise form shown in the drawing. Harvey Hubbell, Inc. v. General Electric Co. (C. C. A.) 267 F. 564, 570; Consolidated Bunging App. Co. v. Metropolitan Brewing Co., 60 F. 93, 8 C. C. A. 485. Notwithstanding the fact that the claims of the patent in suit all commence with the words “an audion wireless receiving system,” the Circuit Court of Appeals decided in the De Forest suit, supra, that the Armstrong patent in suit is not limited to feedback in a receiving system, but also covered feed-back in an oscillating audion or transmitter, and held as follows: “The inventor is entitled to the benefit of all uses to which his invention can be put, no matter whether he conceives the idea of the use or not.” It is therefore clear to me that Armstrong’s invention covers the regeneration or feed-back audion and this invention is not limited to an audion functioning as a detector. Therefore, Matheson v. Campbell, 78 F. 910, 24 C. C. A. 384, cited by defendant, is not in point. Each of the two radio frequency tube .systems in the Melco sets is an audion receiving system, and the patent covers the use of the feed-back circuit in such systems. In my opinion the claims should not be interpreted as though the words “functioning as a detector” were added to them. . ■ The defendant contends that by the patentee’s filing of an affidavit, under .Patent Office Rule 75,.and failure to file under Patent Office Rule 94, the plaintiffs are now es-topped from claiming that the patent in suit is broad enough to cover an audion as an amplifier anterior to detection, as shown in the Schloemilch & Von.Bronk patent. . The history of the patent in suit in its progress- through the Patent Office, -without unnecessary detail, is as follows: The application was filed October 29, 1913, - with fourteen elaims. Claims 9 and 13 were rejected by the Patent Office on the British patent of Schloemilch & Von Bronk, Thompson, 8,821,. of 1913, which had an acceptance date of October 2, 1913. On an application filed March 14, 1913, there had issued, February 17, 1914, the Schloemilch & Von Bronk United States patent, - No. 1,087,892. Without any discussion of the disclosures of the reference, Armstrong canceled claim 13, added some claims, and carried his invention back of the Schloemilch & Von Bronk references. The elaims were then, allowed. I do not see the force of defendant's reasoning that because the patentee did not file an affidavit under rule 94, the plaintiffs cannot lay claim to the use of an audion as a radio frequency amplifier, separate from and anterior to detection, because'it clearly appears from the testimony of all the expert witnesses that Schloemilch & Von Bronk taught nothing of feed-back, whereas, the patent in suit taught the employment of regenerative feed-back. If an affidavit had been filed under rule 94, an interference would have been proper, but there was no reason therefor, as the applications of the respective patentees did not show or claim the same invention, and therefore I do not see that Lewis Blind-Stitch Machine Co. v. Arbetter F. Machine Co. (D. C.) 208 F. 992, affirmed 219 F. 557, 135 C. C. A. 325, so freely quoted by the defendant, is an authority in the case at bar. Plaintiffs cannot complain if the circuits of the Schloemilch & Von Bronk patent be so constructed as not to utilize feed-back, but plaintiffs have a right to complain if the circuits of the Schloemilch & Von Bronk patent be so constructed as to utilize what Schloemilch & Van Bronk knew nothing of, namely, feed-back. There is no proof that there was ever any adjudication of the Schloemilch & Von Bronk patent, and therefore it would hardly seem to be entitled to be described, as it is by defendant, as a basic patent. But be that as it may, undoubtedly the circuits shown in that disclosure can be so constructed as to produce feed-back. But that does not make the invention of the patent the same as the invention of the patent in suit. General Knit Fabric Co. v. Steber Machine Co., 194 F. 99, 114 C. C. A. 177. The defendant has offered. in evidence a number of patents, but its expert discussed but few of them, and inasmuch as the defendant does not now deny the validity of the patent in suit, presumably they were offered solely to show the prior state of the art. The Sehloemileh & Von Bronk United States, German, and British patents: The Sehloemileh & Von Bronk United States patent was a copending application with and therefore not prior art to the patent in suit. The effective date of the British patent was its date of sealing, and the effective date of the German patent was the date of its publication, both of which are later than the date of invention of the patent in suit. The date of invention of the patent in suit was January 31, 1913; therefore the Sehloemileh & Von Bronk reference? are too late. The De Forest patents, Nos. 841,386, 995,126, 1,507,016, and 1,507,0.17: None of these patents were explained by defendant’s expert. No. 841,386 shows no grid as in the audion of the modern art or as shown in the patent in suit, and No. 995,-126 shows a three-electrode audion, but Armstrong’s invention is not disclosed or even suggested in either patent. The other two patents are too late. The Lindridge Article in the Telephone Engineer of September, 1912: This was introduced in evidence in the De Forest suit and deals with the well-known singing in telephone systems. There was nothing in it to suggest the invention of the patent in suit. The Von Lichen et al. patents, which are earlier than Armstrong, relate to audio amplifying systems. They disclose two stages of audio frequency amplification. The tubes employed were mercury vapor tubes which were exceedingly critical in their operation, and were therefore provided with a potentiometer (control of grid voltage with respect to the filament). None of the Von Lieben references teach' or even suggest that radio frequency energy may he fed hack from the plate circuit to the grid circuit. In the apparatus constructed according to the circuit diagram of the Von Lieben French patent, Amseo Chart 6, by the defendant, and demonstrated by it, there was no tuning shown, and tuning would be an utterly undesirable thing in an audio frequency amplifier. The defendant demonstrated by a test that, by increasing the amplifying power of the tubes, this system could he made to oscillate at some random undetermined and uncontrollable' frequency, and that when modem nongasoous tubes were used, these oscillations could he made to cease by adjusting the potentiometer so as to decrease the amplifying power of the tubes. Oseilla/tions of that sort have been present in the amplifying telephone system for many years and recognized as an obstacle to the use of the telephone amplifiers. No control of the frequency of the oscillations is disclosed in these patents. Fessenden patents, Nos. 706,738 and 742,779, Stone patents, Nos. 714,831 and 864,272, and Ehrot patent, No. 734,048: These patents disci oho a plurality of tuned circuits connected by radio frequency transformers, and also disclose the use of condensers, which was old prior to Armstrong. The Sindig-Larsen Norwegian patent, No. 18,491, was not explained. The defendant called as a witness Mr. Sleeper, the editor of a publication devoted to radio engineering news, and who was in close touch with radio matters, to show that there was a recognized distinction between the Armstrong circuit and tuned radio frequency circuit, and while he testified that the tuned radio frequency receiver is a nonregenerative circuit, I do not think much weight can be attached to that testimony, as showing that the Moleo-Supremo receiver does not infringe the claims of the patent in suit, because his classification of radio receivers was regenerative, nonregenerativc, and superheterodyne sets, notwithstanding the fact that it has been decided that superheterodyne sots utilize regeneration and infringe the Armstrong patent. Westinghouse Co. et al. v. Morris Taub (D. C.) 4 F.(2d) 605. In any event, the questiem of infringement is not to he determined by evidence of recognized distinction, as that may he largely one of name, but by evidence showing the structure, function, mode of operation, and results. It is to ho noted, however, although he testified on direct-examination that tuned radio frequency receivers do not oscillate, on cross-examination he testified that he supposed you might so tune a radio frequency receiver to oscillate so that you could pick up distant stations by the beat note, and that there would be regeneration in the tuned radio frequency receiver which generated oscillatioris in the radio frequency system. Prior to Armstrong, that is, prior to January 31, 1913, there was no tuned plate circuit. In the old use of the simple audion there existed within the same tube the function of rectification or the Fleming effect, and in addition a slight increase in sensitiveness, the improvement to a double sensitive* ness, which may be assigned to audio frequency amplification. All of this was well known to Armstrong and pointed out by him in the Electrical World article. .Armstrong added to the simple audion circuit the new invention that has been called the feed-back circuit or regenerative-circuit. Armstrong’s invention is based on his discovery that in the plate circuit of the audion there appeared, or could be made to appear, in substantial quantities, not only the audio frequency changes of the current which operated the telephone, but also radio frequency currents of the extremely high frequencies in waves and agreeing in frequency, of course, with the frequency of the arriving waves and the frequency of the current in the grid circuit. All this was entirely new, and the claims of the patent in suit are not limited by the prior art.

3997480-7481

SUMMARY ORDER Plaintiffs-appellants appeal from a judgment of the District Court granting the defendants-appellees’ motion to dismiss for lack of subject-matter jurisdiction and, alternatively, for judgment on the pleadings, pursuant to Rules 12(b)(1) and 12(c) of the Federal Rules of Civil Procedure. We assume the parties’ familiarity with the facts and procedural history of the case, and the issues on appeal. The District Court dismissed the case in light of the plaintiffs’ failure to exhaust their administrative remedies under the Individuals with Disabilities Education Act (“IDEA”), 20 U.S.C. § 1400 et seq. Although the Amended Complaint did not include a claim expressly under the IDEA, the District Court held that the claims purportedly arising under the Americans with Disabilities Act, 42 U.S.C. § 12101 et seq., and the Rehabilitation Act, 29 U.S.C. § 701 et seq., “all relate to the identification, evaluation, or educational placement of Daniel, or his treatment by his teacher because of his disability, and therefore these claims all invoke Daniel’s right to a free appropriate public education” under the IDEA. Baldessarre v. Monroe-Woodbury Cent. Sch. Dist., 820 F.Supp.2d 490, 505 (S.D.N.Y.2011). Accordingly, the District Court found that the relief the plaintiffs sought was “available under the IDEA” and that the IDEA’S exhaustion requirement applied. Id. at 507-08. We review de novo a district court’s dismissal of a complaint pursuant to Rules 12(b)(1) or 12(c), accepting the well-pleaded allegations in the complaint as true. See Sharkey v. Quarantillo, 541 F.3d 75, 82 (2d Cir.2008) (Rule 12(b)(1)); Morris v. Schroder Capital Mgmt. Int’l, 445 F.3d 525, 529 (2d Cir.2006) (Rule 12(c)). Having undertaken a de novo review of the record on appeal, and upon consideration of the arguments of the parties, we affirm the judgment of the District Court, substantially for the reasons stated in its comprehensive and well-reasoned Opinion and Order of June 29, 2011. See Baldessarre, 820 F.Supp.2d at 493-510. 1. Plaintiffs Failed to Exhaust Administrative Remedies under the IDEA “It is well settled that the IDEA requires an aggrieved party to exhaust all administrative remedies before bringing a civil action in federal or state court.” J.S. ex rel. N.S. v. Attica Cent. Schs., 386 F.3d 107, 112 (2d Cir.2004). Moreover, “potential plaintiffs with grievances related to the education of disabled children generally must exhaust their administrative remedies before filing suit in federal court, even if their claims are formulated under a statute other than the IDEA (such as the ADA or the Rehabilitation Act).” Polera v. Bd. of Educ. of Newburgh, 288 F.3d 478, 481 (2d Cir.2002); 20 U.S.C. § 14150) (“Nothing in [the IDEA] shall be construed to restrict or limit the rights, procedures, and remedies available under ... other Federal laws protecting the rights of children with disabilities, except that before the filing of a civil action under such laws seeking relief that is also available under [the IDEA], the procedures under subsections (f) and (g) shall be exhausted to the same extent as would be required had the action been brought under [the IDEA].”). We have held, on multiple occasions, that the “[f]ailure to exhaust the [IDEA’s] administrative remedies deprives the court of subject matter jurisdiction.” Cave v. East Meadow Union Free Sch. Dist., 514 F.3d 240, 245 (2d Cir.2008) (citing Polera, 288 F.3d at 483 and Hope v. Cortines, 69 F.3d 687, 688 (2d Cir.1995)). There is no dispute that the plaintiffs did not exhaust the administrative remedies available to them and required by the IDEA. Moreover, as the District Court observed, the relief sought by the plaintiffs is “relief that is also available under [the IDEA].” 20 U.S.C. § 14150). Although the plaintiffs, in addition to injunctive relief, seek compensatory damages—a form of relief not available under the IDEA, see Polera, 288 F.3d at 486 — we have made clear that “a disabled student who claims deficiencies in [his] educational program may not bypass the IDEA’s administrative exhaustion rule merely by claiming monetary damages.” Cave, 514 F.3d at 247. Rather, “the theory behind the grievance may activate the IDEA process, even if the plaintiff wants a form of relief that the IDEA does not supply.” Id. at 246 (emphasis added) (internal quotation marks omitted). Here, the theory behind the plaintiffs’ grievance was that the defendant school district’s classification and placement of the student, Daniel, was discriminatory and resulted in his being mistreated by his teacher, defendant Nalick. The IDEA provides relief for this type of grievance. As we stated in Cave, “[p]arents are specifically entitled to request a due process hearing in order to present complaints as ‘to any matter relating to the identification, evaluation, or educational placement of the child, or the provision of a free appropriate public education.’ ” 514 F.3d at 245 (quoting 20 U.S.C. § 1415(b)(6)(A)). That plaintiffs declined to exercise their rights under the IDEA’S administrative enforcement regime does not entitle them to come straight to federal court, thereby depriving the state edu cation agency of the opportunity “to bring its expertise to bear on [the] problem as well as to correct its own mistakes,” if any. Heldman v. Sobol, 962 F.2d 148, 159 (2d Cir.1992). Further, the IDEA provides relief “[f]or disabled students such as [Daniel] who are removed from school for disciplinary reasons.” Coleman v. Newburgh Enlarged City Sch. Dist., 503 F.3d 198, 209 (2d Cir.2007) (Straub, /., concurring) (citing, inter alia, 20 U.S.C. § 1415(k)(1)(E) (providing a right to a “manifestation hearing” to determine whether student’s conduct was caused by or directly related to his disability)). The District Court’s holding that the plaintiffs’ failure to exhaust the IDEA’S administrative remedies required dismissal of their complaint was clearly compelled by our Circuit precedent. The plaintiffs apparently do not contest this, but, rather, request that we abandon this precedent and instead adopt the view of the Court of Appeals for the Ninth Circuit. See Payne v. Peninsula Sch. Dist., 653 F.3d 863, 871 (9th Cir.2011) (en banc) (“Non-IDEA claims that do not seek relief available under the IDEA are not subject to the exhaustion requirement, even if they allege injuries that could conceivably have been redressed by the IDEA.”). We decline to do so. “This panel is bound by the decisions of prior panels until ... they are overruled either by an en banc panel of our Court or by the Supreme Court.” In re Zarnel, 619 F.3d 156, 168 (2d Cir.2010) (quotation marks omitted). 2. Plaintiffs Failed to Show That Exhaustion Would Be Futile The IDEA’S exhaustion requirement “does not apply ‘in situations in which exhaustion would be futile.’ ” Coleman, 503 F.3d at 205 (quoting Polera, 288 F.3d at 488). “The party seeking to avoid exhaustion bears the burden of showing futility.” Cave, 514 F.3d at 249. Although plaintiffs argued in the District Court that exhaustion would have been futile, they do not make such an argument in their opening brief, and therefore are deemed to have abandoned it. See J.P. Morgan Chase Bank v. Altos Hornos de Mex., S.A. de C.V., 412 F.3d 418, 428 (2d Cir.2005) (“[A]rguments not made in an appellant’s opening brief are waived even if the appellant pursued those arguments in the district court or raised them in a reply brief.”).

4322230-24615

CLAY, Circuit Judge. Defendant Debbie Sferrazza is a citizen of Great Britain and lawful permanent resident of the United States. In 2011, Sfer-razza pleaded guilty, pursuant to a plea agreement, to five counts of: (1) conspiracy to commit wire and mail fraud, in violation of 18 U.S.C. § 1849; (2) money laundering, in violation of 18 U.S.C. § 1957; and (3-5) filing a false tax return, in violation of 26 U.S.C. § 7206(1). The district court sentenced Sferrazza to 46 months in prison and 36 months of supervised release. After serving her prison sentence, Sferrazza was detained by U.S, Immigrations and Customs Enforcement (“ICE”) and is currently awaiting deportation in county jail. On appeal, Sferrazza challenges the district court’s order denying her petition for a writ of coram nobis or, alternatively, habeas corpus. Because both forms of relief are procedurally barred, we AFFIRM. BACKGROUND In 1977, Sferrazza immigrated to the United States from Great Britain. Her husband and four children are all U.S. citizens. On January 13, 2010, a federal grand jury returned a 33-count indictment charging Sferrazza and others, including her husband and several of her family members, with conspiracy, wire fraud, mail fraud, money laundering, and filing false tax returns. Each of these charges arose from a mortgage fraud scheme, allegedly orchestrated by Sferrazza and her co-conspirators, which began in December 2004. • Before she was indicted, but after she learned that the government was investigating her activities, Sferrazza retained attorney Robert Neil Trainor to represent her. At the time she retained him, Sfer-razza had known Trainor for approximately ten years through his previous work as her brother’s attorney. Trainor represented Sferrazza up to the time of her guilty plea. On January 4, 2011, Sferrazza pleaded guilty, pursuant to a plea agreement, to Counts 1, 25, 28, 29, and 30 of the indictment. At the plea hearing, the district court explained the maximum penalties associated with each of the charges against her, but informed her that it would not be able to determine her advisory guidelines range until after a presentence report was prepared by a probation officer. Additionally, the court asked Sferrazza whether she (1) had read the plea agreement, (2) discussed its terms with Trainor, and (3) understood the agreement in its entirety, Sferrazza answered each of these inquiries in the affirmative. Prior to calling a witness to set out the facts underlying Sferrazza’s guilty plea, government counsel stated the following: [T]here’s one other matter I wanted to bring up in terms of advising the defendant of her rights, and that is with respect to immigration consequences. I understand the defendant, correct me if I’m wrong, Mr. Trainor, that she’s originally a citizen of Great Britain. I believe she might be a permanent resident of the United States. I don’t know that there would be any immigration consequences, but I wanted to make sure that that is explained to her as well. (R. 331, Plea Hr’g Tr., PagelD# 1151). At this time, Trainor assured the court, “Your Honor, we have reviewed that thoroughly. ...” (Id. at 1152). The discussion continued as follows: THE COURT [addressing Sferrazza]: All right. What country are you a citizen of? THE DEFENDANT: Great Britain. THE COURT: And how are you in the United States? THE DEFENDANT: I’m a permanent resident. THE COURT: All right. Do you understand that this conviction may have consequences for your visa or whatever permanent kind of condition you have at this point in time with the immigration authorities and may even lead to your deportation? MR. TRAINOR [to Sferrazza]: You’re aware of that. ([Sferrazza] conferring with Mr. Trai-nor.) MR. TRAINOR: Your Honor, she is — you are aware it may lead_ THE DEFENDANT: Yes, Your Honor. THE COURT: Are you certain of that, Miss Sferrazza? (Mr. Trainor conferring with [Sferraz-za].) THE COURT: Let me explain it a little bit more. Neither I nor the United States in the form of the U.S. Attorney’s Office ha[s] any influence whatsoever over immigration. [The immigration authorities] have their own rules and regulations. Since you aren’t a citizen of the United States, you’re in the United States on some kind of a permanent visa, it is possible that the immigration authorities may seek to deport you. I don’t know if that will happen, I doubt it will, but it is a possibility, and I just want to make sure that you are aware of that. THE DEFENDANT: Yes, Your Honor, I’m aware of it. THE COURT: All right. (Id. at 1152-53). The parties then proceeded to discuss the facts underlying Sferrazza’s guilty plea, which were set out by a special agent for the Federal Bureau of Investigations. After the special agent recited the statement of facts, Sferrazza confirmed that everything the agent had said was true and correct, and the district court accepted Sferrazza’s guilty plea. On June 30, 2011, Sferrazza filed a pro se motion to withdraw or set aside her guilty plea and proceed with the assistance of a public defender. As part of her motion, Sferrazza attached a slip opinion from the Ohio Supreme Court stating that Trai-nor’s license to practice law had been sus pended earlier that month based on his: (1) failure to notify a client that he did not carry malpractice insurance, (2) failure to promptly return funds to a client, and (3) prior discipline for professional misconduct in both Ohio and Kentucky. Sferrazza noted- that in light of Trainor’s suspension, he could no longer represent her in her criminal suit. Additionally, although the slip opinion did not describe Trainor’s professional misconduct as arising from or relating to Sferrazza’s case, Sferrazza opined that “[i]t [wa]s clear from that opinion that [she] was not being represented adequately during [her criminal] case.” (R. 288, Mot. to Withdraw, PagelD# 996). Sferrazza also asserted that she “would not have pled guilty had she been properly informed of the consequences,” though she did not explicitly identify the “consequences” to which she was referring. (Id.). On July 12, 2011, the government filed an opposition to Sferrazza’s motion to withdraw. In her pro se reply, Sferrazza argued for the first time that Trainor was ineffective because he lacked knowledge about immigration law and, as a result, she neither was informed about nor understood the immigration consequences that attached to entering a guilty plea. Shortly after Sferrazza filed her motion, Peter Rosenwald, a public defender, was appointed as her attorney. On September 9, 2011, Rosenwald filed a second motion to withdraw Sferrazza’s guilty plea. In her attorney-filed motion, Sferrazza argued that her guilty plea should be set aside because Trainor “did not provide effective assistance” and “her Pleas were not knowingly and intelligently made.” (R. 336, Mot., PagelD# 1196). In support of this assertion, Sferrazza maintained that (1) the disciplinary actions against Trainor, as referenced in the Ohio Supreme Court’s slip opinion, demonstrated that Trainor “tended to neglect the needs of his clients,” (2) Trainor was not sufficiently “well[-]versed in the United States Sentencing Guidelines” to properly advise Sferrazza as to what her sentence would be, and (3) Trainor failed to properly advise her of the potential immigration consequences of entering a guilty plea, including deportation. (Id. at 1197-98). Sferrazza also alleged that she was not aware of the potential immigration consequences of pleading guilty until government counsel raised the issue at the January 4, 2011 plea hearing. At the hearing on her motion to withdraw, Sferrazza testified that Trainor failed to adequately explain the sentencing guidelines and insisted that Sferrazza sign the plea agreement even after she told him that she did not commit some of the acts described therein. Despite her misgivings, however, Sferrazza followed Trainor’s advice because she trusted him when he told her that pleading guilty was in her “best interest.” (Id. at 1234,1237). When Sferrazza later spoke to Trainor about withdrawing her plea, he told her that withdrawal was impossible. Sferrazza also testified that she only learned that pleading guilty could result in deportation based on government counsel’s remarks at the plea hearing, stating: I believe at one point right after [government counsel] had actually brought up the fact that I could be deported, I told Mr. Trainor I didn’t — “We haven’t talked about this.” I believe that the Judge then asked — I believe Judge Dlott asked if — -if I was aware of that, and I believe Mr. Trainor actually answered for me. And I was still having words with him saying, “I did not know that; that we didn’t talk about this, and I don’t want to do this.” He told me to just agree and we would talk about it after court. (R. 347, Testimony Tr., PagelD# 1243). According to Sferrazza, Trainor failed to discuss the possibility of deportation with her even after she pleaded guilty. On cross-examination, Sferrazza admitted that she neither raised any complaints about Trainor’s representation nor said she had previously asked to withdraw her plea when speaking to her pretrial services officer or her probation officer. Government counsel pointed out that despite Sfer-razza’s post hoc complaints about Trainor’s representation, and despite the fact that Trainor was retained rather than court-appointed, Sferrazza never fired him. Government counsel also suggested that based on the timing of her co-defendants’ sentencing hearings, Sferrazza’s true reason for wanting to withdraw her plea was because she had seen some of her co-defendants, including her brother, receive prison sentences based on their roles in the mortgage fraud scheme. Finally, government counsel noted that Sferrazza never mentioned Trainor failing to withdraw her plea in contravention of her wishes in either of her pro se pleadings. After hearing from the parties and rejecting Rosenwald’s proposal to subpoena Trainor, the district court denied Sferraz-za’s motion to withdraw. The court noted, among other things, that: (1) the possibility of deportation, as well as the maximum penalties associated with the charges against her, were explained to Sferrazza at the plea hearing; (2) Sferrazza confirmed under oath that the government’s statement of facts was correct; (3) Sferrazza indicated that she understood and agreed to the terms of the plea; (4) despite her allegations that she repeatedly asked Trai-nor to withdraw her plea, approximately six months elapsed between the date Sfer-razza pleaded guilty and the date she filed her pro se motion to withdraw; and (5) although Sferrazza was given the opportunity to seek alternate representation after learning that Trainor’s license had been temporarily suspended in Kentucky, she elected to keep Trainor as her attorney. On December 1, 2011, the district court sentenced Sferrazza to a total of 46 months in prison and 36 months of supervised release. The court also imposed monetary penalties in the form of $536,208.66 in restitution, plus a $500 special assessment. Sferrazza filed a timely appeal in December 2011. However,- five months later, the appeal was dismissed for want of prosecution after she failed to file an opening brief. See 6 Cir. R. 26(b). On June 9, 2015, Sferrazza filed the petition for a writ of coram nobis or, alternatively, habeas corpus, underlying this appeal. In an affidavit submitted in conjunction with the petition, Sferrazza alleged the following. On May 8, 2015, after being released from prison, Sferrazza was immediately taken into custody by ICE and placed in a county jail in Elk River, Minnesota, where she is awaiting removal proceedings. ICE has informed Sferrazza that her removal from the United States is mandatory based on the specific offenses to which she pleaded guilty. In both her petition and accompanying affidavit, Sferrazza asserted that Trainor, Rosenwald, and the district court failed to inform her that deportation was mandatory — rather than ‘possible — when she pleaded guilty. Sferrazza also'asserted that she would have (1) insisted on going to trial and (2) directly appealed the district court’s order denying her motion to withdraw, if she had known that a guilty plea would result in her automatic deportation to Great Britain. Analogizing her situation to that of the petitioner in Padilla v. Kentucky, 559 U.S. 356, 130 S.Ct. 1473, 176 L.Ed.2d 284 (2010), Sferrazza argued that because her attorney failed to properly advise her of the risk of deportation associated with her guilty plea, she was not fully aware of the consequences of pleading guilty and her plea was not “voluntary.” Depending on whether she was “in custody” at the time of her petition, Sferrazza requested that the district court either construe her petition as one for a writ of coram nobis or, alternatively, habe-as corpus. In either event, Sferrazza sought an order vacating her guilty plea and convictions. On June 18, 2015, the district court issued an order denying Sferrazza’s petition, noting that Sferrazza had expressed an understanding of the penalties and other ramifications associated with a guilty plea, including deportation, at the plea hearing. Ultimately, the district court denied habe-as relief under 28 U.S.C. §' 2255 because Sferrazza failed to comply with § 2255’s one-year statute of limitations. See 28 U.S.C. § 2255(f). The court also denied coram nobis relief on the grounds that coram nobis is an “extraordinary writ” available only to correct fundamental errors affecting a defendant’s criminal proceedings. In this vein, the district court found that coram nobis relief was inappropriate because (1)- Sferrazza had overstated the predictability of the immigration consequences flowing from her guilty plea and (2) Trainor had satisfied the requirements set out in Padilla and Strickland v. Washington, 466 U.S. 668, 104 S.Ct. 2052, 80 L.Ed.2d 674 (1984), by advising Sferraz-za that the criminal charges against her carried the risk of deportation. This appeal followed. DISCUSSION I. Writ of Coram Nobis In reviewing the district court’s denial of Sferrazza’s petition for a writ of coram nobis, we review its legal conclusions de novo and its factual findings- for clear error. Pilla v. United States, 668 F.3d 368, 372 (6th Cir.2012). Citing our decision in Maiyo v. United States, 576 Fed.Appx. 567 (6th Cir.2014), the district court denied Sferrazza’s request for coram nobis relief on the grounds that Trainor “satisfied his duty to [Sferrazza] under the holding of Padilla ” by informing her that she could be deported if she pleaded guilty. On appeal, the government argues that Sferrazza’s petition for a writ of coram nobis is barred in any event because she is still “in custody.” Appellee’s Br. at 18-21. We agree with this assertion, and affirm the district court’s denial of Sferrazza’s request for coram nobis relief on this ground. See Bangura v. Hansen, 434 F.3d 487, 498 n. 3 (6th Cir.2006) (“[T]his Court,may uphold a district court’s order on any ground supported by the record.”); Bybee v. United States, 66 Fed.Appx. 557, 559 (6th Cir.2003) (affirming “the district court’s [denial of a § 2255 petition] for reasons other than those set forth by the district court”). “Coram nobis is an extraordinary writ that may be used to ‘vacate a federal sentence or conviction when a § 2255 motion is unavailable — generally, when the peti tioner has served his sentence completely and thus is no longer in custody.’ ” Pilla, 668 F.3d at 372 (quoting Blanton v. United States, 94 F.3d 227, 231 (6th Cir.1996)); see also Chaidez v. United States, — U.S. —, 133 S.Ct. 1103, 1106 n. 1, 185 L.Ed.2d 149 (2013) (“A petition for a writ of coram nobis provides a way to collaterally attack a criminal conviction for a person ... who is no longer ‘in custody and therefore cannot seek habeas relief under 28 U.S.C. § 2255 or § 2241.”). A person who is still “in custody” is not eligible for coram nobis relief. United States v. Johnson, 237 F.3d 751, 755 (6th Cir.2001) (collecting cases). The government argues that Sferrazza is barred from seeking a writ of coram nobis because she has not yet completed her supervised release. Appellee’s Br, at 19-21. Because she failed to file a reply brief, Sferrazza makes no attempt to rebut this argument. This Court and several of its sister courts have held that for purposes of evaluating a coram nobis petition, a defendant is “in custody” while she is completing her supervised release term. See United States v. Estrada, 580 Fed.Appx. 672, 673 (10th Cir.2014); United States v. Miller, 546 Fed.Appx. 335, 336 (5th Cir.2013) (per curiam); United States v. Sandles, 469 F.3d 508, 517 (6th Cir.2006); United States v. Akkaraju, 97 Fed.Appx. 43, 44-45 (7th Cir.2004); United States v. Smith, 77 Fed.Appx. 180, 180 (4th Cir.2003) (per curiam); Matus-Leva v. United States, 287 F.3d 758, 761 (9th Cir.2002); see also Maleng v. Cook, 490 U.S. 488, 491, 109 S.Ct. 1923, 104 L.Ed.2d 540 (1989) (noting that a prisoner need not be “physically confined” in order to be “in custody,” and that prisoners placed on parole are “in custody” for habeas purposes). Because a defendant completing her supervised release is “in custody,’’ .“the writ of coram nobis is not available to [her].” Sandles, 469 F.3d at 517 (citation omitted). Sferrazza was sentenced to 46 months in prison and 36 months of supervised release. She completed her prison term on May 8, 2015, and therefore will not complete her supervised release until May 8, 2018. Since Sferrazza remains in custody under the terms of her supervised release, she is barred from obtaining relief pursuant to a writ of coram nobis. II. Writ of Habeas Corpus As an alternative to coram nobis relief, Sferrazza seeks a writ of habeas corpus pursuant to 28 U.S.C. § 2255. For the following reasons, we agree with the district court’s conclusion that Sferrazza’s request for habeas relief is barred by the Antiterrorism and Effective Death Penalty Act’s (“AEDPA”) one-year statute of limitations. See 28 U.S.C. § 2255(f). As an initial matter, the government argues that we lack jurisdiction to adjudicate Sferrazza’s petition for habeas relief because Sferrazza neither sought nor was granted a certificate of appealability (“COA”) after the district court denied her petition. Appellee’s Br. at 13-14. “Under 28 U.S.C. § 2253(c)(1)(B), the final order in a § -2255 proceeding is not appealable without a certificate of appeala-bility. Absent a certificate of appealability we lack jurisdiction to review such an order.” United States v. Bryant, 246 F.3d 650, 653 (6th Cir.2001) (citation omitted); see also United States v. Hardin, 481 F.3d 924, 926 (6th Cir.2007) (“[W]e lack jurisdiction to hear a habeas appeal without a certificate of appealability.”)- “[Federal Rule of Appellate Procedure] 22(b)(1) requires the district judge to decide whether to issue a COA upon the filing of the notice of appeal.” Castro v. United States, 310 F.3d 900, 903 (6th Cir.2002). “A [COA] may issue ... only if the applicant has made a substantial showing of the denial of a constitutional right.” 28 U.S.C. § 2253(c)(2). The district court issued its order denying Sferrazza’s petition on June 18, 2015, and Sferrazza appealed on July'9, 2015. However, it appears from both this Court’s docket and the district court’s docket that Sferrazza never requested, and the district court never granted (or denied), a COA. Under such circumstances, we generally remand the matter to the district court for a decision as to whether a COA should issue. See Castro, 310 F.3d at 903-04 (“[W]e hereby remand this case to the district court so that it may either issue a COA or state why a certificate should not issue pursuant to Rule 22(b)(1) and 28 U.S.C. § 2253(c).”); Cruz, 108 Fed.Appx. at 348 (“We generally transfer COA requests in the first instance to the district court when the district court has not ruled.”). In this case, however, because we agree with the district court’s conclusion that Sferrazza’s habeas petition is barred by AEDPA’s one-year statute of limitations, remanding this case would only waste judicial resources. See Cruz, 108 Fed.Appx. at 348. “In reviewing á district court’s denial of a motion under [§ ] 2255, we apply a clearly erroneous standard to its factual findings and review its conclusions of law de novo” Jenkins v. United States, 394 F.3d 407, 410 (6th Cir.2005) (quoting Nichols v. United States, 285 F.3d 445, 446 (6th Cir.2002)). Under AEDPA, a prisoner has one year from the date her conviction became final to file " a § 2255 petition. 28 U.S.C. § 2255(f)(1); Reed v. United States, 13 Fed.Appx. 311, 312 (6th Cir.2001). “As a general matter, convictions become final upon conclusion of direct review.” Sanchez-Castellano v. United States, 358 F.3d 424, 426 (6th Cir.2004) (citing United States v. Cottage, 307 F.3d 494, 498 (6th Cir.2002)). Because Sferrazza appealed her convictions and sentence, but the appeal was eventually dismissed for want of prosecution, the date on which her convictions became final is somewhat ambiguous under our precedent. However, this ambiguity is of little import because it is clear from the record that Sferrazza’s § 2255 petition was filed outside of AEDPA’s one-year statute of limitations. We have held that “[w]hen a federal criminal defendant appeals to the court of appeals, the judgment of conviction becomes final for § 2255 purposes upon the expiration of the ninety-day period in which the defendant could have petitioned for certiorari to the Supreme Court, even when no certiorari petition is filed.” Johnson v. United States, 457 Fed.Appx. 462, 464 (6th Cir.2012) (citing Sanchez-Castellano, 358 F.3d at 426-27). On the other hand, “when a federal criminal defendant does not appeal to the court of appeals, the judgment becomes final upon the expiration of the period in which the defendant could have appealed to the court of appeals, even when no notice of appeal was filed.” Sanchez-Castellano, 358 F.3d at 427. We dismissed Sferrazza’s appeal for want of prosecution on May 4, 2012. Assuming her convictions only became final upon the expiration of the 90rday period to file a petition for a writ of certiorari, AED-PA’s one-year statute of limitations began to run on August 2, 2012. See Id. at 426; see also United States v. Gamble, 208 F.3d 536, 537 (5th Cir.2000) (per curiam). Thus, in order to comply with AEDPA’s one-year statute of limitations, Sferrazza was required to file her § 2255 petition no later than August 2,2013. On the other hand, if we treat the date Sferrazza’s appeal was dismissed for failure to prosecute as the date the statute of limitations began to run, the one-year statute of limitations expired approximately three months earlier, on May 4, 2013. This was the approach takén by the district court and is the argument advanced by the government on appeal. Finally, if we treat Sferrazza’s failure to prosecute as the failure to file an appeal in the first place, then the statute of limitations expired even earlier. See Sanchez-Castellano, 358 F.3d at 427 (“[W]hen a federal criminal defendant does not appeal to the court of appeals, the judgment becomes final upon the expiration of the period in which the defendant could have appealed to the court of appeals, even when no notice of appeal was filed.”). Under this calculation, Sferrazza’s convictions would have become final on December 27, 2012 — fourteen days after the date the district court entered the judgment of conviction. Fed. R.App. P. 4(b)(1)(A)®. Regardless of which date we construe as the one-year deadline — August 2, 2013, May 4, 2013, or December 27, 2012 — the statute of limitations expired approximately two years (or more) before Sferrazza filed her § 2255 petition on June 9, 2015. Thus, to the extent she seeks habeas relief under § 2255, Sferrazza’s petition was untimely and the district court did not err in denying the petition as barred by AED-PA’s one-year statute of limitations. In an effort to save her § 2255 petition, Sferrazza argues that the district court’s denial of her habeas petition ignored the possibility that the limitations period was equitably tolled. Appellant’s Br. at 27-28. In general, “a petitioner who misses the [one-year] deadline may still maintain a viable habeas action if the court decides that equitable tolling is appropriate.” Allen v. Yukins, 366 F.3d 396, 401 (6th Cir.2004) (citing Dunlap v. United States, 250 F.3d 1001, 1007 (6th Cir.2001)).

5709719-7713

MEMORANDUM OPINION JOE J. FISHER, District Judge. The plaintiff, Johnson P. Curtis, filed this suit under Section 205(g) of the Social Security Act, 42 U.S.C. see. 405(g) (1976), seeking judicial review of a final decision of the Secretary of Health and Human Services denying his claim for disability benefits under the Act. Both parties have moved for summary judgment. Because this Court believes the Administrative Law Judge did not correctly consider or develop the evidence, the case is remanded. Curtis is a 61-year old male with a formal 10th grade education. He did attend a business college for a short period; and the vocational expert who testified at plaintiff’s disability hearing believed that Curtis had the equivalent of a high school education. Curtis worked for most of his life as an auto parts salesman, at one time owning his own store. For a short period after 1980 he worked as a salesman of industrial cleaning machines and equipment. Curtis ceased work on July 25th, 1981, claiming he was disabled because of heart problems. These heart problems had been of long duration. In 1970, he underwent single coronary bypass surgery. The operation was successful, but for the next nine years Curtis suffered recurrent attacks of angina pain, which increased in severity as the years passed. Finally, on August 6, 1981, shortly after he quit working, Curtis underwent triple bypass surgery. Once again the operation was successful, and plaintiff was discharged from the hospital eight days later. Several doctors examined Curtis after his 1981 surgery. Some of them believed Curtis was disabled. Dr. Ross Kyger, the doctor who performed Curtis’ 1981 heart surgery, stated five months after the surgery that the plaintiff was “disabled from any sort (of) activity requiring exertion.” Dr. Auldine Hammond, an osteopathis surgeon, examined Curtis in March, 1982, regarding a whiplash injury plaintiff had suffered in a car accident subsequent to the triple bypass. Hammond stated after the examination that Curtis was “not physically able to continue working.” Hammond explained this statement by saying “(h)is capacity for lifting is very limited, and exertion and stress cause angina.” Other private doctors also examined Curtis. While they did not directly state so, the ALJ believed their findings supported his belief that the plaintiff was not disabled. Dr. John Lancaster saw plaintiff at two month intervals after Curtis’ 1981 sur gery. During this time period, Lancaster reported that plaintiff was suffering chest pain, which might have been angina. Lancaster last examined the plaintiff in early 1982. At that time the Doctor reported that Curtis had “no discomfort with exertion.” He also found, however, that Curtis was “unable to do any lifting because he gets weak.” On balance, Lancaster found plaintiffs physical exam “unremarkable.” Dr. Baya Huynh examined Curtis in December, 1981; apparently the only time Huynh saw Curtis. This doctor found the plaintiff still suffering from heart disease and suffering chest pain. Huynh characterized Curtis’ status as basically post-operative. Staff reviewing physicians of the Social Security Administration clearly supported the AU’s conclusion that Curtis was not disabled. These doctors made an initial determination of Curtis’ condition in January, 1982. They stated that plaintiff's operation had been of benefit to him, and that despite his heart problems he still possessed the capability of medium work. Yet two months later the doctors changed their minds and limited Curtis to a light level of work. The ALJ accepted the later finding. In sum, there seems to be confusion surrounding the true state of Curtis’ health. His treating physicians state he is disabled, yet do not explain their statements. Other doctors who examined Curtis report his exertional capabilities are limited, but do not state how. Government doctors initially state Curtis can do a medium level of work, but later downgraded his work status. Therefore, the question becomes: given this medical confusion, can it be said that the ALJ had substantial evidence to justify his finding of no disability? Given Curtis’ age, his long-term heart disease, and the seriousness of triple bypass surgery, this Court holds that he did not. In remanding, this Court must state that it is well aware of the circumstances surrounding the 1980 amendment of Section 205(g) of the Social Security Act. Congress, concerned about a flood of unjustified federal court-ordered remands, replaced the “good cause” standard for remand with a stricter standard that requires not only good cause, but the probability that new and material evidence will be presented. 42 U.S.C. § 405(g) (1980). Nevertheless, this provision is not nearly as restrictive as a literal reading of it might suggest. Dorsey v. Heckler, 702 F.2d 597, 605 (5th Cir.1983). The Social Security Act is to be “broadly construed and liberally applied.” Williams v. Califano, 590 F.2d 1332, 1334 (5th Cir.1979). Considerations of fairness and efficiency may enter into a decision to remand a ease to the Secretary. Dorsey, 702 F.2d at 605. See also Ferguson v. Schweicker, 641 F.2d 243 (5th Cir. 1981). Though this Court cannot and will not re-weigh the evidence, neither can it “abdicate (its) traditional judicial function of scrutinizing the record as a whole to determine the reasonableness of the decision reached.” Williams v. Finch, 440 F.2d 613, 615 (5th Cir.1971). In the instant case, the AU found that the doctors who reported Curtis disabled made their comments without delineating any concrete reasons for stating so. Therefore, the AU labeled the statements as “conclusory” and further stated that “it was extremely doubtful” that the doctors reporting Curtis to be disabled had “any vocational expertise or are knowledgeable as to the criteria for ‘disability’ under Social Security standards.” The AU was correct in observing that what an ordinary doctor means by “disability” may not rise to the level required for disability under the Social Security Act. See Harmon v. Finch, 460 F.2d 1229 (9th Cir.1972) cert. denied 409 U.S. 1063, 93 S.Ct. 571, 34 L.Ed.2d 515 (1973). See also 20 C.F.R. 1527 (1983). A similar situation can be found in the recent Fifth Circuit opinion in Jones v. Heckler, 702 F.2d 616 (5th Cir.1983). In Jones, the claimant alleged that the AU had given more weight to the reports of physicians who stated claimant was not disabled than to the evidence submitted by doctors claiming she was. The Jones’ Court held that the only evidence sub mitted favoring disability had been letters from two doctors. That Court noted the letters contained “a complete absence of objective findings” in the letters. Thus, the letters stated mere conclusions, while the reports of the doctors finding no disability contained extensive analyses. Id. at 621. At best, the Court said, the letters presented “conflicting evidence for resolution by the Secretary,” and had been properly discounted. Id. Yet Jones can be distinguished here. In that case the evidence asserting no disability was clear, strong and free from the taint of bias. In the instant case the strongest proponents of a non-disability finding were the Administration’s staff reviewing physicians. Even they backed down from a finding of capability to do medium work to a later finding that claimant could only do light work. Other physicians were simply ambiguous. Dr. Kyger, at least, submitted a report with his letter concluding Curtis was disabled. Finally, the ALJ made no ruling at the hearing that the record be held open so that more evidence could be presented after the hearing, as has been done many times before.

11621287-21379

BOGGS, J., delivered the opinion of the court. WELLFORD, J. (pp. 578-79), delivered a separate concurring opinion. MOORE, J. (pp. 579-81), delivered a separate dissenting opinion. BOGGS, Circuit Judge. Plaintiffs sought injunctive relief against the closing of county and state courts and offices on Good Friday. The district court granted partial summary judgment for each party. Its order enjoined Defendants from posting overtly religious signs announcing the closing and permitted Defendants to continue closing the building and offices on the Friday before Easter for a “Spring Holiday.” Plaintiffs appeal the district court’s denial of an injunction against the Good Friday closings and its reduced award of Plaintiffs’ attorney’s fees. For the reasons set forth below, we affirm the judgment of the district court in all respects. I In November 1995, the Kenton County, Kentucky, Fiscal Court, the Kenton District Court, and the Kenton Circuit Court, all located in the Kenton County Courthouse and Administration Building (the “Courthouse”), each entered orders adopting identical holiday closing schedules for 1996. Good Friday, April 5, 1996, was included in the orders. The federal district court found that “the courts and the offices in the [Courthouse] have closed on Good Friday for as many years as any witness in this case can remember.” In early April 1996, George Neack, the Deputy Judge Executive of Kenton County, acting without the knowledge or authorization of any defendant, made signs bearing an image of the Crucifixion and announcing that the building would be closed “for observance of Good Friday,” April 5, 1996. Neack had the signs posted at the entrances to the Courthouse. Plaintiffs observed the signs and, on April 3,1996, filed their lawsuit against the County Judge-Executive and various county officials who had offices in the Courthouse or whom Plaintiffs believed exercised control over the Courthouse (the “county defendants”), as well as various officers and judges of the state courts with offices in the Courthouse (the “state defendants”). When the county defendants received notification of the suit, they immediately had the signs removed and replaced by signs simply announcing that the building would be closed on April 5. Defendants admitted that the sign violated the Establishment Clause (U.S. CONST, amend. I) and stated on the record that no such signs would be posted in the future. The Courthouse was open on April 5, 1996, although the courts and most offices were not. Defendants now refer to the Friday before Easter as Spring Holiday on their calendars and closing orders. The district court found that “[although the closing is to be observed on Good Friday, the day on which Christians remember Jesus’ crucifixion, there is no evidence that the court and office closings are otherwise related to the Christian holiday.” The court also found that the holiday is a secular event. Many Kentucky families begin a vacation that day; the court found that according to state traffic statistics, Good Friday had the third-largest daily traffic volume on Kentucky highways in 1995. Defendants also presented evidence that the courts were concerned about the availability of jurors on Good Friday. On April 8, 1996, the district court filed its order denying Plaintiffs’ request for a temporary restraining order. On December 31, 1996, all parties filed motions for summary judgment. On February 14, 1997, the district court declared that the sign Neack posted in April 1996 violated the Establishment Clause, and granted Plaintiffs’ motion with respect to the sign. The court’s February 27, 1997 injunction prohibits Defendants from posting signs that depict the Crucifixion or state that the closing is in observance of Good Friday. Its February 27, 1997 judgment permits Defendants to continue closing their offices on the Friday before Easter “if current practices are pursued and the Injunction is obeyed.” The judgment also awards costs, “including appropriate attorney’s fees,” to Plaintiffs. The state defendants moved to amend the judgment to reflect that they are not responsible for any attorney’s fees awarded to Plaintiffs. Plaintiffs moved for the award of attorney’s fees of $25,723.75 and litigation expenses of $207.95. The district court’s May 5, 1997 order granted the state defendants’ motion and referred the attorney’s fees issue to a magistrate judge. On March 31, 1997, Plaintiffs appealed the judgment. On August 7, 1997, the magistrate judge issued a report recommending • that Plaintiffs receive $4,617.95 for their attorney’s fees. Plaintiffs objected. On October 7, 1997, the district court adopted the recommendation of the magistrate judge. Plaintiffs appealed the fee award, and the appeals have been consolidated before this court. II Plaintiffs argue that the district court erred when it granted Defendants’ motion for summary judgment allowing Defendants to continue closing the Courthouse and offices on the Friday before Easter. We review a district court’s grant of summary judgment de novo, and its findings of fact for clear error. Grand Traverse Band of Ottawa and Chippewa Indians v. Director, Mich. Dep’t of Natural Resources, 141 F.3d 635, 638 (6th Cir.1998) (citing Russo v. City of Cincinnati, 953 F.2d 1036, 1041-42 (6th Cir.1992) and Eastern Ky. Resources v. Fiscal Court of Magoffin County, 127 F.3d 532, 539-40 (6th Cir.1997), cert. denied, — U.S. -, 118 S.Ct. 1512, 140 L.Ed.2d 666 (1998)). “A finding is clearly erroneous when ‘although there is evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed.’” United States v. Russell, 156 F.3d 687, 690 (6th Cir.1998) (citing United States v. United States Gypsum Co., 333 U.S. 364, 365, 68 S.Ct. 525, 92 L.Ed. 746 (1948)). “Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof.” U.S. Const. amend. I. The First Amendment was made binding upon the states by the Fourteenth Amendment. Capitol Square Review and Advisory Bd. v. Pinette, 515 U.S. 753, 757, 115 S.Ct. 2440, 132 L.Ed.2d 650 (1995). In 1971, the Supreme Court articulated the well-known Lemon test to determine whether a statute violates the Establishment Clause: First, the statute must have a secular legislative purpose; second, its principal or primary effect must be one that neither advances nor inhibits religion; finally, the statute must not foster an excessive government entanglement with religion. Lemon v. Kurtzman, 403 U.S. 602, 612-13, 91 S.Ct. 2105, 29 L.Ed.2d 745 (1971) (citations and quotation marks omitted). In more recent decisions, the Court has applied the “endorsement” test to Establishment Clause cases. See Lynch v. Donnelly, 465 U.S. 668, 687-94, 104 S.Ct. 1355, 79 L.Ed.2d 604 (1984) (O’Connor, J„ concurring) (advocating a focus on excessive entanglement and government endorsement); County of Allegheny v. ACLU Greater Pittsburgh Chapter, 492 U.S. 573, 593, 109 S.Ct. 3086, 106 L.Ed.2d 472 (1989) (applying the endorsement test and collecting Supreme Court cases applying the test); Capitol Square Review and Advisory Bd. v. Pinette, 515 U.S. 753, 115 S.Ct. 2440, 132 L.Ed.2d 650 (1995) (adop tion by eight Justices of the endorsement test for cases involving government speech). The endorsement test prohibits speech that a reasonable observer would think is an endorsement of religion by the government. This Circuit has treated the endorsement test as a refinement or clarification of the Lemon test. See Americans United for Separation of Church and State v. City of Grand Rapids, 980 F.2d 1538, 1542-45 (6th Cir.1992) (en banc) (applying the endorsement test as a clarification of the second part of the Lemon test); American Civil Liberties Union v. City of Birmingham, 791 F.2d 1561, 1563 (6th Cir.1986) (applying the endorsement test as a refinement of the first two parts of the Lemon test); American Civil Liberties Union of Ky. v. Wilkinson, 895 F.2d 1098, 1103, 1105 (6th Cir.1990) (applying the endorsement test on its own, without relating it to the Lemon test); Hawley v. City of Cleveland, 24 F.3d 814, 820 (6th Cir.1994) (characterizing the Allegheny endorsement test as a “refined version” of the Lemon test); Pinette v. Capitol Square Review and Advisory Bd., 30 F.3d 675, 678-79 (6th Cir.1994) (applying the reasonable observer test as a refinement of the Lemon test), aff'd, 515 U.S. 753, 115 S.Ct. 2440, 132 L.Ed.2d 650 (1995); Kunselman v. Western Reserve Local School District, 70 F.3d 931, 932 (6th Cir.1995) (applying the endorsement test as a clarification of the second part of the Lemon test); Chaudhuri v. State of Tennessee, 130 F.3d 232, 236 (6th Cir.1997) (applying the endorsement test as a clarification of the first part of the Leman test), cert. denied, — U.S. -, 118 S.Ct. 1308, 140 L.Ed.2d 473 (1998). We believe that the observations of a reasonable observer are more germane to the effects analysis than to the secular purpose analysis. Accordingly, we follow our en banc precedent in Grand Rapids and consider the endorsement test a clarification of the second part of the Lemon test. Because Defendants concede that the sign posted by Neack in 1996 was unconstitutional, the sole substantive issue on appeal is whether closing state and county offices on Good Friday is unconstitutional. Two other circuits have considered this question. In Cammack v. Waihee, 932 F.2d 765 (9th Cir.1991), the Ninth Circuit found that Good Friday has become secularized in Hawaii and concluded that the state could declare it a holiday without violating the Establishment Clause. In Metzl v. Leininger, 57 F.3d 618 (7th Cir.1995), the Seventh Circuit held that an Illinois statute making Good Friday a school holiday was unconstitutional, although the court limited its holding to the particular facts and apparently invited the state to reform its practice by adopting a new rationale for the closing: Building on Cammack, Illinois might have argued that the contemporary purpose of the Good Friday public school closing law is to provide a long spring weekend.... [However, t]he argument is no more than hinted at in the state’s brief ..., perhaps because its premise— that Illinois, like Hawaii, wants to create a long spring weekend in all its public schools — is false. Had Illinois made a forthright official announcement that the public schools shall be closed on the Friday before Easter in order to give students and teachers a three-day spring weekend, rather than to commemorate the crucifixion of Jesus Christ, we might have a different case. [W]e have left open the possibility that Illinois can accomplish much the same thing ... by officially adopting a “spring weekend” rationale for the law, in place of the governor’s proclamation of a state religious holiday.... Id. at 622-24. These two cases suggest that holiday closings are suspect only if the purpose for which they are instituted is religious. Furthermore, Metzl implies that the fact that a particular closing was once constitutionally suspect does not prevent it from being reinstated in a constitutional form. A government practice need not be exclusively secular to survive the first part of the Lemon test; unless it seems to be a sham, the government’s assertion of a secular purpose is entitled to deference. Chaudhuri, 130 F.3d at 236 (6th Cir.1997). In the case now before us, Defendants presented credible evidence that Good Friday has become a day with secular effects in Northern Kentucky. Many school children are on Spring vacation the following week, and many Kentucky families start their vacations early, on Friday. Traffic statistics show that highway volume is very high on Good Friday. Courts and government offices do not expect much activity from the public, and the courts worry about the availability of jurors. Furthermore, the policymakers who set the holiday schedules testified that their goal was to provide a break for their employees at that time of year, conveniently scheduled on a day of light activity and proximate to many families’ vacations. Plaintiffs argue that Defendants’ intention to continue closing for a Spring holiday on the Friday before Easter is a “sham.” This argument implies that the sign posted for several days in 1996 irrevocably established an endorsement of religion, from which Defendants cannot retreat. We prefer Judge Posner’s reasoning in Metzl. If Illinois could reinstate its Good Friday closing as a secular Spring Weekend celebration after the Seventh Circuit explicitly declared its former closing policy unconstitutional, a for-tiori we see no reason that Defendants’ policy here, if otherwise constitutional, should not remain so after an unauthorized employee posted an unconstitutional sign for a few days. Plaintiffs have presented no evidence that there is no significant secular purpose for the holiday. They have argued that the sign posted in 1996 shows a sectarian purpose, and have speculated about the purpose of the holiday decades ago; however, these arguments do nothing to counter Defendants’ evidence that there is now a secular purpose for the Spring Holiday and, therefore, the arguments do not address the first part of the Lemon test. Plaintiffs have also asserted that all future closings are shams because the 1996 sign permanently tainted the practice with a primarily sectarian purpose; however, we have rejected this argument. Because there is unrefuted, credible evidence of a significant secular purpose, the Spring Holiday satisfies the first part of the Lemon test. Recent Supreme Court Establishment Clause jurisprudence sets a high bar for assertions of excessive government entanglement. See, e.g., Agostini v. Felton, 521 U.S. 203, 232-36, 117 S.Ct. 1997, 2015-16, 138 L.Ed.2d 391 (1997). In the case before us, public officials are not required to make religious determinations at all, much less on an ongoing basis. They simply decide on what dates their courts and offices will be closed. There is no entanglement here; therefore, Defendants’ practice of closing the Courthouse and offices on the Friday before Easter satisfies the third part of the Lemon test. The first and third parts of the Lemon test having been satisfied, the remaining question is whether the primary effect of Defendants’ practice advances or inhibits religion. To answer this question we apply the endorsement test. Thus, the narrow question before us is whether reasonable observers would think that Kenton County is endorsing religion by closing its offices on the Friday before Easter. We hold that they would not. Justice O’Connor thinks that the reasonable observer “must be deemed aware of the history and context of the community and forum,” Pinette, 515 U.S. at 779-82, 115 S.Ct. 2440 (concurring, joined by Souter and Breyer, JJ.), while Justice Stevens would not impute any special knowledge to the reasonable observer, id. at 799-801, 115 S.Ct. 2440 (dissenting). Both views have been expressed in our cases, as well. Cf. Grand Rapids, 980 F.2d at 1543-44, 1549-50 (Boggs, J.) (imputing fairly detailed local knowledge to the reasonable observer) with id. at 1557-58 (Lively, J., dissenting) (contending for a more general observer with less local knowledge). We need not decide the exact scope of the knowledge to be attributed to the reasonable observer, because in the case before us even Justice Stevens’s sparsely-informed observer would not believe that Defendants were endorsing religion. Many of the details of our commonly observed calendar have religious roots. This includes our very style of calendar (the “Gregorian,” named for Pope Gregory XIII, who devised it in 1582 to replace the pagan (and less accurate) “Julian” calendar, named for Julius Caesar). The names of our days (in English) advert to deities of the Romans (Saturday, from Saturn, the god of time) and Norsemen (Tuesday, from Tiu, the son of Odin; Wednesday, from Woden, or Odin, the chief deity; Thursday, from Thor, the god of thunder; and Friday, from Freyja, the wife of Odin). In Spanish (an official language in places under the United States Constitution, see 1 L.P.R.A. § 59 (1998)), the names for Sunday (“Domingo” — the Lord’s Day) and Saturday (“Sábado” — the Sabbath) also have religious roots. Yet no one has seriously, and certainly not successfully, contended that the Establishment Clause is offended by the use of those names, nor by the practice of closing public offices almost universally on Sunday (the day observed as holy by most Christians) and frequently on Saturday (the day observed by Jews and some Christians) to the exclusion of other days that may have similar significance for some religions. Nor is the Establishment Clause offended by the dating of government documents using a system computed from events based on the Christian religion, and apparently not even by the use in official proclamations of language reflecting the religious origins of that dating system. See, e.g., 35 Weekly Comp. Pres. Doc. 58 (Proclamation 7163 — Martin Luther King, Jr. Day Federal Holiday, January 15, 1999.) In just the same way, holidays are established for the convenience of the citizens, and that convenience often is caused by individual motivations that may be a mix of secular and religious. The exact mix involved in Christmas Day (declared a federal holiday by that name, see 5 U.S.C. § 6103) has been thoroughly discussed. See, e.g., County of Allegheny, 492 U.S. at 579-80 & nn. 1-5, 109 S.Ct. 3086. Thanksgiving Day is observed by many citizens with thanks directed to one deity or another, and by other citizens with no such motivation. And Easter Sunday, though a day of overwhelming religious significance for Christians, (albeit frequently used for secular purposes, see Irving Berlin, Easter Parade), is universally observed with office closings, for it falls on Sunday. Finally, we note the frequent practice of school districts with a large or even a moderate Jewish population of closing the schools when the religious holidays of Yom Kippur and, at times, Rosh Hashanah, fall on school days. See, e.g., Lois M. Collins, Professor Details Need to Separate Church, State, DeseRet News, Nov. 21, 1998, at El (well-known political theorist Michael Walzer notes approvingly that school closings on Christmas and Yom Kippur are not “for religious reasons”); Bonnie Miller Rubin and Patricia Tenni-son, Memories Help Console Victims’ Families, Friends, Chi. Trib., September 11, 1994 (obituary notes successful drive by gentile to add “Rosh Hashanah and Yom Kippur as school holidays” in Chicago suburb “even though ... most students in the district were not Jewish”); Editorial, The Week That Was, SyRacuse Post-StanDARD, Jan. 25, 1997, at A8 (noting Good Friday and Yom Kippur as Albany school holidays); Staff, School Profiles, Syracuse Post-Standard, Aug. 29, 1996 (same, in Fayetteville-Manlius School District); Heather Camlot, Why Synagogue Attendance Soars on Three Days Each Year, Jewish Telegraphic Agency, Aug. 9, 1996, at 8A (Rosh Hashanah and Yom Kippur closings at “many public schools”); see also, Northern Indiana Public Service Co. v. Certain Underwriters at Lloyd’s London, 1996 WL 115466, *9 (N.D.Ind.1996) (unpublished) (depositions shall not be scheduled on or within one day of certain days including Good Friday and Yom Kippur); U.S. v. Stanfa, 1996 WL 368967, *1 (E.D.Pa. July 1, 1996) (unpublished) (jury excused “in observance of Yom Kippur”); U.S. v. Myerson, 684 F.Supp. 41, 45 (S.D.N.Y.1988) (trial postponed for Rosh Hashanah). Few would argue that any of these practices are done to establish the Jewish religion, but rather as a secular recognition of the practicalities of school or court attendance that might otherwise be disrupted, much as the Friday before the Kentucky Derby is a holiday for schools in the Louisville area, lest attendance be disrupted by observance of a tradition that approaches religious character in the area of this Judge’s chambers. In- short, so long as the finding can be made that there is a significant secular reason for closing on any particular date, a finding that the district judge made in this case and did not err in so finding, the fact that the closing is also convenient for persons of a particular faith does not render the closing unconstitutional. A reasonable person who knew that many people in private and other public employment in the community had the day off and made plans to travel, and that the Courthouse had been closed on Good Friday for many years, would not think that the closing was an endorsement of religion absent an explicit endorsement such as the sign involved in this case. Because Defendants have been enjoined from future explicit endorsements, future closings will not make a reasonable person think that Defendants were endorsing religion. Plaintiffs are correct that the sign posted in 1996 could make a reasonable observer think that Defendants endorsed the Christian religion. However, we hold that the sign posted for several days in a past year by an errant official did not permanently taint the closings, and that a reasonable person contemplating a Spring Holiday celebrated on the Friday before Easter would not conclude that Defendants were endorsing religion. Ill

199950-20622

EBEL, Circuit Judge. While driving a rented Ryder truck on a rural road about 45 miles north of the Mexican border, defendant-appellant Felix Barron-Cabrera was stopped by Border Patrol Officer Robert Glenn Garcia. Officer Garcia found 21 illegal aliens in the truck, including Barron-Cabrera. Barron-Cabrera moved to suppress the evidence obtained during the traffic stop, on the grounds that Officer Garcia lacked reasonable suspicion to make the stop. After the district court denied Barron-Cabrera’s motion, Barron-Cabrera pled guilty to one count of transporting illegal aliens and aiding and abetting, in violation of 8 U.S.C. § 1324(a)(l)(A)(ii) (1994 & Supp. 1997) and 18 U.S.C. § 2 (1994), reserving under Fed.R.Crim.P. 11(a)(2) his right to appeal the district court’s denial of his motion to suppress. Barron-Cabrera now brings that appeal. Because we agree with the district court that, under the facts and circumstances of the case, the traffic stop was predicated on reasonable suspicion, we affirm. BACKGROUND On Wednesday, August 30, 1995, Felix Barron-Cabrera was driving north on New Mexico Highway 180, in a rented Ryder truck. The City of Deming, New Mexico (pop.15,000) was behind him, and Silver City was ahead. Except during morning and afternoon rush hours, when some workers commute between Deming and Silver City, Highway 180 is lightly traveled. There are no established Border Patrol checkpoints on Highway 180, which bypasses other north-south routes with established checkpoints. However, in April 1995, the Northern County Unit of the Deming Border Patrol station began daily patrols of Highway 180 north of Deming. Between April 1995 and October 1995, that Unit apprehended 30 “smuggling loads” carrying a total of 140 illegal aliens on Highway 180 north of Deming. At about 2:45 p.m., Barron-Cabrera drove a Ryder truck past a marked Border Patrol vehicle (a white Chevy Suburban) which was being driven southbound by Officer Robert Glenn Garcia. Officer Carlos Roches was a passenger in the Border Patrol vehicle. At that time, Barron-Cabrera was driving north at about 55 mph, and Officer Garcia was driving south at 45 mph. Officer Garcia testified that he was suspicious of Ryder trucks because he knew that a Border Patrol unit operating out of Lordsburg, New Mexico had recently apprehended a rental truck filled with either illegal aliens or narcotics. He was especially suspicious of Ryder trucks, such as Barron-Cabrera’s, which were neither towing nor driving in tandem with another vehicle. This was because, in Officer Garcia’s life experience, “[njormally you would see a Ryder truck with the personally owned vehicle of the driver, say, in tow behind it, or there may be a husband and wife, a spouse, driving their personally owned vehicle behind it as they were moving to wherever they were going.” Officer Garcia testified that he was first able to observe Barron-Cabrera when the two vehicles were about 120 feet apart from each other. Garcia claimed that he and his partner Officer Roches then made the following observations as the cars drew closer: (1) Barron-Cabrera had a passenger in the cab of the truck; (2) Barron-Cabrera, the driver, looked at Garcia with a surprised look as the two vehicles passed; (3) Barron-Cabrera’s eyes got wider after looking at the Border Patrol vehicle; (4) Barron-Cabrera then looked straight forward at the road, with both hands on the steering wheel in the 10:00 and 2:00 position; and (5) Barron-Cabrera’s passenger also looked at the Border Patrol vehicle once, looked a second time, and then stared straight forward. At the speeds the two vehicles were moving, Officer Garcia would have had nine-elevenths of one second to make these observations, before the two vehicles passed each other. Officer Garcia then pulled onto the southbound shoulder of the road, to maintain surveillance of the northbound Ryder truck in his side-view mirror. As soon as Officer Garcia pulled over, however, he saw the Ryder truck hit its brake lights. He then immediately turned his Border Patrol vehicle around, and began to “tail” Barron-Cabrera’s Ryder truck as it proceeded north on Highway 180. Garcia testified that as he approached the Ryder truck from behind, he and Officer Roches could see in the Ryder truck’s outside mirrors that Barron-Cabrera and his passenger were “keeping an eye” on the Border Patrol vehicle by moving their heads in jerky fashions to see into the outside mirrors. While the Border Patrol vehicle “tailed” the Ryder truck at close distance for about two miles, the Ryder truck slowed down from about 58 mph to about 45 mph (the speed limit was 55 mph). Officer Garcia also testified that, while tailing the Ryder Truck, he observed it touch both the shoulder of the road and the center line. However, he explicitly stated that he stopped the truck not for any traffic violation, but exclusively “[t]o ascertain whether or not they were illegal aliens.” After following the Ryder truck north on Highway 180 for about two miles, Officer Garcia pulled it over. Without Barron-Cabrera’s consent, Garcia searched the truck. He found it to contain 21 illegal aliens, including Barron-Cabrera. Barron-Cabrera was charged with two counts of transporting illegal aliens in violation of 8 U.S.C. § 1324(a)(l)(A)(ii) (1994 & Supp.1997), and aiding and abetting in violation of 18 U.S.C. § 2 (1994). He then moved to suppress the evidence obtained in the search of the Ryder Truck on the grounds that Officer Garcia lacked reasonable suspicion to stop and search the truck. On November 2, 1995, after holding a brief hearing, the district court denied Barron-Cabrera’s motion to suppress. Pursuant to a negotiated plea agreement, Barron-Cabrera then pled guilty to count one (8 U.S.C. § 1324(a)(l)(A)(ii)), and was sentenced to four months in prison plus two years supervised release. With the approval of the court and the consent of the government, as permitted by Fed. R. Crim P. 11(a)(2), Barron-Cabrera conditioned his guilty plea on the right to appeal the district court’s denial of his pretrial motion to suppress. Barron-Cabrera now appeals the denial of his motion to suppress. The district court exercised original jurisdiction over the present case pursuant to 18 U.S.C. § 3231 (1994). We exercise appellate jurisdiction pursuant to 28 U.S.C. § 1291 (1994). DISCUSSION Barron-Cabrera claims that the district court erred in two respects. First, he claims that the district court erred in crediting Officer Garcia’s account of Barron-Cabrera’s actions between the time Officer Garcia first observed Barron-Cabrera’s Ryder truck, and the time the truck was stopped. Barron-Cabrera argues that Officer Garcia simply could not have observed everything that he testified to having observed in such a short period of time. Second, Barron-Cabrera claims that whether or not Officer Garcia’s testimony is credited, the totality of the circumstances did not give rise to reasonable suspicion for the traffic stop. We address these contentions in turn. I. The district court’s determinations of reasonable suspicion and probable cause are reviewed de novo on appeal. Ornelas v. United States, — U.S. -, -, 116 S.Ct. 1657, 1663, 134 L.Ed.2d 911 (1996). However, its “findings of historical fact” are reviewed only for “clear error,” and due weight must be given to inferences drawn from these facts by trial judges and law enforcement officers. Id. Further, “[w]hen reviewing the denial of a motion to suppress evidence, we view the evidence in the light most favorable to the government and [to] the district court’s findings.” United States v. Anderson, 114 F.3d 1059, 1063 (10th Cir.1997). In the present case, the district court credited Officer Garcia’s testimony, and thereby found that the factual events at issue occurred as Officer Garcia described them. The court’s finding in this regard is a “finding of historical fact” which we review only for “clear error.” In Anderson v. City of Bessemer City, 470 U.S. 564, 575, 105 S.Ct. 1504, 1512, 84 L.Ed.2d 518 (1985), the Supreme Court specifically discussed the issue of when an appellate court must defer to a trial court’s credibility determinations. According to the Anderson court, When findings are based on determinations regarding the credibility of witnesses, Rule 52(a) demands even greater deference to the trial court’s findings; for only the trial judge can be aware of the variations in demeanor and tone of voice that bear so heavily on the listener’s understanding of and belief in what is said. This is not to suggest that the trial judge may insulate his findings.from review by denominating them credibility determinations, for factors other than demeanor and inflection go into the decisions whether or not to believe a witness. Documents or objective evidence may contradict the witness’ story; or the story itself may be so internally inconsistent or implausible on its face that a reasonable factfinder would not credit it. Where such factors are present, the court of appeals may well find clear error even in a finding purportedly based on a credibility determination. But when a trial judge’s finding is based on his decision to credit the testimony of one of two or more witnesses, each of whom has told a coherent and facially plausible story that is not contradicted by extrinsic evidence, that finding, if not internally inconsistent, can virtually never be clear error. 470 U.S. at 575, 105 S.Ct. at 1512 (citations omitted). In the present case, Barron-Cabrera specifically attacks the district court’s finding that Officer Garcia’s testimony regarding the stop itself was credible. In regard to that testimony, the district court stated the following: as far as actually the stop, as I say, I find the agent’s testimony was credible. I do find that he had—he viewed the vehicle coming towards him and he slowed down. He did not have much time. Unquestionably, it’s a matter of seconds, a very limited time to make the observations; but I think he did have sufficient time to make the observations to which he testified, that the person looked at him. He had enough vision of the driver’s face that he thought he had a—as he called it, a surprised or seared expression, and then turned back immediately, gripping the wheel firmly and looking straight ahead; and the agent testified he has seen that same expression before, on people who are smuggling. Transcript of Proceedings on Defendant’s Motion to Suppress Physical Evidence and Statements, No. CR 95-509 HB, at 65-66 (D.N.M. Nov. 2,1995) (Bratton, J.) (emphasis added). While the district court apparently believed that Officer Garcia had “seconds” in which to make the observations he reported, Officers Garcia and Roches in fact had only nine-elevenths of one second to observe Barron-Cabrera and/or his passenger exhibit “surprised or scared” facial expressions, widen their eyes, look back to watch the Border Patrol vehicle go by, return to looking straight forward with both hands gripping the steering wheel, look a second time, and then stare straight forward again. In essence, Barron-Cabrera argues that the district court would not have credited Officer Garcia’s testimony if it had correctly computed the time available to Officer Garcia to make his reported observations. We disagree. While nine-elevenths of a second is in many respects a short duration of time, we note that it is nearly twice the interval in which a major-league baseball batter must observe the trajectory of an approaching pitch, determine what kind of pitch it is, decide whether or not to swing at it, and then, if indicated, swing his bat into a proper position to hit the ball. We recognize, of course, that Officer Garcia is not a major-league baseball player. However, nine-elevenths of a second is roughly the interval in which a high-school baseball player must complete the same calculations. Further, Officer Garcia could draw upon three-and-a-half years of experience at observing the reactions of motorists in helping him decipher what he was quickly observing. In addition, we reiterate that the district court expressly found that Officer Garcia was “a credible witness” generally, and also that “the agent’s testimony was credible” with respect to the particular stop at issue. Here, we cannot say that Officer Garcia’s testimony was so implausible on its face that no reasonable trier of fact would have credited it. We therefore hold that the district court did not commit clear error when it credited Officer Garcia’s factual account of the events leading up to the traffic stop. II. Barron-Cabrera further claims that even if Officer Garcia’s factual testimony is credited, the totality of the circumstances did not give rise to reasonable suspicion for the traffic stop. We review the district court’s determination of reasonable suspicion de novo. Ornelas v. United States, — U.S. -, -, 116 S.Ct. 1657, 1663, 134 L.Ed.2d 911 (1996). A routine traffic stop is a seizure under the Fourth Amendment. United States v. Anderson, 114 F.3d 1059, 1063 (10th Cir.1997) (citing United States v. Botero-Ospina, 71 F.3d 783, 786 (10th Cir.1995) (en banc), cert. denied, — U.S.-, 116 S.Ct. 2529, 135 L.Ed.2d 1052 (1996)). The Fourth Amendment provides that “[t]he right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no Warrants shall issue, but upon probable cause, supported by Oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized.” U.S. Const, amend. IV. Section 287(a)(3) of the Immigration and Nationality Act of 1952, on the other hand, authorizes Border Patrol agents, without warrant, within a reasonable distance from any external boundary of the United States, to board and search for aliens any ... vehicle ... for the purpose of patrolling the bor der to prevent the illegal entry of aliens into the United States. 8 U.S.C. § 1357(a)(3) (1994 & Supp.1997) (footnote added). Further, without any geographic limitation, Section 287(a)(1) authorizes Border Patrol agents “to interrogate any alien or person believed to be an alien as to his right to be or to remain in the United States.” 8 U.S.C. § 1357(a)(1) (1994). In United States v. Brignoni-Ponce, 422 U.S. 873, 95 S.Ct. 2574, 45 L.Ed.2d 607 (1975), the Supreme Court reconciled the seemingly incompatible mandates of the Fourth Amendment and Section 287(a) of the Immigration and Nationality Act of 1952 by limiting the reach of Section 287(a). Specifically, the Court announced that “the Fourth Amendment forbids stopping vehicles at random to inquire if they are carrying aliens who are illegally in the country, [and] also forbids stopping or detaining persons for questioning about their citizenship on less than a reasonable suspicion that they may be aliens.” Id. at 884, 95 S.Ct. at 2577. Thus, the Court held, “[e]xcept at the border and its functional equivalents, officers on roving-patrol may stop vehicles only if they are aware of specific articulable facts, together with rational inferences from those facts, that reasonably warrant suspicion that the vehicles contain aliens who may be illegally in the country.” Id. By easting the required inquiry in terms of “reasonable suspicion,” the Brignoni-Ponce Court reinforced its holding that courts should apply the “investigative detention” principles of Terry v. Ohio, 392 U.S. 1, 88 S.Ct. 1868, 20 L.Ed.2d 889 (1968), when analyzing immigration-related vehicle stops conducted near the border by Border Patrol officers. See Brignoni-Ponce, 422 U.S. at 880-82, 95 S.Ct. at 2579-81 (discussing nature, purpose, and parameters of a “Terry stop”); accord United States v. Anderson, 114 F.3d 1059, 1063 (10th Cir.1997) (“Because a traffic stop is constitutionally analyzed as an investigative detention, requiring reasonable suspicion of criminal activity, as opposed to a full custodial arrest requiring probable cause, the principles of Terry v. Ohio apply.”) (citing Terry, 392 U.S. at 19-20, 88 S.Ct. at 1878-79). In the period since Brignoni-Ponce was decided, a large body of case law has addressed the question of when a Border Patrol officer on roving patrol has “reasonable suspicion” sufficient to allow the officer to stop a vehicle suspected of violating the immigration laws, without running afoul of the Fourth Amendment. We recently summarized the main thrust of this case law as follows: Border patrol agents on roving patrol may stop vehicles only if they are aware of specific articulable facts, together with rational inferences from those facts, that reasonably warrant suspicion that those vehicles’ occupants may be involved in criminal activity. Any number of factors might contribute to an agent’s decision to stop a vehicle on reasonable suspicion. The law does not specify a minimum number of factors necessary to constitute reasonable suspicion or any outcome determinative criteria. Each case turns upon its own facts. In all instances, however, the agent is entitled to assess the facts in light of his experience in detecting criminal activity. Law enforcement officers may perceive meaning in actions that appear innocuous to the untrained observer. This is not to say that an agent may stop a vehicle on an unpartieularized suspicion or hunch. While the necessary level of suspicion is considerably less than proof of wrongdoing by a preponderance of the evidence, the Fourth Amendment requires some minimal level of objective justification. United States v. Cantu, 87 F.3d 1118, 1121 (10th Cir.), cert. denied, — U.S. -, 117 S.Ct. 265, 136 L.Ed.2d 190 (1996) (internal citations and quote marks omitted). In United States v. Brignoni-Ponce, 422 U.S. 873, 884-85, 95 S.Ct. 2574, 2581-82, 45 L.Ed.2d 607 (1975), the Supreme Court articulated a non-exhaustive, multi-factor test to guide our “totality of the circumstances” inquiry. We have summarized this test as follows: In determining whether there is reasonable suspicion to stop a car in the border area, officers may consider any number of factors, including: (1) characteristics of the area in which the vehicle is encountered; (2) the proximity of the area to the border; (3) the usual patterns of traffic on the particular road; (4) the previous experience of the agent with alien traffic; (5) information about recent illegal border crossings in the area; (6) the driver’s behavior, including any obvious attempts to evade officers; (7) aspects of the vehicle, such as a station wagon with concealed compartments; and (8) the appearance that the vehicle is heavily loaded. United States v. Lopez-Martinez, 25 F.3d 1481, 1483-84 (10th Cir.1994) (quoting United States v. Monsisvais, 907 F.2d 987, 990 (10th Cir.1990), appeal after remand, 946 F.2d 114 (10th Cir.1991) (citing Brignoni-Ponce, 422 U.S. at 884-85, 95 S.Ct. at 2581-82)). We have noted that “[n]either BrignoniPonce nor its progeny identify a minimum number of factors necessary to constitute reasonable suspicion or any outcome determinative criteria. Indeed, such an approach would be antithetical to a totality of the circumstances inquiry.” Lopez-Martinez, 25 F.3d at 1484. Applying the Brignoni-Ponce factors, sometimes we have upheld the findings of “reasonable suspicion” to uphold vehicle stops near the border. See, e.g. United States v. Cantu, 87 F.3d 1118, 1122-23 (10th Cir.), cert. denied, — U.S. ——, 117 S.Ct. 265, 136 L.Ed.2d 190 (1996); United States v. Lopez-Martinez, 25 F.3d 1481, 1485-87 (10th Cir.1994); United States v. Martin, 15 F.3d 943, 950-51 (10th Cir.), aff'd on reh’g in part, 18 F.3d 1515 (10th Cir.), cert. denied, 513 U.S. 868, 115 S.Ct. 187, 130 L.Ed.2d 121 (1994); United States v. Barbee, 968 F.2d 1026, 1029 (10th Cir.1992); United States v. Pollack, 895 F.2d 686, 690 (10th Cir.), cert. denied, 498 U.S. 985, 111 S.Ct. 520, 112 L.Ed.2d 532 (1990). Other times, we have concluded that the government lacked “reasonable suspicion” to make the stop in question. See, e.g. United States v. MartinezCigarroa, 44 F.3d 908, 909-11 (10th Cir.), cert. denied, 514 U.S. 1029, 115 S.Ct. 1386, 131 L.Ed.2d 238 (1995); United States v. Peters, 10 F.3d 1517, 1519, 1521-22 (10th Cir.1993); United States v. Venzor-Castillo, 991 F.2d 634, 635-36 (10th Cir.1993); United States v. Guillen-Cazares, 989 F.2d 380, 383 (10th Cir.1993); United States v. Miranda-Enriquez, 941 F.2d 1081, 1083-84 (10th Cir.1991); United States v. Monsisvais, 907 F.2d 987, 990-92 (10th Cir.1990), appeal after remand, 946 F.2d 114 (10th Cir.1991).

6050863-29938

MEMORANDUM OPINION AND ORDER PHILIP PRATT, Chief Judge. This is an action arising out of the alleged theft of trade secrets from the plaintiff by some of the defendants which were then sold to other of the defendants. The plaintiff filed a multiple-count complaint, charging violation of the Racketeer Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C. § 1961 et seq., and of Michigan common law. The defendants now move for dismissal pursuant to Fed.R. Civ.P. 12(b)(6). McIntyre’s Mini Computer, the plaintiff, is a distributor of used computer equipment. It maintains a list of accounts, potential customers and other information in a computer program. In November of 1984, plaintiff sought the advice of defendant Creative Synergy, a software consulting firm, regarding possible modifications of its systems. It is alleged that Creative Synergy, through its employees, defendants Michael Van Brocklin, Kevin Stewart, Gerry Manning and Geoffrey Chalmers, stole the plaintiff’s confidential customer list in the process of doing work for the plaintiff. The plaintiff claims that the purloined list was then sold to the remaining defendants, Hanson Data Systems (“Hanson”), Delta Computech, Inc. (“Delta”), Computer Repaid Center (“CRC”) and Newman Computer Exchange (“Newman”). Six of the eight counts of this complaint allege RICO violations. The defendants are in each count alleged to have violated both the substantive provisions of RICO, 18 U.S.C. § 1962(c), and to have conspired to violate RICO, 18 U.S.C. § 1962(d). Creative Synergy and its employees are named in each count. Delta is named in Count 2, Hanson in Count 3, CRC in Count 4, CRC and Newman in Count 5, and all defendants are named in Count 6. In addition, all the defendants are charged with the misappropriation of trade secrets (Count 7) and fraud (Count 8). When deciding a motion to dismiss for failure to state a claim upon which relief can be granted brought pursuant to Fed.R. Civ.P. 12(b)(6), the plaintiff’s allegations must be accepted as true, and the complaint dismissed only “if it is clear that no relief could be granted under any set of facts that could be proved consistent with the allegations.” Hishon v. King & Spalding, 467 U.S. 69, 73, 104 S.Ct. 2229, 2233, 81 L.Ed.2d 59 (1983). As the several motions to dismiss are all brought on similar grounds, the court will treat them as one. To state a civil cause of action under RICO, the plaintiff must allege (1) conduct (2) of an enterprise (3) through a pattern (4) of “racketeering activity” which has caused injury to the plaintiff. Sedima, S.P.R.L. v. Imrex Co., Inc., — U.S. -, 105 S.Ct. 3275, 87 L.Ed.2d 346 (1985). On its face, the plaintiff's complaint appears to have met three of the four elements. Creative Synergy, along with its employees, Van Brocklin, Stewart, Manning and Chalmers, arguably operated in the form of an enterprise. The Supreme Court has held that to establish an enterprise under 18 U.S.C. §§ 1961(4) and 1962(c), there must be evidence that the defendants function as a “continuing unit,” and that the enterprise must have an existence “separate and apart from the pattern of activity in which it engages.” United States v. Turkette, 452 U.S. 576, 583, 101 S.Ct. 2524, 2528, 69 L.Ed.2d 246 (1981). The circuits are divided as to how to interpret the “separate and apart” requirement, with some holding that a RICO enterprise have an ascertainable existence apart from the alleged wrongful conduct, United States v. Bledsoe, 674 F.2d 647 (8th Cir.1982), cert. denied, 459 U.S. 1040, 103 S.Ct. 456, 74 L.Ed.2d 608 (1982); United States v. Riccobene, 709 F.2d 214 (3rd Cir.1983), cert. denied, 464 U.S. 849, 104 S.Ct. 157, 78 L.Ed.2d 145 (1983); United States v. Tillett, 763 F.2d 628 (4th Cir.1985); Allington v. Carpenter, 619 F.Supp. 474 (D.Cal.1985), while others have held that an enterprise existed where it was no more than the sum of the predicate racketeering acts. United States v. Bagaric, 706 F.2d 42 (2d Cir.1983), cert. denied, 464 U.S. 840, 104 S.Ct. 134, 78 L.Ed.2d 128; United States v. Weinstein, 762 F.2d 1522 (11th Cir.1985), cert. denied — U.S. -, 106 S.Ct. 1519, 89 L.Ed.2d 917 (1986). This split in authority does not impact this case, as Creative Synergy and its employees certainly form an ongoing enterprise which has an existence separate and distinct from the conduct with which they are charged. The plaintiff has also properly alleged that the defendants engaged in racketeering activity. Racketeering activity is defined in 18 U.S.C. § 1961 as including any act indictable under certain criminal statutes. The defendants are accused of having used the mails and wire communications to perpetrate their scheme, in violation of 18 U.S.C. §§ 1341 and 1343, and with having transported stolen property in interstate commerce in violation of 18 U.S.C. §§ 2314-15. Violation of any of these statutes are predicate acts to a RICO claim. The element which poses a problem in this case is that the plaintiff must allege that the defendants engaged in a pattern of racketeering activity. 18 U.S.C. § 1961(5) says that a pattern “requires at least two acts of racketeering activity, one of which occurred within ten years ... after the commission of a prior act of racketeering activity.” In a rather lengthy footnote, the Supreme Court has invited courts to develop rigorous standards for what constitutes a pattern of racketeering activity. As many commentators have pointed out, the definition of a “pattern of racketeering activity” differs from the other provisions in § 1961 in that it states that a pattern “requires at least two acts of racketeering activity,” § 1961(5) (emphasis added), not that it “means” two such acts. The implication is that while two acts are necessary, they may not be sufficient. Indeed, in common parlance two of anything do not generally form a “pattern.” The legislative history supports the view that two isolated acts of racketeering activity do not constitute a pattern. As the Senate Report explained: “The target of [RICO] is thus not sporadic activity. The infiltration of legitimate business normally requires more than one ‘racketeering activity’ and the threat of continuing activity to be effective. It is this factor of continuity plus relationship which combines to produce a pattern.” S.Rep. No. 91-617, p. 158 (1969) (emphasis added). Similarly, the sponsor of the Senate bill, after quoting this portion of the Report, pointed out to his colleagues that “[t]he term ‘pattern’ itself requires the showing of a relationship____ So, therefore, proof of two acts of racketeering activity, without more, does not establish a pattern----” 116 Cong.Rec. 18940 (1970) (statement of Sen. McClellan). See also id., at 35193 (statement of Rep. Poff) (RICO “not aimed at the isolated offender”); House Hearings at 665. Significantly, in defining “pattern” in a later provision of the same bill, Congress was more enlightening: “criminal conduct forms a pattern if it embraces criminal acts that have the same or similar purposes, results, participants, victims, or methods of commission, or otherwise are interrelated by distinguising characteristics and are not isolated events.” 18 U.S.C. § 3575(e). This language may be useful in interpreting other sections of the Act. Cf. Iannelli v. United States, 420 U.S. 770, 789, 95 S.Ct. 1284, 1295, 43 L.Ed.2d 616 (1975). Sedima, S.P.R.L. v. Imrex Co., Inc., — U.S. -, 105 S.Ct. 3275, 3285 n. 14, 87 L.Ed.2d 346. Many lower courts have accepted the Supreme Court’s invitation, and have held that where the predicate acts all occurred in the course of a single scheme to defraud the victim, a pattern of racketeering activity had not been established. Northern Trust Bank/O’Hare, N.A. v. Inryco, Inc., 615 F.Supp. 828 (N.D.Ill.1985); Professional Assets Manage, v. Penn Square Bank, 616 F.Supp. 1418 (D.Okla.1985) ; Allington v. Carpenter, 619 F.Supp. 474 (D.Cal.1985); Frankart Distributors, Inc. v. RMR Advertising, Inc., 632 F.Supp. 1198 (S.D.N.Y.1986); Superior Oil Co. v. Fulmer, 785 F.2d 252, (8th Cir.1986) . The requirement that the predicate acts must have occurred in different criminal episodes is consistent with Congress’ intent to exclude isolated criminal conduct from RICO liability. See Sedima, 105 S.Ct. at 3285 n. 14. While it is true that Congress intended RICO to reach both legitimate and illegitimate enterprises, Id., RICO ought not be used as a basis for federal question jurisdiction in every “garden variety” fraud case. As one court has noted, “[m]ost substantial business transactions involved two or more uses of the mail during negotiations. To hold that two such [acts] are sufficient to constitute a ‘pattern of racketeering activity’ would be to sweep into federal courts, under RICO, the great majority of action for fraud in commercial transactions.” Medallion T. V. Enterprises, Inc. v. SelectV, Inc., 627 F.Supp. 1290, (D.C.Cal.1986). This interpretation is also consistent with the plain meaning of the word “pattern.” True enough, “pattern” connotes similarity, hence the cases’ proper emphasis on relatedness of the constitutent acts. But “pattern” also connotes a multiplicity of events: Surely the continuity inherent in the term presumes repeated criminal activity, not merely repeated acts to carry out the same criminal activity. It places a real strain on the language to speak of a single fraudulent effort, implemented by several fraudulent acts, as a “pattern of racketeering activity.” Inryco, 615 F.Supp. at 831. This court is persuaded by the reasoning of the postSedima courts adopting a rigorous definition of the term “pattern,” and holds that separate acts in furtherance of the same criminal episode or transaction do not constitute a “pattern” of racketeering activity under RICO. Returning to the facts of this case, it is clear that the plaintiff has alleged only one scheme, viz, to steal and sell the plaintiff’s list which purportedly contains trade secrets. The alleged indictable conduct was all performed in furtherance of this single scheme to appropriate this one item. The conduct of the defendants, assuming all of the allegations of the complaint to be true, does not amount to a “pattern of racketeering activity.” Having failed to plead an essential element of a RICO claim, Counts 1-5 of the complaint must be dismissed. Count 6 charges all of the defendants with conspiring to violated RICO, in violation of 18 U.S.C. § 1962(d). In criminal cases involving § 1962(d), it has been held that an agreement to violate RICO must be alleged in addition to the four elements set forth in Sedima. United States v. Sinito, 723 F.2d 1250, 1260 (6th Cir.1983), cert. denied, 469 U.S. 817, 105 S.Ct. 86, 83 L.Ed.2d 33 (1984). United States v. Phillips, 664 F.2d 971, 1012 (5th Cir.1981), cert. denied, 457 U.S. 1136, 102 S.Ct. 2965, 73 L.Ed.2d 1354 (1982). As this court has already dismissed the substantive RICO counts the dismissal of the conspiracy count must follow. The conspiracy count also suffers from “technical” deficiencies. The conspiracy count is set forth in at best broad and conclusory language. Most courts have held that conclusory allegations of a RICO conspiracy are legally insufficient. Chambers Devel. Co., v. Browning-Ferris Industries, 590 F.Supp. 1528 (W.D.Pa.1984); Al-faro v. E.F. Hutton & Co., Inc., 606 F.Supp. 1100 (E.D.Pa.1985); Van Schaick v. Church of Scientology of California, Inc., 535 F.Supp. 1125 (D.Mass.1982). Further, the complaint fails to allege an agreement, which is the essential element of any conspiracy charge. Finally, given that the plaintiff has not opposed the dismissal of the RICO conspiracy counts as to all but Creative Synergy and its employees, two more problems arise. The first is that Count 6 does not allege a conspiracy between any of the parties remaining in Count 6. Secondly, a corporation and its employees are not capable of engaging in a RICO conspiracy between them. Landmark Savings & Loan v. Rhoades, 527 F.Supp. 206 (E.D.Mich.1981); Yancoski v. E.F. Hutton & Co., Inc., 581 F.Supp. 88 (E.D.Pa.1983); contra, Garvey v. Servicemen’s Group Life Ins., 584 F.Supp. 623 (E.D.Pa.1984). To sum up at this point, Counts 1-5 are dismissed because the plaintiff has failed to properly allege an essential element of a RICO claim, while Count 6 is dismissed because it was dependent on the substantive RICO counts, and further, that conspiracy was not plead with sufficient specificity. The court now turns to the sufficiency of the state claims. Defendant Hanson has raised a threshold issue by filing a “supplemental” motion to dismiss on the ground that this court lacks personal jurisdiction over it. Fed.R.Civ.P. 12(g) provides that if a party who makes a Rule 12 motion but omits from that motion any defense then available to it, those defenses are waived (with some exceptions set forth in Rule 12(h)). Where, as in this case, the defendant files a 12(b)(6) motion to dismiss without raising the defense of lack of personal jurisdiction, he waives any objection to that defect. Rauch v. Day & Night Mfg. Corp., 576 F.2d 697 (6th Cir.1978). However, the circumstances of this case are such as to make the application of the general rule inappropriate. When this action was first filed, this court had federal question jurisdiction over the subject matter, as the bulk of the claims arose under RICO, and there was not complete diversity between the parties. RICO authorizes nationwide service of process on defendants. 18 U.S.C. § 1965(d). Where Congress has provided for nationwide service of process, the “minimum contacts” analysis set forth in International Shoe Co. v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945) and its progeny becomes inapposite, and due process requires only that the defendant have minimum contacts with the United States. Haile v. Henderson National Bank, 657 F.2d 816 (6th Cir.1981), cert. denied, 455 U.S. 949 (1982); Fitzsimmons v. Barton, 589 F.2d 330 (7th Cir.1979); Dunham’s, Inc. v. Nat. Buying Syndicate of Texas, 614 F.Supp. 616 (E.D.Mich.1985); Clement v. Pehar, 575 F.Supp. 436 (N.D.Ga.1983). Defendant Hanson is a Massachusetts corporation, and obviously has the requisite minimum contacts within the United States to allow this court to exercise personal jurisdiction over it pursuant to 18 U.S.C. § 1965(d). Thus, this court is persuaded by the defendant’s argument that the defense of absence of personal jurisdiction was not available to it when the original Rule 12(b)(6) motion was filed. The issue of personal jurisdiction in the form of minimum contacts with the forum only became available as a defense when the plaintiff dismissed the sole nondiverse party, and also decided not to oppose Hanson’s motion to dismiss the RICO claims, reducing the action to a diversity case involving state claims. Thus Hanson’s supplemental motion to dismiss is not barred by Rule 12(g), and the court now turns to the merits of the personal jurisdiction issue. The general personal jurisdiction statute over corporation under Michigan law provides: The existence of any of the following relationships between a corporation and the state shall constitute a sufficient basis of jurisdiction to enable the courts of record of this state to exercise general personal jurisdiction over the corporation and to enable such courts to render personal judgments against the corporation. (1) Incorporation under the laws of this state. (2) Consent, to the extent authorized by the consent and subject to the limitations provided in Section 745. (3) The carrying on of a continuous and systematic part of its general business within the state. M.C.L.A. § 600.711. Michigan courts have interpreted state law to extend the jurisdiction of courts to their “full potential” and should be considered co-extensive with the Due Process limitations of the Federal Constitution. Sifers v. Horen, 385 Mich. 195, 198, 188 N.W.2d 623 (1971). The Due Process Clause of the fourteenth amendment permits personal jurisdiction over a defendant in any state with which the defendant has “certain minimum contacts ... such that the maintenance of the suit does not offend ‘traditional notions of fair play and substantial justice.’ ” Intemational Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95 (1945). A court has not exceeded its powers where the defendant has “purposefully availed himself of the privilege of conducting activities within the forum state,” Hanson v. Denckla, 357 U.S. 235, 253, 78 S.Ct. 1228, 1239, 2 L.Ed.2d 1283 (1958), or has “purposefully directed” his activities at the forum state. Keeton v. Hustler Magazine, Inc., 465 U.S. 770, 104 S.Ct. 1473, 1478, 79 L.Ed.2d 790 (1984). In judging minimum contacts, a court properly focuses on “the relationship among the defendant, the forum, and the litigation.” Shaffer v. Heitner, 433 U.S. 186, 204, 97 S.Ct. 2569, 2579, 53 L.Ed.2d 683 (1977). Where the court seeks to exercise its jurisdiction over a cause of action not related to the defendant’s contacts in the forum state, i.e. general personal jurisdiction, due process is not offended so long as there exist the requisite minimum contacts. Helicopteros v. Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 104 S.Ct. 1868, 1872, 80 L.Ed.2d 404 (1984). After reviewing the facts of this case, the court concludes that it may properly exercise personal jurisdiction over Hanson. The affidavits supplied by the defendant reveal the following information. Hanson began doing business in 1980, and was incorporated in the state of Massachusetts in 1981. It does not maintain an office, own property, employ an agent or any other person in Michigan. The majority of its sales occur in the New England states. However, since its incorporation in 1981, an average of slightly over 2% of its total sales have occurred in Michigan during each year of its existence, with a figure of 3.7% being reached in 1983-84. In the six months preceding the filing of this case, Hanson transacted approximately $50,000 of business in Michigan, most of it with the plaintiff. Hanson’s business in Michigan was conducted through the mails and by telephone. At least one salesperson employed by Hanson had telephone dealings with the vice-president of the plaintiff 25-30 times a year for several years. Where the defendant has been carrying on in the forum a “continuous and systematic, but limited, part of its general business,” personal jurisdiction may be exercised over it. Perkins v. Benguet Mining Co., 342 U.S. 437, 438, 72 S.Ct. 413, 414, 96 L.Ed. 485 (1952). Here, the defendant has carried on a significant, though small, percentage of its business in Michigan during every year of its existence. Its sales in Michigan have been continuous, not sporadic. The relatively large volume of telephone dealings between the plaintiff and defendant is also significant in determining that the defendant “purposefully availed itself of the privilege of conducting business in Michigan, such that it would be reasonable to subject it to the burdens of litigation in this forum.” Burger King Corp. v. Rudzewicz, 471 U.S. 462,105 S.Ct. 2174, 85 L.Ed.2d 528 (1985). The defendant in Burger King, a Michigan resident, argued that personal jurisdiction could not be exercised against him in Florida because he never entered the forum state and all contacts with Florida had been by mail or telephone from Michigan. The Supreme Court emphatically rejected the notion that physical presence was a prerequisite for the exercise of personal jurisdiction. Jurisdiction in these circumstances may not be avoided merely because the defendant did not physically enter the forum State. Although territorial presence frequently will enhance a potential defendant’s affiliation with a State and reinforce the reasonable foreseeability of suit there, it is an inescapable fact of modern commercial life that a substantial amount of business is transacted solely by mail and wire communications across state lines, thus obviating the need for physical presence within a State in which business is conducted. So long as a commercial actor’s efforts are ‘purposefully directed’ toward residents of another State, we have consistently rejected the notion that an absence of physical contacts can defeat personal jurisdiction there. [Citations omitted]. Id. 105 S.Ct. at 2184. It is the court’s conclusion that Hanson has “purposefully directed” its efforts toward Michigan, and has carried on a systematic and continuous business in this forum, such that it is appropriate for this court to exercise jurisdiction over Hanson under both Michigan law and due process. Turning to the merits of the state claims, the court will first address the motions to dismiss Count 8, which charges the defendants with fraud. Fed.R.Civ.P. 9(b) states that “in all averments of fraud or mistake, the circumstances constituting fraud or mistake shall be stated with particularity.” This is an exception to general rule of notice pleading set forth in Fed.R. Civ.P. 8, which requires only a short and plain statement of the claim. Although this is a diversity case, and the substance of fraud claims must be decided under state law, the manner in which the fraud is alleged is still governed by Rule 9. Miller v. Affiliated Financial Corp., 600 F.Supp. 987 (D.C.Ill.1984); Clinton Hudson and Sons v. Lehigh Valley Co-op. Farms, Inc., 73 F.R.D. 420 (D.C.Pa.1977), aff'd. 586 F.2d 834. Upon a review of the pleadings, the court finds that the plaintiff has not met the requirements of Rule 9(b) as to defendants Hanson, Delta and CRC. The substance of Count 8 consists of only one paragraph: “The acts of defendants as referred to in paragraphs 12 through 26 of plaintiff’s complaint constitute fraud.” Paragraph 12 through 21 describe the activities of defendants Creative Synergy and its employees leading to the alleged theft of the computer list on January 17, 1985. Paragraph 22, 23, and 24 state that in the fall of 1985, the list was sold to Delta, Hanson and CRC, respectively, all of the defendants having actual or constructive knowledge of the illicit nature of the product. The conclusory allegation that buying this list several months after its alleged theft constitutes fraud does not state the circumstances constituting the fraud with particularity. There are absolutely no facts alleged which indicate that these defendants knew the list was stolen, or that they had anything to do with its theft. Rule 9(b) requires that at a minimum the plaintiff must allege the time, place, and contents of the misrepresentations upon which it relied. Bender v. Southland Corp., 749 F.2d 1205, 1216 (6th Cir.1984). As to these defendants, the plaintiff has not approached this standard. Count 8 also does not state a cause of action for fraud even under the lenient pleading standards of Rule 8. To sustain an action for common law fraud under Michigan law, it must appear that 1) there was a material representation by the defendant that was false; 2) the defendant knew it was false when he made it or made it recklessly without any knowledge of its truth and as a positive assertion, 3) the defendant made it with the intention that it should be acted upon by the plaintiff; 4) plaintiff acted upon it and 5) thereby suffered injury for which he sues. Eaton Corp. v. Easton Associates, Inc., 728 F.2d 285, 292 (6th Cir.1984). While it is not necessary that each and every element of an action must be alleged with precision under Rule 8, the plaintiff has not alleged even one element (other than damages) of this cause of action, and has not alleged a single fact against Hanson, Delta or CRC from which these elements could be inferred. Turning to defendants Creative Synergy and its employees, the plaintiff has sufficiently pleaded fraud both under Rule 9(b) and Michigan substantive law. In paragraphs 12 through 21, the plaintiff sets forth specific allegations that Creative Synergy induced the plaintiff to enter into a consulting relationship with it for the purpose of stealing the confidential information. Count 7, which alleges that all the defendants misappropriated trade secrets in violation of Michigan common law, sufficiently states this cause of action and cannot be dismissed on the pleadings. Defendant CRC also filed a cross-claim against defendants Creative Synergy, and its employees, Van Brocklin, Stewart, and Mannings. The cross-claim incorporates by reference the principal plaintiffs complaint. In addition, it alleges CRC entered into a contract with Stewart to purchase the customer list which it believed Stewart had a lawful right to sell, and that if the plaintiffs allegations of fraud and trade secret theft are true, Stewart breached this contract. Creative Synergy and Manning only have filed a motion to dismiss the cross-claim. CRC concedes that its pleading rests entirely upon the validity of the principal complaint, and that to the extent the plaintiffs complaint is deficient, so its claims must be dismissed. Accordingly, any of CRC’s claims relying upon Counts One through Six of the principal complaint are dismissed. Any claims arising out of Count Seven are also dismissed, as that charges misappropriation of trade secrets. To the extent trade secrets have been misappropriated, they belong to the principal plaintiff and not to CRC, one of the recipients of the putative secrets. CRC’s remaining substantive allegation is that of fraud against Creative Synergy and its employees. Paragraph Ten of the cross-complaint states that if the plaintiff's allegations of fraud prove true, they also constitute fraud against CRC. This court has already held that Count 8 of the principal complaint plead with sufficient specificity, in paragraph 12 through 21, fraud against Creative Synergy and its employees. Count 8 does not, however, plead any facts which would support a claim of fraud by CRC against Creative Synergy. Nor is there a single factual allegation of fraud against Creative Synergy or Manning in CRC’s cross-complaint. The only independent allegations of misconduct contained in the cross-complaint are specifically directed against Stewart in the breach of contract count, in which neither Creative Synergy or Manning are mentioned. CRC’s cross-complaint of fraud against Creative Synergy and Manning is not plead with the specificity required by either federal or state law, and must be dismissed as to those two defendants. The final claim of CRC’s cross claim is for indemnification and contribution. Under Michigan law, indemnity permits an innocent party who has been held vicariously liable for passive negligence to recover from the one who is actively negligent, but is unavailable to those whose liability is based upon their own active negligence. Wear v. Webb Co., 572 F.Supp. 1257 (W.D.Minn.1983). The party seeking indemnity must plead and will have to prove freedom on its part from personal fault. Brown v. Intern. Union, United Auto, Etc., 85 F.R.D. 328 (W.D.Mich.1980). In this case, the only count remaining against CRC in the principal case is for misappropriation of trade secrets. Since CRC can only be found liable on this count if it engaged in active misconduct, the remedy of indemnity would be unavailable to it. In sum, the court grants the defendants’ motions in toto as to Counts 1 through 6, and grants in part their motions as to Counts 7 and 8, and grants defendants Creative Synergy’s and Manning’s motion to dismiss CRC’s cross-claim against them, except as to the statutory contribution claim. Accordingly, Counts 1 through 6 are dismissed as to all defendants, Count 8 is dismissed as to defendants Hanson, Delta and CRC only and CRC’s cross-claim is dismissed as to Creative Synergy and Manning only, except as to CRC’s right to contribution. IT IS SO ORDERED. . Newman, a Michigan corporation and the only non-diverse defendant in this action has been voluntarily dismissed by the plaintiff. As Newman is not an indispensable party, its dismissal preserves the diversity jurisdiction of this court over the state claims, which are not merely pendent to the federal counts. See, Reed v. Robilio, 376 F.2d 392 (6th Cir.1967); Lopez v. General Motors Corp., 697 F.2d 1328 (9th Cir.1983); Caperton v. Beatrice Pocahontas Coal Co., 585 F.2d 683 (4th Cir.1978); Samaha v. Presbyterian Hosp. in City of New York, 757 F.2d 529 (2d Cir.1985). . The plaintiff, in its responsive pleadings, has said that it will not oppose CRC’s and Hanson's motion to dismiss as to the RICO claims. Accordingly, this court will dismiss the RICO claims against Hanson and CRC. As to the RICO claims, the plaintiff is contesting only the motions of Creative Synergy and its employees. . Defendant Delta Computech has not filed a motion to dismiss, and has entered into a stipulation with the plaintiff that it has ten days after receipt of the court's decision as to these motions to file an answer. However, this opinion is equally applicable to the charges against Delta. . It should be noted that the plaintiffs did not adequately plead each element of mail and wire fraud, though the court does not base its decision on this shortcoming in the pleadings. See, United States v. Green, 745 F.2d 1205 (9th Cir. 1984), cert, denied, — U.S. -, 106 S.Ct. 259, 88 L.Ed.2d 266 (1985); United States v. Bohonus, 628 F.2d 1167 (9th Cir.1980), cert. denied, 447 U.S. 928, 100 S.Ct. 3026, 65 L.Ed.2d 1122 (1980). . Prior to Sedima, most courts had concluded that a pattern could be established merely by showing the commission of two acts of racketeering acitivity withinthe last ten years. See, e.g., United States v. Aleman, 609 F.2d 298 (7th Cir.1979, cert. denied, 445 U.S. 946, 100 S.Ct. 1345, 63 L.Ed.2d 780 (1980); United States v. Pamess, 503 F.2d 430 (2d Cir.1974), cert. denied, 419 U.S. 1105, 95 S.Ct. 775, 42 L.Ed.2d 801 (1975).

678973-17172

FOLTA, District Judge. The first income tax statute for the Territory was enacted on January 22, 1949, as Ch. 3 of the Extraordinary Session of the Legislature convened on January 6, 1949. Because doubt was, entertained as to the validity of the composition of the Extraordinary Session, the Legislature which convened in regular session on January 24, 1949, re-enacted its provisions, adding one for the ratification of the tax withholdings already made under the original act, and this act became Ch. 115. In this suit plaintiff challenges not only the validity of the Extraordinary Session, and consequently the validity of the original income tax statute and everything done in pursuance thereof on the ground that the membership thereof was composed of those who were elected in 1948 and 1946 instead of those elected in 1946 and 1944, whose terms had not expired until the regular session was convened, but also challenges the validity of Chapter 115 on the following grounds: (1) that the provision for the adoption of future amendments of the Federal Income Tax Law and the regulations thereunder constitutes a delegation of legislative authority to Congress and the Commissioner of Internal Revenue; (2) that the act is lacking in uniformity because a tax on income, being a property tax, cannot be graduated; (3) that the act burdens interstate commerce in the constitutional sense; (4) that payment of the tax is made a condition precedent to the right to carry on any business, including that in interstate commerce; (5) that the formula prescribed for the apportionment of the wages of plaintiff’s nonresident seamen is discriminatory because it has not, in express terms, been made applicable to other nonresident employees of 'the plaintiff; (6) that the statute is void for indefiniteness and uncertainty because it fails to define the terms “income” in Section 5A(2) (a), “days in port” in the succeeding paragraph, and “continental shelf” in Section 5 B(1); (7) that the withholding provision, so far as seamen are concerned, is in conflict with Section 601, Title 46, U.S.C.A., and therefore void; (8) that Section 7D of the statute delegates legislative authority to the Tax Commissioner. Plaintiff operates steamships between the State of Washington and the Territory of Alaska, employing more than 700 seamen whose wages are paid at the end of each voyage in Seattle. In a suit against the plaintiff, filed in the Federal Court in Seattle, the Sailors’ Union of the Pacific has obtained an injunction, restraining the plaintiff from paying to defendant the tax withheld from the wages of its members under Chapters 3 and 115. Plaintiff asserts that similar suits by other maritime unions on behalf of those members who are employed by plaintiff have been forestalled only upon agreeing to similarly impound the tax withheld from their wages pending the outcome of this litigation. 1. Validity of the Extraordinary Session Plaintiff contends “that the members of the Legislature elected at the general Territorial election in October, 1946, being required to take office on the fourth Monday in January, 1947, and having a term of two years fixed for the members of the House and four years for the members of the Senate, were entitled to hold office and to exercise the functions of legislators for two years and four years, respectively, from the fourth Monday in January, 1947, and that therefore when the Extraordinary Session was called to convene on January 6, 1949, that session should have been composed of those members who were elected in 1946, and not those who were elected in 1948. However, those who were elected in 1948 were called, appeared, organized and attempted to function as a Legislature regularly called, and they passed the first income tax law, Chapter 3 of the Laws of the Extraordinary Session, 1949.” Although the Organic Act for the Territory, Act of August 24, 1912, 37 Stat. 513, 48 U.S.C.A. § 67 et seq., prescribes the terms of members of the House and of the Senate at two and four years, respectively, it does not fix the time for the commencement thereof. However, it does provide, as it has provided ever since its enactment despite amendments, that immediately after assembling the members of the Senate shall, by lot or drawing, be divided into two classes ; that the seats of the members of the first class shall be vacated at the end of two years and the seats of the members of the second class shall be vacated at the end of four years, Sections 68 and 69a. The general election is held in October of the even-numbered years, and the Legislature is regularly convened on the fourth Monday in January of the odd-numbered years. 48 U.S.C.A. § 74. The successful candidates, therefore, take their seats at the first regular session following their election. It would, therefore, appear that the provision for vacating the seats of the members of the Senate at the end of two and four years, 48 U.S.C.A. §§ 68 and 69a, referring as it does to the time of taking their seats upon assembling for the regular session, contemplates that the terms shall begin upon tailing their seats. But if any doubt remains on this score, it would seem to be dispelled by the fact that since it cannot be known until after the determination by lot or drawing whose term shall be vacated at the end of two or four years, manifestly their terms cannot begin until such determination. If this is the correct view, then it follows that the terms of the members who were elected in October, 1946, who took their seats on the fourth Monday of 1947, and of the long-term members elected in 1944, did not expire until the convening of the Legislature in regular session on January 27, 1949, and that they, instead of those elected in 1948 and 1946, respectively, who were called, should have composed the membership of the Extraordinary Session of the Legislature convened on January 6, 1949. It would likewise follow, if this view is correct, that the acts of the Legislature at its Extraordinary Session, including the enactment of the first income tax law and everything done pursuant thereto, were without authority and, hence, void. Defendant contends that the terms began when ¡the Canvassing Board issued the certificates of election under the Act of March 26, 1934, 48 Stat. 465, 48 U.S.C.A. § 144a, which provides, so far as is material to this controversy, that: “The said canvassing board shall commence the performance of its duties at the office of the Governor within ten days after the second Tuesday in October in each year in which an election is held * * * and shall continue with such work from day today until the same is completed. * * * In case it shall appear to the board that no election return, -as herein prescribed, has been received by the Governor from any precinct in which an election has been held, the said board may accept in place thereof the certified copy of the certificate of election for such precinct received from the clerk of the court, and may canvass and compile the same with the other election returns. The canvassing board shall terminate the canvass and issue the certificates of election so soon as it is satisfied that no missing return would, if received, change the result of a canvass based upon the returns at 'hand, but when the board has information that an election was held at any precinct from which no return has been received and which return, if received, the board has reason to believe will affect the result of the election, it shall be the duty of the board to await the arrival of such return- until 4 o’clock postmeridian on the 10th day of December in the year during which the election is held, but no longer, and any return' received after that time shall not be'counted by the board. “Upon the completion of the said canvass as herein provided, the said board shall declare the person who has received the greatest number of votes for the office for which he is a candidate elected- to such office for the term for which he is elected, and shall issue and deliver to him in writing, under 'their hands and seals, a certificate of his election.” It is clear that so far as terms are concerned, all that the Canvassing Board is empowered to do is to declaré the term for which the successful candidate has been elected, not to fix the time for its commencement. That a definite time for the commencement of the' terms-of the members of the Legislature was intended is not only implicit in the provisions of the Organic Act already discussed, but also is apparent upon general considerations. These lead to the conclusion that the terms of the members of the Legislature elected in 1946 began upon their assembling for the regular session on the fourth Monday of January, 1947, and taking the oath of office. Farrelly v. Cole, 60 Kan. 356, 56 P. 492, 500, 44 L.R.A. 464. Further support for this conclusion may be found in the provision of Section 74, Title 48 U.S.C.A.: “The Legislature of Alaska shall convene at the capítol at the city of Juneau, Alaska, on the fourth Monday in January in the year 1941 and on the- fourth Monday in January every two years thereafter; but the said legislature shall not continue in session longer than sixty days in any two years unless again convened in extraordinary session by a proclamation - of the Governor, which shall set forth the object thereof and give at least fifteen days’ notice in writing oir by telegram or radiogram ■to each member of said legislature, and in such case shall not continue in session longer than thirty days. The Governor of Alaska is hereby authorized to convene the legislature in extraordinary session for a period not exceeding thirty days when requested to do so by -the President of the United States, or when any public danger or necessity may require it. Apr. 18, 1940, c. 105, § 1, 54 Stat. 111.” Obviously, the word “again” in the foregoing provision would be rendered meaningless if any extraordinary session of the Legislature were called for a date subsequent to the issuance of the certificates of election but before the convening df the regular session, as was done in this instance. Accordingly, it is my opinion that the Extraordinary Session was not constituted in accordance with law; that the original income tax statute enacted during the session was invalid and, therefore, that the tax withholdings made pursuant thereto were likewise invalid unless it was in the power of the Legislature to ratify them in accordance with Section 16 of the act. Whether this ratification provision of Section 16 may be given effect depends on whether the Legislature could have enacted the withholding provisions of Ch. 3. Manifestly, the invalidity which would preclude ratification must inhere in the act. If it merely goes to the composition of the Legislature, and the act is one within the legislative power, it would appear that it could be ratified. Whether the act, or at least the withholding provisions of the act if they are separable, were within the power of the Legislature, therefore, becomes the next subject of inquiry. 2. Delegation of Legislative Functions to Congress and the Commissioner of Internal Revenue The tax levied under the act is upon the income tax payable to the United States under the Internal Revenue Code. This adoption of the provisions of the Federal Income Tax Laws and Regulations made pursuant thereto, would make possible the administration of the act at a minimum of cost with all the attendant benefits of uniformity. But, manifestly, the administration of the statute requires a strict and immediate conformity with subsequent amendments of the Federal Law and Regulations. That the Legislature was fully cognizant of this requirement is attested by the provisions of Section 3B that: “Whenever the Internal Revenue Code is mentioned in this Act, the particular portions or provisions thereof, as now in effect or thereafter amended, which are referred to, shall be regarded as incorporated in this Act by such reference and shall have effect as though fully set forth herein. “Whenever any portion of the Internal Revenue Code incorporated by reference as provided in Paragraph (1) of this subsection refers to rules and regulations promulgated by the United States Commissioner of Internal Revenue, or hereafter so promulgated, they shall be regarded as regulations promulgated by the Tax Commissioner under and in accord with the provisions of this Act, unless and until the Tax Commissioner promulgates specific regulations in lieu thereof conformable with this Act.” It is this part of the statute which is attacked as an attempt to delegate legislative power to Congress and the Commissioner of Internal Revenue. It must be admitted, however, that there is no delegation of authority to Congress or the Commissioner of Internal Revenue in expressed terms. The act merely provides for the conformity pointed out which is necessary to its life. Nevertheless, the weight of numerical authority supports the position of plaintiff and would, if deemed controlling, preclude the Territory from availing itself of the advantages to be gained from adopting the Federal Law. State v. Webber, 125 Me. 319, 133 A. 738; Florida Commission v. State, 155 Fla. 772, 21 So.2d 599; Santee Mills v. Query, 122 S.C. 158, 115 S.E. 202; Featherstone v. Norman, 170 Ga. 370, 153 S.E. 58, 70 A.L.R. 449; In re Opinion of Justices, 239 Mass. 606, 133 N.E. 453. Obviously, if the Territorial Legislature were in session continuously, it would be in a position to adopt immediately each amendment to the Federal Laws and Regulations. But since it convenes biennially for a session of sixty days only, there was no alternative but the one to which it resorted. However, Ex parte Lasswell, 1 Cal.App.2d 183, 36 P.2d 678, cited by the plaintiff supports the defendant’s contention. In that case a provision in the California Industrial Recovery Act which, as in the instant case, had adopted a Federal act, to the effect that when the Federal authorities had fixed a code for the operation of any industry, that code would automatically become the state code, was upheld as against the contention that it was an unconstitutional delegation of legislative power. 36 P.2d pp. 684-687. I am inclined to agree with the reasoning of this decision, and in any event the objection is not available to the plaintiff because it is not shown that there has been any amendment of either the Federal law or regulations since the enactment of Chap. 115 and, hence, it is not perceived how the constitutional rights of the plaintiff could have been infringed. Cf. Panama Refining Co. v. Ryan, 293 U.S. 388, 55 S.Ct. 241, 79 L.Ed. 446. 3. Uniformity The objection that the statute is wanting in uniformity and, hence, offends the due process and equal protection clauses of the Fourteenth Amendment is predicated upon the proposition that a tax on income is a property tax and cannot be graduated. In support of the proposition that it is a tax on property, Pollock v. Farmers Loan & Trust Co., 157 U.S. 429, 15 S.Ct. 673, 39 L.Ed. 759, is cited. But aside from the fact that the Fourteenth amendment does not apply to the Territories, South Puerto Rico Sugar Co. v. Buscaglia, 1 Cir., 154 F.2d 96, 101; Anderson v. Scholes, D.C., 83 F.Supp. 681, 687; cf. Haavik v. Alaska Packers Association, 263 U.S. 510, 44 S.Ct. 177, 68 L.Ed. 414, it would appear, from what was said concerning the nature of a tax on income in Brushaber v. Union Pacific R. Co., 240 U.S. 1, 16, 17, 36 S.Ct. 236, 60 L.Ed. 493, L.R.A.1917D, 414, Ann. cas.1917B, 713, and People of the State of New York ex rel. Cohn v. Graves, 300 U.S. 308, 315, 57 S.Ct. 466, 468, 81 L.Ed. 666, 108 A.L.R. 721, that the implications of the Pollock case were misunderstood. Moreover, inequalities of the kind pointed out are not sufficient to invalidate tax legislation. Beers v. Glynn, 211 U.S. 477, 29 S.Ct. 186, 53 L.Ed. 290; St. Louis Land Co. v. Kansas City, 241 U.S. 419, 429, 36 S.Ct. 647, 60 L.Ed. 1072. And speculation of the kind indulged in as to hardship and injustice in hypothetical cases cannot be considered by the courts. 4. Burden of Interstate Commerce Formula Apportionment The contention that the tax burdens interstate commerce in the constitutional sense is based on the fact that in hypothetical cases in which gross receipts (One of the factors of the formula set forth in Section 5A(1) (2) for apportioning income attributable to local activities) are derived wholly or nearly so from interstate commerce or outside activities, such as the sale of gold or salmon, and the components of the remaining factors are so negligible as to have little countervailing effect, the resulting fraction, so far as its numerator is concerned, makes the formula discriminatory to such an extent as to result in practical effect in imposing a burden on interstate commerce. The formula may be expressed as follows: Fed. Income Tax without Deduction of x Alaska Tax Local Payroll Tangible Gross in Local Receipts Alaska Property -----x 10% = Tax Gross Rec. Payroll Tangible Everywhere Everywhere property Everywhere

6496115-12093

OPINION AND ORDER R. GUY COLE, Jr., Bankruptcy Judge. I. Preliminary Matters This matter is before the Court upon a Motion to Show Cause Why Defendant Internal Revenue Service Should Not Be Held in Contempt of Court (“Motion”), filed by Lawrence L. and Carol J. Nichols (“Debtors”), the debtors in this Chapter 7 proceeding. The Motion requests that the Court hold the Internal Revenue Service (“IRS”) in contempt for its alleged violation of the automatic stay imposed by 11 U.S.C. § 362(a), and prays for compensatory and punitive damages. A Motion to Dismiss was filed in response by the United States on behalf of the IRS. The matter came on for hearing on June 8, 1992. Following the close of evidence, the parties were given an opportunity to file post-hearing briefs. The Debtors filed a post-hearing memorandum on June 15, 1992. The Court has jurisdiction over this case pursuant to 28 U.S.C. § 1334(b) and the General Order of Reference entered in this district. This is a core proceeding which the Court may hear and determine in accordance with 28 U.S.C. § 157(b)(1) and (2)(A) and (G). The following opinion and order constitutes the Court’s findings of fact and conclusions of law pursuant to Federal Rule of Bankruptcy Procedure 7052. II.Findings of Fact The Debtors filed a petition under Chapter 7 of the Bankruptcy Code on June 14, 1991. Listed in Schedule A-l, under “Creditors Having Priority,” are several obligations to the IRS. At the hearing, counsel for the parties advised the Court that they had stipulated to all the relevant facts. The following stipulations of fact were read into the record: 1. A wage levy was issued by the IRS against Carol Nichols’ wages by notice issued by the IRS on May 31, 1991. The wage levy was completed on Mrs. Nichols’ wages. 2. The Chapter 7 bankruptcy was filed June 14, 1991. 3. A copy of the Chapter 7 petition was transmitted to the IRS via its agent, Thomas Charles, and the levy was released June 14, 1991. 4. An adversary proceeding to determine the dischargeability of the underlying tax debt was filed by the Debtors on September 20, 1991. 5. A pretrial was held in the adversary proceeding on January 6, 1992. 6. On January 17, 1992, a notice of levy was sent by the IRS to the Debtors. 7. On January 28,1992, Brenda Dodrill and Terry Serena were notified by Debtors’ counsel of the levy and the levy was terminated. 8. On February 14, 1992, a levy was completed on the paycheck of Mrs. Nichols by her employer in the sums of $257.86 on one week, and $257.85 on the next week’s paycheck were held. 9. No money was released by Mrs. Nichols’ employer to the IRS. 10. Notice was given to the IRS of a levy, and the levy was released Feb-niary 21, 1992. 11. Ón March 6, 1992, the IRS levied on the Telohio Credit Union checking account and Telohio held the sum of $199.19. 12. No money was released by Telohio to the IRS. 13. The IRS was notified and the levy was released March 17, 1992. 14. This contempt motion was filed March 19, 1992. 15. On May 4, 1992, a notice of setoff by the IRS was received by the Debtors indicating that the IRS set off their 1991 tax refund by the sum of $2,274.11. 16. The funds were held by the IRS and, after notice to Terry Serena, were released to the Debtors approximately thirty days later. 17. The Debtors received two correction notices dated March 29, 1992 and April 19, 1992 relative to existing tax liens. At the hearing, the Court took judicial notice of the fact that the IRS did not file a proof of claim in the bankruptcy case. The Debtors request an award of both compensatory and punitive damages. The Debtors seek reimbursement for costs in curred as a result of the two IRS levies, as well as for the costs and fees in filing the Motion and attending the hearing. The Debtors also request that the Court assess punitive damages in the amount of $25,000. III. Conclusions of Law Sovereign immunity is a “judicial doctrine which precludes bringing suit against the government without its consent.” Black’s Law Dictionary 1396 (6th ed. 1991). Section 106 of title 11, the general sovereign immunity provision of the Bankruptcy Code, provides as follows: (a) A governmental unit is deemed to have waived sovereign immunity with respect to any claim against such governmental unit that is property of the estate and that arose out of the same transaction or occurrence out of which such governmental unit's claim arose. (b) There shall be offset against an allowed claim or interest of a governmental unit any claim against such governmental unit that is property of the estate. (c) Except as provided in subsections (a) and (b) of this section and notwithstanding any assertion of sovereign immunity— (1) a provision of this title that contains “creditor,” “entity,” or “governmental unit” applies to governmental units; and (2) a determination by the court of an issue arising under such a provision binds governmental units. Subsection (a) of § 106 waives sovereign immunity with respect to compulsory counterclaims to governmental claims; subsection (b) waives sovereign immunity with respect to permissive counterclaims to governmental claims, although such immunity is waived only to the amount of setoff. United States v. Nordic Village, - U.S. -, -, 112 S.Ct. 1011, 1015, 117 L.Ed.2d 181 (1992). The waivers found in §§ 106(a) and (b) are generally held to apply where the government has filed a proof of claim in a bankruptcy proceeding. Sullivan v. Town & Country Home Nursing Serv., Inc. (In re Town & Country Home Nursing Serv., Inc.), 963 F.2d 1146, 1150 (9th Cir.1992); Taborski v. United States of America, 141 B.R. 959, 962 (N.D.Ill.1992); United States v. Wolaschak Farms (In re Wolaschak Farms), 109 B.R. 736, 737 n. 3 (N.D.Ohio 1989). Neither § 106(a) or (b) is applicable to the instant facts, as the IRS has not filed a proof of claim. Thus, the issue before the Court today is whether § 106(c) acts to waive the sovereign immunity of the United States to the relief requested by the Motion. Until late February 1992, § 106(c) was subject to divergent interpretations with respect to monetary claims against the federal government. However, the Supreme Court’s decision in United States v. Nordic Village, - U.S. -, 112 S.Ct. 1011, 117 L.Ed.2d 181 (1992), appears to resolve these disputes. In Nordic Village, about four months after the filing of the Chapter 11 petition, an officer and shareholder of the debtor paid $20,000 of the debtor’s monies to the IRS and directed the IRS to apply the funds against his individual tax liability, which it did. A subsequently appointed trustee commenced an adversary proceeding against the IRS seeking to avoid and recover the $20,000 transfer under §§ 549(a) and 550(a). The bankruptcy court permitted the recovery. The IRS raised the defense of sovereign immunity for the first time on appeal. The district court and the Sixth Circuit affirmed the decision of the bankruptcy court. The Supreme Court articulated that, to be effective, a waiver of the government’s sovereign immunity must be unequivocally expressed. Id. at -, 112 S.Ct. at 1014 (citing Irwin v. Dep’t of Veterans Affairs, 498 U.S. 89, -, 111 S.Ct. 453, 457, 112 L.Ed.2d 435 (1990)) (additional citations omitted). This doctrine is based on the rationale that the government’s consent to be sued must be construed strictly in favor of the sovereign and not extended beyond specific statutory language. Nordic Village, - U.S. at - - -, 112 S.Ct. at 1014-15 (quoting McMahon v. United States, 342 U.S. 25, 27, 72 S.Ct. 17, 19, 96 L.Ed. 26 (1951); Ruckelshaus v. Sierra Club, 463 U.S. 680, 685, 103 S.Ct. 3274, 3277, 77 L.Ed.2d 938 (1983) (quotation omitted)). Subsections (a) and (b) of § 106 unequivocally express the government’s waiver of sovereign immunity with respect to compulsory and permissive counterclaims. Nordic Village, - U.S. at -, 112 S.Ct. at 1014. As to § 106(c), however, although it also waives sovereign immunity, it does not “establish unambiguously that the waiver extends to monetary claims.” Id. Rather, while § 106(c) permits a bankruptcy court to issue declaratory and injunctive relief against the government, the section is capable of at least two interpretations which do not authorize monetary relief. Id. at -, 112 S.Ct. at 1015. Thus, as a waiver of sovereign immunity must be explicitly stated in the statute, and § 106(c) may be interpreted in more than one manner, this section does not constitute an unequivocal expression of waiver. Id. at -, 112 S.Ct. at 1016. See also Hankerson v. United States Dep’t of Educ., 138 B.R. 473, 477 (E.D.Pa.1992). The Nordic Village court concluded that: “[njeither § 106(c) nor any other provision of law establishes an unequivocal textual waiver of the Government’s immunity from a trustee’s claims for monetary relief.” Nordic Village, - U.S. at -, 112 S.Ct. at 1017. Thus, a bankruptcy court can order declaratory or injunctive relief against the United States, but cannot order a recovery of money, unless a proof of claim has been filed. The Debtors argue that the fact that they are proceeding under § 362, while the trustee in Nordic Village sought relief under §§ 549 and 550, mandates a different conclusion. The Nordic Village analysis, however, focuses upon § 106(c). The key fact in Nordic Village was that the trustee had requested monetary relief as opposed to declaratory or injunctive relief against the government, and not that his cause of action was based upon §§ 549 and 550. The doctrine announced in Nordic Village is that § 106(c) does not act to waive the federal government’s sovereign immunity as to money damages. As such, Nordic Village governs all proceedings in which: 1) monetary relief against the government is requested, and 2) neither § 106(a) nor (b) applies. The Code section pursuant to which the monetary relief is pursued is not relevant. While the facts show an intentional violation of the automatic stay by the IRS, this Court is bound by the doctrine of stare decisis to follow the Nordic Village decision. The clear mandate of Nordic Village precludes monetary recovery against the IRS for its violation of § 362(a). As such, the Motion must be denied. Although the Court is required to follow Nordic Village, it regrets the inequities this decision may cause. The Court notes the following from the dissent in Nordic Village: The injustice that the Court condones today demonstrates that it is time to reexamine the wisdom of the judge-made rules that drives its decision. An officer of an insolvent corporation appropriated corporate funds and used them to discharge a personal tax obligation. Because the Federal Government was the ultimate recipient of the stolen property, the Court holds that the bankruptcy trustee cannot avoid the transfer_ This result is neither equitable nor just. Nordic Village, - U.S. at - - -, 112 S.Ct. at 1017-18 (Stevens, J., dissenting). So it is in the instant case. Multiple and egregious violations of the automatic stay go uncompensated, merely because the IRS is the violator, and it has not filed a proof of claim. However, as Nordic Village binds this Court, the Motion must be denied. IT IS SO ORDERED. . The IRS attempts to argue that the Court lacks jurisdiction over this matter. This theory appears to be based on a single statement in United States v. Nordic Village: “Congress has not empowered a bankruptcy court to order a recovery of money from the United States. - U.S. -, -, 112 S.Ct. 1011, 1017, 117 L.Ed.2d 181 (1992). The Court rejects this argument. A bankruptcy court clearly has jurisdiction over matters involving the automatic stay, one of the fundamental protections of bankruptcy. See 28 U.S.C. § 157(b)(2)(G). The statement from Nordic Village referred to by the IRS concerns governmental immunity and not jurisdiction. Nowhere in the Nordic Village decision does the Supreme Court state that a bankruptcy court lacks jurisdiction over § 362 matters merely because the government is involved. . This date is incorrect; the pretrial was actually held on January 10, 1992.

10527725-18197

OPINION OF THE COURT SCIRICA, Circuit Judge. This case is before us on remand from the United States Supreme Court for fur ther consideration in light of Mathews v. United States, 485 U.S. 58, 108 S.Ct. 883, 99 L.Ed.2d 54 (1988). We will affirm Mari-no’s conviction because (1) given the evidence of entrapment Marino presented at trial, he is not entitled to an instruction on entrapment under the standard enunciated in Mathews, and (2) Marino has asserted unequivocally that he has no additional evidence of entrapment to present that would justify remand for a proffer hearing, United States v. Bay, 852 F.2d 702 (3d Cir.1988). I. Nicholas Marino, a practicing tax attorney, was convicted of conspiring to transport stolen securities in interstate commerce and of receiving, selling and disposing of stolen securities moving in interstate commerce in violation of 18 U.S.C. §§ 2315, 2 and 371. Central to the government’s case was the testimony of Morton Swirsky, who had participated in the bond transactions that led to Marino’s conviction. Unknown to Marino, Swirsky was acting as a government informant at the time that he arranged to buy stolen securities from Marino. . Morton Swirsky had been arrested for possession of stolen securities and agreed to cooperate with the government by working undercover for the Federal Bureau of Investigation. The FBI instructed Swirsky to attempt to purchase additional stolen bonds. To comply, Swirsky sought aid in finding stolen securities from a stock broker, Paul North. Swirsky told North that he was interested in buying “deep discount” bonds, which Swirsky described at trial as bonds sold at a substantial discount of their original price. App. at 755a. North then introduced Swirsky to Marino. Swirsky asked Marino to help him buy “deep discount” bonds for clients with large amounts of cash to invest. Swirsky specified that he only wanted to buy bonds that were “usable” and that had not been reported stolen. App. at 763a. Marino told Swirsky that he “might be able to help [Swirsky] out with what [he] wanted.” App. at 758a-59a. Shortly thereafter, in a telephone conversation taped by the FBI, Swirsky told Mari-no that he had $340,000 to invest for one million dollars worth of bonds. App. at 764a. During the conversation, Swirsky referred to himself as “Mr. Blake,” an alias that Swirsky said was suggested by Marino “to keep the transaction as nebulous as possible.” App. at 763a. Swirsky and Marino then arranged to meet at a hotel, where they discussed the proposed transaction. When Swirsky asked whether Marino had brought any securities, Marino told Swirsky to follow him to his law office. According to Swirsky, upon arriving at Marino’s office, Marino asked Swirsky to remove his clothes, presumably to check him for body wires. After Swirsky removed his jacket and shirt, Marino left the room briefly to speak with someone, then told Swirsky to get dressed, and informed him that he would find “what [he] wanted” under the seat of his car. Swirsky returned to his car and discovered eight $25,-000 municipal bonds under the front seat. App. at 769a-70a. Swirsky delivered the municipal bonds to FBI agents who examined the bonds and questioned whether they were authentic. App. at 772a. Consequently, Swirsky returned the bonds to Marino and told him they were unacceptable. A few days later, Marino called Swirsky to tell him that he had something for him and requested that they meet. App. at 780a-81a. They again met at a hotel, where Marino offered Swir-sky ten Federal Home Loan Bonds with a face value of $100,000 each. The two worked out a sale price of $350,000 for the bonds, payment of which Marino requested in small denomination, nonsequential bills. App. at 795a. According to Swirsky, Mari- no gave him one of the Federal Home Loan Bonds to take with him in order to “check it out to see whether it was reported stolen or not.” App. at 781a. Swirsky took the bond and the next day met Marino to obtain delivery of the other nine bonds. Mar-ino produced four bonds for Swirsky. When Swirsky inquired as to the other five bonds, Marino gave Swirsky the keys to his car and told him that the bonds were in the glove compartment. Swirsky retrieved the bonds and delivered them to the FBI. App. at 799a. When Swirsky met Marino the following day to pay for the bonds, Marino was arrested. At trial, Marino requested an entrapment instruction. Following the close of evidence, the district court rejected this request on the ground that Marino had denied knowing that the bonds were stolen and therefore could not properly claim that he had been entrapped. Marino was convicted by a jury and appealed. We affirmed Marino’s conviction, relying on “well settled federal law in this circuit that a defendant may not contest an essential element of an offense and still claim the defense of entrapment.” United States v. Marino, No. 87-5339, memo-op. at 5 (3d Cir. Dec. 23, 1987) (unpublished). [838 F.2d 463 (table) ] Because Marino did not admit knowing the bonds were stolen, an essential element of the offense, we affirmed the district court’s refusal to instruct the jury on entrapment. Marino petitioned for writ of certiorari. On May 2, 1988, — U.S. -, 108 S.Ct. 1590, 99 L.Ed.2d 904, the Supreme Court granted the writ, vacated the judgment, and remanded the case to this court for further consideration in light of Mathews v. United States, 485 U.S. 58, 108 S.Ct. 883, 99 L.Ed.2d 54 (1988). On remand, we requested supplemental briefing in light of Mathews and United States v. Bay, 852 F.2d 702 (3d Cir.1988). In his supplemental brief, Marino stated that he had presented all his evidence on entrapment at trial and that remand was not required as Bay was inapplicable. II. Before the Supreme Court’s decision in Mathews v. United States, 485 U.S. 58, 108 S.Ct. 883, 99 L.Ed.2d 54 (1988), the prevailing law required the defendant to admit all the elements of the offense before he was entitled to a charge on entrapment. See, e.g., United States v. Hill, 655 F.2d 512 (3d Cir.1981). In Mathews, the Supreme Court held that a defendant could assert inconsistent defenses and could properly request a jury instruction on entrapment without admitting all the elements of the crime. 108 S.Ct. at 887. “[A] valid entrapment defense has two related elements: government inducement of the crime, and a lack of predisposition on the part of the defendant to engage in criminal conduct.” Id. at 886. We held in United States v. El-Gawli, 837 F.2d 142 (3d Cir.), cert. denied, — U.S. -, 109 S.Ct. 55, 102 L.Ed.2d 34 (1988), that “ ‘[entrapment occurs when a defendant who was not predisposed to commit the crime does so as a result of the government’s inducement.’ ” Id. at 145 (quoting United States v. Jannotti, 673 F.2d 578, 597 (3d Cir.), cert. denied, 457 U.S. 1106, 102 S.Ct. 2906, 73 L.Ed.2d 1315 (1982)). In this case, we must decide whether Marino has produced sufficient evidence of inducement to require a jury charge on entrapment. In El-Gawli, we approved the trial judge’s instruction that “[a] solicitation, request or approach by law enforcement officials to engage in criminal activity, standing alone, is not an inducement.” Id. at 149. We also approved the trial court’s definition of inducement to include the fol lowing: “persuasion, fraudulent representation, threats, coercive tactics, harassment, promises of reward or pleas based on need, sympathy or friendship.” Id. Thus, El-Gawli defined inducement to mean more than mere solicitation. This standard is mirrored in Mathews, in which the Supreme Court stated: The Government contends as an alternative basis for affirming the judgment below that the evidence at trial was insufficient to support an instruction on the defense of entrapment. Of course evidence that government agents merely afforded an opportunity or facilities for the commission of the crime would be insufficient to warrant such an instruction. 108 S.Ct. at 888. In Bay, we noted that the Supreme Court in Mathews held that a defendant is entitled to an entrapment defense when sufficient evidence exists from which a reasonable jury could find entrapment. 852 F.2d at 704. A reasonable jury, however, could not find inducement under the standards set forth in Mathews and El-Gawli from mere evidence of solicitation by government agents. Other courts of appeals require something more than mere solicitation before they find a defendant entitled to an entrapment charge. For example, in United States v. Rodriguez, 858 F.2d 809 (1st Cir.1988), the Court of Appeals for the First Circuit noted that, although no bright-line rule existed as to the quantum of proof necessary to warrant an entrapment charge, the threshold is not overcome by a showing of mere solicitation or by a defendant’s conclusory or self-serving statements. Id. at 812-13. See also United States v. Luce, 726 F.2d 47, 49 (1st Cir.1984) (evidence must show that defendant was “unready” to commit the offense or that he was “corrupted” by government agents before entrapment defense may be submitted to jury); United States v. Velasquez, 802 F.2d 104, 106 (4th Cir.1986) (evidence of solicitation not enough to show inducement and thus make entrapment question for jury); United States v. Ortiz, 804 F.2d 1161, 1165 (10th Cir.1986) (trial judge did not err in refusing to give entrapment instruction when evidence revealed only that government agent solicited, requested, or approached the defendant to engage in criminal conduct); United States v. Andrews, 765 F.2d 1491, 1499 (11th Cir.1985) (defendant seeking to raise entrapment defense must show that “the government’s conduct created a substantial risk that the offense would be committed by a person other than one ready to commit it”; defendant need demonstrate an element of persuasion or mild coercion), cert. denied, 474 U.S. 1064, 106 S.Ct. 815, 88 L.Ed.2d 789 (1986); United States v. Parr, 716 F.2d 796, 803 (11th Cir.1983) (initial approach by government does not require entrapment instruction); United States v. Burkley, 591 F.2d 903, 914 (D.C.Cir.1978) (trial judge must give entrapment instruction if there is any foundation in the evidence that he was induced, i.e. that there existed persuasion, fraudulent representations, threats, coercive tactics, harassment, promises of reward, pleas based on need, or other government conduct that would create the risk of causing an otherwise non-predisposed person to commit the offense), cert. denied, 440 U.S. 966, 99 S.Ct. 1516, 59 L.Ed.2d 782 (1979); United States v. Christopher, 488 F.2d 849, 850-51 (9th Cir.1973) (lone fact that government agent initially contacted defendant and provided opportunity for commission of crime not enough to require entrapment instruction); United States v. Bradley, 426 F.2d 148, 150 (7th Cir.1970) (mere opportunities for defendant to violate law if he were so inclined insufficient evidence of inducement to require entrapment instruction). Our holding is consistent with these opinions. III. In this case, Marino asserts that he was entrapped by Swirsky because Swirsky induced Marino to commit the crime “by ruse, sham and false representations; [that Swirsky acted to] bait, lure and cajole [Marino] into the transactions and beguile [him] into the commission of a crime.” Appellant’s Supp. Brief at 6. In particular, Marino argues that he was “lured” into committing the crime because he did not know that the bonds were stolen. Contrary to Marino’s assertions, however, the record is devoid of any evidence that Swirsky induced Marino to sell him stolen securities. Marino initiated tele phone calls to Swirsky and returned Swir-sky’s calls to consummate the securities transactions. App. at 758a, 763a, 780a, 789a, 790a and 791a. He also suggested hotels as meeting places to discuss Swir-sky’s proposal. App. at 791a-92a. Marino exhibited no reluctance to enter into or complete the transactions with Swirsky. Moreover, there is no evidence that Swir-sky pressured Marino by means of persuasion, fraudulent representation, harassment, threats, coercive tactics, promises of reward, or pleas based on need. Swirsky merely offered Marino the opportunity to commit the offense. Finally, Marino’s argument that he was “lured” into commission of the offense because he was unaware that the bonds were stolen lacks merit. Whether Marino knew the bonds were stolen relates to intent to commit the illegal act. It does not bear on whether Marino was induced to sell these securities. Accordingly, we find that Mari-no’s evidence of mere solicitation, without more, is insufficient evidence of inducement to have justified a jury charge in this case. The trial court correctly refused to instruct the jury on entrapment. IV. Under our holding in Bay, we must also consider whether the defendant can show that he could have adduced sufficient evidence on entrapment had he been given the opportunity to do so. 852 F.2d at 705. Before Mathews, a defendant was precluded from presenting evidence on entrapment if he failed to admit all the elements of the offense. Therefore, we held in Bay that a defendant was entitled to a limited hearing on remand to determine whether he could produce sufficient evidence to warrant a jury charge on entrapment if the district court’s pre-trial ruling, rejecting an entrapment instruction, might have precluded the defendant from introducing evidence supporting an entrapment instruction. Id. The circumstances of this case distinguish it from Bay. Here, the district court denied Marino’s request for an entrapment instruction only after the trial had ended. App. at 1270-72. Both Marino and the government had presented all their evidence without any pre-trial ruling which might have limited the admission of evidence supporting an entrapment defense. Indeed, Marino has asserted unequivocally that a Bay hearing is inapplicable because he presented all his evidence on entrapment at trial and that on the basis of that evidence, we should find that he was entitled to an entrapment jury charge. We do not agree that Marino was entitled to an entrapment instruction. We will not remand the case for a new trial because the trial judge did not err in refusing to give an entrapment charge; Marino’s evidence of inducement wa3 insufficient to have warranted such a charge. Remand for a proffer hearing would be futile; Marino has assured us that he has no additional evidence on entrapment. Thus, we will affirm Marino’s conviction. . Marino was able to provide bonds to Swirsky because an individual named Jack Sliker, who owed Marino and his law partner $110,000, offered Marino securities for resale in order to pay his debt. Specifically, Sliker had offered Marino $975,000 in municipal bearer bonds that Marino could sell. . Marino had also obtained these bonds from Sliker. . To make an entrapment defense, Marino must produce evidence of both inducement and non-predisposition to commit the crime. El-Gawli, 837 F.2d at 145. Consequently, if the defendant does not produce sufficient evidence of inducement, his evidence of non-predisposition alone would not warrant an entrapment charge. Cf. id. at 147. Given our holding that Marino did not produce sufficient evidence of inducement, we therefore need not consider his evidence of non-predisposition to sell stolen securities. See also United States v. Rodriguez, 858 F.2d 809, 812 (1st Cir.1988) (initial showing on entrapment necessitates some evidence on each of two prongs of defense). . We noted in El-Gawli that this list was exemplary, and not presented to the jury as a “finite group of possibilities.” 837 F.2d at 150. . In Mathews, the Court decided the question whether a criminal defendant could avail himself of inconsistent defenses. The Court was not required to decide the quantum of evidence sufficient to warrant a jury charge on entrapment. Nevertheless, we believe we must follow the Mathews Court’s suggestion as to what constitutes sufficient evidence for an entrapment charge. . Marino cites this court's decision in United States v. Watson, 489 F.2d 504 (3d Cir.1973), for the proposition that mere evidence of government initiation is sufficient to take the entrapment defense to the jury. Watson adopted this "workable test" from the Second Circuit. 489 F.2d at 509 (citing United States v. Riley, 363 F.2d 955, 958-59 (2d Cir.1966)). In Riley, the Second Circuit stated that inducement "goes simply to the Government’s initiation of the crime and not to the degree of pressure exerted." Riley, 363 F.2d at 958. Under the "bifurcated approach” — the split burden of proof on entrapment adopted in Riley — this standard might well have been justified because the defendant bore the burden of proof on inducement. However, under the unitary approach enunciated in United States v. Jannotti, 729 F.2d 213, 224 (3d Cir.), cert. denied, 469 U.S. 880, 105 S.Ct. 243, 83 L.Ed.2d 182 (1984), and El-Gawli, the defendant only carries the burden of production on the defense. In El-Gawli, we held: Under our jurisprudence, to make an entrapment defense a defendant must come forward with some evidence as to both inducement and non-predisposition. After the defendant has made this showing, which is a burden of production, the government then has the burden of proving beyond a reasonable doubt that it did not entrap the defendant. This court thus follows the so-called unitary approach, whereby after the defendant has made his original showing, the burden falls on the prosecution to prove beyond a reasonable doubt that the defendant was not entrapped. 837 F.2d at 145. Indeed, in El-Gawli, we pointed out that our approach was "distinct from the ‘bifurcated approach’ adopted by ... the Second Circuit,” a standard which we rejected because of "our disapproval of the fact that it required the defendant to shoulder a substantial burden in making this defense.” Id. at 145-46. As we have noted, El-Gawli approved the trial court’s jury instruction that "[a] solicitation, request, or approach by law enforcement officials to engage in criminal activity, standing alone, is not an inducement,” id. at 149, and stated the following:

3907566-17702

CALEB M. WRIGHT, Senior District Judge. In July of 1986, plaintiffs Flying Tiger Line, Inc., Tiger International, Inc. and Warren Transport (collectively “Tiger”), brought this action seeking declaratory and injunctive relief against the defendant pension funds (“Funds”). The action contained three counts. The first count sought a declaration that Tiger was not an “employer” for the purpose of the Multiemployer Pension Plan Amendments Act (“MPPAA”) and was therefore not subject to the MPPAA’s procedures. The second and third counts were facial and as-applied challenges to MPAA’s constitutionality. This Court issued an Opinion and Order on September 12th denying defendants’ motion to dismiss. The Court held that because the Tiger companies faced irreparable injury if forced to make interim payments, the normal requirement of exhaustion of administrative remedies would not be required. Accordingly, this Court determined that it would decide the Count I issue of “employer” status before requiring Tiger to go through the arbitration procedures. The Court stayed resolution of the facial constitutional challenge until the Supreme Court rules on the pending appeal of United Retail & Wholesale Employees Teamsters Union Local 115 Pension Plan v. Yahn & McDonnell, 787 F.2d 128 (3d Cir.1986). 55 U.S.L.W. 3127 (U.S. August 14, 1986) (No. 86-231). The Court also stayed the as-applied challenge because no one has applied MPPAA to Tiger yet. Now before the Court are the Funds’ various reconsideration motions. FACTS The factual setting is the same as for the prior opinion. For a description of the facts, see Op. at 1-5. IRREPARABLE INJURY This Court decided on September 12th that it had the power to hear Count I because Tiger’s claim fit into the irreparable injury exception to the exhaustion doctrine. When a plaintiff is confronted with irreparable injury if forced to go through administrative proceedings before coming to court, the plaintiff may bypass these procedures and go directly to court. Republic Industries, Inc. v. Central Pennsylvania Teamsters Pension Fund, 693 F.2d 290 (3d Cir.1982); Op. at 7. On reconsideration, the Court must “bite the bullet”, West v. Keve, 721 F.2d 91, 94 (3d Cir.1983), and reverse itself. Accepting the allegations of Tiger’s financial condition, the Court does not believe that Tiger will be harmed more if forced to go to arbitration than if Tiger goes to court. If there is no distinction in the harm Tiger faces whether in court or in arbitration, then the irreparable injury exception to the exhaustion doctrine should not apply. The first harm Tiger alleged was that the collection of interim withdrawal liability payments would irreparably harm the company. A determination that interim payments are due, however, is not self-enforcing. If a Fund wishes to collect payments, that Fund must come before a court. United Retail & Wholesale Emp. v. Yahn & McDonnell, 787 F.2d 128, 134 (3d Cir.1986). The other harms alleged concerned the perception of Tiger’s financial health that would result in even the assertion of withdrawal liability. First, the liability payments that are presently being asserted against Hall’s are arguably being asserted against Tiger as well. Any Tiger creditor knows that Tiger is involved in litigation, whether before this Court or before an arbitrator, with the Funds over the issue of Tiger’s responsibility for Hall’s withdrawal. In plaintiffs’ opposition to the recon sideration motion, much is made of the Override Agreement between plaintiffs and their creditors. Yet, there is nothing to convince this Court that the strict requirements of that agreement yield a different result in arbitration or in court. In either case, a court must rule on actual enforcement and in either case the creditors know that the Funds are attempting to assert Hall’s liability against Tiger. Finally, the Court does not find that the perceptions of customers and competitors create the type of harm created in T.I.M.E.-DC, Inc. v. New York State Teamsters Pension Fund, 580 F.Supp. 621 (N.D.N.Y.), aff'd., 735 F.2d 60 (2d Cir.1984) and Central States, Southeast and Southwest Areas Pension Fund v. T.I.M.E.-DC, Inc., 639 F.Supp. 1468, 1478-79 (N.D.Tx.1986). In those cases, the courts were concerned that T.I.M.E.-DC’s customers would perceive that the company had gone out of business if pension funds were permitted to assert withdrawal liability. Moreover, competitors could point to the assertion of withdrawal liability as proof that T.I.M.E.-DC was no longer functioning. As against the company that is primarily liable, then, there is a risk that asserting withdrawal liability will lead to the perception that the company is no longer functioning. By contrast, the instant case involves secondary liability. Hall’s, the company against whom primary liability is imposed, has clearly reduced operations significantly. Nothing in the assertion of liability against Tiger because of its relationship to Hall’s is an indication of Tiger’s current ability to do business. STATUTORY INTERPRETATION Because the Court has reversed itself on the irreparable injury issue, the Court must reconsider whether it should decide Count I under the statutory interpretation exception to the exhaustion doctrine. See Op. at 13; Republic Industries, 693 F.2d at 293. In the prior opinion, this Court chose not to decide this issue. The parties’ major dispute concerns what needs to be decided to dispose of Count I. Plaintiffs contend that the issue to be decided is whether or not Tiger was an “employer” when Hall’s withdrew. The arbitration provision of the MPPAA states that “Any dispute between an employer and the plan sponsor of a multiemployer plan concerning a determination made under sections 1381 through 1399 of this title should be resolved through arbitration.” 29 U.S.C. § 1401(a)(1) [emphasis added]. Because the arbitration only applies to employers, Tiger argues, a court must first determine whether, as a matter of law, Tiger is an employer before an arbitrator has power to resolve a dispute. See, e.g., Refined Sugars, Inc. v. Local 807 Labor Management Pension Fund, 580 F.Supp. 1457 (S.D.N.Y.1984); Paperworks Pension Plan v. Arlington Sample Book Co., 5 E.B.C. 1948 (E.D.Pa.1984). The Funds, however, view the issue raised in Count I differently. To them, the real issue that needs to be decided concerns the January 1985 transaction in which Tiger sold 75% of Hall’s to Hall’s Acquisition Corp. (“HAC”), a corporation wholly owned by Alvin Bodford, then Chief Financial Officer of Hall’s. The Funds argue that this was a sham transaction whose purpose was to avoid the withdrawal liability. Under 29 U.S.C. § 1392(c): If a principal purpose of any transaction is to evade or avoid liability under this part, this part shall be applied (and liability shall be determined and collected) without regard to such transaction. Significantly, any dispute arising under • § 1392 is subject to the arbitration procedures. Therefore, the Funds argue, the issue to be decided belongs before an arbitrator not before the Court. The Court agrees with the Funds. Prior to the 1985 transaction, Tiger owned 100% of Hall’s; therefore, Tiger was indisputably in the “employer” control group of Hall’s until the transaction. If that transaction is proven to be one subject to 29 U.S.C. § 1392(c), then the Funds are free to ignore the transaction and assert liability against Tiger. If the transaction is held to be an “evade or avoid” transaction, then Tiger was an “employer” on the date Hall’s withdrew. But characterizing the issue to be decided as whether or not Tiger was an “employer” is a broad brush description of a specific issue. The case really turns on the determination of the “evade or avoid” question, a question properly before the arbitrator. A problem arises because there appears to be an inherent conflict within the arbitration provision. On the one hand, the arbitrator only is to resolve disputes between employers and funds, while on the other, the arbitrator is empowered to resolve the “evade or avoid” issue. The Court cannot think of a situation where the “evade or avoid” situation will arise except when the entity from whom payments are sought no longer owns the entity that actually withdrew. If the arbitrator were only free to decide issues involving an undisputed employer, Congress would not have empowered the arbitrator to decide § 1392(c) disputes. The present factual submissions and allegations before the Court indicate that there is a genuine factual dispute surrounding the 1985 transaction. For example, the Affidavit of Thomas C. Nyhan, ¶ 5, states that Alvin Bodford, President of Hall’s, admitted that a principal purpose of the 1985 sale was to evade or avoid withdrawal liability. Unlike Dorn’s Transportation v. Teamsters Pension Trust Fund of Philadelphia and Vicinity, 787 F.2d 897 (3d Cir.1986), there is a need in this case to develop a factual record in order to decide the “evade or avoid” question. It is this need to develop a factual record that distinguishes Tiger’s case from the eases plaintiffs cite for the proposition that a court and not an arbitrator should decide Count I. All those cases had an undisputed set of facts on which the court could decide the employer question as a matter of law. By contrast, the facts here need to be resolved before a legal conclusion can be reached. Weighing disputed facts in this context lies in the province of the arbitrator, not the Court. The Third Circuit Court of Appeals’ MPPAA opinions support this view. In Dorn’s Transportation, the Third Circuit commented, “As this was a rare case in which there was no need for the development of a factual record, we do not believe the district court abused its discretion in denying discovery and bypassing arbitration.” 787 F.2d at 903. By implication, in the more usual case where there was a need for the development of a factual record, the district court would have abused its discretion by bypassing arbitration. Similarly, in Warner-Lambert Co. v. United Retail & Wholesale, 791 F.2d 283 (3d Cir.1986), the Court held that an arbitrator needed to make the factual determi nations necessary to interpret a collective bargaining agreement before a court could determine the “date of withdrawal” issue. In dicta in I.U.E. AFL-CIO Pension Fund v. Barker & Williamson, Inc., 788 F.2d 118,129 (3d Cir.1986), the court stated that a corporation which, “legitimately believes its status as a [MPPAA] controlled group member is doubtful ... could bring a declaratory judgment action to have that question resolved by a federal court.” The relevant facts needed for decision in Barker & Williamson were undisputed; therefore, this Court believes that the dicta applies only to those situations where there is no dispute of material facts. In a situation where the facts are not in dispute, a court could issue a declaratory judgment with relative ease. Once facts are in dispute, however, the court’s task becomes more difficult and intercedes into the proper role of the arbitrator. Such is the case here. The Court, therefore, declines to follow the dicta in Barker & Williamson and will refer Count I to arbitration. PROCESS IN ARBITRATION Having decided that the Count I determinations should first be made by an arbitrator, the Court must now determine the appropriate procedure. Arbitration proceedings are to be carried out to the extent consistent with the MPPAA, in the same manner as those under Title 9 of the United States Code. Under 9 U.S.C. § 3, a district court has the power to stay court proceedings pending arbitration. In addition to this statutory authorization, a court has equitable powers to stay proceedings pending arbitration. Gavlick Const. Co. v. H.F. Campbell Co., 526 F.2d 777, 784 (3d Cir.1975) (citing Landis v. North American Co., 299 U.S. 248, 254, 57 S.Ct. 163, 165-66, 81 L.Ed. 153 (1936): “the power to stay proceedings is incidental to the power inherent in every court to control the disposition of the causes on its docket with economy of time and effort for itself, for counsel, and for litigants.”); Wren Distributors, Inc. v. Phone-Mate, Inc., 600 F.Supp. 1576, 1581 (E.D.N.Y.1985). The Court will apply these powers to stay the court proceedings pending arbitration. During arbitration, the Court will retain jurisdiction over the action. The arbitration should follow the law applicable in the Third Circuit. Under United Retail & Wholesale Emp. v. Yahn & McDonnell, 787 F.2d 128, 138-144 (3d Cir.1986), the Third Circuit held that the arbitrator should review trustee determinations on a de novo basis to ensure that the employer’s case gets a full and fair hearing. Now pending before the Supreme Court is an appeal of Yahn & McDonnell. 55 U.S.L.W. 3127 (U.S. August 14, 1986) (No. 86-231). Unless the Supreme Court reverses Yahn & McDonnell, the arbitrator should apply a de novo standard when he reviews the trustees’ determinations. Pending a Supreme Court decision, Yahn & McDonnell is the law to be followed in this Circuit. CLASS CERTIFICATION Also pending before the Court is plaintiffs’ attempt to certify a defendant class action of the pension funds. Plaintiffs’ complaint included class action allegations, and the Court heard preliminary arguments on the certification issue at the October 9, 1986 hearing. In order to properly decide the certification question, the parties must present arguments on the F.R.C.P. 23(a) requirements; the type of 23(b) class action that should be certified, if any; and the appropriate notice if a Rule 23(b)(3) class is certified. Decision on certification is deferred until those arguments are made. EQUITABLE TOLLING The last matter the Court must decide is whether Tiger, by bringing this court action has equitably tolled the statutes of limitations under the MPPAA. Because the Court has decided to refer the matter back to arbitration, it is appropriate for the Court to rule on the issue. The Court finds that the statute of limitations should start to run on the issuance of this Order. By bringing suit in court, Tiger has not rested on its rights and should be free to assert its rights under the statute now that the Court has stayed the matter pending arbitration. See Republic Industries, Inc. v. Teamsters Joint Council, 718 F.2d 628, 644 (4th Cir.1983) (“we think it equitable that when Republic has made a not frivolous challenge to the constitutionality of the arbitration process ... the pendency of the litigation should toll the running of the period prescribed in § 1401(a)(1)(B)”), cert. denied, 467 U.S. 1259, 104 S.Ct. 3553, 82 L.Ed.2d 855 (1984); Terson Co. v. Pension Ben. Guaranty Corp., 565 F.Supp. 203, 207 (N.D.Ill.1982). CONCLUSION The complicated scheme Congress devised in the MPPAA creates a procedure for determining the withdrawal liability of employers who cease to contribute to multiemployer funds. Only in extraordinary circumstances should a court rule that the parties need not exhaust their administrative remedies. Republic Industries, supra, 693 F.2d at 294. On reconsideration, this Court no longer believes that Tiger’s situation is an extraordinary one. Arbitration is the appropriate means to resolve Count I. An Order will enter in conformity with this Opinion. . The plaintiffs seek to certify a defendants’ class action. The named defendants are Central States, Southeast and Southwest Areas Pension Fund; Teamsters Pension Trust Fund of Philadelphia and Vicinity; Western Pennsylvania Teamsters and Employees Pension Fund; Trucking Employees of North Jersey Welfare Fund, Inc.; and Central Pennsylvania Teamster Pension Fund. . The Court outlined the MPPAA procedures in the September 12, 1986 Opinion and Order ("Op.”) at 6-8. The “employer" question here concerns whether or not Tiger was part of the Hall’s Motor Company, Inc. (“HaH’s") control group on the date Hall’s withdrew from the Funds. . The Western Pennsylvania Teamsters and Employees Pension Fund filed a Motion for Reconsideration and a Motion for an Amended Order to Permit an Interlocutory Appeal, and Central States, Southeast and Southwest Areas Pension Fund filed a Motion for Reargument or, in the Alternative, to Stay Pending Arbitration. All named defendants joined in the Central States’ motion. The Court will also rule on the class certification and equitable tolling matters raised at the October 9, 1986 hearing. . It is within the discretion of the district court to decide whether the exhaustion doctrine or an exception thereto applies. See McKart v. United States, 395 U.S. 185, 193, 89 S.Ct. 1657, 1662, 23 L.Ed.2d 194 (1969). . See, e.g., Exhibit C, a Form 10-K submitted by The Flying Tiger Line, Inc., Appendix to Plaintiffs’ Memorandum In Opposition to Defendants’ Motion For Reargument, etc. at 39: At December 29, 1984, Hall’s audited financial statements disclosed a contingent MEPPAA withdrawal liability of approximately $40,-000,000____ [...] Tiger International understands that certain pension plans, with the encouragement of Hall’s and/or Hall’s Acquisition Corp., may commence litigation against some or all of the Tiger International Companies and asert that Tiger International’s sale of Hall's should be disregarded, thereby making the Tiger International Companies jointly and severally liable with Hall’s for Hall’s MEPPAA withdrawal liability. . The interim payments for withdrawal liability become due, "[rjegardless of whether [the employer] requests review, initiates arbitration, or seeks court review____” Op. at 7. Again, there is no differences in harm between an arbitration proceeding and a court proceeding.

3763282-3510

PER CURIAM: Plaintiff-Appellant Joseph Johnson, Jr., appeals from the dismissal of one of his many lawsuits seeking to avoid repaying his student loans. Defendants-Appellees are entities involved in processing such loans, including Johnson’s. The district court granted Defendants’ motion to dismiss pursuant to Rule 12(b)(6) and entered a final judgment dismissing Johnson’s claims. Dissatisfied with this outcome, Johnson filed a motion to vacate the judgment. He contended, as he does on appeal, that his own pleadings failed adequately to allege subject matter jurisdiction so that the district court lacked jurisdiction to hear the case and thus to dismiss his claims with prejudice. Any party may challenge subject matter jurisdiction at any phase of the proceedings. But we are acutely aware of the “tremendous waste of judicial and private resources .... when a party who invokes federal jurisdiction recants his original jurisdictional allegations or ‘discovers’ that there was no diversity after all after suffering a loss on the merits.” Thus, although we are obliged to review both our jurisdiction and the district court’s, we look with a jaundiced eye at Johnson’s after-the-fact disavowal of his own invocation of federal jurisdiction. We have reviewed the Second Amended Complaint and the record, and we conclude that diversity jurisdiction existed at all relevant times. With respect to the amount in controversy, Johnson expressly demanded $50,000 in compensatory damages and $50,000 in punitive damages. Under these circumstances, we will hold him to that amount. With respect to diversity of citizenship, the supplemental materials provided by Defendant ACS Education Solutions, LLC demonstrate that at all times its members were completely diverse from Johnson. Thus, the district court had subject matter jurisdiction to dismiss Johnson’s claims with prejudice and properly denied his Rule 60 motion to vacate the judgment. Johnson’s attempted Rule 41 notice of voluntary dismissal, which he filed after the court’s dismissal with prejudice, was a nullity. All other issues on appeal are moot. AFFIRMED. Pursuant to 5th Cir. R. 47.5, the court has determined that this opinion should not be published and is not precedent except under the limited circumstances set forth in 5th Cir. R. 47.5.4. . See Johnson v. United States, 105 Fed. Cl. 85 (Fed.Cl.2012); Johnson v. Duncan, 746 F.Supp.2d 163 (D.D.C.2010), appeal dismissed, 2011 WL 186574 (D.C.Cir. Jan.19, 2011); Johnson v. U.S. Dep’t of Educ., 580 F.Supp.2d 154 (D.D.C.2008), aff’d, No. 08-5468 (D.C.Cir. Apr. 10, 2009). . The record suggests that the parties were negotiating a settlement at the time, but evidently neither party alerted the district court. . See Coury v. Prot, 85 F.3d 244, 249 (5th Cir.1996). It follows that any party may argue in support of subject matter jurisdiction, with the burden falling on the proponent of jurisdiction. See, e.g., Physician Hosps. of Am. v. Sebelius, 691 F.3d 649, 652 (5th Cir.2012). In this unusual posture, Defendants are the proponents of jurisdiction because they seek to preserve the final judgment entered by the district court. We reject Johnson's sophistic argument that because he invoked jurisdiction first by filing in federal court, he is the only party with standing to show that diversity jurisdiction exists in fact. . Coury, 85 F.3d at 249. . E.g., Griffin v. Lee, 621 F.3d 380, 383 (5th Cir.2010). . See Boelens v. Redman Homes, Inc., 759 F.2d 504, 508 (5th Cir.1985).

4089985-8923

PER CURIAM: Juan Paez-Vega appeals his total 120-month sentence, imposed as an upward variance from the advisory guideline range of 68 to 78 months, after being convicted by a jury of conspiracy to assist an alien with an aggravated felony to unlawfully enter the country, in violation of 8 U.S.C. § 1324(a)(1)(A)(iv), (a)(1)(A)(v)(I) (Count 1); inducing aliens to unlawfully enter the country, in violation of 8 U.S.C. § 1324(a)(1)(A)(iv) (Counts 15, 18-32); and alien smuggling for private financial gain, in violation of 8 U.S.C. § 1324(a)(2)(B)(ii) (Counts 46, 49-63). On appeal, Paez-Vega argues that, despite the court’s statement that it was imposing a variance, the court actually imposed a departure based on grounds not contained within the presen-tence investigation report (“PSI”). Therefore, he asserts, the court erred by failing to give prior notice of its intention to depart upward from the guideline range. Paez-Vega also argues that his sentence was procedurally unreasonable because the court based its decision on clearly erroneous facts. Specifically, there was no evidence that Paez-Vega was as culpable as his son, Lazaro Juan Paez (“Lazaro”), who was found guilty of more smuggling counts than Paez-Vega, and there was no reason for the court to discount Paez-Vega’s history of mental illness. Lastly, Paez-Vega contends that his sentence was substantively unreasonable, because no special factors warranted an upward variance. In addition, the need to avoid unwarranted sentence disparities, he argues, did not justify raising his sentence to match Lazaro’s guideline range sentence. We address each of Paez-Vega’s arguments in turn. I. When a party does not object to a perceived sentencing error at the district court, we review for plain error only. United States v. Castro, 455 F.3d 1249, 1251 (11th Cir.2006). Under plain-error review, the defendant must initially establish that the district court committed an error, that the error was plain, and that the error affected his substantial rights. United States v. Olano, 507 U.S. 725, 732, 113 S.Ct. 1770, 1776, 123 L.Ed.2d 508 (1993). The fourth requirement is that the error seriously affects the fairness, integrity, or public reputation of judicial proceedings. Id. A court can sentence outside of the applicable guideline range by applying a departure or a variance. See Irizarry v. United States, 553 U.S. 708, 714-15, 128 S.Ct. 2198, 2202-03, 171 L.Ed.2d 28 (2008) (discussing the different processes for arriving at an above-guideline sentence in terms of variances versus departures). A court must provide the defendant with advance notice that it is contemplating a departure based on information not contained in the PSI. United States v. Valentine, 21 F.3d 395, 397 (11th Cir.1994) (citing Burns v. United States, 501 U.S. 129, 111 S.Ct. 2182, 115 L.Ed.2d 123 (1991)). A variance, on the other hand, is justified by the 18 U.S.C. § 3553(a) factors and does not require notice because the statute makes the defendant aware of the facts that will be considered. See Irizarry, 553 U.S. at 712-13, 128 S.Ct. at 2201-02 (affirming that, post-Booker, parties know the Guidelines are merely advisory). When a court imposes a departure, it cites to specific guideline departure provisions, and when it imposes a variance, it explicitly considers the § 3553(a) factors and determines that the Guidelines were inadequate. United States v. Kapordelis, 569 F.3d 1291, 1316 (11th Cir.2009). Paez-Vega’s argument that the court failed to give notice of its intention to depart from the guideline range must be reviewed for plain error, because PaezVega did not ask for a continuance or otherwise object to the lack of notice during his sentencing hearing. Castro, 455 F.3d at 1251. Thus, applying the standard, Paez-Vega’s argument fails at the first prong, because the court committed no error. Olano, 507 U.S. at 732, 113 S.Ct. at 1776. The court imposed an above-guideline sentence based on a variance, not a departure. The court called the procedure a variance twice, and related that it was going to use its power under Booker to accomplish the variance. It also stated that the Guidelines were not adequate in this case and then emphasized § 3553(a) factors in explaining its decision. The court made no mention of any departure provisions. All of the court’s actions were consistent with variances, not departures, so no notice was required and no error occurred. Irizarry, 553 U.S. at 712-13, 128 S.Ct. at 2201-02; Olano, 507 U.S. at 732, 113 S.Ct. at 1776; Kapordelis, 569 F.3d at 1316. II. We review the reasonableness of the sentence imposed under a deferential abuse of discretion standard of review. United States v. Thompson, 702 F.3d 604, 606-07 (11th Cir.2012), cert. denied, — U.S. -, 133 S.Ct. 2826, 186 L.Ed.2d 887 (2013). The party challenging the sentence carries the burden to establish that the sentence is unreasonable in light of the record and the § 3553(a) factors. United States v. Turner, 626 F.3d 566, 573 (11th Cir.2010). In reviewing the reasonableness of a sentence, we first ensure that the sentence was procedurally reasonable, meaning the district court, inter alia, did not select a sentence based on clearly erroneous facts. Gall v. United States, 552 U.S. 38, 51, 128 S.Ct. 586, 597, 169 L.Ed.2d 445 (2007). The § 3553(a) factors include the need of the sentence to reflect the seriousness of the offense, promote respect for the law, provide just punishment for the offense, deter criminal conduct, and protect the public from the defendant’s future criminal conduct. 18 U.S.C. § 3553(a)(2). Other factors include the nature and circumstances of the offense, the defendant’s history and characteristics, the kinds of sentences available, the applicable guideline range, the pertinent policy statements of the Sentencing Commission, the need to avoid unwarranted sentencing disparities, and the need to provide restitution to victims. Id. § 3553(a)(1), (3)-(7). When the district court decides after “serious consideration” that a variance is in order, based on the above § 3553(a) factors, it should explain why that variance “is appropriate in a particular case with sufficient justifications.” Gall, 552 U.S. at 46, 128 S.Ct. at 594. The court may rely on acquitted conduct when justifying the variance, “so long as [it] does not impose a sentence that exceeds what is authorized by the jury verdict.” United States v. Campbell, 491 F.3d 1306, 1314 (11th Cir.2007). Paez-Vega’s procedural reasonableness argument fails because the court did not abuse its discretion by basing its decision on clearly erroneous facts. Gall, 552 U.S. at 51, 128 S.Ct. at 597; Thompson, 702 F.3d at 606-07. The court concluded that Paez-Vega was as culpable as Lazaro after looking at the evidence presented at trial and within the PSI, even though the jury acquitted Paez-Vega of some of the charges. While the court could not sentence Paez-Vega for the acquitted counts, it could still rely on all of the evidence presented to justify a variance. Campbell, 491 F.3d at 1314. Because there is no dispute that the court chose a sentence within the statutory limit authorized by the jury, its consideration of Paez-Vega’s acquitted conduct was proper. Id. Furthermore, the court’s decision to discredit Paez-Vega’s mental health diagnoses was supported by the facts that Paez-Vega’s ex-girlfriend believed he was faking the illnesses so that he could receive Social Security benefits and a government psychologist concluded that he is a “nonconforming individual” who refuses to admit to his own wrongdoings. As such, Paez-Vega’s sentence was procedurally reasonable. Gall, 552 U.S. at 51, 128 S.Ct. at 597. III. After we consider the procedural reasonableness of a sentence, we assess the substantive reasonableness, taking into account the extent of any variance, based on the totality of the circumstances and the § 3553(a) factors. Id. at 51, 128 S.Ct. at 597. One of the factors is “the need to avoid unwarranted sentence disparities among defendants with similar records who have been found guilty of similar conduct.” 18 U.S.C. § 3553(a)(6). We have determined that a variance to prevent a disparity between codefendants is warranted only when the codefendants are “similarly situated.” United States v. McQueen, 727 F.3d 1144, 1159 (11th Cir.2013). Similarly situated defendants are those convicted of the same type of offense (i.e. felony versus misdemeanor), in the same manner (i.e., plea bargain versus trial), based on similar conduct of offense. Id. at 1159-60. However, any § 3553(a) factor, including criminal history, may also be the basis for concluding that two defendants are similar or dissimilar. See United States v. Owens, 464 F.3d 1252, 1255 (11th Cir.2006) (upholding a district court’s examination of the § 3553(a) factors to conclude that a sentence disparity between defendants was warranted).